How Millionaires Build Wealth Using Life Insurance

What are the three marvels of wealth–and how do millionaires use those marvels under a tax-free umbrella? Read on for insights into opportunities you may not have known existed. Soon, you too will know how millionaires build wealth using life insurance.

You may have heard me talk about millionaires like Walt Disney, James Cash Penney (founder of J.C. Penney), and Ray Kroc (who started McDonald’s)–all wealthy, savvy people who turned to their life insurance to build wealth and rescue their enterprises in times of need. (Find out more in this blog article).

What do people like these millionaires know, and how do the three marvels of wealth play into it all?

Let’s start with some of the key elements of prudent investing. These are crucial to learn if you want to know how millionaires build wealth using life insurance. Millionaires know that they want to utilize financial vehicles in their portfolio that can pass what I call the LASER Test (which stands for Liquid Assets Safety Earning Returns, meaning the financial vehicle offers sufficient liquidity, safety, and predictable rates of return—with tax advantages as icing on the cake).

how millionaires build wealth using life insurance



They also want to leverage financial vehicles that can deliver the three marvels of wealth accumulation:

  1. Compound interest
  2. Tax-favored accumulation
  3. Safe, positive leverage 

The first two are pretty self-explanatory, but let’s talk a little more about leverage, or the ability to own and control assets with very little or none of your money tied up or at risk in the asset. 

Personal financial disasters usually occur when one is highly leveraged with very little liquidity. The principle of leverage isn’t bad in and of itself—actually it is the very essence of how money works. 

Safe leverage has created untold amounts of wealth in the world where a “win-win” is created again and again. When institutions like banks or credit unions borrow OPM (Other People’s Money) and pay a low interest rate to people who “lend” it to them (when they deposit their money into the bank for savings), the banking institution then turns around and loans that money at higher interest rates to earn a net spread.

Earning interest is a win for the saver, while paying interest to the saver is a win for the bank, because they then loan out the same money at a higher rate. If a bank pays 1%, 2% or 3% interest on savings accounts, they turn around and loan that money at 5%, 6%, or higher. On just $1 million they may pay only $10,000 to $20,000 of annual interest (at 1% or 2%), but they are earning $50,000, $60,000 or more of interest (at 5%, 6% or more).

Just like banks and millionaires, you can put the three marvels to work for you.


To help look at this from another angle, let’s look at flight. I used to be a pilot; I owned a couple of private airplanes, so this analogy feels close to home for me.

Weight is the natural force that pulls a plane toward the earth. To fly, you must overcome weight (or gravity) with an opposing force (lift). In finance, I compare weight, or the pull of gravity, to taxes and inflation. To gain altitude, you must overcome the force of taxes and inflation.

Lift is the force of air flowing over and under the wings of a plane that acts on the wing to move it upward. I compare lift to the power of compound interest. The difference between simple and compound interest can make a significant difference in your long-term financial outcome. 

Thrust is the force created by the engines and propellers that pushes the plane forward. In order for a plane to fly, the thrust force must be greater than or equal to the drag force. I compare thrust to the power of tax-favored accumulation. Tax-deferred accumulation is a powerful propeller engine, but tax-free accumulation is like a more powerful jet engine. 

Drag is the force of resistance caused by the body of the plane that slows down its thrust, or forward motion. It’s the most misunderstood principle, both in flight and in wealth accumulation. I compare drag to the power of safe, positive leverage—using Other People’s Money (OPM), such as a loan or a mortgage from a bank. 

Just as you need drag in order to make an airplane fly, to make your wealth take off, you need something that most people think of as a drag (in the usual definition of that word).  That something is paying interest. “Drag” in my vocabulary is good and vital to wealth accumulation. 

how millionaires build wealth using life insurance



So where do savvy millionaires and even billionaires keep their serious cash and continue to build wealth? Many of them use properly structured, maximum-funded indexed universal life insurance policies, or what I call LASER Funds. 

Now what is that? In short, under IRS tax codes, a LASER Fund allows you to put the most money into a life insurance policy with the least death benefit; allows you to fund it as fast as the tax codes allow (typically four to seven years); your money can grow tax-advantaged; you can borrow money from your policy income-tax-free; and when you pass away, your death benefit can transfer to your heirs income-tax-free. (For more on LASER Funds, see this blog article.)

We work with millionaires who have as much as $1 million, $5 million, and $10 million inside their LASER Funds. They can utilize leverage to borrow money from their policies for just about anything they need. They may pay, say 5% interest, to the insurance company with an Alternate Loan on their LASER Fund, while their money is still earning as much as 10% historically. 

Connecting the Dots: How Millionaires Build Wealth Using Life Insurance

So let’s connect the dots here. Want to know how millionaires build wealth using life insurance? They understand how money really works. They are their own banker, so to speak. So as they accumulate money inside of a tax-free umbrella, their LASER Fund. 

If they ever want or need to access money, do they withdraw it and give up earning tax-free interest on their money? No. They leave their principal inside their LASER Funds as collateral for their loans, and they borrow money to grab a piece of real estate they want, or start a business venture, or pay for a grandchild’s college education. 

Millionaires build wealth using life insurance by taking advantage of the three marvels of wealth accumulation that a LASER Fund can provide when structured properly. They can do so with the peace of mind that comes from a LASER Fund:

  • Liquidity – The ability to access their money whenever needed
  • Safety – The historic safety of insurance companies as proven financial institutions, as well as the safety of principal with a guaranteed 0% floor during economic downturns
  • Predictable rates of return – Historically 5% to 10% returns, again with that 0% floor in volatile markets
  • Tax advantages – The ability to borrow money income-tax-free for retirement income, business ventures, real estate purchases, etc., as well as the ability to transfer the death benefit income-tax-free to heirs upon your passing

Want to Learn More About How Millionaires Build Wealth Using Life Insurance?

Watch the Video – Watch the related YouTube video to see me explain “How Millionaires Build Wealth Using Life Insurance?”(and while you’re there, be sure to subscribe to my YouTube channel so you don’t miss a thing!).

Elevate Your Financial Dimension – Find out how you can improve your Financial Dimension journey and seize the liquidity, safety, predictable rates of return, and tax advantages of a LASER Fund. Explore the in-depth financial strategies and learn from real-life client experiences by claiming your free copy of “The LASER Fund” book at Just pay for shipping and handling, and we will send it to you, absolutely free.

Join a Webinar – Want to find out if a LASER Fund (a maximum-funded, properly structured indexed universal life insurance policy) is right for you? Join us for an upcoming webinar where you can explore these strategies.

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how millionaires build wealth using life insurance

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