Thursday, November 19, 2020

441 - Is Max Funding a 401k Enough to Retire

Today, Chris Miles focuses on the question: Is Max Funding 401K enough to retire?
He’s here to tell you that he has already run through the numbers so many times, enough to tell you that it is impossible to retire in an abundant lifestyle with your 401K.

One of the main struggles in discussing this topic is that Chris needs to keep on battling myths. So many people are having a hard time accepting this because we are taught by the masses that are not financially free, so why are we listening to them?

When we look at the real numbers, the real actual returns, then we will start to see something different.

In this video you will find out why you should pass up your 401K.

Tune in to learn more!

https://www.blogtalkradio.com/moneyripples/2020/10/07/441--is-max-funding-a-401k-enough-to-retire


http://moneyripples.com/ https://www.blogtalkradio.com/moneyripples https://www.twitter.com/chriscmiles https://www.facebook.com/moneyripples #FinancialAdvice #RealEstateInvesting #Finance

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Hello! My fellow Ripplers. This is Chris Miles, your Cash Flow Expert and Anti- Financial Advisor. Guys, this show is for you and about you. Those of you that work so hard for your money, and you’re ready for your money, start working harder for you. Now! You want that freedom, that cash flow that prosperity, that passive income, right? You want that right now. So you can live the life you love, doing what you love, being with those you love. But guys so much more than that is you’re here to create purpose and meaning with your life, by creating a Ripple effect in the lives of others, whether it be your family, your community, or across the world, you are here to be something more than just a consumer. You are here to be a creator. Someone who can actually create massive impact in the world by being financially-free yourself and helping others do the same.

So guys, I’m excited to be here. A part of this with you because through me, I mean really through you and me, like we’re really working together here. Aren’t we? I mean, I create this Ripple effect through you and then you create it out in the world. And that’s why I’m here doing what I’m doing everyday. So thank you for being a part of this. Thank you for bingeing and sharing and being a part of this movement because without this, my Ripple effect couldn’t create beyond me. So thank you as a reminder, check out our website, WWW.MONEYRIPPLES.COM And other great blogs on there, but you can also go check out our YouTube channel, the Chris Miles of Money Ripples. You can check out that YouTube channel and find other videos of these very same episodes on there too. So if you love YouTube, check us out on there as well.

So today, guys, I want to go into really this. I have to keep battling myths, right? Because the reason why so many people have a hard time accepting this is because someone has really gone deep enough to say, listen, is the status quo enough? For example, today, my focus is Max Funding Your 401k Is That Enough To Retire. Can you truly retire putting in the maximum 401k and getting the max match on top of that. And I’m here to tell you that I’ve already ran the numbers many times, but I’m about to go into it with you step by step to let you know that it it’s impossible. It’s virtually impossible to retire and abundant lifestyle in your 401ks, but that’s not what we’re taught our, we were taught by the masses, which by the way, the masses aren’t financially-free. So I’m not sure why we’re listening to them, but we are taught by these masses, right?

We’re taught by all these everyday people. And I know like many of my clients, I just had a mastermind my house recently. And they said, yo, Chris is so hard because we tell them that this stuff like what you’re teaching is actually good. And what’s taught in the world, doesn’t work. These 401ks don’t work, but everybody keeps saying, no, that’s crazy talk. You can’t go there. That’s no, no, no. You fund that 401k. Cause that’s free money. Why would you pass that up? That’s crazy. It’s insane. Well guys, you’re going to bet. You’re about to find out why you should pass it up, right? Because I’m telling you that the reason I don’t believe in it anymore is because I ran real numbers, right? I was that financial advisor telling you to max fund your mutual funds, right? I was telling you to put all your money in those baskets to be able to create that life of freedom, to become a millionaire someday.

Right? But here’s the thing is that when we look at real numbers, real numbers, not the numbers that they’re telling you, but the real actual returns, then we start to see something different. So guys, there’s a lot of assumptions being made in the market that have to be battled and I have to blow up your Island like crazy for you to see this. Okay. First, there’s assumptions being made. One is that there’s stock markets together. Certain return. Now you’ll hear people say 10, 12%, sometimes more, especially if they’ve only been around the last 10 years, they think 14, 15% is normal. That is not normal. Guys. I’ll tell you the last 20 years, the actual real rate of return, average out. If you were to put it into a calculator, take the SB 500. And you know, we’ll say October of 2000, until October, 2020, you put in the calculator.

