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Think Retirement = 🚫 Work? You may NEVER retire. Do THIS instead.

to make sure that'' s this one type of command.
that keeps appearing in action to my videos it'' s the whole oh you take care of.
rentals ah you'' re still working you ' re not retired or oh you make YouTube videos.
you'' re still working no you ' re not retired it ' s not such as the retirement police you know I. suggest clearly to these people around retirement strictly means no more working no more require to.
generate income and also for some surprisingly it'' s even age bound obviously to be retired I obtained ta be 60.
plus [Music] I imply to be sincere I believe this is simply a foolish argument over semiotics right because.
well you can call it whatever you like we'' re delighted living the means we live We'' re not gon na alter.
anything just because of YouTube comments right yet I likewise really feel obliged to point out that for.
these individuals believing retired life strictly implies no extra functioning normal earning money they''
re. in fact really mistaken it ' s a sight that ' s type of just separated from truth completely and also.
the most frightening thing is that if you stick to this belief you may never ever retire look I understand the.
origins of the suggestion that retirement equates to regular work I grew up because period as well that era where.
you will work 40 plus years in this one stable task retire at 65 and after that Tada Grand exit with.
this golden wall gold watch as well as your pension or you understand Singaporean case you know cpaf and afterwards.
off to the golf program you go now historically if you check out the context this was developed in the.
supposed gold years of the post-world War II full work right currently these days quite.
evident life work every little thing has substantially transformed considering that not least reason for Automation and.
digitalization work are no much longer the stable thing it used to be rather now it'' s very volatile.
I mean take a look at what took place during the pandemic and afterwards since the pandemic is over it'' s the. technology discharges as well as increasingly fantastic news with the breakthroughs in AI decreases are disappearing.
completely the middle course is vanishing they claim the abundant are getting richer the bad are.
getting poorer so job these days currently looks so various from what it used to be 30 years ago.
so why on Earth would any individual anticipate retirement to stay the like prior to I imply the fact.
is that it doesn'' t for one it ' s obtained'a whole lot much more pricey we ' re living
a lot longer these. days Medical Care has actually also obtained increasingly pricey housing prices maintain Climbing so expensive.
Climbing inflation not enough wage growth the amount of cash the specialists maintain claiming you need.
for a comfy retirement keeps Rising however allow'' s just take a reasonable number for the minimum.
advised amount of financial savings for retired life in the United States evidently that would have to do with 555 000 US.
bucks or 10 times the U.S mean earnings however then one more study reveals that typically retired people have.
simply somewhat over a hundred as well as seventy thousand bucks saved for retirement some retirees.
apparently just have absolutely nothing zero and even in Singapore one of the wealthiest countries in the.
globe over 60 percent of pre-retired singaporeans are stating they'' re out track to retired life. either so then what do you believe all these people across the world both pre-retirement and also already.
retired are doing so this is what they'' re doing this is simply what pops right up if you do.
a quick Google online incidentally according to Wikipedia everyone'' s default Expert.
on all points in deep space if you take a look at Wiki'' s page on retired life in the US as you mature you.
have 6 way of life options as well as out of the six 4 includes some type of work permanent or part-time.
the truth appears to be that whole lots of retirees are around side rushing or freelancing or setting.
as the end however as a brand-new chapter of Life thingy which entirely makes good sense right since we'' re all. living longer and also early retired life is obtaining a lot more preferred so retired life isn'' t simply that 5
to. 12 year period anymore yet possibly 20 to 40 plus years certainly most retired people aren'' t back to the. full time nine-to-five dissatisfied Daily Work there'' s many differing levels of job after retired life. there'' s like semi-retirement you understand going back to work part-time that'' s freelancing Consulting.
what some individuals call opportunistic functioning in some cases they just do stuff like offering.
or contributing any way they enjoy but appears like it'' s a standard that numerous retirees are.
out there working or making cash or simply getting this established routine in their retirement feeling.
purposeful engaged and also rather happy it'' s in fact a lot around just evolving past that stage in life.
where your work is so consolidated paying the cost of you and your family'' s presence that numerous.
individuals stick with doing bad work they actually do not like just to endure I believe that urging.
that retired life should be a Perpetual vacation without any type of work or making money whatsoever it'' s. actually just rather a naive idea that valued Timeless vacation vision is not even a lasting.
point in reality I indicate check out all the anecdotal evidence from all individuals out there you recognize.
they'' re stating that that Infinite getaway phase of retired life it really lasts practically one.
two years on ordinary Max prior to one obtains tired as well as dispirited which feeling of loss as well as being.
shed sets right in it'' s an entire cycle evidently you rest you obtain bored ultimately you discover.
brand-new Pursuits and also involvement money making or not and after that you get delighted once more up until the.
end to ensure that'' s the four stages of retired life so this man discusses it in this video clip it makes.
overall feeling you seem like you can check that out but essentially moral of the tale at whatever age.
or stage of Life maintaining active having objective and involvement an excellent regular feeling included.
really feeling financially protect it'' s healthy and balanced and also it makes people satisfied on the other hand if you.
remain to firmly insist retirement you should indicate no even more job ever before because that'' s just how you'believe
you ' ll. more than happy until your end although the evidence factors otherwise then you recognize that trashful.
amount of retirement cost savings is only ever going to keep moving continually greater as well as to hit it.
you'' re probably going to wind up functioning that additional much more years it'' s already taking place official.
retired life ages across the globe maintains boosting and state eventually happily you actually take care of to.
arrive you retire you'' re sigh greatly relax right into your beach chair and that dream.
come to life Perpetual trip circumstance and after that one two years later bam on time.
it'' s lost disaster as well as your sphere lonely shed maybe wondering where everything went pear-shaped.
You pedal through some more ears and also allow shed the bottom setting and also after that you'' ll locate on your own. perhaps aged 70 and yet lacked cost savings due to the fact that you didn'' t work right in between and also after that you.
finish up being one of those people around Googling how to locate a job at 70.

Regretfully because.
you really need to that'' s obtained ta suck so rather right here'' s my tip rather of clinging onto this.
outmoded idea of retired life I believe it'' s way extra productive to spend your time identifying what'' s. possible now for you and also your ability you might hang out reasoning of how you can potentially take.
control as well as redefine job as well as retirement in your life on your own because if you wear'' t job as well as. retired life is being redefined for you by culture and government anyway whether you like it or otherwise.
and after that you'' re simply going to be adhering to along you can consider how you can possibly decouple.
the job you do from the price of your existence as well as then perhaps even far better you can think of.
whether you can locate some means to decouple generating those presence calls from the direct.
input of your time and I assume this is all truly important if you wear'' t intend to be stuck on the.
grind till you'' re concerning like I don ' t understand 120 years of ages due to the fact that it'' s coming for everybody.
that time in your life where you can'' t make the exact same cash at your task as you could when you.
were more youthful or had even get a decent paying work whatever that might be when you require one since.
of like ageism and also all those things you understand most Monetary advice around they say that.
commonly for any of us to retire pleasantly we require about 75 to 80 percent of our pre-retirement.
revenue to proceed our current criterion of living so below'' s the circumstance when I was still.
in the workforce myself running that corporate hamster wheel so I worked I was so done busy.
simply functioning so I can hang on to that work it was my only resource of cash so my entire presence.
was you recognize dependent on that income and also as quickly as heck was not believing to myself regarding just how I.
can redefine work for myself or if someday if I quit working just how I can still produce 80 of.
that income monthly so my existence wouldn'' t have to considerably modify I mean sure you can do.
like what we did currently appropriate you recognize downgrade your way of living maybe relocate overseas to a less costly area.
end up being a lot less high upkeep in retired life so you put on'' t requirement 80 of your pre-retirement income.
Maybe you'' ll still require what 30 40 percent and also if right currently your only revenue generation.
is with that work that salary you got no Investments no various other abilities no side hustles.
no absolutely nothing when that job retires you at that obligatory age or because of some other circumstances.
God forbid then what are you mosting likely to do I believe that'' s the honest truth for many working.
grownups out there still particularly extra so if you actually obtained wed and begun popping out.
kids you understand time simply vaporizes extremely rapidly at this phase of life currently so I believe most of us.
require this tip you recognize to seek out from our service you know to check out the larger photo.
and attempt to regulate where we'' re all headed in the direction of if you'' re still seeing this video at this point.
then I wish this functions as that pointer for you anyhow if you'' re considering your ability collections.
and perhaps thinking of discovering brand-new ones you may want what today'' s video clip. sponsor skillshare needs to offer skillshare is an on the internet discovering neighborhood with thousands.
of courses for any person who loves finding out if 2023 is the year you guaranteed on your own.
you'' re lastly gon na explore new career or side rush choices or possibly deal with.
your individual growth skillshare is a great location to begin for the Italian me we.
enjoy being innovative in our retired life so we create a lot right we we prepare we do art we.
do ceramic and we additionally make videos on YouTube when we initially began skillshare was where.
we found out a lot of Essentials like videography narration as well as much more so today among the.
best classes I ever rested via online anywhere is still that class by Sorel Amore YouTube success.
construct an authentic Channel that'' s worth to follow so her advice regarding locating your Niche valuing.
authenticity over Charm as well as producing meaningful messages as well as giving value to the target market it.
just actually leveled up the videos we were creating back then it'' s always easy to take whatever you.
learn on skillshare and also apply it straight to your life Pursuits whatever those might be I very.
suggest having a look at skillshare using my link in the summary below the initial 1000 people fail to remember.
one month of skillshare absolutely totally free you can attempt it out find out something brand-new move a step better.
to your 2023 objectives inevitably no one actually understands anything so you need to produce your very own process.
take care of threat as well as after that stay with your strategy via thick and also thin well likewise continuously learning.
from mistakes and enhancing all of us only live as soon as allow'' s attempt to do it the very best that we can by this.
point I'' m sure you ' ve got a great deal to say in action whether you assume what I'' ve simply claimed is all.
bollocks or if you 2 are searching for a better way of life layout after that this typical retirement.
version which I'' ve constantly located so disappointing well you can leave me remarks below and also we.
can review I hope you enjoyed this video as normal leave a like so with any luck even more people will.
see this and also subscribe if you intend to maintain with even more of this things thank you all once again.
and allow'' s chat once more next Saturday Cheerios.

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Personal Finance & Retirement Planning Tips : Will Advice & Tips

This is economic adviser, Patrick Munro,
discussing recommend for an executor, or executrix when it comes to a lady. An administrator or executrix
is contacted by an estate to be the one to execute the will at the time of the passing
of the individual that did the will. It is an extremely accountable as well as in some cases difficult
work. The individual has to collect all the documents that the will telephone calls for. He
has to find the properties and the documentation to backup those assets. He has to pay the
taxes to the State if any kind of are due. And afterwards the much more difficult job it needs to split the
assets up amongst the recipients. Occasionally they are a recipient.
it is an extremely stressful job as well as the very best method to get it done is to be in close contact with
the proprietor of the estate prior to she or he passes away, to ensure that you can see to it that all paperwork
is in area, as well as all the dreams of the individual are plainly stated to ensure that there will be no
conflict. This is Patrick Munro reviewing the advantages of exactly how to be a well notified

The individual has to collect all the files that the will calls for. In some cases they are a recipient.

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F.I.R.E – 6 Uncomfortable Truths we discovered about Early Retirement & how to mitigate them

foreign hello what are the unsightly sides to.
retiring early aren'' t you bored every day simply lying around doing absolutely nothing don'' t. you people bother with running out of money hi individuals welcome back to another gorgeous.
day below in Heaven Bali a lot of you have been asking me many questions like the.
over so today I'' m gon na run with 6 awkward realities regarding layoff.
As my suggestions for reducing them based on our own experiences reaching fire and also.
being retired right here in Bali Indonesia for the previous two years so uncomfortable reality number.
one retired life is a journey not a destination for the document lying around all day not doing anything.
in retirement is a myth it'' s constantly wonderful to have a couple of days of that occasionally but in truth.
you do that for long stretches of time as well as you'' re probably going to be hit very extremely difficult with.
feelings of dullness lack of self-worth and you'' re gon na be missing a sense of gratification retired life.
isn'' t a destination like Bali or Boracay it truly is the beginning of a New Trip in your life it'' s. that stretch of time where you ultimately do those things you intended to do however always couldn'' t. due to the fact that you were so active generating income to survive it can be anything taking a trip the world.
lastly writing that publication or examining that state cross stitch side rush if you never ever get past the.
myth you'' ll probably wind up getting bored and after that end up going back to work as well as missing out on this.
Remarkable Life Adventure so like every various other journey start preparing what is this legendary journey you.
want to spend your retired life time and also money on number two if you obtained tired during your.
retirement things perhaps you'' re doing it incorrect so for a lot of people their retirement Jam.
is about taking a trip the world right that'' s a super common one and also it'' s impressive enjoyable you never
. really feel extra active as well as it'' s such an excellent obstacle since in fact you require many various skills.
to take a trip correctly right you need Sharp to browse the towns and also rip-offs and various other issues.
when traveling you need to be able to plan your schedule publication the very best traveling deals understand just how.
to bargain your prices not to point out stuff like riding a motorbike and also scuba diving and also at the.
start it'' s constantly impressive it ' s so extraordinary yet on excitement as well as sense of success starts to.
plateau and after that you'' re gon na hit that factor of decreasing returns and it wasn'' t simply. in travel either it was also my painting my organizations my enduring The Nomad life thingy I.
discover that when love to stay largely undirected most Searches really tend to shed their flavor.
with time one more method of putting this is probably you feel yourself falling into stagnancy or.
mediocrity point is if you'' re very early retired on your very own efforts then you'' re probably more of. the go-getter and up-and-comer type of individual as well as the facet of your individuality doesn'' t. transform simply because you'' re tired you ' ll still be looking around and evaluating if'you ' re. spending your time meaningfully as well as successfully to this solution personally I found 2 remedies. that worked truly well for me one either I begin drilling deep down into the information of.
what I'' m doing or 2 I make it right into a service take my father baking is his great love in retired life.
He'' s not simply asking anyways for the fun of it the last couple of years he'' s in search of cooking.
a more delicious sourdough bread any person has actually ever before come across out of 365 days in a year he is most likely.
baked regarding I'' m presuming perhaps 400 sourdough loaves 2 loaves each bake he modifies the dishes.
the starter the technique the active ingredients he does some reverse engineering of sourdough bread that'' s. commercially marketed outside it'' s been maybe three years and he'' s still going solid so he established his.
own special sourdough bread goal and also Target and criteria rather than just serving and also yogurting.
for enjoyable I ended up being professional teachers in both and also eventually began both a yoga exercise business as well as.
a surf institution as well as you know I learned so much a lot more concerning both in the entire procedure whatever.
Pursuit around if you begin truly piercing down there'' s constantly much more Enhancement to be had.
much more individual development to pursue please say you love Pottery put on'' t simply do it aimlessly to pass time.
brighten up your skills enter competitors become an expert Potter do commissions as your.
retirement side rush or teach pottery classes when you maintain pressing on your own to those higher.
standards since you'' re either really drilling down into the craft of it or you'' re running it.
as a Venture you'' ll locate new actions of productivity therein and also you will be tired not to.
state if you'' re really like us on lean fire whatever site revenue you produce will assist settle.
the expense of your passions as well as hobbies so you don'' t demand to tap on your long-lasting Investments.'isn ' t that a really bargain so two years back at the age of 38 I retired with my hubby below.
in Bali it'' s rather early by the majority of criteria as well as it'' s been an entirely outstanding journey we''
ve. found out a lot as well as I wish the understandings we are showing you guys serve if you'' re on. your own fire Journey or currently neck deep in retirement smack that like button show to us in.
the comments below what your retired life appears like until now just how you'' re maintaining hectic and whether you.
agree or differ with the points we made right here currently on to the third uneasy reality it'' s. hard that you should safeguard your time you most likely retired so you can spend your time doing nonetheless.
you please whenever you please most of us will certainly have actually invested the vast majority of Our Lives.
so far making a living which implies normally somebody else is routing your time either your.
boss or your customers as well as we get truly made use of to that so then in retired life self-directing your.
time ends up being something brand-new as well as kind of international and if you check out retired people in Singapore.
after working jobs that whole lives most of them finish on in retired life working as complimentary.
childcare services for their grandchildren if that'' s their supreme dream and for some.
Traditional older folks it definitely is after that it'' s terrific I ' m really
happy pleased themYet for some it might not really be that yet they find themselves doing it anyway kind of like by.
default due to the fact that they'' re just so used to enabling a person else to direct their time for them there'' s. always mosting likely to be people around who will try to make the most of your leisure time asking you to.
run tasks for them perhaps or like for us below in Bali we get numerous requests from both individuals.
we recognize directly and also complete unfamiliar people of the web asking us to do stuff like strategy their.
vacations show them around Bali Etc of course we like organizing friends as well as household and also we.
delight in assisting people normally however sensibly speaking our very own private lives would certainly simply vanish.
if we were to amuse all the demands we obtain you'' ll demand to find out exactly how to state no to people and also. how to strike equilibrium retirement is as much concerning sharing your time with the people that matter.
to you as it is concerning having time for your own personal development and also advancement simply understand.
awkward fact number four it'' s most likely gon na be simply you and also your loved one from.
now on out so upon retired life your social scene is going to alter substantially every person else is at.
work or busy with their very own stuff you'' re either gon na need to learn to enjoy your own firm.
a lot or if you'' re fortunate enough to have retired with your loved one that'' s that you ' ll. possibly be spending majority of your retirement with so best discover to obtain along companionably excellent.
interaction is crucial as it'' s simply generally being a mindful and considerate human being through.
the pandemic and when driving this previous decade I'' ve seen a lot of individuals that seem actually shocked.
by the individual the other half truly is when they start retired life and begin taking a trip together.
24 7 a day yet building that Convenience to do things on your own and also developing that fantastic.
relationship with your various other fifty percent can likewise potentially be the most satisfying component of your.
retired life trip as well as your personal growth before I show you the fifth unpleasant.
reality just the fast word from our sponsor of today'' s video MooMoo Singapore the stock.
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uneasy truth number five your cash strategies are never ever as foolproof as you believe all retirement.
whether it'' s the normal kind or fire truly all come down to the economic preparation behind it.
As well as the most unpleasant fact of all might be that your retired life funds are never.
as sure-fire as you prepare for especially if your strategies are meant to spend 30 40 also 50.
years when it comes to layoff expert forecasts and assumptions go wrong you made a.
error in your portfolio planning because of all the buyers that all of us carry Bearishnesses take place.
blacks on events grey Rhinocerous events so numerous things regardless of the plan regardless of exactly how much anxiety.
testing you did before you dove into it the unforeseen often occurs as well as the earlier you come.
to terms with this unpleasant truth the faster you can carry on to hatching against the risks.
You can predict most retired people they'' re functioning their monetary planning and less Aid around.
the 4 percent drawdown regulation right so the U.S stock market has actually had a sensational Run for the.
last 10 12 years or so now certainly things are looking a little various for the near.
future so those that have been conventional and that have avoided touching their long-term.
investments will have extra breeding room currently to come through this bearish market nonetheless long it may.
last friends that have actually been following our journey for a while now recognize that a dominant section of.
our retirement here in Bali is composed of rental income from a number of real estate Investments.
and also sadly in the last two years since we started retired life Europe is a video game up in arms.
soaring Power costs have actually increased the price of living across the globe as well as everywhere massive.
inflation is currently a huge issue fortunately we have so far handled to fix whatever disturbances.
we'' ve knowledgeable but generally yet another uneasy truth in retired life is that managing.
your cash to make it last till completion occupies even more time than you believe wear'' t just go to sleep on.
it constantly aim to branch out the eggs in your basket and also be open to readjusting your money strategies.
like rebalancing your portfolio or changing just how you spend your retirement Toolbox as various.
opportunities provide themselves for time you may not need to work for cash any kind of longer but doing.
stuff that fuels your individual development which generates some added side income as a reward is.
never ever a Bad Thing uncomfortable truth number 6 no factor sweating the little things y'' all understand I ' m. a large fan of simple thrifty living and no pretenses whereas satisfied dining in a fancy restaurant.
as we are consuming at the neighborhood War rooms right here often much more delighted in fact but most of us.
can likewise conveniently obtain brought away diving into with the itsy bitsy details of economical living you.
know investing two hrs below looking up bargains and also promo codes that end up saving you 10 dollars three.
hours there finding out how to optimize your air miles ought to you secure in that 3.5 repaired.
deposit price currently or wait till following week where maybe it could be 3.7 I mean it can be fun.
and after that it can additionally be a poor use your time you can do it if you appreciate the obstacle.
feel in one's bones that so long as you obtain the big stuff right your retired life is possibly mosting likely to function.
out just great so put on'' t sweat the little stuff huge things include things like keeping top.
of your general General expenses you recognize doing your taxes right maintaining a balance after that.
Diversified profile so as lengthy as you maintain in addition to all of that I think that'' s about 95 of.
the huge photo actually on the other hand what I'' m likewise claiming is that if you blow up your retirement.
financial resources by for example attempting to go large or go residence on crypto no amount of coupon cutting is.
gon na save you from needing to go back to a task so yeah that'' s my take on not sweating the little.
stuff we'' re all retire at some time of Our Lives whether very early or late voluntarily or involuntarily.
everything boils down to option and advanced planning just what I'' ve directly observed is that if.
you removed all the noise and disturbance in life what do you assume are the actual currencies we.
absolutely traded the means I see it is 4 things it'' s money time Young people as well as wellness just think of it.
whatever we do throughout our entire lives is actually us trading one of these for the other an.
layoff is that a person abnormality where you are in a placement to invest all four currencies at the same time.
simultaneously and that maximizes your experience of life a truly clear picture of this is.
traveling you can take a trip in your 60s and also 70s sure that'' s what most individuals will wind up doing and also it'' s. excellent you know you see these people actually appreciating seeing brand-new points being extremely delighted but it'' s commonly.
in the form of like great deals of cruise journeys around the world as well as that'' s cool as well yet they'' ll never ever. experience what it'' s like to try learning to browse or sail and getting all salty as well as scorched and.
muscle achy yet happily exhausted oh they'' ll never attempt anything more vigorous as well as daring.
like state backpacking your method through Europe you understand squashing in new hostels meeting insane people.
from Iceland or any place and also doing foolish points with each other we all have 2 lives the life that we.
presently live and the life we might perhaps live so then which life would you select tell me in.
the remarks listed below as well as wear'' t inform me you wouldn'' t retire early due to the fact that you simply wouldn'' t actually understand. what to do that'' s just a cop-out answer because yep well you'' re too lazy to do the research.
as well as try new things and understand on your own thanks for enjoying as constantly talk.
again next Saturday bye international.

