Epic Real Estate Investing - Control Your Money, or Someone Else Will - Epic Wealth Wednesday | 280

Episode Date: July 5, 2017

Epic Wealth Wednesday presents a route to financial freedom that goes beyond the standard investment plan centered on stocks and bonds, mutual funds and 401k plans. Get clear proof that real estate, while remaining mostly overlooked by the average investor, is actually the surest and fastest way to wealth. Are you on your way to financial freedom? Join us to outline your clear plan for securing your financial freedom and building long-term wealth. Learn why taking the boring and predictable route through real estate is how you will get rich permanently.  Stay the course with Epic Real Estate Investing. ______   The free course is new and improved!  To access to the two fastest and easiest strategies to a paycheck in real estate, go to FreeRealEstateInvestingCourse.com or text “FreeCourse” to 55678. What interests you most? • E.ducation • P.roperties • I.ncome • C.oaching Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's episode is sponsored by Credit Bump, 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 costs 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.

And 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. Credit bump has an A-plus 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. And now, back to creating your epic wealth. 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. So, 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 is really doing with your money? 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? You know, if there's 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.

So ask your financial planner to open their books to prove that they know what they are. are doing? Are they producing solid returns for themselves? Or are they living merely on the commissions of investing your money? You know, 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. You know, 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're going to do with your money.

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. And given money is what makes the society. of which we live, go round, money's important. It's very important. So, 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 stock 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, it's all very basic. You know how to do that. But what most people don't know how to do is, they don't know how to access one of the bigger chunks of money that they have available to them. And it's not even that they don't know how so much. Most don't know that they can. And to what I'm referring is your 401k 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. You know, we discussed a few episodes back. What a disaster the 401K has been. You want to get control of that. You want to take control of it. And you can.

It's called self-directing. And here's how it works. since the inception of 401Ks and the traditional and the Roth 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? And why is it that most of us don't even choose the stocks, bonds, and mutual funds that were invested in? You know, while there's nothing wrong with having those in your portfolio, portfolio. These investments are choices traditionally fed to us by the major banking and investment

organizations. You know, since the advent of these accounts, Wall Street has worked long and hard to create investment products that fit into company 401K plans and the Roth IRAs. And why would they do that? First, that's where the money's at. There's trillions of dollars inside of retirement accounts. That's where the money's at. Second, it benefits them. really more than it does you. I mean, did you know in 1980 there were 564 mutual funds, just a little over 500 mutual funds?

And as of 2009, there were almost 8,000 mutual funds on the market being offered to you and I as investments for retirement savings. Went from, let's that 20, almost 30-year period. We went from 500 mutual funds to 8,000. See, Wall Street keep,

feeds 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 control, by the way. No, it's the exact opposite, actually. It's the ultimate surrendering of your money. And 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're very clear about this. The IRS says your IRA can invest in anything except collectibles. Anything except collectibles. This means you can invest in a most, I mean, you can invest in real estate, private companies, private banks, gold, notes, racehorses, bucking bowls, commercial buildings, including storage centers, gas stations, car washes, vending machines, business partnerships. This is but a very short list of the things that you can invest in using your retirement

account. I mean, the possibilities here seemingly endless. Self-directed IRAs give you the ability to invest in nearly anything. But there are three rules the IRS requires you to follow. They're very clear about these three rules. Number one, no self-dealing. The investment that you choose, it cannot be for personal use. For example, you cannot buy your next home in your IRA and then live in it.

You know, instead, you know, we help many of our clients buy rental properties with the IRA, but you can't buy your primary residence. You know, 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 that they're forbidden you cannot buy or sell any investments in your retirement account with you know your grandparents your parents your spouse your children

children's spouse grandchildren you know business partners um individuals that can influence your financial well-being accountants for example you can't invest with them either now while i named about 10 to 20 people you cannot do an investment with there's 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. And 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's just no way to tell if the collectible is actually going to be used for personal use. They can't keep dips on that. So sorry. Sorry to crush your dreams of using your retirement funds to invest in Babe Ruth's, ball jersey or that Ansel Adams original that you saw at the gallery. But hopefully I've created new dreams for you. As what I haven't mentioned, and perhaps I didn't have to, but whatever you

choose to self-direct your retirement funds do, that grows tax-free. It grows in a tax-free environment. And I mentioned a couple segments back. What a big deal that is, right? Specifically, I mentioned how detrimental the smallest of tax liability can be to your wealth creation. You know, $1 doubled every year equates to $1 million in 20 years. You're on a paltry 15% tax rate, you lose 75% of that wealth build. But in a tax-free environment like a self-directed 401k, you get all of it. In fact, I can double the value of your 401k within the next 45 days with no extraordinary effort at all.

I can double the value of your 401k within the next 45 days. Here, let's say you have $100,000 in your 401k. 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 bought it for cash flow, bought it for its income. And if you're wondering where the rest of the money came from,

if you only put $75,000 in, your 401k borrowed it. Yeah, from a bank, just like you do. Your 401k can borrow money from the bank too. So from beginning to end, that process would take about 45 days. And now, after that 45 days, inside your 401, what was 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's some left over even each month that goes into your account, the positive cash flow. So, assuming there, it's about $3,000 of positive cash flow on a property like that, after all the expenses and debt services is taken care of, and then assuming a national average of 3% appreciation,

you end your first year with your 401k's value at $342,900, almost three and a half times growth and a return on your principal of 57%. And Uncle Sam can't touch it. How did the current mutual fund that you've got right now in your 401K, how did that perform last year? Was it anything close to 57%? You know, 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. And this is what the people at Cashlow Savvy do for their clients. I mean, how quickly would retirement be an option for you with 57% annual returns? Well, I'll tell you. I'll tell you exactly right after this. If waiting for your investments to grow feels like waiting for pink to drive, there's a powerful secret your financial planner doesn't want you to know.