I just did it about a week and a half ago, put in the calculator from late September to late September. You know, I came out with a 3.88% return in the S and P 500. That was the 20 year average, 3.88% per year, not 10 or 12 or 14, 3.88. Now the last 30 years, because we hit a little bit of a low October of 1990. So it’s that thing that Ben Stein’s father told him figures don’t lie, but liars figure, right? If when I was a fFinancial Advisor, I would look for when there would be lows in the market to compare to higher numbers later on, because you know, the reason why the last 20 years don’t look great is because we hit a high in 2000, right? And then now it came down a little bit by the fall. You know, we had, we started have Y2K come to effect, but it came down and then went down much worse than Y2K. Then came up and then went down with a recession, then came back.

Yup. Again, these last really 11 years that we’ve had an upmarket, right? That’s ridiculously, almost statistically been unheard of. It’s unprecedented to use other people’s words, right? For the year of 2020. So anyways, so to see that kind of growth, even despite all that up, those ups and downs, we only average 3.88% that’s before management fees are taken out of your funds. So if you get the S and P 500 fund, you’re not making full S and P 500 returns, you’re making less after they take out your fees, right? So you’re looking maybe made 3% last 20 years. This is why people feel like they didn’t make any money in the last 20 years. But if you throw in the nineties, the nineties were the roaring nineties. Now you’ve got much better return. It actually threw up the average to beat 8%. Now it was seven and a half earlier this year.

But thanks to that low low in 1990, October, 1990, it drove the average up to be 8%. Now I guarantee if I run this against six months or a year later, that number might go back towards like seven and a half. Usually you’ll see it go between seven and 8%, just depending on where it falls. But let’s just say it’s 8% right? Now, when you have fees taken out of your 401k easily, you’ve got at least 1% of administration fees. Occasionally you might be like a 0.8% 0.7, if you’re really lucky, but the truth is you don’t get full market returns because very few people put all a hundred percent in the S and P 500, they put an international stocks or other things that don’t make as good returns anyways. So as a result, that’s why I think if I’m going to run these numbers, I want to run this more.

You earning a six and a half percent rate of return, right? Because I think 7%, even for a 401k. I mean, very few people think they’ll ever get that long-term, right? Not saying that short-term, you won’t get it, but long-term, if we’re trying to put good numbers out here, six and a half percent of very good return for a 401k now, okay. So that’s the market returns, right? It’s not 10 or 12, which makes a massive difference in your numbers, but it’s more like six and a half. Here’s the other thing, when you get to your final number, now, there’s been people out there telling you, like for years, even when I first started 20 years ago in the Financial Advising business, they would say, you know, you live on 4%. So if you had a million dollars, you live on 4%. That’s 40,000 a year.

Guys. That is not a feasible number that was made back in the seventies. That was before inflation. That was before people live longer than they are now. And that’s before interest rates dropped significantly. Now the interest rates have dropped. It’s actually better. If you want your money to last you, your entire life, it’s more, the better advisors. You know, even though they’re teaching you crappy stuff in the mutual fund market, right, then the stock market, they’re going to tell you about 2% is what you should pull out to let your money last. So instead of having a million dollars to pay you 40,000 a year, that needs to be of a million dollars. It pays you 20,000 a year. So this is the thing. Let’s take the example. What happens if you met fund your 401k and you get a 6% match? Now I’m based it now, that’s a bigger mass that I know many of you get.

Some of you do get 6%. I’ve never seen anybody higher than 6%. So I’m going off of, I’m really trying to play devil’s advocate against my own point here to show you that yes, you can get six and a half percent, even though you may not even get that much in your 401k, depending on what you’re invested in. Two, I’m going to pretend you get a 6% match and that you make 140,000 a year. Chris, why’d you pick 140,000 a year? Well, I had to decide, okay. I know that a lot of the clients, the people that you guys reach out to me, most of you usually make about at least 150 to 200,000 a year, if not, half a million or more a year. Right? So I know that I went based off the average household income, which is just a little over 60,000 a year, about 65,000 a year.

And I more than doubled it. So I just said, all right, let’s put it more than double the average income, the average person in America, they’re going to be max funding, their 401k 140,000. So they’re putting 19,500. That’s what you’re allowed to do in 2020 in your 401k. And then you get a 6% match on your 140,000. That means you’ve got about 27,900 a year between your contributions and your employer. Now I know I’m throwing lots of numbers. I’m mainly doing this for those of you that like to double check math, all right. For the rest of you, you’re probably going to say, all right, whatever Chris just go on, right? So I’m doing this because I want you guys to know that I’m not just pulling these numbers out of thin air. Like these are numbers. I’m pulling out to make it as realistic as possible.