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Retire in the 0% Tax Bracket with David McKnight

Casey Weade: I'm very excited to offer you
today's guest, David McKnight. I've been following David for quite a few
years as he has been a champion for the American people when it comes to ringing the warning
bell of higher taxes in the future, and what to do today so you can be in the 0% tax bracket
in retirement. That's what I said, 0% tax bracket. It may sound impossible, but David's going
to walk you through exactly how to accomplish it in our discussion today. This is a guy that has made frequent appearances
on television. You’ve probably seen him before actually. He's been in Forbes, USA Today, the New York
Times, CNBC, and numerous other national publications. His bestselling book, The Power of Zero, has
sold over 140,000 copies. And his revised version launched in September
of 2018, becoming the number two most sold business book in the world, which has now
been turned into a full-length documentary film also entitled The Power of Zero, which
we're going to spend some time on today.

David will cover why tax rates are destined
to not only increase, but potentially double during your retirement years and what you
should be doing about it. One of my favorite topics covered is something
David likes to call legislative diversification, how to protect your retirement assets from
potential legislative changes in the future and one of the most heavily discussed topics
in the tax world today, Roth conversions, why, when and how to do it. Without further ado, I give you, David McKnight. [INTERVIEW] Casey Weade: Dave, welcome to the podcast. David McKnight: Thanks for having me. Casey Weade: Hey, I'm really excited to have
you here. Our whole office was really jazzed up to have
you here because we've all watched your movie. Many of us have read your book.

I've followed you for many years and have
found your research, the information you provide to the public and to advisors out there incredibly
valuable. And I know you've been doing this for a really
long time. Now you've made this transition from being
an author to somewhat of a movie producer. And now you have this new movie about the
tax train coming. Why this passion for just, I mean, you do
a lot of traveling in order to get the word out about the future of tax rates. Why this passion? David McKnight: Well, it's really interesting. Back in 1997, Bill Clinton stood before the
country during the State of the Union. He said, “Hey, I got great news. The national deficit is now zero and here
we are 20 years later.

Not only is the national deficit not zero,
it's about a trillion dollars per year and growing, but also our national debt is $22
trillion and it's growing by leaps and bounds. And during a period of relative prosperity,
while all the other nations in the world are getting their financial houses in order, we
just keep plowing things onto the National Credit card, and the debt just keeps getting
bigger and bigger and more and more unsustainable. So, it seems strange to me that as our fiscal
condition of our country sort of spins out of control, and the likelihood of higher taxes
down the road to be able to liquidate all this debt becomes more and more reality, it
seems strange to me that we have 75 million, 78 million baby boomers who continue to grow
the lion's share of their assets in tax-deferred vehicles, like 401(k)s and IRAs, meaning they
haven't paid taxes on those assets yet.

So, we're sort of marching into this future
where all of the financial experts basically agree that tax rates are going to have to
rise dramatically in the next 10 years, yet most Americans aren't really doing anything
about it. So, I've sort of over the last five years,
in particular, I really sort of taken upon myself to barnstorm across the country, try
to raise the warning cry to whoever will listen. I do that a lot of different ways through
the movie, through my books, through public appearances, but really just trying to get
the word out and educate people on the reality of what's going on in our country and how
they can best prepare themselves as they move into their retirement years. Casey Weade: What do you hope the end result
is of all this work that you're doing and trying to get this word out? What do you hope actually comes out of the
work that you're doing? David McKnight: Well, I think first and foremost,
I would love to raise awareness among the largest voting bloc in the country, which
is the baby boomers.

They have the ability to elect really every
single elected official every two or four years. And they have a lot of clout, and they leave
a really large footprint and if they can make it known to their elected officials, that
the type of fiscal irresponsibility is being shown in Washington, it's just not going to
cut it. It's not good for us. It's not good for our children, certainly
not good for our grandchildren. That's really the primary hope. But I'm not very optimistic on that account. And so, absence any real fiscal restraint
on the part of the federal government, the secondary goal really is to help people prepare
for the inevitability that the government is not going to get their act in order. They're probably not going to cut spending. They're probably going to have to raise taxes
dramatically over the course of the next 10 years. Therefore, what can the 75 million to 78 million
baby boomers do to protect their hard-earned savings from a dramatic increase in taxes
that’s bearing down on us like a freight train? Casey Weade: Now, let's dive into that a little
bit further, because I think most retirees have been told that their taxes are going
to be lower in retirement and I'm still hearing that today.

People come in, and they're saying, “Well,
why would I pay taxes today? Why would I do a Roth conversion today? I'm going to be at a lower tax rate environment
in retirement. My CPA told me I needed to get tax deductions
today because I'm going to be – I’m going to have less income in retirement,” but
you're saying even if we have less income in retirement, it doesn't mean we're going
to pay less taxes. David McKnight: Yeah. I’ll give you an example. I was listening to a radio show a couple of
years ago.

It was one of those financial radio shows. I can't remember if it was Dave Ramsey or
who it was, but it was a financial radio show. And the lady calls in and she says, “I don't
understand. I am making less money in retirement, but
I'm paying more in taxes. How is that even possible?” She was totally flabbergasted. And the radio show host says, “Well, tell
me about your deductions,” and she says, "Deductions? I ran out of those a long time ago.” He goes, “Oh, I think I understand your
problem.” So, even if tax rates were to stay level for
the rest of our lives, this much we know, all of the deductions that you experienced
during your working years literally vanished into thin air. What are we talking about? We're talking about your house. Your house is typically paid off, by the time
you reach your retirement. Your kids, that's a huge source of tax savings,
because kids are tax credits, right, though your kids have moved out by the time you reach

You're no longer contributing to your 401(k)
or IRA and instead of donating money during retirement, people typically donate time. So, all of these major sources of deductions
vanished into thin air right when you need them the very most, which is retirement. So, even if tax rates weren’t going to go
up, which I think is a mathematical impossibility at this point, all of the deductions that
we enjoyed during our working years are gone and the only thing we're left with is a standard
deduction, which if you retired today, as a married couple, is 24,400.

So, we've got the combination of disappearing
deductions plus the likelihood the tax rates are going to go up, which make it nearly impossible
for you to be in a lower tax bracket than you are right now in retirement. Having said that, everybody's situation is
different and the real catalyst that should help you understand what you should do in
terms of whether you should shift money out of tax-deferred to tax-free comes down to
what you believe in your heart of hearts about the future of tax rates, and that is the single
overriding variable when it comes to making these decisions. I happen to think having examined all of the
data and having interviewed most of the major experts on these types of things all across
the country, particularly for the movie, I happen to be very, very frightened about the
future of tax rates and that's why I'm so motivated to do the types of things that I'm

Casey Weade: In the movie, you cover all kinds
of different reasons why we're going to see higher taxes in the future and I think we're
just kind of overwhelmed as a society by trillion this, trillion that, social security taxes,
Medicare is going to have issues, disability, OSDI. I mean, we've just got all these things that
are going to jam down our throats that are kind of confusing and overwhelming. And I think you simplify it too in the movie. You kind of say, “Well, I think we all believe
that history tends to repeat itself.” Let's look back throughout history and see
what's happened in the past because what's happened in the past tends to happen again
in the future. I think that would be a good thing for us
to provide people.

It’s just kind of a little history around
the tax system and historical tax rates. David McKnight: Yeah. Our reality attempts to be driven by the things
that have happened in our lifetime. And most people don't realize that there is
a period in the history of our country where tax rates were dramatically higher than they
are today. Granted, there were different deductions back
in the day. You can deduct credit card interest. You can deduct interest on a car loan, those
types of things that have more deductions, but that does not offset the reality that
in the prime of Ronald Reagan's career, he talked about how he never made more than two
movies in a year. Reason being he made about $100,000 per movie,
and any dollar he made above and beyond $200,000, he only kept $0.06 on the dollar and truth
be told, he didn't even get to keep the $0.06.

That $0.06 went to the state of California. So, it didn't make sense for Ronald Reagan
to even work past the month of June, because he wouldn't keep any of the money. So, he writes in his biography that he never
made more than two movies in a year. He would go to his ranch, he'd ride horses. He pretty much just hang out until the next
year, so he can start making his two movies again. So, that was a long time ago and even as recently
as the decade of the 70s, the highest marginal tax bracket was 70%. You fast forward to today, the highest marginal
tax bracket is only 37%. These are historically low. You may make the case that under George W.
Bush, tax rates were a tiny bit lower at 35% but the income parameters that govern tax
brackets today are so much more favorable to the American taxpayer than they were even
under George W.

Bush. We are experiencing the tax sale of a lifetime. We don't recognize how good it is because
we don't often think about how high tax rates were during the 40s, 50s, 60s, 70s. It wasn't until Reagan actually got into office
that tax rates started to lower dramatically. But we're in an environment where politicians
are talking about raising the marginal tax rate at 70%. I heard Elizabeth Warren talking about raising
it to 90% on the wealthiest among us. And then you got to remember is when that
highest marginal tax rate goes up, historically, it's a bellwether for all of the other tax
rates. As that highest marginal tax rate goes up,
all of the lower ones tend to rise right along with it and that's why we keep our eye on
that highest marginal tax bracket. So, we have to, I think we've sort of been
lulled into this false sense of security that tax rates are low, and they'll always be low.

Well, history tells a different story. Casey Weade: Let’s get into some of the
finer details, reasons why you expect taxes will be higher in the future. Outside of just history tending to repeat
itself, what do you think the top reasons are that we're going to see higher taxes in
the future and somewhat dramatically higher taxes? David McKnight: Well, we interviewed Larry
Kotlikoff, who is a Ph.D. out of Boston University, and we interviewed him for the movie. He has about a seven-minute segment of the
movie, which to me is one of the most compelling sections of the movie, and he talks about
something called fiscal gap accounting. Now the national debt, according to the federal
government, that what we call the publicly stated national debt is $22 trillion. That's two, two followed by 12 zeros. Doesn't seem like a big deal, because our
debt-to-GDP ratio is 106%. What makes us fifth in the world doesn't seem
like a big deal, because we were actually worse in the wake of World War II. We had I think the debt-to-GDP ratio that
was around 110%, 115%. Now, we're only at 106%.

So, the casual observer says, "Hey, look,
it's not that bad. In fact, it's been worse, and we were able
to recover from it.” Well, according to Larry Kotlikoff, Dr. Kotlikoff
says, "There's something called fiscal gap accounting. Fiscal gap accounting is the difference when
you calculate the difference between what we actually owe, what we've actually promised
to pay to baby boomers in the form of Medicare, Medicaid, social security, interest on the
national debt versus what we can actually deliver on based on current tax rates.” And he says, last year he said that that fiscal
gap was $199 trillion. This year, he says, pardon me. It’s not 199. He says $222 trillion. This year, he says it’s $239 trillion, so
it's gone up just in one year. So, according to Dr. Kotlikoff, our debt-to-GDP
ratio is actually closer to 1,000%. We're not required by law to include in that
national debt number what we call off-the-books obligations, off-the-books obligations or
promises that we made for social security Medicare that we're not technically required
to include in the national debt. Well, guess what, every other country in the
world uses fiscal gap accounting.

So, according to all of the rankings, Japan
has the worst debt-to-GDP ratio at 250%. If we were to conduct our accounting and tabulate
are national debt like Japan does, our debt-to-GDP ratio would actually be 1,000%, which is breathtaking. It's really, really out of control. And so, the only reason it doesn't seem worse
is a simple accountability. It's a simple accounting trick that the federal
government uses to not have to disclose all of their debts. So, really, things are much worse than they
seem, and it's driven by primarily promises made for Medicare, Medicaid, Social Security. Casey Weade: Well, you use that word, trillion,
a few times. We're probably going to continue to use that
T-word. And I think we've almost become numb to that
word and it's a really big word.

And maybe you can share with us a way that
you help people really wrap their minds around what a trillion really is. David McKnight: You know, there's a lot of
different analogies that people use. I know Tom Hegna has got a great analogy,
where he says, "If you spend a million dollars per second, every second for 33,000 years,
you wouldn't be able to pay off the national debt.” It's a massive, massive number.

I don't have any of those awesome analogies
to explain how big the debt is. But it's to the point right now, that if we
don't dramatically raise taxes, I'll give you an example Larry Kotlikoff use. He says, “Basically if all we did was not
spend any money as a government for the next 10 years and just use every little bit of
money that we bring in from tax revenue to pay down the national debt, it wouldn't even
put a dent in it.” So, it's just amazing, breathtaking amounts
of money.

There's videos on YouTube that will show you
what it looks like if you stack $100 bills up. It's basically unfathomable. There's all sorts of analogies that you can
use to show how big, but the average American can't even fathom how much money that is. Casey Weade: And a lot of politicians see
here, this discussion about outgrowing the debt. And I'm not sure that we really have a good
understanding as a general public what it means to outgrow that debt and the reason
why that's ludicrous. David McKnight: Right. The debt is growing so fast. Ben Bernanke, he talks about this in the movie. He says, "Look, it was irresponsible to do
the tax cuts.” Now, keep in mind, I love low taxes just like
anybody else but there's got to be this commensurate reduction in spending, which we did not do.

