One of my favorite client couples, hands down. Here’s a 30 year old couple case study. Though the results are impressive, the process is surprisingly boring.

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Transcript:   Let’s do a case study today. A young couple just turned 30; they’re high earners. Between the two of them they make quite a bit of money, probably over a couple hundred thousand total. They save a lot of money; they don’t live up to their eyeballs. Several thousand a month after tax; probably five or six thousand. They have enough money to buy one small property in Texas. It’s going to cost them about 80-85,000. They’ve done that. We’re about two years into their plan. He thinks he’s going to work until his mid-60s. No matter how much I try to move him off of that rock he stays on it. He loves what he’s doing so I’ll believe him now. She’s not started having kids yet and they have said they’re going to have them. Your know happens when we have kids; we’ll let them find out for themselves. For now they have built themselves up to where, in a few months this summer, they will close their fourth small property. Now they have, give or take, 1,100,000 in property with a total of about 70%, 73 or 4 percent in debt. It’s all cash flowing and what they’re doing as part of their plan is they’re taking all the cash flow plus what they can comfortably afford – and they make that decision. Comfort zone is a big thing; you know that with me. They’re going to add a little bit from their family budget every month to the total of cash flow from all four duplexes, onto one of the loans. They’ll pay that loan off early, however long it takes. Then they’ll just go to the second duplex and they’ll do it until all four are free and clear. My guess, assuming kids and Murphy’s law and just life happening, getting those four paid off is going to take somewhere between eight and twelve years. Okay? Now, because of their youth, an EIUL – equity index universal life – it’s an insurance policy, and it’s geared towards income. It’s not geared for life insurance. Yes, there is life insurance but that’s secondary. I sent them to David Schaefer, my in-house expert on EIULs; he has forgotten more than I know about them if I studied them for five years. Bottom line is they’ll put 1 to 2,000 a month, again depending upon their family budget and their combined comfort zone. When they’re 65-66, somewhere in there, the numbers work out – and this is Dave – that they will begin receiving just a few happy meals, over 200,000 a year tax free for virtually the rest of their lives. That’s a stand alone source of income, has nothing to do with real estate. The premiums are indexed to inflation so they don’t get the results wiped out for some bad economic times. It’s structured to give them flexibility and it’s independent of everything else they’re doing. If everything goes to hell in a hand basket so to speak, they have over 200,000 tax free, which at that level of income you’re probably talking about 260 to 300,000 free tax income for most people. Now look at their four duplexes. They’re probably going to buy more because they save a lot of money. Well let’s just say that’s all they end up with. That means from the time that they’re no older than early to mid-40s, they’re going to have in the vicinity of 5 to 6,000 dollars a month coming in from four free and clear duplexes. They can do with that whatever they want: buy more, buy notes. Oh notes, yes. They’re having a hard time wrapping their heads around the concept of notes. But slowly but surely they’ve come around to the idea of it because at first they were concerned about the risk and...