Epic Real Estate Investing - How to Turn the "Financial Independence" Odds in Your Favor | 377

Episode Date: April 20, 2018

Today on Financial Freedom Friday, Matt shares shocking news about 401ks and the reason why 95% of Americans aren't prepared for retirement - or even headed in the direction of financial independence. Learn how to flip the equation so you can prepare for retirement and come out ahead of all your friends, even if they're "high income" earners. Learn more about your ad choices. Visit megaphone.fm/adchoices

Hey, Rockstar, Epic Investor, badass real estate investor. Just a quick heads-up. We're going to go, per your request, to all audio here on the show. And if you want to catch the video version still of the podcast, you can catch them all at EpicR-E-I.tv.TV. And also, if you haven't followed us on Instagram, we are pushing out daily summaries of everything that's going on over here at Epic. So you can catch us on Instagram at Epic Real Estate. Enjoy the show. This is Terrio Media. Hey, I'm Matt Terrio and welcome to Financial Freedom Friday. It's time for Financial Freedom Friday with Matt Terrio. You know, I was just thinking when we meet here each and every Friday, we talk about finances. We talk about financial freedom. We talk about your financial future.

And when you talk about money, most people, they have an emotional attachment to it. And understandably so, because it's money. that really provides for everything that we care about. It provides for ourself. It provides for our family. And it allows us to do all those fun things. It pays the doctor's bills. And it pays for the necessities.

A roof over our head. It pays for the food in our stomach. And, you know, if you go out without some of that, you get pretty emotional, right? But when it comes to making your financial decisions, when it comes to making your investment decisions, people have a hard time separating their emotion from those decisions. when really it's just a basic binary math equation. It's really black and white. So I was just cleaning up our YouTube channel.

We're making some edits over here and trying to make it look better and nicer. And I came across one of our videos. I haven't seen it a long time. It was kind of like reminiscing Friday also along with Financial Freedom Friday. But I went through it and it's one that's what they're not telling you about your 401K. And it's probably received the most views out of any. Top three on all of the videos that we released for sure. And, but where it is the leader,

is the leader in the thumbs down thing, the negative comments. And they're pretty, there's some pretty scathing comments about me and what's in this video. And they are obviously emotionally charged, sharing that what is this guy talking about? He doesn't know what he's talking about. He's a total loony. He's a scam artist. Where did he get his education? He doesn't know anything.

Don't listen to him. They say that over and over. don't listen to this guy. And all I've got to say to them, and I'll say it to you as well, if your financial plan is working in the way that you want it to be working, then don't listen to me. There's nothing to learn from me. If what you've got going on is going to get you to where you want to go

and you're happy with that, then don't listen to me. If it's not broken, don't try and fix it. But for most people, it's not working. The vast majority, per the Department of Health and Human Services, it's failing. 95% of our population. Yeah, this whole concept of, retirement plan based on the investing strategy of work, work, work, and save, save, and put as much

as you can in there. So by the time you reach the age of 65, hopefully there'll be a pile of money big enough to where it will spit off a residual income that's going to allow you to live the rest of your golden years in luxury and happiness and comfort. Okay. But it's failing for 95% of the people. And those are the numbers I'm talking about. That's not an emotional decision.

However, it's probably pretty emotional for those 65-year-olds once they reach that point and they realize what they were told their entire life didn't work. That's pretty emotional. But it doesn't have to be that way if you take your emotions out of your financial decisions and you just do the math. Look at where you are right now, how much you're investing, how you're investing, what vehicles you're doing, project that out until you reach the age of 65. and then if that's going to work for you, great.

If it's not, it's time to make some changes. And for most of you, for just most people, you don't make enough money for that plan to work. You don't have the discipline to put the money away every single month for that long of a period for it to work. And most of us don't just have the, we don't have the good fortune. At some point in our life, we're going to reach some sort of financial emergency. You know, the cause of most fortunes lost is a medical emergency.

And so we're really hoping that luck is going to be on our side for that plan to work. And obviously, it's just, it's not the number say so, the stats say so. And if you look at them, I pulled up just a few articles because I did my research before I ever made this video. And nothing has really changed since. And I just pulled up some articles right here. And I didn't go to your mom and pop's blog post either. I didn't go to the crazy conspiracy theorist guy either. I just went to regular conventional media source.

sources. I don't know, and you might think those are conspiracies as well, but Huffington Post, why your 401K is a scam. CNBC, four reasons why your 401K may be a giant rip-off. Here's on Forbes, why 401Ks have failed. This is at USA Today. 401Ks are broken. Here's how to fix them. Let's see, Time Magazine. What's to say? Why it's time to retire your 401K. Let's see, this one's on CNBC. For millions, 401K.

plans have fallen short. This is the this is the fiscal times. The retirement revolution that failed, why the 401K isn't working. I really like this one. This is from the Wall Street Journal. It says the champions of the 401k

lament the revolution that they started. What that means are the people, the original advocates of the 401K are in hindsight are like, oops, we made a mistake. We got the world into a little bit of trouble. In fact, the article even concludes, it's been a while since I read the article

and now it's concealed from me, But at the end of that article, if you want to go look at it, that's the title. But one of the original architects of the 401K, he was telling his story, or they were telling his story of how he's, I think he's in his 70s, and he's still working. The 401K didn't even work for him, and he's one of the guys that originally created it. Then, what's this? This is the Los Angeles Times. Bad news, your 401K won't give you a decent retirement.