In fact, to finance the debt cuts, we actually
borrowed $1.5 trillion over the next 10 years to be able to pull it off. Casey Weade: Can you talk about that as well? Just talk about the difference, because I
think a lot of people say, well, this is Reaganomics all over again. Yeah, well, we haven't done it the same way. This is different than it's been in the past
when we've dramatically lowered taxes.

We've also coupled that with something else. David McKnight: Yeah. Reagan always said that if you're going to
lower taxes, you got to lower spending commensurately to be able to pay for those tax cuts. So, David Walker, former Comptroller General
of the federal government, I paid a lot of attention to Dave Walker, because he was basically
the CPA of the USA for 10 years under Bush and Clinton. He's a centrist. He tells it like it is. He's in the CPA Hall of Fame. He really knows his stuff. He basically said, “Look, when we did these
tax cuts, we had the dessert before the spinach. We ate our dessert before the spinach.” What do we do? We dramatically lower taxes and we increase
expenses to be able to pull it off.

We did exactly the opposite of what most economists
are telling us we need to do, which is either raise more revenue, double revenue, reduce
spending by half or some combination of the two. We did just the opposite. We increased spending. We reduced revenue. And people will confront me, and they'll say,
“Dave, you've been preaching the tax rates got to go up for the last 10 years,” and
I’ll say, “Yeah, I have.” They say, "Well, what happened? Tax rates went down. You were predicting they were going to go
up. They actually went down.” And I said, "Guess what, all Congress really
did is kick the can further down the road,” which means that the fix on the back end is
going to be all the more severe, all the more draconian, all the more aggressive.

So, we just made problems much worse. All this really means is that 10 years from
now, tax rates will have to go even higher to fix the mess that we've gotten ourselves
in. Casey Weade: Which furthers that point, we
can't outgrow this, because we have to reduce spending, we have to increase taxes. If we do either one or both of those things,
we hurt the growth of the economy and we can't outgrow it. It just seems like we're in a bit of a pickle.

David McKnight: Yes. If you were to look at a graph, and if you
were to consider a 5% growth in the economy, which is incredibly robust, there's very few
periods in the history of our country where we've sustained 5% growth for more than just
a couple years. But if we were the guy from Vanguard, the
chief economist from Vanguard in the movie, he says, "If we were to have some massive
sort of economic boom, due to artificial intelligence, or what have you, and sustain 5% growth, 5%
growth looks like this. It's sort of this sort of flat curve. When you look at the growth of what we owe
for all these programs, it's going like this.” So, even a robust 5% growth is not going to
help us pay for all of the things that we promised. There's a massive delta between what, you
know, the tax revenue the way it would be coming in as a result of 5% growth, and the
actual curve, that is our spending.

And there's a really scary graph that we show
in the movie, which literally shows the geometrical curve of the of the debt, and it goes up like
that. And there's no way that we're ever going to
raise enough revenue to be able to liquidate all that debt unless we can dramatically reduce
spending. And by the way, every year that we fail to
cut Social Security, Medicare by one-third means the fix on the back end is going to
be all the more dramatic. I mean, we have to do massive, massive cuts
starting yesterday. And Donald Trump has made the promise that
he's not going to touch Social Security, Medicare during his administration. That's potentially eight years of letting
this thing snowball out of control. Casey Weade: And we can talk about all these
problems without growing the debt, but I think the biggest problem and I talked about this
all the time, when it comes to the economy, when it comes to social security or Medicare,
it's a demographic issue that we have.

Can you just speak to the change in demographics? Because when I have that discussion, many
times people say, “Yeah, but all these baby boomers are going to be traveling. They’re going to have all this free time. They’re going to be spending money. They're going to be taking money out of their
IRAs. They're going to be spending all this money
on health care.” But I don't think that quite cuts it. David McKnight: It doesn't cut it because
they are not putting money into social security Medicare anymore. They're starting to take the money out. People don't realize it when Social Security
first started out in 1935, you had 42 workers putting money into the program for every one
person that took money out. So, you have all of these people putting money
in, hardly anybody taking money out. When they took it out for two years starting
at 65 and they typically died a couple years later. So, this program was set up to last forever.

And by the way, when they started out, they
guaranteed that taxes would never be more than 1%. So, payroll tax, FICA tax, whatever you want
to call it, they guaranteed in writing. I've seen the actual code, the IRS tax code
back then. It said it will never be more than 1%. And as we move forward in time, these numbers
were working great and then all of a sudden, soldiers came home from World War II, and
they started to do something that array to which they’ve never done before. What they started doing they started to have
children. So, you may be thinking, "Great. More children equals more taxpayers equals
more money going into Social Security, and eventually into Medicare, which came around
as part of the Great Society in the mid-60s.” Well, that's not what happened because the
baby boomers, remember, they didn't have nearly as many children as their parents did.

They had 30 million fewer children. So, now we have this Generation X. I'm a Generation
X. We didn't have nearly as many children as
our, sorry, we had quite a few children, but we don't have very many peers. So, we're now in the situation where you have
30 million fewer Generation Xers. They're trying to support 75 million to 78
million baby boomers by way of Social Security, Medicare, Medicaid, and it's just not possible. We just can't pull it off. 60 Minutes calls it a demographic glitch. Generation X is a demographic glitch. There's not enough of us to be able to pay
for all of these baby boomers. And by the way, it's not just the US. It's happening in Japan. Japan sells more adult diapers than they do
baby diapers. Recently in Finland, they tried to reform
their universal health care, because they're collapsing under the weight of the programs
and they shut it down. Nobody wanted to reform it. So, they're now spiraling into bankruptcy. So, this is going to, this is all portending
what's going to happen to the United States 10 years from now.

Tom McClintock talked about in the movie how
eight years from now we're going to be Venezuela. Ten years from now I'm predicting a massive,
massive increase in tax rates, if not sooner. So, the long and the short of it is you people
ten years from now will look back on 2019 and say, "Why did we not take advantage of
historically low tax rates?” Those were good deals of historic proportions. Nobody likes paying tax. I give them permission to not enjoy it but
when compared to what it's likely to be even 10 years from now, we just don't even have
any clue what's about to hit us. Casey Weade: Well, I got to say I got done
watching the movie and I have followed this for so long and have felt very negative about
the future of tax rates for a long time.

However, I've still been guilty of throwing
money in that tax-deferred retirement account, taking that tax deduction and I always diversified. I would throw half of it in Roth and half
of it in 401(k) because I don't really know the future. I just have this idea of what it's going to
be. I get done watching that movie. I emailed their HR director and said, “Hey,
move everything to Roth. I'm going to pay all the taxes today because
they are guaranteed going to be significantly higher taxes in the future.” We could beat this drum all day, but I think
most people recognize and believe that to be the case. Taxes will be higher in the future than they
are today. But I've asked thousands of people.

I've had rooms of 100 people at a time where
I've said, "Who in here things taxes will be lower in the future?” I've never once had a single person raise
their hand to that question. So, I think we can pretty much admit that
everybody has this pretty good understanding. Taxes will be higher in the future. I think then we go, "Well, what do we do about
it? Just we know that taxes will be higher in
the future but what do we do about it?” I've seen statistics from Vanguard that 74%
of individuals are concerned about rising taxes. However, only about 20% are actually doing
anything about it. So, what can we do? David McKnight: Well, you make a good point.

If you look at the cumulative 401(k)s and
IRAs in our country, if you were to add all of them up, they add up to about $21 trillion,
$22 trillion which is interesting, because that's basically what the national debt is. All you'd have to do is raise taxes to 100%
on all those retirement programs and you can liquidate the debt tomorrow. But if you look at how much money is in the
cumulative Roth IRAs, Roth 401(k)s, Roth conversions in our country, it's only about 800 billion
so it's like a 22, 23:1 ratio. So, if you think of the train analogy, if
you have money in an IRA or 401(k), you have your money sitting on the train tracks, and
a huge freight train is bearing down and you know it’s come in in the form of higher
taxes. We know roughly when it's going to good here,
we know what it's going to feel like, but we also know what we need to do to get our
money shifted off the tracks and that's really, there's a couple of different ways to do it.

It's how we're funding our retirement accounts. Are we putting money into after-tax types
of accounts like Roth 401(k)s, Roth IRAs? Are we doing Roth conversions where we're
preemptively and proactively paying the tax on these accounts, really trying to stretch
that tax liability out over as many years as possible? I tell people to try to get it done before

Because it used to be that people say, “Dave,
when are tax rates going to go up?” I say, "Well, in some distant, unknowable
future, perhaps 10 years from now, tax rates are likely to go up.” Well, guess what, we now know the year and
the day when tax rates will go up, January 1, 2026. We're going to go automatically go back to
the pre-2018 tax rates. We know it's going to happen unless something,
you know, unless democrats, for example, gets control of the House, the Senate, and the
presidency before then, we know that we've got seven years to be able to systematically
shift that money to tax-free. So, stretch that tax liability out over seven
years. Don't rise into a tax bracket that gives you
heartburn as you make those shifts from tax-deferred to tax-free, but at the same time recognize
that you do have to get all the heavy lifting done before 2026.

So, in my mind, there is an ideal amount of
money to shift every year. It's the amount that keeps you in the tax
bracket that doesn't give you heartburn, but that allows you to get all the shifting done
before tax rates fall for good. Casey Weade: From my experience, and we know
from the statistics, I mean, most people aren't doing tax planning. They have this concern about rising taxes. They're just not even doing anything about
it. What are some of the top reasons you think
that individuals aren't doing their tax planning that needs to be done? David McKnight: The number one reason why
people are loath to do tax planning to preemptively and proactively do Roth converting is nobody
wants to pay a tax before the IRS requires it of them.

Nobody wants to pay a tax today and think
that the tax rate down the road could be lower than what they're paying today. Nobody wants to pay a higher tax rate today
and get out of potentially being able to pay a lower tax somewhere down the road. So, it all comes down to uncertainty, uncertainty
over the future of tax rates. People don't want to pay a higher tax today
and miss out on a lower tax rate down the road because that's the line that we've been
fed our whole lives.

What's the reality? The reality is that tax rates are probably
going to be higher than they are today. We've never had more certainty around that
subject than we do today. We've never had more certainty around the
tax code. The current tax code sunsets in 2026. So, like I say, in Chapter 6 of my book, The
Power of Zero, we have this window of opportunity during which to take advantage of historically
low tax rates. We finally have some certainty dispelling
the doubt around the future of tax rate, so why not take advantage of it? Casey Weade: Well, I totally agree, and I
still think that there's this feeling that people have that, well, my CPA didn't tell
me to do that.

My financial advisor hasn't had this discussion
with me yet. I mean, just the other day, I had a client
who said my CPA wants me to set up a simple IRA for the business and the 22% tax bracket
today, he's only going to make more money in the future than he has currently. He’s in his mid-40s.

And why would we put anything in tax-deferred
retirement accounts at this point? Why do I see that most CPAs are not recommending
Roth or not recommending tax-free strategies? And financial advisors alike aren’t having
those types of discussions really encouraging people to do things like Roth conversions? David McKnight: Yeah. CPAs are sort of a peculiar breed. There's a couple of very proactive ones, but
by and large ones, I have CPAs that are some of my best friends. I've got a brother-in-law that's a CPA. Some of them get it. A lot of them, however, recognize that the
key to keeping their job is to give their clients as many tax savings today. CPAs don't get brownie points for saving you
money 20 years from now, when they're dead, right? CPAs get brownie points for saving you money

If you get a big tax refund at the end of
the year, then their clients are absolutely doing backflips. If you end up owing more money than you did
last year, then all of a sudden, they're looking for a new CPA. This is sort of the harsh reality of it. You can pay tax now or you can pay tax later. CPAs love giving you tax savings today because
it makes them look like the hero. However, if the tax that they save you today
is lower than the tax that you could potentially pay later on, if you postpone the paying of
those taxes so some point much further down the road, they're not the hero. They’re the goat. So, like I said, there's a lot of proactive
CPAs that get it. They understand that there are strategies
that can be brought to bear in a client's portfolio today that can really maximize retirement
income and retirement by minimizing taxes. But the vast majority of them don't buy it. They have not adopted that strategy.

They're like the medic at the end of the battle
who walks across the battlefield and say, "This is how many are dead, and this is how
many are injured,” right? They're very reactive. They're very historical. What CPAs need to learn how to do is to be
more proactive and more futuristic by saying what is your tax bracket today? What is your tax bracket likely to be 10 to
20 years from now, when you take this money out? And let's opt for the bucket that will maximize
your retirement income. If tax rates are going to be lower in the
future, let's put as much money into tax-deferred as we can today. If tax rates are going to be higher in the
future, then let's put as much money into tax-free as we possibly can. Casey Weade: Well, and financial advisors
I think when I've sat down with families, I was discussing this with our team of advisors
the other day, we have these discussions about doing Roth conversions. So, you need to fill up that 22% tax bracket
or you need to fill up that 24% tax bracket.

Let's do these conversions. We get this sense that sometimes they feel
like we're doing it for our own benefit. And it's just the opposite but I think it's
because they haven't heard this from another financial advisor or their own advisor. David McKnight: Yeah. And let me just take two seconds, Casey, to
talk about the 24% tax bracket. My favorite and I asked rooms full of financial
advisors, what do they think is my second favorite tax bracket? They all know my favorite tax bracket is zero
because if tax rates double two times zero is still zero, but they hardly ever guessed
that my second favorite tax bracket is 24. And let me tell you why. Let's say that I'm talking to my client, and
they're in the 12% tax bracket.

Currently, if I were to persuade them to bump
up into the 22% tax bracket, in an attempt to get them to tax-free in retirement, they're
not going to be all that invested in that recommendation. Why? Because I essentially doubled their tax rate
in an attempt to get them to the 0% tax bracket. I sort of got them to pay a lot more in taxes
and then attempt to save them taxes. That doesn't make a lot of sense. However, if they're currently in a 22% tax
bracket, and they're probably always going to be in the 22% tax bracket, why not bump
up into the 24% tax bracket? That's only 2% more. It allows you to converge an extra $150,000
to tax-free for only 2% more. We're not talking doubling your tax rate. We're talking increasing it ever so slightly
on the margin from 22 to 24 and you can protect an extra $150,000. Why let a single year ago by where you're
not maxing out the 24% tax bracket? So, there's so much opportunity in this existing
tax code.

Most people don't realize that if you go to
the top of the 24% tax bracket today, it's in the area of 326,000. I think that's the top of the 24% tax bracket. If you wanted to convert up to $326,000 after
2026, that would put you in the 33% tax bracket. What an incredible savings. What an incredible tax sale that we're right
in the midst of and most people don't even realize it. Casey Weade: I love that. And that is why I talked about it all of our
events. This is a big deal going from 15% to 12% is
exciting but you go, "Well, it's only 3%.” It's 20% less taxes. I mean, that's the reality. It's a big deal. But taking away that 25%, not leaving the
24% until you get over to $315,000, $325,000 and you have a doubled standard deduction,
that is just huge because now we can make more sense at Roth conversions than ever before.

And I think this is an important point you
made in your book when it comes from financial advisors and I think this is important for
people to understand. Financial Advisors don't benefit when you
do a Roth conversion. It doesn't matter if they are commissionable
advisors or fee-only advisors if they're doing a Roth conversion as a commercial advisor,
but they're going to be potentially having 25% less earning a commission on. If they are doing Roth conversions and they're
a fee-only advisor, they're going to have 25% less in fees.

They're going to be able to collect over the
life of that account. So, it's important to have these conversations
with your advisor and recognize that they're doing this solely for your benefit. David McKnight: Yeah. And that's something I talk about in all of
my workshops as well. Why do most major financial institutions not
want to talk about this? It's because how do they get paid? They charge you a fee. If they're managing a million of your dollars,
and you're charging 1%? They're making $10,000 per year off it.

If you were to shift that million dollars
to tax-free because you think that tax rates are going to go up, you might pay 25% tax
along the way. So, now you've got 750,000 sitting into your
tax-free bucket. If they're still charging you 1%, now they're
only making $7,500 per year off you. They just experienced a pay cut for persuading
you. The tax rates in the future going to be higher
than they are today. And for that reason alone, the major money
management institutions, the Merrill Lynchs, the UBSs of the world, they don't even want
to touch this conversation with a 10-foot pole.

Casey, you and I, we don't care how much money
we're managing. What matters to us is how much people get
to spend after tax. That's the only number that matters. And if we can pay a tax today at a lower rate
than what it would otherwise be 10 years down the road, then that's good for everybody. Casey Weade: Well, it's funny.

I hired an advisor, hired a couple of advisors
from one of the largest national brokerage firms in the world, and when he came to work
for me, he said, "We weren't allowed to talk about taxes.” Why would a financial advisor not be able
to talk about tax planning? But I think you hit the nail on the head. It's because that wouldn't benefit their shareholders.

It wouldn't benefit the board of directors. It wouldn't benefit the company they were
working for, even though it would benefit their clients. There was something you said in the book. I just want to make sure we get it out. I think you said it in the movie as well and
it just hit me like a ton of bricks. You talked about the purpose of traditional
retirement accounts. Can you speak to what the purpose of those
retirement accounts really is? David McKnight: Yeah. So, we've been weaned on this notion that
one of the primary purposes of a retirement account is to save us taxes. We put money into a 401(k) so we can save
taxes. Our CPA says, “Hey, do a SEP IRA, so you
can save money in taxes.” Well, guess what? The true purpose of a retirement account is
not to save you money in taxes. It's to increase.

It's to maximize your retirement income at
a period in your life, when you can least afford to pay the taxes. That's the true purpose of retirement income. And to the extent that we start fixating on
that, as opposed to how can I save the most money today, that's when we're going to start
to solve this retirement crisis. [ANNOUNCEMENT] Casey Weade: Hey, I just wanted to take a
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are gone. Now, back to the podcast. [INTERVIEW] Casey Weade: Yeah, I love that. Maximize after-tax income at a point in your
life you can least afford to pay the taxes. I think that just drives all the sense in
the world and it really hit me strongly. I think one of the things as we get into what
we can do specifically, in order to get these tax-deferred dollars and to tax-free dollars,
let's just give the audience a quick overview of the tax buckets and the three tax buckets
that you talked about.

