Do you know how to grow your retirement fund faster? Do you know what your financial planner is doing with your money?
Most people only invest in stocks or mutual funds, but Epic Wealth is here to share a better way. Join us as we explore ways to control money and achieve financial independence through self-directed investment plans. Learn how you can build a diverse portfolio that includes passive income through real estate so that you can grow your retirement fund faster.
What you Will Learn About How to Grow Your Retirement Fund FASTER:
- How to achieve financial independence faster
- How to control your money
- Why you should leverage the power of self-directed investment plans
- Why most people only invest in stocks and mutual funds
- How to build a diverse portfolio creatively
- Why you should consider a self-directed retirement account
- How to double the value of your 401k in 45 days
- Ways to build your retirement fund faster than the stock market
Read the Transcript:
Matt Theriault: Today's episode is sponsored by Creditbump, a new fast and simple way to get up to $150,000 of revolving lines of credit. Use the funds for anything you need: startup cost for your business, capital expenses, product development, inventory, marketing, promotion, creative real estate acquisitions and strategies, anything your business needs. They have a 60-second online application. It's a soft inquiry, meaning the application process will not impact your credit score in any way. There are no upfront fees, interest rates are as low as 0% for the first 12 to 18 months. If you opt in for their credit consulting, you'll learn how to extend your 0% interest rates far and beyond that, build corporate credit, and so much more. The approval is based on your credit score and your stated income. If you're pre-approved and you don't receive at least $50,000 in funding, you don't pay a cent in fees. Through their service, I've helped members of my Epic community receive more than $13 million of funding in the last six months. They've got top-notch customer service, Creditbump has an A+ rating with the Better Business Bureau. In short, you're in great hands and you've got nothing to lose. Go to creditbump.com, creditbump.com. That's creditbump.com.
Narrator: Now, back to creating your Epic Wealth.
Matt: Financial independence does not come as a result of you sending your money to someone else but rather, getting someone else to send their money to you. Sounds nice, doesn’t it? Yeah. The only way you can make that happen, the only way to make that happen is to take control of your money. I mean your money is important to you, right. It is. Since it is, who should be in control of it then? You, of course. Then, why aren’t you? Do you even know what your financial planner is really doing with your money? Do you even know if your financial planner even really knows what they are doing with your money? Here’s a good one for you: Is your financial planner’s wealth greater than yours? If there is something that you want out of life, the best place to start is to go ask someone who already has it. Seek the counsel, the guidance, the mentorship of someone that’s already been there and done it.
Ask your financial planner to open their books to prove that they know what they are doing. Are they producing solid returns for themselves, or are they living merely on the commissions of investing your money. I heard Warren Buffett once say “Wall Street is the only place where a person will drive a Rolls-Royce into the city to get advice from someone who took the subway.” If you’re not going to control your money, if you’re not going to do that, at the very least, make sure that the person you are entrusting to control your money is better off financially than you, and that they got there by doing with their money, what they are going to do with your money. In the very least, do that.
Now, if you’re going to make the decision right now to take control to take back control of your money, good for you. That’s the best thing to do. That’s the best thing you could do. I mean nobody cares about your situation more than you. Given, money is what makes the society of which we live go round, money is important. It’s very important.
With regard to your money: Hey, you know your situation better than I do. Meaning you know how to access it. You know who to call to take back control, right. You know who’s got control of it. I mean, you know you can go call your mortgage broker and refinance the equity out of your home and reallocate that to a higher yielding investment. You know you can do that. You know who to call. You know you can call your stockbroker and tell them what to sell, what to liquidate and where to reallocate those funds. You know how to do that. You know their phone number. You know how to cash in that gold and silver and invest it in an income producing asset. All of that type of stuff, that’s all very basic. You know how to do that, but what most people don’t know how to do is that they don’t know how to access one of the bigger chunks of money that they have available to them. It’s not even that they don’t know how so much, most don’t know that they can.
