Rod Zabriskie joins today’s episode as he discusses how passive investors can utilize life insurance strategies like the “Investment Optimizer” and “Capital Avalanche” to enhance their returns on alternative investments such as real estate syndications. Need guidance on finding the right insurance agent who can tailor a customized policy to match your goals? Rod also shares tips to help you navigate this crucial process.
About Rod Zabriskie
Rod Zabriskie is the president and CEO of Money Insights, a firm that specializes in alternative investing strategies utilizing life insurance. He is also the co-host of the Money Insights podcast, where he discusses business ownership, passive income opportunities, and leveraging assets with tax advantages. Bringing in decades of experience in both the insurance and investment industries, Rod helps passive investors craft customized plans to meet their unique financial goals.
Here are some power takeaways from today’s conversation:
[02:44] Rod’s real estate journey
[05:30] How he uses life insurance to fund his investments
[07:08] The investment optimizer approach
[10:05] The benefits of life insurance
[12:36] The value of alternative investing beyond actual returns
[16:01] How the ATM fund works
[21:57] The capital avalanche strategy
[29:20] How to find a quality insurance agent
[35:51] Dividend payout rates and interest rates
Episode Highlights:
[07:08] The Investment Optimizer Approach
This approach refers to using cash-value life insurance as a way to fund alternative investments while allowing the cash value in the life insurance policy to continue growing tax-free. Loans can then be taken from this cash value to invest in deals like real estate syndications, while the cash value collateralizing the loans continues compounding tax-free inside the policy. This allows investments to be made while still earning returns on the money inside the life insurance policy, creating an "additional layer of profitability.” The loans are repaid using returns from investments, while interest paid on the loans is typically lower than the returns earned inside the policy.
[12:36] The Value of Alternative Investing Beyond Actual Returns
Alternative investments offer more opportunities for tax savings beyond just deferral. For example, in real estate, bonus depreciation can create permanent tax savings that enhance overall returns. Compared to traditional options like 401(k)s or IRAs, alternative investments provide investors with greater control and a more customized approach. They also offer better risk-adjusted returns, allowing for higher returns without necessarily taking on additional risk. Leveraging is a common strategy in alternative investing, particularly in real estate, which amplifies returns. Additionally, it opens doors to passive streams of income beyond traditional dividends, providing new opportunities for diversification.
[21:57] The Capital Avalanche Strategy
The capital avalanche strategy involves using loans from the bank to build a life insurance policy as the primary asset. This strategy allows you to obtain a larger amount of funds to grow the policy than if you solely relied on your own contributions, maximizing the benefits of the policy, such as tax-free income during retirement or funding educational expenses.
This show is for entertainment purposes only. Nothing said on the show should be considered financial advice. Before making any decisions, consult a professional. This show is copyrighted by Passive Investing from Left Field and Left Field Investors. Written permissions must be granted before syndication or rebroadcasting.
Resources Mentioned:
www.moneyinsightsgroup.com/lfi
www.aspenfunds.us/lfi
Rich Dad Poor Dad by Robert Kiyosaki
Cashflow Quadrant by Robert Kiyosaki
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