David McKnight: Yeah. We've been told that there's millions of different
types of investments out there. There are millions of different types of investments
but I'm here to tell you that all of those investments basically fit into only three
types of accounts. I refer to these accounts as buckets of money. The first bucket is what we call a taxable
bucket. These are going to be investments where you
pay a tax every year, rain or shine.

You're going to pay tax on the growth of that
money. These are CDs, money markets, brokerage accounts,
mutual funds, stocks, bonds, anything that produces a 1099 is going to cause a taxable
event every year. It doesn't seem like a big deal. But every year you're paying tax, that's eroding
the growth of your money over time. You amortize that. That inefficiency, that taxation, you amortize
it out over 30 years, it could cost you a million dollars. How can you tell where the government wants
you to put money? Well, what account Do they have no limit on
how much you can put in? Like a brokerage account. Yeah. If you won the Powerball lottery, you can
put every last dime of those savings, every last dime of those winnings into a mutual
fund and the government would just love it.

They would just take it to the bank because
they're making taxes each and every year. So, the taxable bucket, we want to be careful
because it's the least efficient of all the buckets. We pay taxes every year that erodes the growth
over time. So, really, most financial experts can agree
upon this, that you want to have no more than six months where the basic living expenses
in that bucket. You want to have not too much money so that
it's growing tax efficiently, but you want to have not so little that you're not prepared
for an emergency.

So, that's a taxable bucket. Pretty straightforward. A tax-deferred bucket is the one that most
people are familiar with because they've been saving it most of their lives, 401(k)s, IRAs,
403(b)s, 457s, annuities, pensions, those types of things. They have two things in common. First thing they have in common is, generally
speaking, when you put money in, you get a tax deduction. So, for example, if you're making 100,000
per year, you put 10,000 in your 401(k), your new taxable income is 90. But the second thing they have in common is
how they're taxed upon distribution. And the IRS has a special word that they use
to characterize that income when it comes out. They call it ordinary income. What does that mean? That means when you put money in, all you
really did was defer the receipt of that income until some point much further down the road
when you take the money out, what rate are your tax? Well, whatever tax rates happen to be in the
year you take that out and based on the fiscal landscape of our country that promises to
be probably substantially higher than it is today.

So, we have to be very, very thoughtful about
how much money we can have in our tax-deferred bucket. It's okay to have some money in our tax-deferred
bucket because some of those required minimum distributions at 70.5 are going to be offset
by our standard deduction. But we don't want to have so much money that
it overwhelms the standard deduction and any distributions coming out of the tax-deferred
bucket also count as what we call provisional income, which causes your social security
to be taxed, which causes you to spend down all your other assets to be able to compensate. So, really, we want to have only so much money
in that tax-deferred bucket enough to be able to be offset by the standard deduction, but
also keep our provisional income low enough that our Social Security is not taxed.

And then the third bucket is… Casey Weade: Before you get to the tax-free
bucket, there's an important point you made on the tax-deferred bucket, which is that's
like a loan, right? You basically loaned money, and the IRS is
eventually going to want that money back. You get a loan, a personal loan from a banking
institution or an individual. You have a set interest rate. You know what it's going to be, but with the
government, they can change that interest rate only at some point in the future. David McKnight: Yeah. The analogy that I use is almost as good as
the analogy that Don Blanton uses in the movie. I'll do both analogies and you'll see that
Don Blanton's is much better. The analogy I typically use is when you put
money into an IRA or 401(k) it’s like going into a business partnership with the IRS. Every year, the IRS gets a vote on what percentage
of your profits they get to keep.

It doesn't sound like a very good business
partnership. The way Don Blanton describes it, and I haven't
mastered his ability to tell the story but it's an amazing and compelling comparison. He basically says, “What if the federal
government came up to you and said, ‘Hey, look, I'm going to loan you some money. I'm not going to tell you what the interest
rate is. I'm going to let you spend that money. And then at some point much further down the
road, I'm going to come back and ask that you repay that money. I'm not going to tell you what the loan interest
is until the year in which I need you to repay it.

And by the way, currently, I have $22 trillion
of debt. By the time I want you to repay it, I may
have posted a $40 trillion of debt. Would you take that check from the federal
government?’ And the answer is not in a million years,
you wouldn't.” Don Blanton explains that incredibly well. It sends chills down my spine just thinking
about this but how apt an analogy is that? Casey Weade: Well, if we don't want that kind
of partnership, which we don't, let's get to the tax-free bucket.

David McKnight: That's right. So, the tax-free bucket basically says we
proactively and we preemptively pay taxes on these accounts, because we think that tax
rates there are going to be lower than they will in the future. Once that money gets into tax-free, no matter
how much it grows from that point forward, no matter how high tax rates go from that
point forward, it doesn't matter. We've insulated and protected ourselves from
the impact of higher taxes. I tell people, "Hey, let's try to get to the
0% tax bracket. Why? Because of tax rates double two times zero
is still zero.” So, the only way to truly insulate yourself
from the threat of rising tax rates is to get to a tax-free scenario in retirement. Casey Weade: Well, what falls into that bucket? One, I mean, we know Roths. We pay the taxes today, grows tax-free in
the future. We can pull the money on tax-free. There aren't required minimum distributions. But then there's another, I mean, there's
hardly anything in that bucket and municipal bonds don't even fall into that bucket.

Municipal bonds don’t fall into that bucket
because they affect your provisional income and affect the taxes you pay on Social Security. There's only two things. There's Roth and then there's this thing you
call LIRP. Well, what is LIRP? David McKnight: Yes. So, LIRP is what I call, and people can call
whatever they want. In Chapter 5 of my book, I call it a life
insurance retirement plan. Basically, it's a bucket of money that gets
treated differently for tax purposes than any of the other buckets that we're customarily
familiar with. What happens with this bucket is you put money
in, you make contributions.

As your money grows, your bucket begins to
fill. Only the IRS is going to treat the growth
on the money in that bucket under a different section of the IRS tax code than any of the
other plans that we're familiar with. What does that section of the IRS tax code
say? It says, you can touch the money pre-59.5
without penalty. You can’t do that in your IRAs or 401(k)s. As your money grows, you receive no 1099 so
no tax as it grows. When you take the money out, does not show
up as reportable income on your tax return. What does that mean? That means it's tax-free and does not count
as provisional income, which means it does not cause your Social Security to be taxed. They're also going to tell you that there
are no contribution limits. They got clients to do $50 a month.

I got clients that do 200,000 per year and
everywhere in between. They're going to tell you that there are no
contribution, sorry, no income limitations. And the question I like to ask people is can
Bill Gates to a Roth IRA? And the answer is no, Bill Gates cannot do
a Roth IRA. He makes too much money. You start making north of about $203,000 of
modified adjusted gross income, you can no longer do a Roth IRA. Those income limitations do not apply to this
bucket. You can make a million dollars a year and
still put money into this bucket. They're also going to tell you that if history
serves as a model, there is no legislative risk. What does that mean? That means that they've changed the rules
on this bucket three different times ‘82, ‘84, and ‘88.

And every single time they change the rule,
they simply said, "Whoever has the bucket before the rule changes gets to keep it and
continue to put money into it under the old rule for the rest of their lives.” We call that a grandfather clause. So, we have this bucket that has a lot of
very attractive attributes. And usually, at this point, people say, "Well,
Dave, that sounds like the perfect bucket. Let's put all my money into there.” Well, I tell people all the time, it's never
a good idea to put all your eggs in one basket. And not only that, but the IRS says that,
in order to do this bucket, there's a cost of admission. They're going to require that there'll be
a spigot attached to the side of that bucket through which flows on a monthly basis some

What do those expenses go towards? They go towards the cost of term life insurance. So, long and the short of it is you got to
be willing to pay for some term life insurance or some other administrative expenses in there,
but you got to have a need for life insurance. Now, a lot of people that are approaching
retirement, say, "Hey, look, my house is paid off. My kids have moved out. I'm rapidly approaching retirement. I don't really need life insurance,” and
a lot of the companies that sponsor these programs, they recognize that so they've done
something to sweeten the pot. They simply say that in the event that somewhere
down the road, you should need long term care or have what we call a chronic illness, they
will give you your death benefit while you're alive, for the purpose of paying for long
term care.

So, that can be a very, very attractive way
to pay for long term care insurance. People don't like traditional long-term care
insurance, because it’s a use it or lose it proposition. In this scenario, if you die peaceful in your
sleep 30 years from now, never having used the long-term care portion of it, someone's
still getting a death benefit. So, there is the sensation of having paid
for something you hope you never have to use.

So, some people say, “Well, this sounds
like a silver bullet.” It's a panacea. Let's put all our money into there. It's not a perfect investment. But it does something that none of the other
tax-free investments is able to do. So, what I say is let's take a complementary
approach where we couple the LIRP with our Roth IRAs and our Roth 401(k)s and our Roth
conversions, and taking money out of our IRAs up to standard deductions. And then if we do it all in the right way,
our Social Security is tax-free. Let's have multiple streams of income. But the LIRP can be a very attractive complement
to all of those other streams of tax-free income. Casey Weade: We're talking about an overfunded
life insurance policy meaning we put more in it than we needed in order to support that
death benefit.

So, we end up getting this side account that's
growing tax-free. And this is something that I've used for the
last 10 years. It's something that my dad uses, my mom uses,
the majority of my family's life savings or annual income savings goes to these vehicles. Dan Sullivan, who I'm a big fan of, he talks
about how this is one of the best things that he has in his investment portfolio and so
I'm a big fan. And I think one of the reasons is I am still
putting money in Roth. I'm still maxing out my Roth. I think there's this natural sequence of where
we go with those dollars, whether it goes from HSA, then we go to our Roth 401(k), then
we go to other options, we have to go to life insurance, because we run out of options,
especially as our income goes up. And there's a reason for this diversification
from these two different tax-free options. We don't just go straight to the life insurance
policy. We're going to have some Roth.

We're going to have some cash value life. We're going to have our HSA. Can you speak to the difference in legislative
risk between a Roth IRA and a LIRP? David McKnight: Sure. What we would likely see with a Roth IRA is
if they were to ever change the rules somewhere down the road, and say, "Okay. Roth IRAs are
off-limits. You can no longer contribute to a tax-free
account.” I don't know why they would ever do that,
because Roth IRA is almost certainly ensured that they're going to get more tax revenue
today than they do in the future, because we're using after-tax dollars, but if they
were to ever to make those accounts go away, they would likely say, you get to keep whatever's
in your Roth IRA.

You just don't get to contribute anything
more to it. The thing that makes these life insurance
policies unique is that to make them function properly, you have to have the ability, the
option to continue to put money into them over time. So, every single time they change the rules
on these things, they simply said, “Whoever has the bucket gets to keep it and continues
to support and continue to put money into it under the old rule for the rest of their
lives.” I talked to people occasionally who say I've
got a life insurance policy from 1978. And they start to describe these crazy rules,
like I can put $100,000 in it per year, no problem. And that was what the rule was back in 1978. Casey Weade: And they still do it.

David McKnight: Yeah. It doesn't exist anymore, but they can still
do it because they got grandfathered under the old rule. And so, that's typically how these things
are treated. So, that's a pretty major difference between
the traditional life insurance grandfathering and what would likely happen to a Roth IRA. Casey Weade: So, we start feeling like this
is a great idea. We need to set up this other legislative diversification
for our investments, not just investments between stocks and bonds, but we want to have
some tax diversification as well to protect us against legislative risk. We want to add this LIRP to our toolbox. And so, we hop online, we hop on Google, and
we start googling life insurance as tax-free income. We look at be-your-own banker concepts or
family banking concepts. And I think about half of those articles that
you read out there talk about the agent receives this big commission that comes directly out
of your pocket.

You're going to pay exorbitant expenses and
fees. It's a horrible investment vehicle. What do you say? And what do you say to those individuals? What do you say to those articles that are
out there talking about excessive fees and expenses? David McKnight: Well, I think that the Dave
Ramsey's of the world and some of those online financial gurus, they love to beat up on these
approaches, because the fees for these programs tend to be somewhat front-loaded. This is how I described the fees in life insurance
retirement plan. Say look, they're a little bit higher in the
early years, but they're much lower in the later years but when you average out the expenses
over the life of the program, it ends up being about 1% to 1.5% of your bucket per year,
which if you think about it is about what most Americans are paying in their 401(k). The thing with the 401(k) is that the fees
on 401(k)s are more backloaded.

What do I mean by that? Well, if you're paying 1.5% on a 401(k), you
put in $10,000, you're paying $150 that first year. But guess what, if your 401(k) grows to a
million dollars, you're still paying 1.5% 30 years later. Now, you're paying $15,000 per year. So, the fees really are sort of inverse what
they are with the life insurance. With life insurance, the longer you keep it,
the better it gets. The lower the internal expenses, the higher
the internal rate of return. So, it's not really fair to judge life insurance
policies or life insurance retirement plans based on what the fees are in the first year,
because there's a lot of expenses to get the program up and running.

You've got to pay for the medical exam. You've got to pay for the underwriting. You've got to pay for the advisor that's helping
you to get the plan implemented. There's a lot of expenses that happened in
the early years but as time wears on, those expenses dropped dramatically. And it's like a pie, you got to let it bake,
you got to let it marinate, you got to let it build up a head of steam. And if you do, what you'll find is that the
expenses, on average per year over the life of the program are incredibly low. I would even make the claim that they're lower
than most 401(k)s. You just have to have some patience, and let
the thing marinate over time. Casey Weade: Well, I also want to say I think
there's some truth to some of those articles out there because it has to do with how the
policy is structured.

We have to keep the death benefit as low as
possible, and how do advisors make more money? The bigger the death benefit, the higher the
cost, the more they make. And so, can you just speak to how to properly
structure a policy in order to keep those costs as low as possible and get to that 1%,
1.5% average cost? David McKnight: Most people when it comes
to life insurance, they get as much death benefit as they can for as little money as
possible. Here, we're trying to do just the opposite. We're getting as little death benefit as the
Irish requires of us.

And we're stuffing as much money into it as
the IRS allows in an attempt to mimic all of the tax-free benefits of the Roth IRA,
without any of the limitations thrown a death benefit that doubles as long-term care. And we've got a pretty compelling financial
tool that serves as a very, very attractive complement to our other tax-free streams of
income. Casey Weade: Well, I think that's an important
point. I mean, you say, "Well, I've got this $50,000
annual premium.

I'm only getting a $2 million death benefit.” And you say, "Well, that's a pretty bad deal
because traditionally I would be paying, say $10,000 or $5,000 for that $2 million death
benefit, and now I'm paying way more than that. But that's okay because we're not trying to
dump that $5,000 or $10,000 in there and never see it again. We want to get some return on this. We're going to overfund it and keep those
costs down over time. Then the next decision is what kind of policy
do we use? And historically, and I think still today,
one of the top tools out there, people are using whole life insurance as a strategy.

But then you've also got the strategy. It's been around for say, 20 to 25 years or
so indexed universal life, then there's variable universal life that's been around a little
bit longer than indexed. And that's where it starts to get a little
confusing. What's the difference between whole life,
indexed, and variable? Which one's the right tool for me? David McKnight: Yeah. And you talk to a different advisor, you'll
get a different answer. I personally have written a whole book on
why I believe that index universal life is the appropriate life insurance type to be
able to use in this type of scenario. And the reason is that when you put money
into an index universal life policy, the money in that growth account is the core, at least
the growth of the money in that growth account is linked to the upward movement of a stock
market index.

You get to keep whatever that stock market
index does, say the S&P 500, up to a certain cap. That cap might be 12%. If the stock market ever goes down in any
given year, they simply credit you as zero, so you're always going to be between 0 and
12, or whatever the cap happens to be. So, if you look at historical rates of return,
we're talking 7%, 7.5%. You subtract that 1% to 1.5% fee off of there,
and then we're talking a net rate of return of say 6% over time. Guess what? If you can get 6% in your LIRP without taking
any more risk than what you're accustomed to take into your savings account, that's
a pretty safe and productive way to grow at least a portion of your portfolio.

And that's why I'm a big fan of IUL. Some of these life insurance policies out
there, I think whole life, there's a place, there's a time and a place for whole life. It's not my favorite approach with this type
of worldview. It could still work. It's just tougher. The thing that you don't want to have happen
is have the rate of return in your life insurance retirement plan to be so low, that when you
take money out of an account that maybe was earning 6% or 7%, and you stick it in a life
insurance policy that's only grown at 3%, then that reduction in rate of return can
neutralize a lot of the tax benefits, which were the justification for doing the policy
to begin with. So, if we can keep the rate of return within
the life insurance retirement plan similar to the rate of return that you were growing
in that investment that you liquidated in order to fund the life insurance policy, that's
an ideal scenario.

Casey Weade: Well, I think that also has to
do with how you get the money out tax-free in the first place, which gets into wash loans
and participating loans. Can you just kind of talk through how we get
money out of these in a tax-free manner, and maybe even share with us the difference between
whole life and index universal life when it comes to those participating loans, or loan
caps and zero wash loans? David McKnight: So, there's a way that you
have to distribute the money from these policies.

I always tell people, if you take the money
out of it, take it out the right way, it's tax-free. It does not show up on your tax return. And the way you do that is you take a loan
from the life insurance company, and you use the cash value inside your policy as collateral
for that loan. So, I'll give you an example. Let's say I got a million dollars in my IUL. I wake up one day, I want to take a loan of
$100,000. I call it my life insurance company, I say,
"Hey, send me $100,000.” They say, "Okay.” They then cut me a check from their own coffers
for $100,000. That's the check I get in the mail three to
five business days later. They have to attach a real rate of interest
to that loan, let's call it 3%.