Right? I get it. Some even make more than 140,000 a year. Great! You’re going to realize it’s not going to matter much. You know, it won’t matter at all in fact. But if some of you will make less, this will, should make you more concerned because I’m about to show you that none of you will be able to retire well with a 401k. You might be able to have a little stream of income, but it’s not what you think it is. All right? So those are some, my assumptions, right? Is one, you make six and a half percent in the market. That’s after fees and everything, because they do take out fees before you get the money. Two, we’re assuming that, of course, that you’re only pulling out 2% in retirement. Three. The other thing we’re going to be doing is we’re assuming that you’re getting a full 6% match and you’re max funding it.

So you’re getting almost 28,000 a year thrown into the market every year. That’s a lot of money for some of you guys. You’re not even doing close to that. And then four is inflation. That’s the other killer, right? We’re not even talking about taxes yet. Although what’s likely the taxes are going to be lower than they are now, since we’re now lower than we’ve been in decades. It’s not very likely that’s a bonus, but we’re just going to go with this fourth one, which is inflation right? Now, you’re going to hear the government. And the fed saying that inflation is only about 2%. And that’s our average target. Understand that they’ve manipulated these numbers on inflation to be less why? Because social security, which we already know is already. If you get a social security statements you already see on there that they’re talking about going bankrupt by about 2030, right?

For it to last, they cause they always do a price increase every year, based on those inflation rates. Do you think the government knows that if they can find ways to tweak the numbers to make inflation less, that they can actually make it work? The answer is yes. Right? Absolutely. So, yes, they’re going to be showing lower inflation numbers. The true inflation that you and I are going to feel is a much, much higher. Now there’s places like if you go to WWW.SHADOWSTATS.ORG, You know, shadow stats as in S-T-A-T-S.org they talk about real inflation numbers. They got a much higher than I’m talking about here. I’m going to be very conservative again. Devil’s advocating. It’s my point of only 4% a year. That means with the rule of 72, that about every 18 years, you’ve got to double, you’re about to double your expenses from your lifestyle.

Now 18 years ago was 2002. I can guarantee if we’re looking at food costs and everything back then, you’d probably say, yeah, not too unbelievable. Look at college costs. Definitely not unbelievable! Since they’ve been raising between five and 7% a year for the average cost rising costs of college tuition, right? And so 4%, I think it was a very conservative number, very believable. Now this is important number because this is what it actually feels like because many people come and tell me, they say, Chris, I will live to make 10,000 a month, passive income, or a hundred thousand a year. This is the minimum. Most people are usually more occasionally get somebody that says, Hey, I’ll be happy with four or 5,000 a month, right! 50 or 60,000 years. Wonderful! So I’m going to be trying to figure out what would it take to get to a hundred thousand your lifestyle.

But before I do that, that’s to come what do you got to save in your 401k to get a hundred thousand your lifestyle after inflation? That’s to come right now, I want to talk about what those numbers are going to look like. If you max funded your 401k earning only six and a half percent, getting a 6% match on 140,000 of income every year. And, and what does that number end up being after 35 years? So this is assuming you’re a 30 year old and you got 35 years. You’ve got less time. This is more depressing of a conversation for 35 years. You’ve got before between now and then. So you just say, you’re starting out fresh 30 year old. You’re now going to start max funding, your 401k every single year. And by 65 dad, government, you’re going to be retired. Here’s the results.

And ready for this again, between your contributions and the company’s contributions. That’s 27,900 a year at six and a half percent. After 35 years gives you what, that’s my drum roll. It gives you 3,685,500 bucks and change, right? So basically about just under $3.7 million, sounds like a lot, right? But up wait, there’s more, we only want to pull off 2% a year. And when we’re living on that income, right? What’s that 2% a year. That’s 73,710 bucks a year. So just over 73,000 a year, you’re living on that sounds great! But remember, we’ve got inflation. Now, inflation, because of that, those years, you got to have about quadruple the money that you need to live on that. So what’s quadruple or what’s that cut in a of quarter, right? Because again, with inflation, that price is gonna be about four times higher than they are today in 36 years.