To what I’m referring is your 401(k) or your IRA, your retirement plan. Yes! You can take control of that too. That too? Yeah, that too. And boy, do you want to. We discussed a few episodes back what a disaster the 401(k) has been. You want to get control of that. You want to take control of it and you can. It’s called self-directing. Here’s how it works: Since the inception of 401(k)s and the traditional and the rough IRA accounts, all the retirement accounts, you know we as Americans have had the freedom to choose what we want to invest in for our retirement, yet why is it that most of us only know that we can invest in stocks, bonds, and mutual funds? Why did that most of us don’t even choose the stocks, bonds, and mutual funds that we’re invested in?
While there is nothing wrong with having those in your portfolio, these investments are choices traditionally fed to us by the major banking and investment organizations. Since the advent of these accounts, Wall Street has worked long and hard to create investment products that fit into company 401(k) plans and the rough IRAs. Why would they do that? First, that’s where the money is at. Just trillions of dollars inside of retirement accounts. That’s where the money is at. Second, it benefits them really more than it does to you. Did you know in 1980, there were 564 mutual funds? Just a little over 500 mutual funds. As of 2009, there were almost 8,000 mutual funds on the market being offered to you and I as investments for retirement savings. It went from - what’s that? 20? Almost 30 year period, they went from 500 mutual funds to 8,000. See, Wall Street keeps feeding us more mutual funds not because the product is improving but because the profit is continuously increasing for the people who sell them. That is not controlled by the way. No. It’s the exact opposite actually. It’s the ultimate surrendering of your money. It leaves us, the investors, with nominal to marginal returns riding this emotional rollercoaster all the way to our retirement.
Self direction: it’s the power to choose what you invest in with your retirement funds. In fact, the internal revenue service provides very clear direction on this. They are very clear about this. The IRS says, your IRA can invest in anything except collectibles. Anything except collectibles. This means you can invest in almost - I mean you can invest in real estate, private companies, private banks, gold, notes, race horses, bucking balls, commercial buildings including storage centers, gas stations, car washes, vending machines, business partnerships. These are but a very short list of the things that you can invest in using your retirement account. I mean the possibilities are seemingly endless. Self directed RAs give you the ability to invest in nearly anything, but there are three rules the IRS requires you to follow. They are very clear about these three rules.
Number one: No self dealing. The investment that you choose - it cannot be for your personal use. For example, you cannot buy your next home in your IRA and then leave it. Instead, many of our clients buy rental properties with their IRA, but you can’t buy your primary residence. Upon retirement then you can use the income from the rental property to pay for your dream home. You can do that, but number one, no self dealing.
Number two: You cannot invest with certain individuals and parties. They like to call this one the linear family tree. They are forbidden. You cannot buy or sell any investments in your retirement account with your grandparents, your parents, your spouse, your children, children’s spouse, grandchildren, business partners, individuals that can influence your financial wellbeing - accountants for example, you can’t invest with them either.
Now, while in about 10 to 20 people you cannot do investment with, there are probably over 300 million people that you can invest with. People like your brothers and your sisters, and your cousins, your aunts and uncles, trusted businesses, your nieces, your nephews, your best friends, everyone else. As I previously mentioned, the IRS prohibits making investments in collectibles, and they do that for two reasons. They don’t like that for these two reasons. One, the value of a collectible it’s really tough to determine its value. It’s subject to interpretation. Two, there is just no way to tell if the collectible is actually going to be used for personal use. They can’t keep tips on that. So sorry. Sorry about that. Sorry to crush your dreams of using your retirement funds to invest in babe booths, baseball jersey or that Ansel Adams original that you saw at that gallery. But, hopefully I’ve created new dreams for you. As what I haven’t mentioned -- In fact, I didn’t have to. But whatever you choose to self direct your retirement funds to, that grows tax free. It grows in a tax free environment. I’ve mentioned in a couple of segments back what a big deal that is, right. Specifically, I mentioned how detrimental the smallest of tax liability can beat your wealth creation. $1 doubled every year equates to $1 million in 20 years. Apparently, 15% tax rate. You lose 75% of that wealth build, but in a tax free environment like a self directed 401(k) you get all of it. In fact, I can double the value of your 401(k) within the next 45 days with no extraordinary effort at all. I can double the value of your 401(k) within the next 45 days.