It's got to be an arm's length transaction. They're telling the IRS it's a loan. They've got to have an arm's length transaction,
a real rate of interest that they're attaching to that loan. It’s called 3%. Well, in the very same breath, the life insurance
company will take $100,000 out of your growth account inside your life insurance policy
and they'll put it in what we call a loan collateral account which is also if it's the
right company also growing at a guaranteed 3%. So, even though your loan interest is accumulating
on the one hand, your loan collateral account is mirroring it step-for-step. So, if your loan account grew to a billion
dollars, then you would be guaranteed to have a loan collateral account that matches it,
which will pay off that loan at death. All you know is that you asked for $100,000,
your growth account went down by $100,000, you didn't have to pay tax on it, and you
know, it's all good. And if you die with at least $1 in your bucket,
then it's all tax-free to you.

So, it's very, very interesting. It's very, very compelling. All you know is that you didn't have to pay
tax. It felt like a distribution from Roth IRA
over time. It's not a Roth IRA, but the tax-free nature
of it made it feel like a Roth IRA. Casey Weade: And I think one of the risks
is and I think you kind of alluded to this, interest rates go up, right? So, interest rates skyrocket. That may not improve the profitability of
a whole life carrier and actually pay you a higher dividend to match that higher loan
rate but when you look at IULs, they act differently and can be more beneficial in a rising interest
rate environment. David McKnight: Right. So, cap rates are typically associated with
rising interest rates. So, rising interest rates simply mean that
insurance companies, they have more money to be able to pay for these options that I
don't want to get too complicated here, these options that they're using to make the whole
IUL work. So, as interest rates go up, the cap rates
go up, which means you are allowed to capture more of the upward movement of the stock market

You talk about participating loans. Basically, what a participating loan says
is instead of charging you a 3% interest in your loan collateral account, maybe they'll
charge you a little bit of a higher rate of 5%. But then they'll say in your growth account,
they're not going to take the money out and put it in a loan collateral account. They're just going to leave it in, in the
index, and whatever the index does, then that offsets whatever the cost of the loan is in
your loan account with the life insurance.

To give a quick example, if they're charging
you 5% for the loan, but your index grows at 10%, guess what? They just paid you 5% for taking that loan. And granted, you're not going to get 5% every
year but if you could just net 1% on average per year over the life of your retirement,
that 1% what we call arbitrage and literally double the amount of money that you can take
out of these programs which, boy, I've seen the numbers, and when you look at the numbers,
and you compare them to every other investment out there, it looks very, very attractive. Casey Weade: Yeah. And I think one of the things that's unique
about IULs that is one of the big benefits as long as you get with the right carriers,
a lot of these carriers will guarantee they're going to credit you the same amount of interest
as your loan rate is ever going to be. So, you never have to worry about policy collapsing
due to that particular factor. But I think maybe we're getting too far down
the rabbit hole here. I think one of the things as people are listening
to this they go, “I've never heard of IUL.

I've never heard of LIRP. I've never heard some of these terms. Why isn't my financial advisor having this
conversation with me? I think that we're seeing more advisors have
these conversations. We're seeing more than mainstream brokerage
houses start to utilize these types of vehicles, these types of products, for the clients they’re
working with but why do you think it's taken so long for this to catch hold? And why are most financial advisors not talking
about these tools? David McKnight: I think that, historically,
these life insurance retirement plans have been loaded down with expenses. They've been very expensive. They've been not very efficient. They sort of just trundle along getting people
3% to 4% growth.

Well, guess what. Life insurance companies recognize that there's
a section of the tax code that allows for – Ed Slott, he's done six PBS specials. Ed Slott, USA Today calls him America’s
CPA. Ed Slott says the single greatest benefit
in the IRS tax code is life insurance. Why would a guy of Ed Slott’s repute say
on PBS, no less, over and over and over again that life insurance is the single greatest
benefit in the IRS tax code? Well, guess what? Companies have engineered these programs. They've evolved these programs over time such
that the expenses are so low that like I said, when we average that over life, the program
that they're less expensive than the average 401(k). So, they've been able to re-engineer these
policies so that they're very, very low expense, they're very efficient, they accumulate money
very, very quickly and safely and productively. And some of these evolutions and these reengineering
of these programs that happened only in the last 10 years, I have been studying these
types of programs for the last 20 years of my life. I've seen these things evolve over time.

I've seen all of the reduction and expenses
and the addition of variable participating loans versus just the standard wash loan. There's all these different things that have
made these programs so much better, the addition of the long-term care or chronic illness rider
that allows you to get the death benefit before you die from perhaps long-term care. These programs are so good and so compelling,
that I think that some advisors are just behind the curve whereas guys like you and me, Casey,
who have been studying this for so many years, we understand it. I've written books on how to understand these
things better.

They're not something that you can pick up
overnight. So, I think that more and more financial advisors
are going to start to embrace these as they start to recognize how an unlimited bucket
of tax-free dollars can really be a boon to the average American in a rising tax rate
environment. Casey Weade: Well, we've covered so many topics
from the future of tax rates, tax planning, talked about Roth conversion, and then we
got the LIRPs. I've just got a handful of miscellaneous questions
that I'd like to get out there that I think can be really beneficial to individuals, even
advisors for that matter. I think, typically, as a financial advisor,
we're coached to help people through our clients’ emotional roller coasters. They might go on, “Don't panic when the
market tanks.” But I think there's also an element of emotional
coaching that we can do, behavioral coaching we can do around taxes at the same time. What do you have to say about tax-based emotional
decisions? David McKnight: In terms of do we sort of
have a hair-trigger response to… Casey Weade: Well, let me say this.

I've got a couple that I worked with recently
where a couple of years out from retirement, and I've gone, “You know, let's just fill
up this 24% tax bracket. You'll be tax-free for the rest of your life.” I show them the analysis that proves that
it's going to be better to pay the taxes today. They can see it with their own eyes, but they
just won't pull the trigger. And you need to do this, but they just don't
want to pay the taxes. They don't want to pay the taxes, and it's
all emotional because they have the facts. What should I do in that situation? David McKnight: That's a good question.

We see that a lot. And I tell people all the time, “I give
you permission to not enjoy paying the taxes, but you have to consider the alternative.” You know, the number one question I get when
I do my workshops is am I too old to get to the zero percent tax bracket? And I simply tell people that we barnstorm
across the country filming The Tax Train Is Coming, interviewing George Shultz. We interviewed David Walker. We interviewed Ed Slott, Tom Hegna, Don Blanton. We interviewed the Governor of Utah. We interviewed every major professor in academia
from the most prestigious schools across the country, and they're all saying in ten years,
tax rates are going to be dramatically higher than they are today. Some of them even said tax rates are going
to have to double. Tom McClintock said, "We're going to be a
Venezuela in eight years.” So, if people don't want to pull the trigger,
it's because we haven't convinced them I guess, of the urgency of the situation.

If they knew what was coming around the bend,
they would get that money, shipped it out of there, and they'd say 24% is a good deal
of historic proportions. I'm going to not let a year go by where I'm
not maxed out on my 24% tax bracket. So, we're not saying don't pay taxes. We're saying, “Look, when given the choice
between paying taxes at today's historically low tax rates or postponing the payment of
those taxes to some point further down the road, you'll probably be better off paying
them today.” So, it's just, yeah, you don't have to enjoy
it but consider the alternative.

That's really what it comes down to. Casey Weade: Well, that brings us to that
24%. Again, I just love that 24% tax bracket. I say fill it up. Once you factor in social security taxes,
potential Medicare premium penalties, and the future of tax rates, you can pretty well
be assured you're probably going to pay higher than 24% in the future. In my mind, our advisors have attended Ed
Slott’s event.

They attended right after we saw TCJA go through,
the Tax Cuts and Jobs Act, also known as the Trump Tax Plan. That went through, we went and updated our
IRA knowledge. Ed Slott is like the premier IRA expert in
the country. And at that event, he said, “I would convert
all the way to the highest tax brackets that we currently have. There is no perfect tax bracket.” And I wonder, first of all, that seems pretty
darn aggressive. But I wonder what you think. How high should we be going? Should we go just to the 22, 24? How do we find the right balance for ourselves? David McKnight: Yet going from 24 to 33 is
a pretty big leap. So, I don't know if I'm quite as aggressive
as Ed, although I love Ed, and he's a friend of mine, I would probably say, "Hey, look,
if you're currently in the 22, that means you're the line 10 on your tax return, which
is your taxable income, that means that you probably have $100,000 of taxable income.

That means that you can I think the top of
the 30, top of the 24 is like 326,000 in change, something like that, that means that you have,
what is that, $226,000 per year that you could convert without bumping out of the 24% tax
bracket. That is a lot of money. And if you can do $224,000 per year over the
next seven years, that's $1.5 million that you could get shifted. Now, if you have more than $1.5 million that
you need to shift, then you could certainly entertain bumping up into the 30 to 35 or
the 37. But I would say at the very least make sure
that if you're okay with the 22, then you're almost certainly going to be okay with the

And why not max that thing out as well? Casey Weade: You seem pretty confident that
we're going to see these tax rates last until the end of 2025 resetting in 2020. I have interviewed other people that have
said they're definitely not going to last that long. Why this confidence that you've got this set
period? David McKnight: Well, because people got to
remember that in order for this to change that you need control of the House, you need
control of the Congress, and you need the presidency. You need all three of those things. Now. I happen to think that these things go and
go in cycles, the pendulum swings one way, then it swings the other. I think that in this period of relative economic
prosperity, Trump's going to be very, very hard to beat. Remember Clinton said, “It’s the economy,
stupid.” Most of the prognosticators say that if this
economy continues to do really well through the election, that Trump will be almost impossible
to unseat.

And then you say, "Okay. Can the Democrats win back? They've already won back the House, but can
they win back the Senate as well?” That might be a trick as well. So, those stars really have to align for the
democrats for us to see a change to this before 2026. Casey Weade: Okay. Yeah, that's good insight. And now I just have one more maybe tactical
question for you before we move on to those higher-level philosophical questions. And that is some people, I think we've all
been told put your money in your 401(k). If you’re getting the match, put as much
in there as you can get that match and then put that money somewhere else. Maybe get your match and then put it into
a Roth IRA or a LIRP, look for another tax-free alternative. If all we have is a tax-deferred 401(k) and
a tax-deferred match, are there reasons in your mind that we shouldn't even put money
in there for the match? David McKnight: I'm a big fan of the match.

I like the match. Not everybody agrees with me. But I think that if you can say get $1 for
$1 match up to 6% of your income, you're doubling the return on your investment that first year. And remember, you need to have some money
in your tax-deferred bucket. What better way to get money into your tax-deferred
bucket than by putting up to the match in your 401(k)? Because remember, when you retire, you're
going to have a standard deduction and that standard deductions got to offset something.

And if you have all your money in tax-free,
then your standard deduction is going to sit there languishing, and it's not offsetting
anything. So, you've got to have some money in your
tax-deferred bucket. Why not put money up to your match, to be
able to get money accumulating and growing in that account so that by the time you retire,
you have the standard deduction, which if you're married today is 24,400 that you can
use to offset distributions from that bucket.

So, I think it's okay to have money into a
match. I sort of draw the line that putting money
above and beyond the match. Casey Weade: Now, if you have a pension along
with that 401(k) that you expect to receive in the future, does that change your mind
on that fact? Because now maybe we don't want anything in
that tax-deferred bucket, because we already have a lot in that tax-deferred bucket in
the form of a pension. David McKnight: I still like the free money. I still think that once you get it in there,
you're still going to be able to shift the money out of there to tax-free and be able
to do it in historically low rates at 22 or 24. Remember, this type of planning is especially
compelling for people that have pensions. Why? Because your pension counts as provisional
income. It's going to cause your Social Security to
be taxed. In retirement, the social security and taxable
portion of your social security and your pension will fill up the 10% and 12% tax bracket or
the equivalent, the future equivalent of those tax brackets.

And any money you take out of your IRAs and
401(k)s is going to land right on top of that and be taxed at the 22% tax bracket or the
future equivalent of the 22% tax bracket. So, guess what? If you're currently in a 22% tax bracket,
and your retirement tax bracket is going to be at least 22%, why let a single year go
by where you're not maxing out the 22% tax bracket? And by the way, 24% is only 2% worse so let's
max that out as well. So, I happen to think that people that have
pensions, the Power of Zero worldview, the Power of Zero roadmap to retirement is even
more compelling. Casey Weade: Now, do you get a lot of and
you’ve talked to, I mean, you wrote the book Power of Zero, get this book, Power of
Zero, get the movie, Power of Zero. Do you have many people that are maybe a little
skeptical and say, "Zero? Come on? I'm always going to pay taxes. There's no way I ever get to 0%.” David McKnight: Yeah. I've had people, especially really conservative,
most libertarian people on Facebook, that will send me messages.

They'll just see. They don't know what my book is about, but
they'll see the title, the Power of Zero and they'll say, "Everybody should be paying taxes. You're getting stuff from the government. You should be paying taxes and you're a freeloader
if you think you're going to not pay tax.” Listen, we're not suggesting people not pay

We're just suggested that when given the choice
between paying taxes at historically low tax rates or postponing the payment of those taxes
until some point much further down the road, mathematically, you're better off paying them
today. So, that's really all we're saying. We have other people that say, “Dave, there's
no such thing as a 0% tax bracket.” And I say, "True. There technically is no such thing as a 0%
tax bracket. But if you're living on a lifestyle of say,
200,000 per year in retirement, and you're not paying a single dime to the IRS, what
better way to call it than 0% tax bracket?” Tax-free, 0% tax bracket. I mean, I just really love the way that falls
off my lips, 0% tax bracket. There's power in the zero because of tax rates
doubled two times a year is still zero. So, I call it the zero even though there's
no such thing. You know, if you look at the IRS tax table,
it's 10, 12, 22, 24, 32, 35, 37. There's no such thing as a zero.

But if you’re tax-free, you and I, Casey,
we can call it zero. Casey Weade: Yeah. We're not talking about violating the law
here. We're doing tax planning. We're still paying our taxes. We're just not paying more than then we're
legally required to pay. There's no benefit to your morality or ethics
by paying more than you're legally required to. And I think that's an important point. Now, I've got one last question as we wrap
up here today. And this has to do with your thoughts on retirement. What does retirement mean to you? David McKnight: Retirement and I think my
thoughts on retirement near a lot of the rising Generation X and even some of the back end
of the baby boomer generation. I don't know that I love what I do so much
that I don't know what I would do, frankly, Casey, if I did retire.

Retirement to me means doing what you really
love doing. And for me, that means being in the in a position
where I have the option of not working one day because I want to go on a vacation or
I want to spend time with my grandkids or what have you, but just be in a position where
I have the option of not working. If work is what brings people pleasure, and
it gives them purpose and it gives them aim in life, I think that that's what they should
be doing. And what we're seeing more and more, Casey,
is that people aren't retiring outright.

They're saying, "Let's put ourselves in a
position where we don't have to work if we don't want to, but we love the drive and the
purpose behind having something that really engages us day in and day out.” And people are going to live longer lives
when they have that purpose-driven retirement versus simply retiring and waking up, playing
golf for two weeks, and then trying to figure out what you're going to do after that, right? [CLOSING] Casey Weade: Well, that's why I named the
book Job Optional, because I see more and more people that I'm working with that love
their careers. They want to keep working. They just want to do it on their own terms,
on their own schedule. And it seemed like that's what you're doing. You're living in Puerto Rico and kind of working
when you went to work. You're doing the dream job of your own and
that's pretty neat.

And I think you're sounding the horn, you're
warning people about raising taxes about something they need to be aware of, and sometimes that
can be a little depressing. However, you're also following that up with
hope and putting together strategies and helping people put together plans to make sure that
the retirement doesn't get destroyed by higher taxes in the future.

And for that I thank you. You're doing the world a wonderful service. So, thanks for joining us here today. David McKnight: It's been my pleasure. Thanks for having me, Casey. [END].

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13 Tips To Retire Wealthy | Retirement Planing | Make Money 2022

hey there and welcome to financial fluence today i'' m. going to show you 13 points you need to do prior to retiring you'' re not alone in anticipating.
retired life every worker desires retire and live a life of independence as well as flexibility your.
monetary account may disagree with you also if you'' re ready to retire some individuals retire with. much less than a hundred thousand dollars in financial savings so you ' ll demand to prepare in advance to ensure a. comfy as well as carefree retirement so prior to you retire ensure you look at this checklist to.
get you begun on the roadway to a good retired life leading preparation when you understand when you desire.
to retire you can establish a company structure that will certainly aid you accomplish your retirement goals a strategy.
helps you make a clever list without hurrying it doesn'' t have to be a serious listing it might be. your ticket to the lengthiest getaway of your life so have fun number 2 figure out the resource.
of your retirement revenue when you retire it'' s vital to recognize which accounts to use and when to.
check fixed revenue resources like social security pensions as well as annuities consider income getting.
financial investments such as individual retirement accounts 401ks taxed investment accounts and interest-bearing accounts consider exactly how.
declaring social protection will influence your income and tax obligations number three stay clear of way of life inflation.
many people'' s salaries increase as they approach retirement the lure to purchase unnecessary things.
comes with a monetary adjustment maintain your budget plan as well as investing as if you'' re an university pupil.
on a base pay if you intend to retire early well not completely like that yet you understand.
having a little spending plan before you retire provides you much more flexibility with your cash and also allows you enjoy.
even more of your retired life income being reasonable ways being economically liable which might not please.
risk takers number four discover just how medicare works when you get a job you obtain wellness insurance coverage yet.
what takes place when you are no more employed by the organization to which you have dedicated.
your time medicare will certainly most absolutely be utilized by people over the age of 65.