Those you’ve been around the block long enough, again, 36 years ago. That was what, 1984. I’m sure you’re probably would say four times. That’s not a big deal. I remember when my dad told me back around you actually later than 1984, I remember when he told me, he said he made a hundred dollars a day. I thought he was lying. Now I’ve done the math a hundred bucks a day, five days a week is only 500 bucks a week. You know, that’s only about 25,000 a year. I thought he was rich. 25,000 a year is below poverty level now, right? So that was the eighties. Again, kids perspective. It’s still four times that you cut that $73,700 a year in a quarter. You’re living on the equivalent now with inflation, right of $18,400 a year. And that’s before they tax you, if you lose a quarter of that in taxes, now you’re down to about 14,000 a year that you live on. How many of you guys are willing to put away of your own money, your own Hard-earned money, $19,500 a year for the next 35 years. Hoping that again, the market smiles on you just right, so that you can live on 14,000 a year. Does that math sound good to you? Save me almost 20,000 to live on 14,000 after taxes.

No! That’s horrible.

That’s really miserable! Right? By the way now the one thing that someone will counter with me, they’ll say, yeah, but Chris, I don’t go on max fund this. I just do up to the match. And that is a hundred percent rate of return. You would think so. Right? But it’s not, it’s a hundred percent total return at the end of however, many years, the longer you have for retirement, the less that return becomes. Because remember, if you say that you saved up so much money and you get a million dollars, well, if you get a hundred percent match on your, your 401k money, all it does is just double that end number to be 1 million to $2 million, that’s it. Now here’s the thing that people get confused on. They say, well, that’s a hundred percent. It is a hundred percent, but divide that by however many years, you’ve got, you know, to retirement, right?

That’s 35 years now. You’re like, Oh, that gives me less than a 3% extra return, which is correct. So if you’re earning six and a half percent and you just did the full match, right? That only means that your 401k only pays you nine and a half percent. You know, when you have that company money thrown in there, it feels like a nine and a half percent return on your money per year. Not horrible, but not great. It’s still not enough, by the way, with that same number making 140,000 a year, you put in 6%, they put in 6%, which I know now companies are starting to do less similarly with 50% match, but again, a hundred percent match. It’s about 2.2 million. Well, 2.2 million lives means you live on 44,000 a year. That means you’re actually living in about 11,000 a year lifestyle, but take out taxes.

You’re really only about 8,000 a year of, you know, today’s dollars income that you’re getting, despite putting in that match of actually just over a thousand a year. Again, it doesn’t do that much better. Now you’re just breaking. Even with the money you put in, that’s the money you’re pulling out. That seems horrible, right? That is the big problem. Now I remember I said no. So we already basically said, you get a full match with full legal amount of contributions, 90,500. You can do this year and your 401k, you’re doing the max possible, which I know a lot of you that have talked to me are doing right now, again, that after 35 years is only really returning you a by the way, that’s only about an 8% net return with that match there. When you have the match thrown on only nets you about an 8% return basically it takes, it makes up for your fees.

So what ends up happening is you’re only living on about a 14,000 a year lifestyle, congratulations for sucking and all that money wait. Then you only have 40,000 a year after inflation. Now, what would it take to have a hundred thousand a year lifestyle doing the same thing, Doing your 401k with a match right now? It gets to be ridiculous. Let’s just be honest. If you want a hundred thousand dollars a year, remember you gotta have about four times that in 35 years, if you’ve got 35 years, you’ve got less time. It’s less, but you also have less money to do to put away, or you have to put away more money anyways. So 35 years is like a really ambitious goal, right? Because you have that miracle of compound interest. You know, here’s the thing. If you want a hundred thousand a year lifestyle today, if you, in 35 years, you want to retire, you gotta have have 400,000 a year to pull off of well, what do we got to have to be able to do 400,000 a year?

We got to have about $20 million, right? We have $20 million that we live on that 2%. That’s 400,000 a year. What do you have to save up per year to get to $20 million? By the way, the last example I did with a full-match and the full-contribution only gets you to about three, just under 3.7 million. Yes. We’ve got to do over five times that you gotta be putting away about $150,000 a year into really a 401k. It’s not even allowed to do that much between a 401 K’s and IRA’s which even then that’s disputable. Cause they’ll cap you at how much you can put into those. If you want a hundred thousand dollars a year lifestyle in 35 years, if you’re a 30 year old with all time on your side, you got to save 150,000 a year so that you can have a hundred thousand a year lifestyle.