Here, let’s say you have $100,000 in your 401(k) and you pull out $75,000 to put down on a $300,000 property of which you purchased at say, 10% below market because you got to buy low, right. You got to buy low and you want to buy that for cashflow, bought it for it’s income. If you’re wondering where the rest of their money came from, if you only put $75,000 in your 401(k) borrowed it. Yeah! From a bank! Just like you do. Your 401(k) can borrow money from the bank too. From beginning to end that process would take about 45 days.
Now, after that 45 days inside your 401(k), what is once a $100,000 value, now holds a $330,000 value. That didn’t just double the value of your account, it tripled it. Yeah, but what about the debt on the property? Yeah, don’t worry about that. It’s not you paying back the debt, it’s your tenant paying that debt for you. And there is some leftover even each month that goes into your account, deposit cash flow. Assuming that it’s about $3,000 of positive cashflow on a property like that and for all the expenses and debt services is taken care of. Then assuming a national average of 3% appreciation, you and your first year with your 401(k) is value at $342,900, almost 3.5 times growth. And a return on your principal of 57%. Uncle Sam can’t touch it. How did the current mutual fund that you got right now and your 401(k) - how did that perform last year? Was it anything close to 57%. The simple quick and dirty example here is by no means a special deal either. I kept it super conservative for you. It’s well within the realm of reality. This is what the people at cashflow savvy do for their clients. I mean how quickly would retirement be an option for you with 57% annual returns? I’ll tell you. I’ll tell you exactly right after this.
Narrator: If waiting for your investments to grow feels like waiting for paint to dry, there’s a powerful secret your financial planner doesn’t want you to know. You can accelerate your investment’s growth by 2, 3 or even 4 times. That’s bad news for Wall Street but great news for you. We are cash flow savvy. We’d like to offer you free information that will show you how to take control of your investments, and double, triple or even quadruple their returns. It’s yours for free. For the secret your financial planner doesn’t want you to know, go to cashflowsavvy.com. That’s cashflowsavvy.com.
Now, back to creating your Epic Wealth.
Matt: At a 57% annual return, how quickly would retirement be an option for you? How quickly would retirement be an option for you at a 57% annual return? Sounds crazy doesn’t it? Well, stay with me. At first, we need to establish how much money you need to feel you could comfortably retire. And that number could be in your 30s, it could be on your 40s, it could be your 50s. Age is nothing but a number. We’re looking at that number that you need to establish so you felt you could comfortably retire. I mean you could give that amount where you could get up and go to work each day knowing that if something goes down that you don’t like, if your boss raises their voice or asks you to work the weekend or has to - Hey, we’ve got to tighten the boat and cut salaries. Hey, no more bonuses this year or we got to cut the vacations. Whatever it may be. How much money would you have to have to feel comfortable telling him where to stick his working weekend and just walk out the door? A million bucks? Would that do it? Two million? Five million? Ten million? How much would you need? Let’s put some perspective on this. If we take 1.2 million, just a little over 1 million, so 1.2 million at a 4% return to produce the median household income in America, about 40 grand a year. I’m just pointing that because that’s the reference point.
Let’s say we want to at least live on double that, so 80 grand a year. That have to be 2.4 million dollars. Now it produce about $80,000 a year. That’s enough. It’s enough to live fairly comfortable in most parts of the country. All right? So, let’s just go with that. We’ll just round up to a hundred grand to make the math easy. We’re going to live on a hundred grand a year, so we need about 2.5 million bucks, all right? Now, the average balance in today’s 401(k) of those that make over a hundred grand a year is right around 200,000 bucks. How long at 50% return, at a 50% return will it take to get to 2.5 million. How long will it take to turn that $200,000 into $2.5 million at a 57% return. All right? So I’m going to go ahead and I’m just going use the rule of 72 to figure this out. If you don’t know the rule of 72, it’s just a very simplified way to determine how long an investment will take to double given a fixed annual rate of interest. By dividing 72 by the annual rate of return, investors they can get a rough estimate of how many years it’s going to take for the initial investment to duplicate itself to double. For this example, the rule of 72 states that $200,000, that’s the balance of the retirement account, $200,000 invested at 57% would take 1.3 years to turn into $400,000 to double, 1.3 years. Then, 1.3 more years to turn into $800,000. 1.3 more years to turn into 1.6. And just about one more year to turn into 3 million bucks. So we went a little bit over but we’ll just leave it that.