We come to be much more and also.
much more vulnerable to the requirement for medical therapy as we age learn about just how medicare jobs.
how much your costs will certainly be as well as any protection spaces you might run into as well as whether your.
existing doctors approve medicare beginning finding out about your brand-new insurance coverage before you require.
it to ensure that you get the very best coverage at the best price despite medicare wellness treatment.
rates are climbing the good information is that the more you inform on your own on elderly health care expenses.
the much better equipped you'' ll be to handle and maintain them to a minimum along these lines it pays to.
check into lasting treatment insurance coverage which can assist defray several of the astronomical prices elders encounter.
when they require taking care of homes or helped living care you'' ll additionally be less likely to deal with undesirable.
shocks number 5 analyze your personal cost savings if you'' re lucky you conserved in an ira or 401k throughout.
your working years if you wish to retire you may require to check out your funds as well as just how much cash.
you get daily five hundred thousand dollars is a substantial chunk of money and you might presume.
that it is well secured the yearly withdrawal price of 4 relates to about 20 000 in revenue each.
year with some inflation changes yet given that retirement is uncertain this doesn'' t appear like.
a lot of course this is simply your interest-bearing account it doesn'' t take into consideration various other resources of.
earnings such as rental revenue or earnings from part-time work and also it doesn'' t account for social. protection the objective is to look past the numbers on your retired life strategy statements as well as find out.
just how much cash you'' ll really get in technique with a bigger financial savings account you'' ll have more. time to determine how to invest your money in a long-lasting manner number 6 carry out the.
lowered genuine estate tax program lots of states offer tax relief to senior citizens so appearance right into all.
of your alternatives to reduce your regular monthly cash money flow according to worrying data several senior.
individuals lose their houses due to the fact that they are incapable to pay their genuine building taxes which in some.
conditions are less than a thousand bucks number 7 draw up a retirement spending plan.
complying with a spending plan and monitoring investing is an excellent behavior to have your expenses may alter.
as soon as you quit dealing with the downside you might invest even more cash on leisure as you'' ll have extra. extra time before giving up produce a brand-new spending plan information about retirement expenditures having a budget plan.
will certainly aid you determine if your cost savings will be sufficient for retired life or if you need to conserve.
more number 8 pay off high rate of interest financial obligation must i be financial debt free when i retire this is.
an often asked concern concerning retirement high passion financial obligation threatens retirement spending plans.
also if it'' s on a well-funded bank card the debt to income ratio might come close to 20 percent.
Paying off high interest debt is seen as one of the most important concerns student loan.
financial debt is one type of financial obligation that lots of people forget pupil finance financial debt is something that you will certainly have.
to handle up until the end of your life joking aside the reality that the federal government can select to.
withhold your social safety benefits if you have exceptional college finances isn'' t so funny number.
9 create a plan for claiming social protection social protection will contribute a major.
amount of most elders retired life income of course there is an incorrect way as well as a right method to.
case social safety and security according to a recent study 96 percent of americans declare social safety and security also.
early leaving 3 billion 400 million bucks on the table one hundred as well as eleven thousand dollars.
per family in shed retirement earnings from very early cases your benefits are dependent on exactly how.
a lot you have earned over your occupation but your age at very first declaring can alter that number instead.
of asserting advantages blindly embrace a method at complete retired life age you'' ll get the complete
monthly. advantage based upon your employment history if you wait past full retired life age your advantages will.
rise however if you file early you'' ll obtain your cash faster no filing is best or wrong yet.
you must recognize your total old age as well as the ramifications of claiming benefits early.
when will you start getting social security do you require retired life money soon or wait learn exactly how.
additional kinds of retired life earnings can impact the taxability of your social safety benefits.
number 10 number out what you'' ll do with your time having limitless spare time might seem attractive.
once you'' re there fact might strike hard it'' s difficult to move from a permanent job timetable.
to no structure which is why lots of lately retired individuals create depression plan precisely how.
you'' ll spend your days to stay clear of depression created by being alone and not having a sense of purpose.
consider what you'' ll discover satisfying in retirement plan according to your revenue you can golf.
twice a week and also traveling as soon as a month you'' ll require an alternative strategy if your funds can'' t support.
that way of living sign up with meetups to network enjoy fun activities as well as volunteer with relevant charities.
while understanding and refining leisure activities and even starting a company retired life has stages strategy.
just how you'' ll invest the very first two years after leaving job as well as what you may do later on number eleven intend.
your timing with your companion unprepared spouses will certainly find retired life difficult retirement can make a.
person feel lonesome and also based on their companion this can cause marital tension it'' s enjoyable to think of.
retiring together and also taking a trip or doing laps shocking retirement maintains even more of your cash.
invested you additionally have employer provided benefits clinical coverage alone could be essential number.
12 settle financial accounts it'' s far easier to keep an eye on your investment incomes if you.
have as few accounts as feasible to make document keeping and also capital tracking much easier monetary.
consultants recommend combining economic accounts however as you prepare for retirement they.
recommend you to assume concerning the tax obligation effects before making any decisions such as marketing supplies.
or shared funds number 13 decrease your profile'' s run the risk of profile the worst minute to take a loss in.
your profile is quickly prior to retired life as it will have a direct effect on just how much cash you.
can reside on in retired life if you put on'' t manage your danger account and also modify your profile correctly.
you can find yourself working an extra two to four years after retiring and that'' s all say thanks to.
you for viewing i all the best wish you enjoyed it as well as got something out of it and also if you delight in.
comparable material check out my various other videos and if you like them strike such button subscribe to the.
network and activate the notification bell if you have any type of concerns do not hesitate to leave a remark.
down below as well as i'' ll see you in the next video clip you.

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How to Retire by 40

Hey everybody welcome in on this snowy snowy Wednesday wherever you're joining us from let us know where you joining us from today hey everybody welcome in to the investing in real estate show today we're gonna have some fun talking about how to retire at 40 how to retire by 40 Sean says hello from Brooklyn New York how much snow are you getting out there Sean we get this massive nor'easter once again and once again so the kids are off school just I'm over it I am over it I know there's gonna be people are there I'm right in here and say they're there joining us from there out in California and they're living living large yeah Aaron is running us from Miami Florida there you go Wong from Miami thanks so much rub it in rub it in rub it in everybody so we're gonna get this show started in just about three minutes South Africa Indianapolis Moses welcome Pottstown you're getting hit with some snow right now Matthew Bishop Lakeland Florida hey Matthew yeah I guess California you guys are getting hit with some crazy stuff out there today too huh yeah they cancelled school last night I don't know I you know growing up I don't ever remember them canceling school like the night before did you guys ever have that growing up it was like he'd wake up and he would sit and listen to the radio and you would wait you know I was in Pennsylvania I would be all be waiting to listen for our school if it was canceled I'd be in one-hour delay a two-hour delay and you were hoping that they would cancel it but I never had the night before they send out a text message letting you know that hey your school was cancelled and that was never the case for me never never did you do all right we're gonna get started in just a moment here it's gonna pull up this today we're gonna talk about how to retire by 40 and we'll start here in just about one minute one minute one minute Jerome aramid says hey a guy you talked to me more than two weeks you never came back to me you can take care of this later I know you're alive nobody emailed me the first appointment Jerome who did you talk to on my team let me know and we've got some people in from our team right here in the chat thread as well we can Mike you know a lot of times people will send follow-up emails it goes to your spam folder sometimes people when they initially signup for phone calls with our team they put in the wrong phone number and then they later writes it well I put the wrong phone number in and so our team will be calling and they can't get ahold of you so I apologize for that and Rudy Rudy please check your spam folder please please please because our team is very good about follow-up and we have hundreds of clients around the world so I apologize for that you know because if someone sends you a PDF it might go right to your spam folder and then you're like oh I never emailed me just check your junk folder and who are you talking to please let us know we'll make sure we get you all squared away we have a waiting list for people to get on the phone with us for like a few weeks so I don't ever want anyone to feel like we don't get proper follow-up from our team that's very important so I've got our team right now who is in our chat thread we'll go through and make sure that we get you all taken care of so I apologize for that all right so we are live it is it is a.m.

