📹 In this video we talk about the Roth IRA and why I don’t invest in one. I’ll show you an alternative way to invest for your retirement even if you are young, a millennial or an old geezer like myself. 😉
👉 If you find value in this video, please give me a LIKE, subscribe to my channel and turn on notifications. Would help me out a ton! 🙂
🔐 I will show how locking in your money to a Roth IRA or any retirement account comes with major opportunity cost consequences.
🤑 For most, a Roth IRA may be the forced savings they need, but if you are watching this video, I believe you are an entrepreneur. If I am right, then I highly advise you to stay away from retirement accounts, and save your money in fixed income accounts.
💪 This advise comes from personal experience, and learning from so many other people who have their money locked into accounts, and can’t leverage it for bigger long term investments.
🙅♂️ I also advise against any market investments, because to me, it’s no difference than gambling.
Investing in a Roth IRA or 401K comes with liability. I have seen it way to many times older folks who lose their entire retirement accounts like in 2008.
🏢 One thing with real estate investing you can count on, is rent. Rent increases, tax savings, leveraging and appreciation is the opportunity cost of stuffing your money into a retirement account.
If you want to live like the 2-3%, then do what they do. Retirement accounts is not what they invest in, so model their success.
👁 About this video : Is investing in a Roth IRA a good idea if you want to become wealthy, and is a Roth IRA millionaire really possible? I will explain, in detail, why I don’t have one, and won’t ever have one.
👋 About this channel : In 2014 I was taken on a journey through the online world after almost 7 years of failing everything from M.L.M’s, affiliate marketing, shopify, amazon fb to name a few. I found my calling in the marketing for local businesses space, and haven’t looked back since. I have been awarded an Agency 7 Figure award as well as a Coaching 8 figure award for doing over $20M in online sales. I was a teacher then a Vice Principal in a High School, but needed to find a way to make more money. Although this channel has never gotten any attention from myself, due to running so many other businesses, I have made it my mission in late 2020 and committed for 2021 to grow this as a place I can put a ton of free content I have learned over the last 6 years. Your life can change within 90 days of action, but you have to start something at some point.
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Let me start by saying this. Retirement investing has a place, for most, but not for me. If Real Estate is something YOU wouldn't ever want to get into, then you would have no other choice than to invest in traditional retirement funds, like a Roth IRA. In my gut, I truly believe, locking your money away, rips you from decisions and opportunities in the future. Be smart, be savvy, and stand out from the rest. Be different.
I'm all for new perspectives. Of course, if there is a better way to grow your investments while still having access to your money without being penalized or having to pay bribes to the government.
There are many aspects of traditional investment that I dislike, particularly holding money hostage by the government.
Congratulations on bringing thoughtful reality to the public sphere. Hopefully, others are not afraid to have better, different opportunities. be able to invent ways to make life easier rather than just blindly following what someone else started for the betterment of society a long time ago Everything was getting better and changing for the better.
The beauty of a Roth IRA is that once you have, say, $100,000 of after-tax funds in it, if it grows to, say, $1,000,000 due to wise investing that is not taxed along the way or after withdrawal, then you have $900,000 of tax-free gains (what would normally be taxed as short-term capital gains, long-term capital gains, dividends, etc). The continual daily, yearly tax-free compounding of gains, in addition to the original investment of the principal without concern of wash-sale rules, for example, is a powerful advantage of the Roth.
I agree that there may be better opportunities for a given person given their particular situation, and your real estate example might work out to be a better investment for you, in your case.
But I think it is important to properly compare the value of the alternatives. I don't think you gave the Roth a fair accounting.
In my case I am able to grow my Roth very quickly through SEP and Roth yearly maximum contributions as well as properly-timed SEP to Roth conversions. If you own your own business you can legally time certain large deductible expenses like depreciation in order to give yourself a low tax-bracket year in order to do a relatively low-cost Roth conversion.
I happen to feel more comfortable investing in the market as opposed to in real-estate, so that works for me.
The same liquidity argument could come into play for me. Say that a hot stock investing opportunity comes around and I feel that could get double or triple my normal return with a particular stock if I invest now, (not tomorrow, not 10 minutes from now), but all my money is tied up in real estate instead of in my Roth?
Another risk factor. Look what happened to retirement accounts in Portugal, Greece, Spain, Poland, and elsewhere. Retirement accounts and other savings accounts were confiscated. Why? Because of massive government debt. Where is USA debt headed? It ain't shrinking in 2021. Those annual forms where we tell the taxman how much we put it that IRA, etc. tells them where and how much to raid. Other assets may be safer. Thank you for this reminder about real estate as part of one's assets. Link to just one story about retirement account confiscation: https://www.csmonitor.com/Business/The-Adam-Smith-Institute-Blog/2011/0102/European-nations-begin-seizing-private-pensions
Love the video, James! IMO you are spot on. I have followed Garret Gunderson for a long time and this is how he teaches. To me it makes so much sense. I highly recommend one of his books, Killing Sacred Cows. Very enlightening.
What a waste of 32 minutes. You've clearly done well but you make Rutgers look bad. You're using leverage to help boost your returns, which is fine but carries its own risks. Residential properties, whether multi-unit or SFH, aren't passive investments either and can be a full time job. Depending on how you've structured your holdings (LLC's owning the realty, series LLC's owning realty, land trusts with LLC as beneficiaries, etc.) you could have other risks. Depreciation is great but it reduces your basis. You can 1031 it but have to carry the accumulated depreciation to the new property. Sell it and you'll face depreciation recapture. Bottom line: there are a lot of smart people with a lot of money out there. If rental real estate is that great, they'd all do it and they're not. That's not to say that real estate does not have a place in a well structured portfolio but again, you don't know what you're talking about except for your very own experience, which kudos to you, have been good to you. You're wrong on other points and I can tell you don't know what you're talking about… you can contribute a lot more than $6,000/year to a Roth IRA. I can show you how you can have over $100,000/year in Roth contribution to an IRA. The income limitation is also a joke… you can get around it easily and the IRS approves of it. Some terms to help you do your research: $57,000 401K limit per unrelated employer, after tax contribution, in service distribution, solo 401K, etc.
Regardless, the data over a long time and across many different investments show the following: S&P 500 averages around 9.8% return; commercial real estate a bit worse at 9.4%, and residential a bit better at 10.5%. That's total return… whether you believe or not is up to you.
It is all risk, the difference is without risk there is No Reward… You can hedge your bets. But in the end you get to sell the property… That is the cherry on top…