Guys, you see the problem here. And by the way, that’s before tax after taxes, maybe you have a 75 to 80,000, about $75,000 a year lifestyle. So I didn’t factor in taxes because I just didn’t want to go that high, the numbers right? Now, that I’ve depressed you, you good? Great! Now the solution, and here’s the thing. I’m not going to give any investment advice because one, I can’t do that on the show anyways, but two I’m just throwing out numbers and possibilities because what I learned is a Financial Advisor. This is by the way, why I got depressed as a Financial Advisor, when I started running real numbers and factoring inflation, I had again, figures don’t lie, but liars figure, I had to skew the numbers back in my favor. I would put inflation down to 2%, even though they said put in three, I did two because I was getting depressed.

I was putting the returns up higher. I was saying, well, the average, not the actual, but the, which is always higher than the actual is 10 or 12%. I would put it up higher. I wish I was showing 8% before that was depressing. So I put it back up higher just to show people, Hey, at least you’ll make something, right? Well, then guys, this is where I was lost. Cause I’m like, okay. And then by the way, I became the worst salesman because in the back of my mind I knew something wasn’t right. So it was a little bit harder for me to be a good Financial Advisor. When I was like, I don’t know if this is a solution. I remember my dad asked me, he said, Chris, I’m debt-free. I’ve paid-off my house. I’ve got money. I’ve been stuffing in my 401k.

What can I do now? And I say, well, unless you die within five years, you can’t retire because the money will, you will outlive your money. And he was in his sixties at this point right now, he’s now in his mid seventies retired, but he was in his sixties. And I was like, I don’t know. And he’s like, well, what’s the solution? I said, well, I don’t know. Like I can’t guarantee you good returns. Cause we need cashflow. We need income streams coming in. Now, granted annuities might solve the problem a little bit. There’s annuities out there that might pay you 6% a year. That’s three times better. But remember, even if you’re getting 14,000 a year, times three, that’s only putting you in a 40,000 year lifestyle after you’ve max funded your 401k, we can get that all moved into an annuity that might, at that point, if it’s still around paying you 6% a year, let’s just not, but that’s just not happening for people, right?

It’s like, it’s most people that are retired well, right now. I’ve found have multiple streams coming in or they have other assets to supplement these mutual funds that aren’t working. This is why, by the way, Financial Advisors have not retired. You cannot. I’m telling you, I cannot find Financial Advisors able to retire off of their investments alone. Now some of them have been very good salesmen and packed a lot of money away. So some of them of course have money coming in, residually from the business they’ve done, but actually relying on their mutual funds. It’s not happening, guys. It’s really not happening. And these are people who have been saving for 30 or 40 years. They’ve been giving advice as the seventies and eighties as Financial Advisors and still, they can’t do it. I know this because I even talked to one guy who was that guy.

And he, now he did say I’m retired. He was in his seventies. Right? almost 80 now, he was fully retired now. When I remember the class asked him, said, Hey, well, that’s great! So you put it in your market. He’s like, well, I did put in the market, but I was a Financial Advisor, but I got some, a little bit of real estate. That’s paying me right now. Oh. And I’ve got pensions from the military. Oh! And I’ve got social security. Oh! And I have another pension from a company, he has so many pensions. He didn’t need the money from the mutual funds. He was getting paid from pensions and social security that covered his lifestyle. So of course he was retired, but he wasn’t retired if he lost those pensions and social security. And then by the way, when he lost money, when the COVID hit, he was kind of freaked out.

He’s like, I just lost a lot of money. Cause he wasn’t watching it. He didn’t care. It didn’t matter. This is my point. People like you guys are literally banking on market working for you. But the people that actually have retired comfortably are not. So the solution, what can you do? Well, let me talk about something here. Like there’s different things we’ve talked about. We’ve talked about like American Homeowner preservation, right? They pay 10% a year. Now here’s the thing you make just 10% on that money. Right? You know, even if you put away net so I’m going to use this number right here. So say that you did not get the match and you pulled out that 19,500 now after taxes, if you’re in that $140,000 a year tax bracket, you’re basically paying 24%. That leaves you about 14,820 bucks.