And we're gonna kick off the show after the show I'm gonna do you know to talk about this article talk about how to retire at 40 and then after the show we'll kind of open it up for a few minutes of Q&A if that works for all of you and we'll just kind of answer some real estate questions some of the things you're struggling with you're hoping to achieve and we'll talk we'll do that all right Forrest wants to knows are still owners software coming out for Morrison fest yes indeed in fact we've been working on it for for since like August it's all custom it's been a lot of tweaking we want it to just be perfect Peter Cook says I've had very good follow-up thank you Peter appreciate it and James Frederico o1r from our team is right in here he says hey Jerome I got you all reach back out to you and take care of you good good good all right so we're gonna get started here and we're going to talk about this in a second so first so again at the end of the show we'll take some QA and we'll do that as well let me just get this all dialed in we're recording we got the audio up and running is everything sound ok guys you guys can hear me give me a thumbs up you guys are all good Brandon yes absolutely because some of those beat class properties you're asking about the verb method absolutely because you know buying those 60 70 thousand dollar homes those the banks love they're able to do you know easy refinances on those because there's easy comps to pull in the neighborhood because there's retail sales so I would stay away from like the 3040 thousand dollar stuff if you want to really do like a solid brr-brr method stuff if that's what you're looking for all right sounds good alright so we're gonna get started all right all right and let's get this show started all right today on today's show we're talking about how to retire by 40 a news article from the mainstream media it's kind of total garbage that's today's show let's dive into it hey everyone I'm Clayton Morris longtime real estate investor founder of Morris invest if you're new to the channel thank you so much for joining us and subscribing I hope that you're a subscriber because there's where we talk about passive income building legacy wealth for you and your family that's the goal right and the vehicle that we use is buy and hold real estate but I don't care about the real estate right I don't care about the four walls and a roof I just bought 15 houses this week that we're about to rehab okay I don't care what they look like because once we get them it doesn't matter what I'm buying as a tax shelter and that's what you should be focusing on buying a tax shelter that's what this show is all about on today's show I want to talk about how to retire by 40 and I want to preface this by saying that I got this from an email from a listener a viewer of our show who is getting involved in real estate investing Jesse Daley sent me this email and he said hey Clayton I hope you're doing well man I thought you'd find this article interesting especially how the writer literally doesn't mention anything about investing in real estate there's only a one quick mention of a condo adding to net worth and nothing else in this article I'm so happy that your podcast teaches people how to truly invest properly and retire by the age of 40 this they should have interviewed you for this article so thank you Jesse I promised I would give you a shout out here on the show and I want to go into this article so again I have lampooned some of these CNNMoney articles over the past few years have done shows about these things because I just find them ridiculous I find them ridiculous that they're telling people to invest in their 401k and then that's the way that you build retirement that's the way that you're able to retire by 40 years old I mean how many people are you know you just like a show of hands you're listening right now how many of you think you could actually retire by 40 years old just with your 401k of course you can it's ridiculous the average 401k retirement in this country guess what according to Time magazine is 90 thousand dollars can you retire on that no way so I want to go through this article because it's a lot of fun and Jesse sent it to me so these are tips from CNN money on how to retire by forty three proven tips three proven tips so let's go Chris reading isn't your average retiree he said goodbye to his working years at 37 and is now financially independent living his life on his own terms that's great now he had 4500 dollars in debt and when he started working he got through all of that he finally found a well-paying job working cyber security took out a mortgage bought a condo and financed a BMW okay alright took out a mortgage on a home bought a condo and financed a BMW on our way to success but then he started to wonder is this all there is he finally said I can't do this for 40 years in his late 20s he started searching for alternatives and he read the book your money your life by Joe da Menendez and Vicki Robin and he said look there's other ways of becoming financially independent so he then felt that he had enough to live the rest of his life on his savings and investments without having to work again it took two more years of showing up the cubicle for him to be sure than a 37 he finally walked away so what did he do okay here were his strategies here where his strategies for becoming financially independent and retiring at 40 years old number one save more save more okay so his strategy according to the CNN Money article is cut he cut back on going out to dinner and he cut back on buying lattes so he just started saving more really so let me get this straight that's the way that you can sustain yourself for the rest of your life by retiring at 40 years old from your job it's just having enough in the bank you think that you're gonna have if the average 401k retirement is ninety thousand dollars can you really live the lifestyle that you want so now you're cutting back on dinners in order to save some money you're not buying coffee so what Natalie and I've talked about here on the show repeatedly is the idea of not having to shrink your lifestyle why not find out what your freedom number is using real estate find out what your freedom number is and actually have enough passive income every month coming in the cash flows you're creating a tax shelter for yourself and enabling you to live the life that you want so you can't go buy a latte I find that ridiculous you know David Bach wrote about that in his book the automatic millionaire a years ago and look if you're $40,000 in debt yes maybe not buying a five-dollar coffee every day is probably not a smart strategy you know also if you're a smoker you know spending ten bucks a day on cigarettes or whatever it's probably you know not a smart strategy if you want to claw your way out of debt I get that part of it but as a way of sustaining yourself and retiring at forty years old just saving more savers are losers that money in a bank account is doing nothing for you what about buying performing assets that are actually producing cash flow I mean come on so when he says look where people get into trouble with savings that they think they have to use reusable toilet paper and eat chicken broth but real basically you just you'll never spend zero dollars find a level of living that you're come with and work on earning more without increasing your expenses so he's just saying earn more save more cut out lattes and you can retire at 40 I don't buy that for a second number to earn more okay that's his second tip earn more great so let's save more and earn more again a paycheck job the tax code is written for wealthy people the tax code is written for entrepreneurs who own businesses who own real estate that's what the tax code is written for it's not written for a w-2 employee so earn more so what he says is your actual jobs only part of your work in order to earn the kind of money where you can live on only half or less of your salary so take that extra money socket away that's what he's saying so work harder right work for a paycheck get taxed as like in the highest tax bracket by the federal government right because we know that paycheck employees under the new tax code or hurt the worst he says this career-boosting work can include earning advanced degrees oh that's great so his other bit of advice on this is go out and spend a hundred thousand dollars on getting an advanced degree so go get your master's degree that's only what a hundred thousand dollars that's only a hundred thousand dollars right just go get it a master's degree so that's smart so save more earn more by spending more on getting an advanced degree or certifications and then that way you'll have people who will look at you more favorably in the office and be able to elevate you higher that's great so it's important understand the weak areas and he says look I finding mentors okay that's good yes definitely finding mentors as a very smart move finding mentors who can help propel you and then number three he says invest more so he says the most powerful mechanism for investment right now it's built into their job it's the 401k invest in your 401 K and a two or three percent return contributing at the level where you get the employer match is a must and that's your biggest benefit and that's how you can retire by 40 that's the article unbelievable so okay ridiculous right that's how you could retire at 40 no no that's not how you can retire it 40 and that's not how you could live comfortably and live the life that you want and be able to produce legacy wealth for your family for the rest of your life so he's now retired he's living off of savings but he's got no assets that are actually performing for him for the rest of his life he's got a V BMW that he bought financed and he has a mortgage on a condo that he lives in he has no performing assets that is not financial intelligence any way you slice it wouldn't it have made more sense instead of saving that money while he was working for that cybersecurity company to take that money and invest it in real estate by a performing asset that cash flows that's how you control and move your family forward that's how you can build true legacy wealth for you and your family but actually taking money and buying a BMW buying a liability remember all you need to remember is if you're buying liabilities a liability is something that does not produce cashflow now if he bought that BMW and used it as an uber driver that was producing cash flow that's a different scenario or if he rented out that BMW that's a different scenario but I love these I love these articles and again this is all sort of couched around the idea of the mainstream media right the mainstream media wants you to believe that a paycheck employer job is the way to go that getting a 401 K having their company sort of automatically do it for you because you're too dumb to do it yourself have them handle it have them streamline it and that's how you that's how you have a strong safety net we've been trained to believe that being secure is having a paycheck job you know again I come back to the I keep seeing this commercial and I'm sure so many of you have seen this commercial over the past few weeks I saw it first during the World Series and they continue to run this stupid thing where it shows a couple you know they're in their late 60's and they're sitting there with a how it's a Merrill Lynch advisor and the Merrill Lynch adviser says well it looks like the plan worked and you're gonna be able to have that retirement you wanted and I looked at you look on the iPad app that they're handing to the couple and he's like honey we did it we can do it we can live that life we wanted retirement and it shows that their income is enough they're gonna have about seventy thousand dollars to work with like if you look at if you actually look at the numbers on that screen seventy thousand dollars so now they're almost at retirement and then the next clip it shows them in a boat with their granddaughter right there sailing off into the sunset like some small little boat with their granddaughter and the little girl says aye aye captain you know and she she's driving the boat so this is their retirement they finally did it right they had a wait till they're 70 to buy a boat and to be able to sleep in and spend a little bit of time with her grandkids be all because they had their month their money managed by a financial advisor that was taken out big fees and investing in a stock market and not investing in real estate and cash flowing assets so there you go that's my frustration there you go that's my my little my little two cents my little rant about these types of mainstream media articles and when you see them on TV just roll your eyes think about it for a second saving more earning more get an advanced degree spend $100,000 on a master's degree and then use a 401k that's how you're able to retire at 40 that is total garbage that is total garbage unless maybe the guy wants to go live in like Thailand by himself with no kids and he wants to live like in a hut somewhere for the rest of his life and he doesn't care about actually having any income or cash to be able to buy anything or any food or live the life that he wants I find it to be total garbage I'd love to hear your comments and your reactions to this please send them to us and I really thank you so much so that's gonna do it for that and thank you so much for subscribing to the show I really appreciate it this is the investing in real estate show you can please subscribe share it with your friends and and you know please go out there take action become a real estate investor because I believe it's the number one way to build wealth we'll see you next time everyone all right now with that that's the show so anyone who wanted to get just the shortened version of that but hey now we're gonna open up this agree to some Q&A here in the show we got so much so I saw so many chat threads coming through here asking questions alright so fire them up here alright alright Joel says I've also had an email a few times hit reschedule my call but no response and said ok Joel no worries we'll get you all straightened out I apologize like if people miss their phone appointments cuz like I said we Deanna with our team we have like calls are booked out I think about two weeks and so if we call them like goes to voicemail and then we're trying to reschedule it so we really try to make sure we can get on the get on the same get on the same on the same page Jinger I'm sorry again what's going on Jinger we'll get to the bottom of this so I'm gonna make a list of anyone who didn't get a call back so I apologize alright so can you guys tell me Arum says Glen and Nicole from your team have been great awesome ok so we will dial some of the stuff in ginger and I'm sorry I will get some of these people on your on your team to make sure we get it all taken care of thank you guys let's see all right you know I'm glad you're not upset no I just you know we if sometimes emails get back and forth and we're trying to make sure that everyone gets taken care of okay are Tuffle get you back on your property okay let's the ad tapper says what do you think about joint ventures they have the money I do appraisals marketing and brother does the renovations hey jayvees are great right you need to build a great team for real estate investing that's very important you have to have a great team to do real estate investing well Kelly just uh Kelly Cheatham says I want to hear more about your program great just booked a call with our team Kelly and Morris invest comm we're doing some great things and I'm really excited about some of the new properties that that we purchased that we're about to do we've already designed our contractors to dive in and start rehabbing see Charlie 18 says our new Hara Sean wants to know one of the price of the new house is being built our new houses the three-bedroom two-bathroom right around seventy seventy thousand okay Charlie eighteen I'm gonna answer this question how does it LLC save you on your taxes on your rental how does it LLC save you taxes on your rental properties a lot of the stuff I've been reading times about pass-through income I never thought I thought that that was taxed the same way as a sole proprietor yes however remember that under the new tax law as a pass-through entity as a pastor entity you're now getting an additional 20% deduction 20% and remember when you have your your properties in an LLC you're being taxed as a business and you're able then to depreciate spread that money over all those other your w-2 income and those other things so I've just an all series of videos on understanding tax shelters and remember what you're buying as a tax shelter so forget about buying real estate you know I have talked about Lane I like for repairs so repairs add to your tax shelter helps mitigate your overall cash flow because remember what you're buying in the beginning in a 3-stage is a real estate investing right buy own and cashflow what you're buying in the beginning you're adding to your net worth so I don't care about the cashflow necessarily until years later but you're buying and adding to your net worth you're creating a tax shelter for yourself you're able to mitigate your w2 income you're able to offset all of those things so I would love to hear what you guys thought about today's show and the article please let me know I'd love to hear you which you you know what you thought about that Kelly are speaking of the computer program Oh Kelly yeah we're building a personal owner portal for our clients that the software I mean it's just it's and make it much easier so that we don't like our team doesn't have to send out Purchase Agreements it'll be right there because we have so many clients it like we'll have like three or four clients and want the same house and so a little like yeah give you a purchase agreement and it's kind of like first-come first-serve and then our team has to send out a purchase agreement wait till it's signed and all that BS so this will make it very easy for them to be able to click right on it and then open up DocuSign and be able to do it and pretty great Ryan Millie says okay what are the mechanics after purchasing one property to purchase another property or two and repeat the process over and over again where does that money come from well ideally it could come from a bank right or it could come from private money it could come from you know we we talked about a company that we work with called fund and grow less you know if you go to our if you go to our website Morris and vest com slash funding you don't pay them any money until they actually if they get you money zero percent Interest but why would look at okay so let's just take the mechanics of that to answer your question so I would say you know buying like a sixty seventy thousand dollar rental property and then leveraging that right so maybe putting or or if you have the cash to do that right that ideally if you could come out of the gate you have the cash to purchase your first one free and clear that's more of a B Class play you know that's sort of B minus like 60 65 70 K place play that's kind of maybe you know it's transitioning up to sort of an a-class neighborhood and it you know coud appraised in a few years at 80 or 75 that's the play right so buying that if you could buy that with cash right and then refinancing a pull some equity back out of that and then be able to roll that next amount of cash the bank just gave you into your next property into your second property and then into your third property a buddy of mine here in New Jersey started and did that on an eighty thousand dollar property he now has over two thousand units here our DNA and money when he started and he bought that first property that first property allowed him the snowball and all of these other properties and identity jjh yeah unfortunately JJ was said you purchase second property in Indy in November we'll hopefully get an answer for you an update on where we're at with the rehab and we'll also make sure we connect you with the right management team if you're having some issues you know we work with a 8 different property management teams so what gets you sort it out so just you know email our team you know the team you know our team at Morris invest email us we had a really really really unusually harsh winter that set us back about four or five weeks on construction this year with like a deep freeze we had stuff all the way through Michigan into Indiana down into Pennsylvania where we just had all kinds of problems Ryan you are absolutely welcome thank you so much Sean says you weren't able to pull cash off the cards they got through funding to grow yeah that's unfortunate we have literally funny grows enabled our clients to raise over 20 million dollars for purchases of real estate so I'm not sure why that person had an issue they're very very good at walking you through step by step I just would say reach out to them and make sure that you're working with them they they have a thing with gold money so basically they use the cards to buy gold and then you transfer the gold into cash it's like a little bit of a few hoops to jump through but hey it's 0% interest for a year you know hey beggars can't be choosers right we were able to get a hundred and seventy six thousand dollars in cash because of them in order to purchase real estate so it's an amazing strategy so again and you'll save like five hundred bucks if you go through our website because we've asked them to do that for people who watch us and who listen to us so if you go to Morris invest com slash funding check it out it might not be for you if it is great just check them out you know I have a phone call with them Joe Joe wants to know what appliances do you provide actually I don't do any appliances in our properties now that is to say if we move into some of the b-class properties we some we will sometimes put in a fridge and stove and things like that but far as a washer and dryer we have I made that mistake when I first started in Michigan I bought all appliances and found out that I didn't need to that it's commonplace that tenants will provide all of their appliances they will usually typically go down to a local you know like a little scratch and dent company etc or that's where I bought my first appliances when I had my first condo in Florida I went to a local scratch and dent place they're brand new that may have like a tiny little little scratchy scratch on the side and you get a great deal on a bundle of appliances so that's what most client most tenants will do and then they'll keep them for many many years so you don't have to worry about it so Daniel wants to know what's the fee for you guys to do investing for me there is no fee with us at all I know some other companies charge like ten percent all that stuff we don't do that you're just buying the house we just you know and try to get it all stabilized for you with property management team and cash flowing so you don't have any additional fees you own the property free and clear Jimmy says how do you organize your banking system for your real estate business great question Jimmy you know we have a couple of podcast episodes Natalie and I do where we talk about how to run your you know your family business and finances for real estate investing if you want to check out the investing in real estate podcast you can do so and we have some of those episodes you know the short answer is that you want to have bank accounts set up for your taxes you want to have bank accounts set up for your LLC that owns your rental property and personally so I have LLC's that own my rental properties those LLC's have their own bank account so when the cash flow from the tenant comes in I Clayton Morris don't touch that money that goes into the business then I can pull that money out but you can't commingle money like you don't if it's a business that owns your real estate you don't want that money coming in to your personal bank account that's called commingling that's illegal the IRS does not look favorably upon that so you want to do everything aboveboard making sure that everything is flowing the way that it should Bobby yes what's the best way to start a property management team no cash but at the time and looking to help investors well I would say to start a property management company takes about a hundred and fifty thousand dollars I know this to be the case so right away to be spending one hundred and fifty thousand dollars to set everything up okay you're gonna need you're gonna need to pay for software things like rent manager appFolio those types of things you're gonna want to hire an accountant you're gonna want to hire an office manager you're gonna need to hire leasing agent you also need to get a brokerage right you need to have a brokerage license to make sure that you can manage property so all those things cost some money so to start a property management company that's what about that's what it roughly costs and then about if you have more than 100 properties the rule of thumb is for every hundred properties or so you're gonna want to add another human being to your to your company to facilitate those properties that came to me as a friend of mine who ran his own property management company those are the exact numbers that he used James wants so what's the area oh it's just on the website to find the gold funding option so just go to Morris and Vess comm slash funding it's sort of a hidden page because we don't like promote it but it's there if you sign up like I said you'll save 500 bucks once they get you the money you don't pay anything until they get you the cards Peter said spoke briefly with your guy Justin have a self-directed IRA I was interested that was a month ago he was going to keep an eye out for a property and haven't heard back Peter I will follow up with Justin or you can just you know feel free to reach out to Justin as well from our team because we we can set up a whole dashboard for you for the self direction so I'll make sure that Justin gets back to you Peter I'll have our team make sure we go through this comment thread to take care of it okay how can you cash out on a $40,000 property well so $40,000 homes are tricky because banks are lazy or appraisers are lazy so a bank is going to hire an appraiser to go in and they're going to those types of properties they're being sold every day to investors like I might buy thirty of them right but guess what they're all off market so they're not being sold on a multiple listing service like you buy a house for a hundred thousand right with a realtor and so when an appraiser goes to pull comps in order to appraise the property they don't have any comps to work with the only cops they have are ones that are on the MLS the ones that they end up pulling end up being ones that are like foreclosures or pre rehab so you might have a forty thousand dollar house and you know it's worth forty forty three forty two but they might appraise it at twenty because the only thing they could find that sold recently on that street was a foreclosure that's not been rehabbed yet so you can't you kind of at a crapshoot if you're planning to do a refinance here's my suggestion it's just move up into those sixty sixty-five seventy thousand dollar homes and then you're putting like you know then you're able to pull almost like the full equity out of that house or close to it if the bank then cuts you a check for fifty fifty five great then you can roll that into your next property so I just would say told code don't try to go super cheap if you're planning on doing a refinance banks are lazy and you're frankly just at the mercy of these banks you know I can pull up sales disclosures with hundreds of sales where the house is selling for forty three forty five but guess what the appraiser will not look at that and so then you're at the mercy of like a foreclosure that's on the Multiple Listing Service and unfortunately it's it's just difficult now we've had people who've done refinances on forty thousand dollar homes and you know like one of our clients recently bought one for forty three it appraised for fifty five but again it's a crapshoot he could have just as easily had the appraiser come back and say you know well we think that house is worth twenty two so remember what you're buying is cash flow when you're buying that low and you're trying for that high of are a lie you're you're sort of like the investor that's buying 50 properties like that they don't care about ever refinancing they just want the ROI they want the cash flow I hope that makes sense sure our Lara says I've got a shooter I think I missed it sorry zip past it Ahmad it's kind of invest the United States if I'm not a US citizen yes you can you know just book a call with our team we have people I mean we have a lot of investors Canada and New Zealand all over the world who invest with us do I see Florida getting to California prices within 10 years seeing a lot of new construction and price hikes there in Tampa yeah a lot of those coastal areas you know Tampa those types of places Clearwater Miami of course I don't see them getting to California craziness you wanted let me tell you a California story the reason it's ridiculous so like the same house that I might do in Michigan or Indiana and then our clients would buy maybe like a 3-bedroom 1-bath in the $50,000 range right well there was a 3-bedroom 1-bath last week on the market in the bay area for $900,000 and guess what it was condemned it's a condemned house selling for $900,000 in the bay area that's California it's crazy absolutely crazy Mario says I was thinking about buying houses in my name under a HELOC on my primary residence and then when I get to three to five houses to a portfolio loan and all three to five and an LLC is that okay yeah I mean but why would you need to buy them if you're using a HELOC to buy them just buy them in an LLC now you know there's no reason you should buy them in your own name at all ever buy them buy them in an LLC if you're using the HELOC it doesn't matter how you use the he lock key lock is cash right you could go out and buy a boat if you wanted to with your he lock the bank doesn't care you're just writing a check from your he lock so why not buy them in your own name now I've started buy them in an LLC today you're using the he lock on your primary residence it doesn't matter the bank doesn't care what you're doing with that money you just have to pay it back but I to me having a HELOC is one of the killer strategies I love a key lock on my primary residence I use it to buy properties all day long Michele says what are your thoughts on using quicken loans to buy a house I've never done it you know hey if you can get good rates and good terms from a bank to buy to buy a house great go for it I don't see why not video teaching can you recommend a bank for a HELOC on a New Jersey property lakeland la ke Lakeland Bank we love them they're fantastic smh ninja on the funding Grove fees no notice he you're refinancing very quickly so you're gonna refinance very very quickly by that fifty sixty thousand dollar home and then get it into a long-term 30-year note and you pay off the you pay off the zero interest credit cards and then you recycle them so that's what fund and grow does they recycle and get you more zero percent and then you can just rinse and repeat that's why it's a great strategy so you're not keeping those cards for you know with like you bought a house on a credit card for twenty years you're refinancing it within that first twelve eighteen months and yes you can quit claim deed you can move a property to an LLC Kevin wants to know thoughts on an umbrella insurance versus LLC well that's well I say you have both I mean I would definitely have insurance and also have your properties in a limited liability company the reason you have your properties in a limited liability company is so that people will come after you personally that's the key right you don't want people if tenant slips and falls because a handrail wasn't fixed on your one property and this happened to a buddy of mine in Philadelphia he has a property and a girl was drinking one night she came home to the condo she slipped outside because the sidewalk had like this much of a differential and sued him fortunately you know he had insurance but fortunately the case got dismissed or dwindled down where he only had to pay like seventeen thousand can't come out of pocket seventeen thousand to pay for this girl slipping and falling at his property because he had the property at his own name so don't put properties in your own name if you don't need to there's no reason to forest so to have a bank you recommend for refine 50k rentals I guess it just depends yeah I mean there's a couple you know State Farm actually the insurance company has a refinance program a national program Northpoint Bank all one word with an e at the end North Point also has a refinance program they're a national company as well you could look into them Daniel says how do you tell if a property is a B or C class that's a great question I've got a whole video series here on our YouTube channel about how to understand that so you can if you want to look that up right here on the channel it goes more deeply into that but the short answer is an a-class neighborhood I like to avoid an 8 class neighborhood or those two you know two hundred three hundred thousand dollar homes two-car garages maybe they have a swimming pool they're in the best neighborhoods I stay away from those as an investment property because you're gonna have the most moving parts that break you're gonna have the most entitled tenants that cause the biggest headaches and cause you the biggest problems so garage door openers that break garbage disposals that break multiple heating and air systems that break you know avoid those those also have the most volatility those tend to be the areas where those in a big recession lose their job the a-class neighborhoods we saw that across the country right these a class neighborhoods where people lost their jobs and all these houses went into foreclosure and people couldn't pay their rent or the value plummeted significantly so let's say they're renting it from you for $3,000 a month in an a-class neighborhood and everyone loses their job all around that a class neighborhood now the rent is you know you're gonna have to go down like 20 2022 hundred a month or even 1800 a month we saw that in Manhattan right people renting Manhattan apartments for thirty five hundred bucks a month the recession hits and guess what all these Wall Street people lose their jobs etc and those went down significantly you could rent a place in Manhattan for eighteen hundred a month instead of the 35 that you could before the recession but guess what those C class neighborhoods say the same those C and B class neighborhoods roughly stayed the same it's consistent cash flow those are the people that tend not to lose their jobs those are the people that are working blue-collar b-class is kind of moving towards an a-class it has better schools slightly lower ROI but I've been buying a lot more B class properties lately personally because you know when you get to a point of having find enough cash flow you really want to start thinking about buying those more expensive B class because you're creating more of a tax shelter for yourself you're creating that bigger spread that bigger tax shelter and you're adding to your net worth more significantly so but C and B are my favorites so I've been a lot of C and I'm starting to buy a lot more B yeah lisa says that's why I like condos no outside maintenance but then I don't like the associations right I do not like HOA fees and I've got a whole video on HOAs because HOAs honestly you're sort of at the mercy of these people I mean you're literally at the mercy of these people and you never know when they're going to decide to change the bylaws and make it so that you can't rent the place or they're gonna hit you with a big roof assessment you're gonna have to pay you know $5,000 for a new roof on the property you have no control over that so homeowners associations I'm not a fan of Daniel we don't we don't have a number for you to call us because we want to be able to schedule it with you so just go to our website click on the schedule a consultation button you literally answer like eight questions like your first name last name best email address to get a hold of you make sure you type in your phone number correctly and then we just ask you a few quick questions like how many properties do you currently have what are your goals and then you pick on the calendar the time that you want to schedule a call with us it's very simple so it's up to you you know that you got the kids from to p.m.

