Is your money really safe in the bank? And if not, where is it safe?
It’s a scary question … but M.C. Laubscher, founder of Producers Wealth and Cashflow Ninja and author of The 21 Best Cashflow Niches, has a surprising answer.
Growing up in South Africa and moving to the US in 2001, Laubscher has had front-row seats to big geopolitical drama on more than one occasion — the fall of Apartheid in his home country, and then the Great Recession in his adopted country.
“I remember being a very young man where this happened to my grandparents, where they had money in a bank,” Laubscher told Ricci Truong on the CamaPlan Podcast. “Not an investment bank just to stand a regular bank. And then all of a sudden that bank went out of business, and they lost the majority of their money that was in that bank.”
It’s Not Enough to Make Money
Eager to make his fortune and impressed by the upward mobility available to Americans, Laubscher was inspired by the book Rich Dad, Poor Dad by Robert Kiyosaki to make his first real estate investments, where he fell in love with the passive cash flow and the tax benefits.
But it wasn’t enough for Laubscher to make the money … he wanted to keep the money too. And from his reading of the tea leaves, that will be easier said than done.
“Governments all over the world have been very irresponsible,” he said. “They spend more money than they have or that they will ever be able to produce. They’re so much in debt.”
“There’s only three ways that they’re essentially going to recuperate that capital. And that’s either about rising taxes… they’re gonna print more money … or they’re just gonna default on it, essentially. So, if I’m gonna position capital, I’m gonna look at places where I can position it to protect me from future taxes.”
How to Protect Your Money
How does he do that? Laubscher likes Roth IRAs … but you can only contribute so much to a Roth IRA, and people with higher incomes are not eligible for a Roth IRA at all.
So, what else does Laubscher use? Believe it or not — overfunded whole life policies from mutual life insurance companies.
Why? Because in addition to the death benefit, these policies have a cash value that earns interest and dividends with preferential treatment from the IRS.
“They’re not listed on the stock exchanges,” he said. “They’re out of the wall street casino, the growth and the dividends are tax-free. You can access the money tax-free for your investing through a credit line, which you establish (against the cash value).”
“And then of course, eventually when you pass, the money from the death benefit is transferred tax-free to your beneficiaries. So, it’s very, very, very powerful from a tax strategy and protecting your capital.”
While Laubscher likes cryptocurrency, he sees tax strategy as a major weak point of the crypto-bros.
“There’s a lot of them that are in trouble right now because they did some things as the markets were turning that had taxable events as a consequence,” Laubscher said.
Through Massive Change
A husband and father in addition to an investor and entrepreneur, Laubscher trusts mutual life insurance companies based on their longevity. Many of them have been in business since the 1800s, paying dividends on their policies like clockwork.
“One of the carriers, they’ve seen the Civil War, actually,” Laubscher said. “They were around before the federal reserve was created. They were around during World War I, during World War II. They were around when the Bretton Woods monetary system was created in 1944. They were around in 1971 when Richard Nixon, on August 15, took the world off the gold standard.”
“So, they’ve been through all of these massive changes. And how did they react? … if you look at their past behavior, they were pretty solid during those times that were very uncertain.”
Laubscher has seen enough to know one thing — we’re in another time of major change, and it won’t be the last one.
“We are living through a time period, which I believe folks will look back at and they will say this was a monetary reset,” he said. “Now that sounds scary to a lot of folks. But this happened August 15th, 1971. This happened in 1944 at Bretton Woods. This essentially happened around World War I in 1913 with the creation of the Federal Reserve through the Federal Reserve Act.”
“I love it when folks always say it’s unprecedented,” Laubscher said. “I’m like, “Just look at the past hundred years! How crazy it’s been.”
Listen to the full podcast with MC Laubscher, where he talks about gold and silver, green energy, and other insights on the direction of the economy.