That’s what you get after. It’s all said and done. Now, what if you made 10% a year? Now, if you had that for 35 years, that number would grow up to 4.4 million. If you compounded it at 10%, again, nothing’s guaranteed. Just like the market’s not guaranteed HP Isn’t either, right? I’m just using their numbers, their current numbers. Now they’re paying 10% a year. You can take that as monthly cash flow. Now, if you let that grow for 10 years or sorry, 35 years you’d have 4.4 million. Now granted at 10%, here’s the thing 10% a year, right? Because they’re paying you 10%. They’re paying you that income and interest. You can live on 10% again with mutual funds. You can’t do that because when you start going to bonds and things like that, they’re paying piddly the’re paying nothing right now. So of course with this are paying 10%, 4.4 million means that you living on 440,000 a year. Now, drop that by 75%.

And it’s a one quarter that right, because of inflation, we’ve got to factor that in just to be apples, apples, still 440,000 a year cut into a quarter is 110,000 a year. Guys that actually hit your a hundred thousand all year goal because it was paying you better cash flow it wasn’t gambling on what the returns might or might not be in certain markets. It’s based on what is paying you. So right there, could you do it in three to five years? Yeah. You could live on a hundred thousand plus a year lifestyle potentially right? Now, here’s the other thing. Could you do real estate? Yes. Now the tricky part is what’s the real return of real estate right? Now, if you’re leveraging it, you’re getting mortgages and doing things like that. It’s much higher returns because especially we get appreciation. Oh my goodness! It’s ridiculous.

Now when I buy real estate right now, I’m usually looking for a 1% a month type of thing, right? Whether it’s single family, if it’s duplex or fourplexes my goal a little under that 1% a month, but not much. Right? But let’s just say again, just with cash flow and the fact that your renters pay down your mortgage, which does add extra few percent a year to your money, right? If you’re getting 12%, say as 3%, since 15% a year, now it takes a little while to build up that cash, right? Because it takes you about a year and a half of that 14,800 to get to the point easily, two years within two years, you buy your first property. Okay. Well, let’s say you earn 15% and you got to that point and you just started reinvesting that money and buying more properties. Well guess what?

At 15%, your end balance is $15 million. Now that’s based on equity and cash flow paid out and everything, right? That’s all those things paid out to you. This is my opinion for real estate, a very, very conservative number. Cause it doesn’t even even count anything to do with appreciation. It’s assuming that there is no such thing as appreciation, which we all know is not true, especially long-term. Cause we all know that houses are getting ridiculously more expensive all the time and they’re even more expensive than they were in 2006 and 2007. Aren’t they? So anyways, so we know with inflation, that’s a bigger number than that, but just think about that even after inflation and everything else, that’s still like 3.8 million. If you’re even earning 10% on those 3.8 million, you know, a 10% return on your properties. Even you’re just earning that that’s still 380,000 a year, right?

But that’s 380,000 after inflation. You know where I said HP was 110,000, that’s 380,000. Here’s the thing like I’ve got properties are paying like on average, over like 25, 30% a year. And that’s with appreciation when you start factoring that in, I’m not even counting the tax breaks. I don’t even factor that will really, that is a factor. I don’t have to pay taxes on the money we’re earning because of depreciation and other things you basically can, you can, at least in the current tax laws go almost tax-free with real estate. So what if I bumped that number up to 20%? You know, again, staying less than what I’m getting paid on my current properties, right over the last several years, that’s still pumps that in balance up to $52 million that you know, with equity cashflow and everything over this 35 years, it sounds crazy.

But believe it or not, that’s actually not, that’s actually a conservative number. This is why there are people that have done real estate for so many years. They have millions and millions and millions in real estate. And they’re making hundreds of thousands a year in real estate now. Right? We’ve had people on the show that have been that way. Like Mitch Stevens. We’ve had him on the show before and he comes back. We’ll have another episode with him soon, soon. Right? He’s been doing this for 30 years. He’s making Bucku bucks in real estate. Some of the lava with his own money, but some without his money, I mean you start throwing other people’s money and leverage. It’s ridiculous. Right? Again, we’re just talking about that money you’re throwing in that could have been using a 401k. Now it sounds ridiculous, but still like even after inflation, that’s $13 million.

You’re living on 10% of that. That’s 1.3 million. The question is Chris, can that be possible if you’re packing weight 15,000 a year, you know, just saving that money to buy real estate properties. Is that possible? And the answer is yes. Is it possible? It could be less. Yes. Is it possible? It could be more? Definitely, Yes! So the question is which one sounds better?, Because by the way, can the market be higher? Yes. Could it be lower? Yes. Do you have any control over it? No. See at least when I buy real estate, I have some sort of control now, HP, I don’t have any control over that. Right? Like that’s just their fund, you know, like I’m leveraging them. So I would put that in a similar category to the stock market, although they have paid consistent returns for years, but still I don’t have control. Real estate?