You can accelerate your investments growth by two, three, or even four times. That's bad news for Wall Street, but great news for you. We're cash flow savvy, and 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. And it's yours for free. For the secret your financial planner doesn't want you to know, go to cashflow savvy.com.

That's cashflow savvy.com. And now, back to creating your epic wealth. So, 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. You know, at first, we need to establish how much money do you need to feel you could comfortably retire? Meaning, you know, in that number could be in your 30s, it could be your 40s, it could be 50s, age ain't 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 get up that, 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 got to tighten the belt and cut salaries. Hey, no more bonuses this year or we got to cut the vacations, whatever may be. How much money would you 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. It would take one point two million, just a little over one million. So one point two million at a four percent return to produce the median household income in America, about 40 grand a year.

So I'm just pointing that out because that's a reference point. So let's say we want to at least live on double that. So 80 grand a year. So that would have to be $2.4 million. and that would 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. And we'll just round it up to 100 grand to make the math easy. So we're going to live on 100 grand a year to, so we need about 2.5 million bucks. All right. Now, the average balance in today's 401K of those that make over 100 grand a year, it's right around $200,000. So how long at 50% return, at a 50% return, would it take? to get to $2.5 million.

How long would 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 to use the rule of 72 to figure this out. And 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, you know, given a fixed annual rate of interest. So 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. So for this example, the rule of 72 states that $200,000, that's the balance of our 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. So we went a little bit over, but we'll just leave it there. So I'll add all that up, about 4.9 years, basically five years to do it. All right, so five years. But Matt, come on, 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. And all of their thinking and all of their analysis, It's all around that one property thinking there's no way this thing is going to grow 57% every year. And 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 properties, each time there's equity available to take that out and buy more properties,

what most people would view as miracles happen. They can happen. And they do. They happen every day. For example, a good friend of mine, Jason, he's got a half a dozen or so rentals in his retirement account. He's doing well for himself. They're all cash flowing.

They're all in nice areas. They're all appreciating. And last month, he did something a little different. He completed a high-end fix and flip. Did it in Tampa and Florida. And he purchased the property. Wait, no. Scratch that.

His self-directed retirement account purchased the property. It was a real fix-repper, but still a $400,000. purchase, but only $100,000 came out of his account and he borrowed the rest from a separate lender. Another, oh, then from a separate lender, he borrowed another $100,000 to fix up the property. All right, so he got $400,000 or $300,000 from the bank, another $100,000 to fix the property up. Took about two months to complete, and it was on the market for a few weeks. And then he just closed last month for $925,000. So after he paid back the bank and after he paid off the construction loan, his self-directed

retirement account was left with $425,000. Not bad, right? In three months, he turned 100 grand into 425 grand, a 325% return. And when annualized, that was a 1,300% return, a 1,300% return, all in a tax-free environment. Now, that 57% doesn't sound like all that much, does it? No. All right, so Jason would definitely call this deal. He'd call this deal a home run.

They don't fall in his lap every day. But it's certainly not a once-in-a-lifetime deal either. That's what I mean when I say, quote-unquote, miracles happen. And when you reinvest the profit into more cash-flowing discount property and you keep using those profits to buy more property, I mean, I'm telling you, wealth can get created pretty darn quickly and permanently. So if you'd like to access your 401K's funds or, you know, 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 epicir.com, epicirra.com. It's a free download there. And there's no opt in there or anything either. I don't want your email address. Okay. So it's nothing, nothing like that. Just type in epicira.com and download the document. Take a look. It's 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. And 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 and you can contact him directly.

I'm not involved in any way. So that's at epicir.I.a.com. All right. So next week, I'm going to see you right back here where I'm going to lead you through a step-by-step plan of seven years to seven figures in your spare time that anyone can do if they want to, if it's important enough to them. All right. So a big thank you to our sponsors this week, due overfunding, 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. Ready? So it's been an absolute pleasure.

I will see you next week as we continue to create your epic wealth. If opening up your financial statement each month is about as exciting as watching paint dry, the epic wealth fund may be the next investment opportunity for you. The epic wealth fund invests in distressed real estate and shares the profits with its shareholders. If you're an accredited investor who has already enjoyed success elsewhere in their business or investing life, and you're seeking a broader exposure to real estate in your portfolio on a passive basis, the Epic Wealth Fund's Executive Summary is available for your review. Go to EpicWealthfund.com to review the funds executive summary.

Epicwealthfund.com Real estate investments involve a high degree of risk. Residential income and returns may vary and are not guaranteed. Past performance has no indication of future performance. Nothing herein shall be construed as investment, tax, legal, or accounting advice. This podcast is a part of the C-suite Radio Network. For more top business podcasts, visit c-sweetradio.com.