DAN THOMPSON is a seasoned Financial Advisor and Business Owner, with almost four decades of experience. He started his career as a stockbroker in 1986, but after witnessing the 2001 stock market crash, he realized the need for safer and more predictable investment strategies. He researched and discovered unique strategies, including the “Infinite Banking Concept,” which he uses by combining specially designed whole life insurance policies to build cash value and access tax-free loans.
Dan also developed principles for “Ultimate Cash Flow,” which involve combining time, compounding, safety, leverage, and tax advantages to appreciate assets. He wrote several books, including his latest book “The 4 Keys to Building Wealth,” to educate others on these strategies.
Dan values tax advantages, access to capital, and controlling the flow of money and is dedicated to helping clients find strategies that fit their needs.
Episode Highlights Here:
Dan
But But yeah, we’ll we want to build that foundational tool of having the access to capital inside the life insurance, because ultimately that’s going to also produce tax free income for him down the road.
Brett
What’s the number one secret to beating the taxman?
Dan
Well, what we like to do is start with a foundational investment tool, if you will. And what we do is we pack life insurance policies with as much cash value as the companies will let us have, that’s our biggest battle every week is really just getting the companies to let us put in as much as our clients we’d like to. And then what we do from there is we want to leverage that. And we want to leverage that into other assets, typically, income producing assets, and tax advantaged assets, this can be real estate equipment leasing, back in the day, we were able to do some conservation easements, those got wiped out this last year. And then you can even leverage within the life, you can just leverage on leverage on leverage. And the whole idea is to build this, this bubble, if you will, of growing your money in a tax free environment, living on tax free income, and then passing your assets on to your heirs tax free as well.
Brett
Excellent. So it sounds like the number one secret to building beating the taxman is, is having a foundational investment tool, which you can then leverage into real estate or other things that are tax advantage, and you can live off tax free income. Is that a fair summary?
Dan
So far? Fair summary.
Brett
Excellent. And you mentioned conservation easements been wiped out? What do you mean by that?
Dan
Well, last year was the last year you could do them. So we did quite a few of them. But then this year, the government for their, you know, their wisdom and their, you know, great foresight decided to take them off the table this year. Excellent.
Brett
So let’s move into secret number two, once you’ve figured out the foundational investment tool, and you’ve leveraged in, you’re getting the tax free income, what’s the next secret to beating the taxman down?
Dan
So again, getting into assets that have some opportunity to write off taxes, I’ll just you know, as, as everybody knows, real estate can be one of those assets. When you when you use leverage on let’s just say, a multifamily project, you’ve got, you know, 150 units, there’s some huge depreciation there. And it can not only wipe out the cash flow, the taxable cash flow, I should say, but it can even carry forward for taxes that you may be paying for years to come. So that’s a great depreciation asset.
Brett
Absolutely, yeah, multifamily is a great way to do that with this with cost segregation, and bonus depreciation, and we, and we call that tax flow right to offset the cash flow, which is so so important, as taxes go higher, and your cash flow might be going higher, you want to have an asset on the other side. And so are you sorry, are you finding? Are you finding those that are your clients, the people that you work with? They’re they’re leveraging their their life insurance policies to buy their 150 units and doing that cost segue and kind of put that all together in a picture? How does that look?
Dan
Yeah, usually, we’ll just use the life insurance as the as the down payment. And then we’ll still use bank financing for the majority of it. But But yeah, we’ll we want to build that foundational tool of having the access to capital inside the life insurance, because ultimately, that’s going to also produce tax free income for him down the road.
Brett
Excellent. That’s fantastic. So I’m curious now that conservation easements are perhaps out that you’re helping clients with that in the past or putting them through that direction. What what are some of the ways you’re helping people with some capital gains tax deferral? If and when they do go to exit these, you know, these assets that have been depreciated with either cost segue or just you know, straight line? What’s what’s the strategy there to defer the capital gains tax?
Dan
So there’s quite a few things that you can do. I like what you what you brought up early in your show. And obviously, I’m very interested to hear more about that. But also, charitable trusts that can be used to put those assets inside of those trusts and then they can defer or ultimately even eliminate the tax. The other thing that we do is use leverage into equipment leasing, using the 179 deduction that gives you some very, very sizable tax deductions right off the bat and then those can be carried forward to help offset some capital gains in the future as well.
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About Dan Thompson
DAN THOMPSON is a seasoned Financial Advisor and Business Owner, with almost four decades of experience. He started his career as a stockbroker in 1986, but after witnessing the 2001 stock market crash, he realized the need for safer and more predictable investment strategies. He researched and discovered unique strategies, including the “Infinite Banking Concept,” which he uses by combining specially designed whole life insurance policies to build cash value and access tax-free loans.
Dan also developed principles for “Ultimate Cash Flow,” which involve combining time, compounding, safety, leverage, and tax advantages to appreciate assets. He wrote several books, including his latest book “The 4 Keys to Building Wealth,” to educate others on these strategies.
Dan values tax advantages, access to capital, and controlling the flow of money and is dedicated to helping clients find strategies that fit their needs.
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