What’s Palm Beach Letter’s “Invisible Retirement Fund” that the IRS Can’t See?

Checking in on what they most recently called the "Magic Contract" and the "770 Account," being pitched anew Tom Dyson for the Palm Beach Letter?

By Travis Johnson, Stock Gumshoe, January 7, 2015

“Strange Disappearances May Hold Key to Retirement in America”

This ad pitch we’re covering today has been through a few iterations over the last year or two — Palm Beach Letter started pitching it as the “770 Account,” then the “President’s Account”, then last Fall they touted it as the “Magic Contract” for 100% tax-free retirement… and now, as we enter a new year, I’m being asked about this again — only now, Tom Dyson and the Palm Beach folks are calling it the “Invisible Retirement Account” that’s helping “millionaires disappear” (“invisible” because the IRS can’t see it).

And yes, it’s still the same thing. A variety of life insurance that earns dividends, has tax advantages, and can include some other features if tweaked in a special way. Read on and I’ll explain more, though I don’t use or sell this kind of insurance and I’m not an expert on the detailed implementation.

What follows is the version we updated when Dyson called this the “Magic Contract” last month, but the “Invisible Account” is the same thing, just a different name. Enjoy!

—from 12/8/14—

The thing that keeps me up at night is retirement. And I’m a long way off from that magical, mystical time when I get to walk around in flip flops in Florida with a herd of dachshunds and not worry about anything anymore.

That’s what retirement is, right?

No?

Damn.

Well, the thing that worries thousands of people who are coming up within a decade or two of retirement age is, of course, having enough money to live when you’re no longer working and bringing in some income. Assuming that we want and can afford to stop working (which many people cannot). That’s why we all invest in the stock market, because even those of us who were not fantastic in math class know that if we’re only going to work for 15 or 20 more years (or less), there’s no way to turn that into a retirement-worthy nest egg if you’re earning 1% a year in a savings account or some super-safe short-term bonds. Not unless you’re suddenly able to start saving half of your income.

But we also have tremendous fear of the stock market. People who are of the age to most likely be thinking about their retirement in the next decade or two, like me, have lived through two very dramatic market crashes as 401k-feeding adults (the bursting dot-com bubble and the financial crisis) that destroyed retirement accounts and scared the hell out of everyone — at least for a few years.

So we dream of a guarantee, and we want safety, and we hope to get returns that are a lot better than have been available in guaranteed savings accounts for the past few years.

And on top of that, we don’t trust bonds because “everyone” says that the bull market in bonds that has now lasted for 25 years is is really officially over. The Fed will start raising rates at some point, long-term rates can’t really get much lower than the recent 1.75-2% (they’ve popped up a bit lately) unless there’s severe deflation (though many of us thought that when 10-year treasuries first dropped below 4%, almost a decade ago, and we were very wrong)… so near-retirees and folks who need portfolio growth are starting to get very worried about government and “investment grade” corporate bonds and municipal bonds, the traditional fountain of guaranteed safety and income for the aging portfolio.

What the heck do you do?

Well, Tom Dyson has a big new ad out for his Palm Beach Letter that says this problem can be cured with a “Magic” piece of paper.

Man, what a relief!

I always knew there was some secret that folks weren’t telling me about, some club they wouldn’t let me join, some joyous cartel of wealth that was eluding me just because I hadn’t signed up for the right investment newsletter. So maybe this is it, eh?

So what’s he talking about? Well, I’ll give you a little taste of the ad “presentation” first…

“… what I’m holding in my hands could make you rich.

“I call it a ‘magic contract,’ because this special piece of paper allows regular Americans and Canadians the ability to retire tax-free… without ever having to notify the IRS or any government agency.

“Currently, our research indicates this is only available in North America. And it’s 100% legal.

“Already, I’ve told several of my closest friends and colleagues about this and, armed with their own ‘magic contract,’ they are now on the path to an abundant, tax-free retirement.

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“So what’s so special about this contract?

“Well, for one, you don’t have to worry about creditors… (thanks to this contract, your money is safe)…

“You can also pass on your wealth to future generations, free of income taxes…

“You don’t have to declare a dime of your profits to Uncle Sam…

“And, with the right ‘magic’ contract, you can also get a guaranteed growth of 4% a year — about 100 times more than what most banks pay.”

This is a little bit of a tough thing to sell, because most investment newsletters are promising the moon and giving you dreams of an easy retirement from 1,000% winning stock trades — so we’ll give them credit for that, even as we weep for a world in which the hot enticement is for growth of 4% a year.

So what is it? More from the ad:

“Now, this is not some kind of insurance annuity…

“It’s not a real estate contract (there’s nothing tax-free OR guaranteed about that).

“And it’s not a bond or stock certificate, either.

“In fact, this ‘magic’ contract is about as far removed from Wall Street possible. You see, the companies that issue these special papers (I’ve located about a dozen so far) don’t even trade on the stock exchange.

“That’s why the only way you’ve probably heard about this before is if you accidentally stumbled onto it… because your broker’s not going to tell you about it.”

And this “magic” account has been used by heads of state, we’re told:

“President John F. Kennedy had his own ‘magic’ contract…

“So did President Roosevelt. In fact, here’s a paper we found at the Georgia Archives that shows FDR held about $560,000 of his money—over $7 million in today’s dollars—inside this special contract…

“John A. MacDonald, Canada’s first Prime Minister, also had one. As did Senators John McCain, Mark Warner (the richest members of senate), and Vice President Biden.”

And he makes the point over and over that it’s not something you’ve heard of before, or used:

“It wasn’t related to stocks, bonds, CDs, precious metals, or real estate. And although these returns were all but guaranteed over the long term… and one company we found even guaranteed 4% returns… it wasn’t an “annuity” either. (That’s great, because although annuities have become quite popular of late, they’re not the bastions of security they’re made out to be.)”

He also gives some examples of the other famous people who’ve used this “Magic Contract,” even in times of huge investment tumult like the Great Depression:

“Let’s take a short trip back to 1929…

“We’re smack dab in the middle of the Great Depression, and 9,000 banks are about to go bankrupt—and J.C. Penney’s fledgling chain of clothing stores is about to experience the same fate…

“Luckily, J.C. doesn’t keep his money in the bank. He’s got the bulk of his wealth stored in a ‘magic’ contract, which, by 1929, has grown to over $3,000,000 in value.

“But the key question is… is it still safe?

“Yes—not a single dime would be affected during the depression. Thanks to his ‘magic’ contract, James Cash Penney is able to save his business….”

Is this all starting to sound a little bit familiar?

Dyson goes on to call this “Manhattan’s Secret Vault,” telling us that bankers and wealthy families have secretly been putting their money in these “Magic Contracts” for generations, and not telling anyone about it — partly because they want you put