Add all that up, about 4.9 years. Basically, 5 years to do it, right. So, 5 years. But man, c’mon! You’re not going to get a 57% return every year. That’s absurd! Sure. I’ll give you that. 57%, not going to happen every year but it’s far from absurd if it did. You see, by taking control of your money, sticking to the fundamentals, buying low, buying for cash flow, harnessing the power of leverage and doing all of that in a tax free environment, I’m telling you, you can surprise yourself. 57% not absurd.
Here’s where most people’s thinking ends. They think about one property. They think about this one property in their self directed account, all of their thinking and all of their analysis is all around that one property thinking there is no way this thing is going to grow 57% every year. They're probably right, but what they fail to see is by reinvesting the cash flow and refinancing the equity out to acquire more discounted property, this time there is equity available to take that and buy more properties. What most people would view as miracles happen. They can happen and they do. They happen everyday. For example, a good friend of mine Jason. He’s got half a dozen or so rentals in his retirement account. He’s doing well for himself. They are all cash flowing and they are all in nice areas. They are all appreciating. Last month, he did something a little different. He completed a high end fix and flip in Tampa Florida. He purchased the property. Wait, no. Scratch that. His self directed retirement account purchased the property. It was a real fix wrapper but still $400,000 purchase but only $100,000 came out of his account. He borrowed the rest from a separate lender. From a separate lender he borrowed another $100,000 to fix up the property, all right. So, he got $300,000 from the bank, another 100 grand to fix the property up. It took about two months to complete and it was on the market for a few weeks. Then he just closed last month for $925,000. So he actually paid up the bank, and after he paid off the construction loan, his self directed retirement account was left with $425,000. Not bad, right? In 3 months he turned 100 grand into 425 grand, a 325% return. When annualize, that was a 1300% return, a 1,300% return all in a tax free environment. Now, that 57% doesn’t sound all that much does it? No. All right. So Jason would definitely call this deal. He call this deal a home run. They don’t fall in his lap everyday but it’s certainly not a once in a lifetime deal either. That’s what I mean when I say “miracles happen”. When you reinvest the profit into more cash flowing discount property. You keep using those profits to buy more property, I mean I’m telling you wealth can get created pretty darn quickly and permanently.
If you’d like to access your 401(k)’s funds or the existing ones you got or an old one from an old job and you want to start self directing them or at least talk to someone about it, go to epicira.com, epicira.com. It’s a free download there. There is no opt in there or anything either. I don’t want your email address, okay. So it’s nothing like that. Just type in epicira.com and download the document. Take a look. Just a one pager. It’s a quick read giving you all of the information you need to know whether or not self directing your retirement funds would be a good fit for you and your situation. If you want to take the next step, the contact information of my own financial strategist, Kingsley, it’s there right at the bottom of the document. You can contact him directly. I’m not involved in any way. So that it. Epicira.com. All right?
Next week, I’m going to see you right back here or I’m going to lead you through a step by step plan of 7 years to 7 figures in your spare time, that anyone can do if they want to, if it’s important enough to them. All right? A big thank you to our sponsors this week. Do over funding, cash flow savvy and the epic wealth fund.
If you’re an accredited investor looking to broaden your horizons and diversify, go to epicwealthfund.com to download their executive summary. Go grab that, epicwealthfund.com, grab their executive summary right there.
It’s been an absolute pleasure. I will see you next week as we continue to create your epic wealth.
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