From Bloomberg, the 401K crisis is getting worse. So there's plenty of evidence out there to support what I'm saying. I'm not crazy. Right? And this one I like a lot too. This is from LA Times. Your 401K won't give you a decent retirement. Let's talk about the actual numbers.

First of all, you got to decide what is a decent retirement to you. So, I don't know. That's a personal question. And that's going to be different for each and every one of you. But if we just look, say a decent retirement would be the median salary in the country. Well, the median salary is right around $40,000. I guess depending on which source you look at, it could be somewhere between $35,000, let's just say $40,000. Now, how much do you need to save into your 401K for that to spin off a residual income of $40,000 a year?

Well, if you go by the number that most financial planners, most financial experts will give you, when they tell you the return that you can expect by the time you reach the age of 65, when you can actually start withdrawing from your 401k or your retirement vehicle, Say you can count on 5%. I think that's kind of tough today to find something really conservative at 5%. But let's just, we'll give them the benefit of the doubt. Let's say that's so 5%. If that's the case, what you're going to need to save into your 401k is $1.2 million just to live at the median salary in the country, the median income.

So let's look at what the average balance of 401Ks are for people that reach the age of 65. and I'm talking about 401ks and I'm talking about all retirement vehicles. The average balance by the time the average person reaches the age of 65 is only $180,000. They're just a little better than 10% of the way there to just live the median income in this country. So let's look at today's top income earners. So the top income earners is $100,000 or more. What's the average balance of their 401k by the time they reached age of 65? Well, it's just under $400,000.

I think it's $380, $382 and some change. So even the top income earners in this country, it's not working for them either. They're only a third of the way there. So that's what I mean. It's failing this country. It's probably what these articles are referencing as well. It's been a while since. I mean, I didn't go through and read everyone.

I just had to find headlines because when I originally made this video, I went and read a bunch of stuff and all this stuff. It's all still being reported. Nothing has changed. So what's the solution? What's the alternative? Well, rather than taking this old, antiquated retirement advice of working, working, working, saving, saving, and being very disciplined, making sacrifices, clipping coupons, avoiding all debt, all the traditional advice that we get.

And then hopefully by the time we reach the age of 65, that's high enough, that pile of money is high enough to give us the residual income, to give us the life that we want, instead of doing that, let's just flip the equation. Rather than saving the pile to create the income, focus on creating the residual income first and then let the residual income create the pile. Just reverse it and the priority of what you go about it. And there's a lot of different options, you know, especially in this advancement of today and the Internet and all the different options of what that's given us to create residual types of income.

You know, there's a big push and movement on the Amazon stores and the Spotify store There's all kinds of success stories. There's the eBay thing. And then you go to brick and mortar. You could look at automatic car washes or laundry machines. You could write books and create the residual income. Maybe you got a hit song on you. Those are all different types of residual income we could go after right now.

I mean, this is epic real estate. We're partial to real estate. And we are partial to real estate because it's just when you look at the numbers again, it's created more wealth and more financial freedom than for any other, or for more people than any other industry, any other investment. vehicle. So we just looked at the stats. That's why we, that's why we do what we do. And that's why we started to show people what we do is because it's really the final frontier where the average person has a legitimate shot at creating real wealth. The average person has the legitimate

shot of creating real wealth by reversing that equation, going after the residual income first and letting that residual income create the pile. And what's great about it, even better, is you don't have to wait until you're 65 years old to enjoy it. Your wealth and your finances will still be there when you're at age of 65, but you can start living life a lot sooner during your more younger and more vibrant years that you have. You know, life is short. It's going by quickly, isn't it? I can't believe where I am in my life right now. I mean, it seems like just yesterday.

I was graduating high school. I don't know what that feels like for you, but that's what it feels like for me. And it's been a long time since then. So all that to say, you have options. I'm partial to real estate. There are other options out there. Do you? But the two things I'd want you.

you to take away from today, today's Financial Freedom Friday is one, don't invest with your emotions. Invest with your math. The second thing is focus on creating the streams of income before creating the piles of income. Do those two things and you're going to watch the odds flip in your favor. All right, I'll see you next week on another episode of Financial Freedom Friday. Take care. Oh, and by the way, whenever you're ready, there are two ways that I can help you become the healthy, wealthy beast of an investor God designed you to be. You see, I frequently hear from people looking into investing in real estate for the first time. How long is this going to take? So much so that I created a short course about the two easiest and fastest strategies to a paycheck in

real estate. And there's a complimentary copy of that course waiting for you at free real estate investing course.com. Free real estate investing course.com. Or if you'd like to work with me directly one-on-one on your business, go to rei-a-a-a-a-a-ac.com, share with me a little bit about your business and what you'd like to work on, and then I'll get you all the details. I will see you next week.

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