I do. And this is what I’m talking about, guys. Like again, I didn’t even go beyond 20% cause you wouldn’t believe it anyways. The truth is though, is that when you look at those that are actually wealthy and I’m not talking about just billionaires, I’m not about just multi-millionaires what do they all have in common? Many of them have a business and then two many of them, if not all of them have real estate in their portfolio. Many of those people though, do not have money in the stock market. Or if they do, it’s money they’re willing to lose. They’re just like, let’s look as gambling money to them. It’s like Bitcoin, right? They’re less like, Hey, if I make money awesome, but I don’t not counting on it guys. That is what wealthy people do. They don’t gamble and bet on stupid mediocre market returns of maybe 8%.

Then you know, less than 7% after fees, right? They don’t gamble on that stuff. That’s what the poor and middle class of us were taught to do all our lives. That is what mainstream media is teaching you to do. That’s what financial companies are spending billions of dollars telling you to do. That’s not it. Now guys, I know I’ve taken a lot of time on this topic because it’s, to me it’s so vital that you understand this, that you guys run the numbers yourselves do the same thing. I just did. You’ll see these numbers, right? It’s just ridiculous to believe that you could actually retire with a 401k, but there is hope. Like I said, going outside of what Financial Advisors offer going with more of an Anti-Financial Advisor type plan, right? Going away from that mainstream and going more towards the stream that actually works where those people make better returns.

Those people actually create financial freedom and you might think it’s nobody, but I guarantee you a country of 320 million plus people in this country. I guarantee there’s several million that are doing this very thing I’m talking about, guaranteed! Like there’s several million of those people, but that’s not what’s going to be advertised on TV because financial institutions make no money. When you buy a real estate property, you know, fidelity, Merrill, Lynch, those guys banks they’ll make huge money. When you do that stuff, they make money. When you throw money in the market, take all the risk while they just get their guaranteed fees, they take zero risks. They just take your money. They just take it out and fees every time, whether you make money or lose money, they’re always making money. That is the way your investing should be. Is whether you, no matter what’s going on in the markets, you still make predictable cash flow.

You can count on it each and every month. And that is where freedom comes from. Not from hoping and praying that the market works better this year than last year or that Trump sneezes on his Twitter. And then all of a sudden, the market loses 3% cause he mistyped something or he said something stupid, which never happens. Right guys? It happens all the time. That’s not where your life should be. Again, I’m not giving you investment advice. I’m not saying cash all your money out of the market and throw it in this stuff, right? I’m not saying that all. I just want to open your mind up to that. There’s more options out there. That there’s much more. And for those of you that have been questioning, whether you’re going crazy, you’re not because you are trying to do this other path that I’m talking about here.

Guess what? The crazy people are. The ones that think that somehow these 401ks are going to work. We’re in the last 40 years, they haven’t, they have not worked. People are not retiring. Even after 30 or 40 years of max funding, these things. And I know I’ve met with those people and then they come to me saying, Chris, I’ve got a million or 2 million in here, but that’s not enough. Like I can barely retire off that. Especially if I don’t want to run out of money, that’s always their fear guys. Don’t don’t repeat history. Don’t fall in the same stupid place that everybody else has been in. You choose a different path. You choose the path that works. Not the one that’s been proven by the numbers. And by real life, it has been proven not to work. Sorry if you’re a Financial Advisor, but your stuff you’re selling is crap.

It doesn’t work. It has not worked yet. I know that’s why I had to leave it. It was a tough choice, but I made a decision to leave and do something different. And that’s why my life is drastically different than Financial Advisors. And every one of their clients that follows their advice. Guys, the choice is yours. Will you choose the path that’s been most traveled? That’s already been proven not to work? Will you take the path that’s less traveled and that has made all the difference? Guys. I hope this is valuable for you. I hope you learned something. If this is something that was powerful for you, share it, share it. Somebody else saying this is what I was trying to say, but I couldn’t express it. Share this because this is the Ripple effect I am trying to create to help people become free and you cannot do it. Following the status quo. It doesn’t work. You need to love passive income. As much as I do just like my T- shirt says here, right guys, I hope you make it a wonderful and prosperous week! So at least to a prosperous life and you have hope and freedom that you truly deserve. Guys. We’ll talk to you later.

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