Douglas R. Andrew - The Last Chance Millionaire: Its Not Too Late to Become Wealthy

Gail Russell Chaddock, Baby Boomers Face Retirement Squeeze, Christian ScienceMonitor, February 27, 2004.

Social Security Administration, Basic Facts, February 2, 2006.

Goal Cultivator and The Lifetime Extender are trademarks of The Strategic Coach.

His name and his location have been altered to protect his privacy.

Press release, Social Security Administration, May 1, 2006.

Social Security Online, Retirement and Medicare, Plan Your Retirement, p. 1.

If you obtain a negative amortization loan, or if you dont pay all of your simple interest, then a small portion of the interest will accrue, which could be considered as compoundingwhich isnt always a bad thing. When you take out a typical amortized or interest-only mortgage and dont miss payments, the interest you are charged is simple interest.

Annamaria Lusardi and Olivia S. Mitchell, Baby Boomer Retirement Security: The Roles of Planning, Financial Literacy, and Housing Wealth, Michigan Retirement Research Center, April 2006.

The average for the 1970s was 4.82 percent.

. The historical average is 3.43 percent from 1913 to 2006.

Tami Luhby, New Tax Law Effective in Four Years Will Eliminate $100,000 Income Cap for Converting Traditional IRAs to Roths, Newsday, May 23, 2006.

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These fictional couples represent a combination of real-life families my associates and I have seen.

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IRS Code Section 163 defines a qualified residence, acquisition indebtedness, and home equity indebtedness.

Here is an example. If you bought a home for $250,000 and financed 80 percent of the purchase price, your original acquisition indebtedness would be $200,000. If you paid down the mortgage to a balance of $100,000, your acquisition indebtedness would be only $100,000.

IRS Code Section 163(h)(3), Temporary Regulation 1.163-8T(m)(3).

AARP, Boomers Envision Retirement II, 2005.

Throughout this chapter, as in the previous ones, I assume for the sake of simplicity that you are in the 33.3 percent marginal tax bracket.

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(Federal Trade Commission).

TEAM is an acronym for The Equity Alliance Matrix: a national network comprised of several thousand professional mortgage planners, financial planners, CPAs, attorneys, and Realtors who have been properly trained and know how to design plans that help people responsibly achieve their goals with asset optimization and equity management strategies.

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Ibid.

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www.realtor.org/Research.nsf/files/2ndHOHilites06WebFile.pdf/$FILE/2ndHO Hilites06WebFile.pdf.

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Internal Revenue Code, Section 72(e) 7702 and Section 101.

See the discussion of TEFRA, DEFRA, and TAMRA in Appendix A.

Internal Revenue Code, Section 101.

Maximum Tax Advantaged Life, Sales Insights, Vol. 4, No. 7 (July 2005).

See Appendix A for details on the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) and the Deficit Reduction Act of 1984 (DEFRA), which govern the parameters of a properly structured universal life insurance contract.

See Appendix A for details in the 1988 Technical and Miscellaneous Revenue Act (TAMRA).

Some insurance company actuaries design certain life insurance products one way and other products another way under different parameters and interpretations of the TEFRA, DEFRA, and TAMRA tax citations. They also differ a little from one insurance company to the next. So the breakpoint at which a policy needs to comply with TAMRA using four years of premium installments versus five years of premium installments can be around ages 47, 48, 49, 50, 51, 52, or 53 depending on the insurance product and company.

Under National Association of Insurance Commissioners rules, you are asked to sign an illustration showing the projection of the policy benefits based on the premium payments that you will likely make. The illustration may be based upon the interest rate credited by the company at the time you take out the policy. But the illustration must also show the worst-case scenario using the minimum guaranteed interest rate on the cash values from the start of the policy. This illustration also assumes that the maximum mortality charges allowed are assessed throughout the life of the policy. That low a return is unlikely, but the idea is to show you what could happen. Actual mortality charges are usually less than the maximum, and policies usually far outperform the minimum interest guarantee.

Ellen Hoffman, House Party, AARP Bulletin, September 2004.

Copyright 2007 by Douglas R. Andrew

All rights reserved. Except as permitted under the U.S. Copyright Act of 1976, no part of this publication may be reproduced, distributed, or transmitted in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher.

Warner Business Books

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First eBook Edition: June 2007

ISBN: 978-0-446-50520-8

ALSO BY DOUGLAS R. ANDREW

MISSED FORTUNE

MISSED FORTUNE 101

To my Family and Posterity

May the principles and insights

Contained in this book

Bring you

Clarity, Balance, Focus, and Confidence

To help you accomplish

Your Greatest Dreams

And create a

Meaningful Transformation

In your lives.

An authors work can be unique only in the expression of ideas, which rarely, if ever, claim just one originator. Ideas are the result of countless interactions with people who influence the path one takes.

I wish to express sincere gratitude for the wonderful people who have helped and inspired me to create The Last Chance Millionaire.

To my incredible literary agent, Jillian Manus, thank you for your excitement and encouragement in the creation of this work. You are so generous with your time and talents to help others. You have so much good in your heart, energy in your soul, and passion for life!

I give special thanks to my chief editor at Warner Books, Rick Wolff, for a wonderful working relationship. You have believed in my message and the power of delivering it to the world. And thanks to all of the great people, especially Sean Jones, at Warner Business Books who have helped to make this book a success.

To my wife and loving companion of more than thirty-three years, thank you for your love, compassion, patience, and understanding as I pursue those things that I am passionate about. You have been by my side rendering assistance and encouragement with every project I have undertaken. I love you dearly!

I offer gratitude for my two sons, Emron Andrew and Aaron Andrew. Thanks for carrying the baton while I worked on this book. Special thanks for helping with all of the charts and graphs, as well as the case studies in this work. I feel so fortunate and blessed to be your father.

Special thanks to my entire family, especially to my daughters, Mailee, Adrea, Mindy, and Ashley, for all of your help and support in our mutual endeavors. Thanks to Harmony, my daughter-in-law, and Scott and Brian, my sons-in-law, for your incredible talents and help in our business development. My greatest love and joy are found in my family.

Thanks to Mahesh Grossman, Grace Lichtenstein, and the Authors Team for their help in organizing this work. Grace, it was a delight to work with you closely throughout this project as you helped capture so many of the ideas and expressions that I flooded you with for hours and hours. Thanks for holding me to the task at hand.