We don't write so we want you to pick the time that best serves your needs it'll go on your calendar we'll send you an email reminder about ten minutes before your call and we'll jump on the phone with you and talk to you for like thirty minutes Chad boys wants to know how is Capp West you know I heard good things about them years ago but then I think I heard things kind of fell off and I haven't really actually heard many people using them so I don't know I've never used cap West what if you want to live duplex a class neighborhood your thoughts well Rodney I mean some few if you want to live in the property that's up to you right because that's a different animal than investing in a property but if you want to live in a duplex than in a class neighborhood great you buy it I would rent out the other side so that they're paying your mortgage that's an investment right that's an investment property in a class neighborhood so you know go for it you know just a matter of whether if you're in an a class neighborhood are you likely to have a higher turnover on the rent because people want to have their own single-family home they might not necessarily want to split a house with somebody if they're in a class neighborhood you know when I was younger I was fine kind of having a shared wall with somebody but now that I've got three kids and I'm an adult there's no way I want to share a wall with somebody else you know I want my own place I want my own yard what do I think about a land trust well it's funny you mention that as our tax accountant thinks that they are a total mistake so I do not do anything in the land trust sam says I spoke to Glenn a few minutes ago awesome

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How To Retire Early Through Property Investing | A Retirement Planning Pension Strategy

– Impossible is probably the
response most people will have when they see the
thumbnail for this video, but let me show you how, by taking action, you really can retire in
two years by investing in a certain type of property. (upbeat music) Hi, my name's Tony Law from
Your First Four Houses, and I teach people how to build
a small property portfolio that generates a great income
for them so they can give up their day job if they
wish because they're now financially free.  So for 21 years, I ran a kitchen
business where I exchanged my time for money, but
in less than two years, I managed to replace that
kitchen income with a passive, or relatively passive, rental
income, and I want to show you how you can do exactly the same. So for this exercise, I'm not
gonna assume that you need 10,000 pounds a month to
retire and live comfortably. In fact, depending on
where you live in the U.K., the average household
incomes seems to be somewhere between 28 to 35,000 pounds
a year, although personally, I might struggle to live on
that if I'm being really honest, so let's just round that
up to 42,000 pounds a year which quite conveniently
helps me with the maths because it means that's 3,500
pounds a month that you need as a passive rental income. Now, for some that may seem
a little on the low side, but I think most people
could probably retire and live quite well on that
if they're being really honest if you had no other bills to pay. So we now have a clear goal. We need to earn 3,500
pounds a month passively moving forward, so let's
just break this down. How many rental units does
that actually equate to? Well, it obviously depends
on the type of deals that you're doing and the
strategy that you're following. In fact, to be honest, I've
got a property that by itself, one single property, after
all bills have been taken off, would cover that amount of
money, although for transparency, I've also got other properties
that only cashflow a couple of hundred pounds a month give or take, and it always surprises me,
there are people out there that have got properties
that simply don't cashflow at all, I just don't understand
that, but let's just say, for the sake of this
exercise, that on average, my property portfolio cashflows
about 500 pounds a month after all bills, so if you
wanted to hit 3,500 pounds a month, how many properties do you need? Well it's seven, isn't
it, nice and simple. It's seven at 500 pounds a
month, but can you acquire seven properties in two years? Yes, I know you can. Maybe in year number one
you might do two or three which will leave you maybe
four or five in year number two as your experience and
confidence grows, but I know that you can do it. Is it gonna be easy? No, you're gonna have to
put in some massive effort to hit this target. You're gonna have to
take a tonne of action, but I know that you can do
it, and if you want a list of 15 tasks that you can
do in the next seven days, check out this video because
I'll run you through exactly what you need to do in
order to hit that target. You see, the thing about
property investing that is quite magical, quite amazing
actually, is that you need to work really, really
hard for a couple of years, and if you do, you can replace
your income in its entirety after just maybe a
couple of years of work, and if I can in some way
help you in your journey, well that would make me very happy. I recently updated my 50 point
checklist that will run you through all the tasks you need to take before buying that next
investment property. If you'd like a copy, simply
click on the link here or in the description box
below and I'll send it straight out to you.

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How to Replace a $70,000 a Year Salary with Real Estate Investments and Rental Property

How can I replace $70,000 a year in annual income with rental properties that is the subject of today's video hi everyone I'm Clayton Morris the president of Morris invest let's dive into it so how do we replace seventy thousand dollars a year in annual income with passive income with rental property income from tenants every month providing cash flow from the properties that we own you might think that that sounds like a tall order but it's not and I'm going to show you how simple it can be to actually replace that annual income you know a little story about me that's in fact how I got started I was frustrated sitting down with my wife one night I said we were frustrated with our bills and I said how come at the end of the month where we still have more bills to pay and we don't have enough paycheck to cover it aren't we doing well what are we doing wrong the problem was that we weren't putting the money to work for us to start creating cash flow in our lives and creating passive income so I put together and it was really the foundation of my freedom cheat sheet it's the number that changed everything for me by the way that link you can download a free pdf it's like three pages long sit down with your husband or wife and go through it totally free the link is right below this video and it'll walk you through step by step with some numbers and figures on exactly how to figure out how many houses it will take for you to recover that annual income but I want to tackle the $70,000 question specifically most of the houses that I buy and that my company rehabs and sells are in that forty to forty five thousand dollar range okay single family homes two bedroom one bath three bedroom one bath and some duplexes okay duplexes or you know door on each side typically and two bedrooms on each side or three bedrooms on each side those are the types of properties that I buy now I buy them low and I fix them up and I place a great tenant in the property each of those properties will cashflow about $700 let's just say for round number $700 okay now think about how much is $70,000 a year how much are you probably making per week well let's bring out the calculator so $70,000 a year let's divide that by 52 weeks that's about thirteen hundred and forty six dollars a week that you are earning from your paycheck okay thirteen hundred and forty six dollars a week so now let's figure out how many houses it would take us to replace seventy thousand dollars a year in passive income seventy thousand dollars right it's a simple formula if each of our houses is bringing in seven hundred dollars a month that's a simple formula right seven hundred times 12 gives us $8,400 okay now let's take that 70 thousand dollars and let's divide it by eighty four hundred that's eight houses that is eight point three properties eight houses bringing in seven hundred dollars a month now imagine if you're buying a forty thousand dollar house if you had to bring a little bit of money to put down as a down payment or deposit you were able to reach out and get private financing or seller financing on a property then you're able to accrue these properties very quickly now some of the things I didn't talk about in this video and I can dive a little deeper now that we always want to take out money for for vacancy and repairs on our numbers right so that eighty four hundred dollars a year let's multiply that now times point six so we're gonna remove forty percent for vacancy repairs and expenses this is just to be totally conservative with your numbers so let's take that eighty four hundred dollars and let's multiply that times point six so we're bringing in about five thousand and forty dollars per property per year okay so now let's take that five thousand and divide it by seventy thousand so this will be a totally conservative number but this will help us really make sure that we're totally covered should something go wrong maybe we have a vacancy for a few weeks or a month or two in one of our properties this will take in that into account so seventy thousand dollars let's divide that by five thousand forty that gives us thirteen point eight properties so let's round that up fourteen properties fourteen properties would bring you about seventy thousand dollars a year in net income that would replace that $70,000 paycheck that you're making every year then in other videos in this series I'm going to go through exactly how to find properties how to acquire properties but just for the sake of this video I wanted you to start to put your mind in a place where you can begin to reverse engineer that number for a lot of people you don't think that you're going to be able to create passive income or bring in that much cash every year hogwash I do it hundreds of thousands of other investors out there do it every day they do it exactly the way that I do it some buy residential properties some buy commercial properties it doesn't matter it can be done that's what I do I'm Clayton Morris

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How To Become A Millionaire In Two Years Buying One House Per Month – Real Estate Investing

Joe: Hey, it's Joe Crump. I've got another video here for you. This one is from Karen Smith in Columbus, Indiana. Karen: “Joe, can you explain the millionaire matrix? Does it really work and can you do it without down payments or using your credit?” Joe: Absolutely, it works. The Millionaire Matrix is a structure that I teach that shows people how they can actually make a million dollars in equity and in cash within 2 years by buying just one property per month using no credit and no down payment.

And instead of just me explaining it in this video with a talking head, I'm going to pull up a little power point here and show you exactly how this process works. Joe: I created this little power point to show you what the Millionaire Matrix is and how and why it works. Joe: Before you can understand how it works, you need to understand the principles behind it and why it works. That brings us to the idea of businesses in general. 90% of all of the businesses that start up fail in the first year, whereas 90% of all new franchises succeed. Why is that? Why would franchises succeed and businesses in general, not succeed? And the big answer is — systems. Franchises have step by step systems to show the business owner (the person who's implementing the tactics in the strategy of the business) how to do each little system in the business.

Joe: Let's take the ultimate systematization — McDonald's. If you go to a McDonald's, everything is done the same at every McDonald's that you go to because each of their processes is spelled out in a specific system. They have a system for making a Big Mac. They have a button to press when it's time to flip the burger. They know how many burgers to put on there, they know what order to have with a picture of a hamburger, and how to put it together where it shows you that that's where the bun goes and that's where the hamburger goes and that's where the lettuce goes and that's where the special sauce goes. And it makes it very easy for people that are not very skilled to put together a hamburger consistently all over the world. Whether it's here in Indianapolis or whether it's in Wisconsin or California or Berlin or Paris or Ireland — it doesn't matter — wherever you go to a McDonald's, you're going to get the same burger — it's going to be put together the same way by the same skill level of people.

Now, McDonald's has a 200% employee turnover every year. That means that they're constantly trying to train new people. For them to get that consistency, they have to have a system in place to make that business work. Joe: And that's what I've created in the Push Button Method and the mentor program. I've created systems so that I can take new people (people that have never been real estate investors before) and give them a system and say, ‘Step 1, do this. Step 2, do this. Step 3, do this.' Joe: That takes us to the next question in the process here, which is what types of deals make you money.

You need to understand that as well. In real estate, there's only two types of deal that'll make you money. One is properties that you buy substantially under market value, either for cash or as an assignable cash offer. And two is properties that you can buy at market value or below but you can buy them on terms. Now, by terms we're talking about zero down structures that I teach; subject-to, multi-mortgage, land contract, contract for deed, lease option, assignable cash deals. Those are terms and if you can buy properties on terms like that, then you can make money even if you buy them very close to market value. Joe: That's going to take us to the next step which is the beginners Millionaire Matrix. Now here's what we want to do with the Millionaire Matrix and the goal of each system. We want to be able to make $5,000 per deal. We want to be able to do one deal per month. We want to be able to work 10 hours per month. That means hours per week. We want to be able to have $200 residual income per deal.

That residual income I'm talking means every month you're going to get $200. We want to buy 10% under market value; it doesn't have to be dramatically under market value because you're buying on terms, and I'm going to show you why that makes the difference. And you're going to want to sell it for 10% over market value and I'm going to show you how to do that. Because we're selling it on terms as well so we can sell it for more than it's worth. So this is the basic concept for the Millionaire Matrix. Joe: Now let's take an example deal — how the Millionaire Matrix and an example deal would work within it. Joe: Every deal is going to be a little bit different and you're going to make a little bit different amount of money on each one, but this is sort of the model that we're going by. I used the $100,000 as sort of the market value of the property simply because it's a nice round number.

I know that the market value across the country is all over the place. You should probably go by percentages rather than this but I want to show you, even on a lower end market, that you can still make this kind of money. On a higher end market you're going to make more money. So let's start with a lower end market and then you can extrapolate from there. Joe: Let's say you've got a purchase price of $90,000. The market value is $100,000. The financing — you're not putting any money down, you're not getting a new loan — you're buying it subject to the existing loan. Which means that the property is going to be deeded to you and you're going to take over the payments on the loan — without qualifying on that loan (remember that).

You're going to sell this property for $110,000 to a new lease option buyer. You're going to sell it on a one year lease option or maybe a 2-5 year lease option if you choose to do that. At closing you're going to make $5,000 on the lease option fee at closing of this deal. The equity left after the lease option fee is about $15,000. You're taking $110,000 sale price, you're taking $5,000 from that, and that means you've got $105,000 that they still owe you for the property. You only owe $90,000 so that means there's $15,000 in equity. Now the monthly loan payment on this 90,000$ loan that's there — let's say its $900 a month and you're going to lease this property for $1,100 a month. This is an example deal. Joe: Let me also reiterate — you're buying this property subject to the existing loan. That means that you're not putting any money down and you're not qualifying for a loan. They're deeding you the loan. You have complete control of the property but it's subject to that loan that's existing on there.

You're buying it for a little bit under market value but not that much under market value. You're selling it for a little more than market value but not that much over market value. You're selling it on a lease option which the buyer may or may not exercise. You're getting a lease option fee at closing — you're making $5,000 at closing. And you're going to have that equity left in the property, and if they exercise that option, you're going to make that other $15,000. You're going to have that loan payment that's on that existing loan of $900. And you're going to get a lease income on that property of $1,100. So you've got $200 of positive cash flow every month. So that's sort of the model of this whole thing. Joe: So let's go to the next frame here. This breaks down to doing one deal per month over the first year. I'm going to show you how to become a millionaire basically over a 2 year period.

Month one — let me bring my little arrow up here — cash at closing, making $5,000, that's the lease option fee. The $200, remember the difference between the $1,100 and the $900 a month payment so that you made $200 a month on that. Equity payoff this month, you didn't make anything. It hasn't paid off. Nobody has exercised their option. Equity buildup — you've got $15,000 because you bought that property and there's $15,000 of equity. Remember the spread — you bought and sold it for $110,000, you got $5,000 and they still owe you $105,000, and there's a $90,000 mortgage. That leaves $15,000 on there that's your equity. Joe: And then a tax benefit based on $100,000. This is depreciation. If you take this property and you depreciate it by years, and then you divide that by 12, you're going to end up with an actual tax savings in your pocket of about $106 based on about a 30% tax bracket. And these are just general numbers here but they're pretty close.

Joe: Month 2 — you're going to do the same thing. You're going to do another property, make another 5 grand, make another $200 a month and so now your monthly residual income is going to go up to $400 a month. You're not going to get any payoff because the year hasn't passed yet. You are going to build another $15,000 of equity in the property. And now your monthly tax benefit is going to be $212. Month 3 — $5,000 -same thing – it just goes up every month for the whole year. Let's go all the way down to the bottom of the year. At the bottom of the year you've made $60,000 in cash at closing from just doing these 12 deals. And believe me, I've got people that are doing 5 or 6 of these a month on a regular basis because they've set up the systems that I've given them to do that.

Joe: The next thing is the monthly residual. Just from what's going on here, you've made $15,000 the first year in that; residuals. Equity payoff — nothing's paid off the first year yet because nobody has exercised their option yet. Equity buildup — you've built $180,000 worth of equity in the deal and you've made $882 in taxable savings during that first year. So in that first year in the Millionaire Matrix, you've made a total amount of cash of about $83,000. You've made total equity of about $180,000. So you've just made $263,000 in the first year doing only one deal per month. Joe: Now with these deals, if you have 8 or 10 hours of work into these deals, that's a lot of time in these deals. So remember there's a startup learning curve. And there's going to be the time that it takes to set this process up, to get this system going; all of that stuff. But the actual time of the deals is very, very low. And once you learn how to do it and once you get it going, it's going to be easy to keep it going.

Joe: So let's go to year two, and look at the second year. Things start to change dramatically in year two, if you're going by this model. And we have different models that we go by. You don't have to go by this one. But I'm just taking a simple model and how it can expand your income very, very quickly. Let's look at month one. You've got $5,000, your residual income is now $2,400 a month because you've got 12 deals (and you only have to keep 12 deals like this because they're going to be paying off as they exercise their options).

So as the first one pays off and you get your equity out of the property because they exercised their option, you made $15,000 equity payoff in cash plus you bought a new property, so you've got $15,000 new equity buildup and now you've got 12 months' worth of tax savings over 12 properties. So you're going to be making about $1,200 a month in tax savings, which is pretty substantial when you start making this kind of income; it'll save you a lot of money. Second month — same thing. Joe: Now, keep in mind — this is the big variable — how many properties are going to actually exercise their option? It's going to be much less than the total amount, so you may not make this full amount. There are ways to optimize this process and get more of the people to exercise their option, and I show you how to do that.

I'm not going to spend the time on this video to do that. Joe: But let's look at the bottom line on the second year. $60,000 – same as you made last year on the cash flow. Monthly residual — it well over doubled. Equity payoff — assuming that they exercised their options, just made a nice chunk of money on equity payoff. Equity buildup — you make another $180,000 on top of this $80,000. You made $15,000 in real cash money in your tax savings through depreciation, so it was a really nice year two. Then your second year on the beginners Millionaire Matrix is total cash at $284,000, and total equity of 180,000$. The grand total of year two is $464,000. I add that to the $263,000 and you've got $750,000 in your first two years, not quite the million that I promised you but pretty darned good. Joe: Let's say you get better at what you do, that you get a little bit better at the process. As you're doing this, how much will you improve? Will you get 100% better? Will you get 75% better, 50% better, 25%? How much better are you going to get at this process after one year? I venture to say that it will be more than you think.

But let's say that you only get 25% better. If you get 25% better at better price from the seller on your property, instead of getting 10% under market value, you get 12.5% under market value. Not very much — next to 2.5% better on your price. Let's say you get 25% down from your buyer so instead of getting $5,000 down you get $6,250 down. Let's say you get 25% more lease money monthly and your $200 goes to $250 a month. Let's say you get 25% higher price from your buyer — instead of getting $110,000, your price goes up to $112,500; not that much more. And you do 25% more deals a year so instead of doing 12 a year you go up to 15 deals a year. Now this is very realistic to think that you can get just 25% better. I have people that get 100% to 500% better at what they do and their production goes up with that statistic. The ability that you have and the talent that you have in this grows as you do it.

This is a skill and you build that skill through this process. Joe: So let's look at the second year Millionaire Matrix if you're 25% better. Now you're making $6,200 instead of $5,000 so that jumps that up from $60,000 to $93,000. That just increased your income by 50%; right in the first column. The second column goes up a good deal as well. Your equity payoff went up almost $100,000. Your equity buildup went up by $100,000. Your tax benefits, well, they didn't go up at all. But still, you just increased your income by a substantial amount of money. So just getting 25% better at the second year of the Millionaire Matrix — now you've made $730,000 that second year. You made $260,000 the first year, so NOW you're at the million dollars. Joe: This is a realistic model and it can work. Again, part of the biggest downfall of this process is the amount of people that exercise the option which is less than we would like, but keeping these properties — you also continue to build your equity and you buy down the notes.

You get the depreciation and those other things start to grow. So that's not a bad thing, either. Joe: So this is a great way to do it. This required no money and it required no credit. All it required is your effort to follow through with the step by step system of putting together subject-to deals, of finding buyers for those subject-to deals and filling those properties.

And you do this all without risk because you've got so many contingencies in the deals that you're doing that and if you don't find a buyer for the property that you buy, you don't close it. I think the whole beauty of this system is that you never have to close a deal until you know that it's going to make you money, so instead of everybody doing zero down (which everybody talks about and I talk about as well) you're not really doing zero deals.

What you're doing is cash out deals, all the time, without using your credit. So it's very exciting stuff. Joe: That's the Millionaire Matrix. it's a very powerful way to buy properties. It creates cash flow for you upfront so that you can have a sustainable business and it also creates that long term growth and wealth building that anybody needs if you want to retire from this business and be wealthy. It's an exciting process. This, by the way, is what I teach in my six month program. It's what I teach in my Push Button Method. So, either one of these programs will get you into more detail about exactly the step by step process of how to put all of that together.

I'd love to work with you and to help you and make your business and your dream come true on this. Thanks. Bye. .

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