Is traditional retirement dumb? Is it stupid?
I'm Kris Krohn and today we're talking about that.
No, man. You're stupid. - Your mom's
stupid. - Well, your mom goes to college. - Your mom invests in college. - You're a poopoo
face. - Dumb head. - Do you guys remember third grade and what like backyard
schoolyard bullying looked like? Okay, Steven and I,
we're probably going to come across a little bit like we're going to revert to
some juvenility, to some ultra youngness because we're
talking about retirement systems and these kind of get us a little bit fired
up because the traditional retirement system is so dang broken, it's so
frustrating and our team are having these conversations every day with
people like, I'm putting money in my 401k and I'm paying off my house and I'm
doing this like, it's like, do you know that that system is broken and is
guaranteed to never get you where you want to go? - Yeah, so let's talk about it.
Why are retirement, the traditional retirement platforms stupid? Just start
out right with that. Let's just talk about it. Most of us are taught our
entire lives to put our money in a 401k. Now I want to talk about this 401k
because the reality is is the 401k was never meant to retire you. Just ask your
parents, ask your grandparents, ask anyone you know, how much do you have in your
401k? And even people that have done it right and I'm saying right in air
quotes here, right. People that have done it the right way, they've gone to school,
they've gotten the job, they've worked hard, they put their money away, they've
paid down their home, they typically still only have, I mean, even though
they've done really well, they may have what?A couple hundred thousand dollars
in a 401k and think about this, if you've been used to making fifty grand a year
and you've got a couple hundred thousand dollars in a 401k for retirement
- Then you're going to retire for 4 years. - You're retiring for 4 years. Are people retiring for
longer than 4 years? - People these days, modern medicine is keeping us alive
forever. - We're indestructible.
- No, but actually our quality of life really sucks and now they're just
making it so we can live a suckier life longer. - I mean, most people are living 20, 25, 30 years
past retirement so if you've got enough for 4 years, it's just not enough. The
system's broken. - Well and here's the thing that people don't know about 401k's
and our financial system. There's no transparency in fact, 401k's they are not
federally regulated in a manner where they're actually able to charge us 4%
now by the way, you're not averaging 4% on your money but
they're getting rich on this multi trillion dollar industry and we're the
ones left holding the bag but it's our own hard-earned money at work so here's
the deal on 401k, can you touch it? No. Does it pay you a monthly dividend or
cash flow? No. Can you control it and tell you where
you want to put it? No. Well, I totally get that if you
watch this video and you have a 401k or for you young people out there. Now
listen, I'll tell you, 401k is brilliant if you have no financial plan. If you
have no plan - It's a savings bucket. - Then it is a savings bucket and that's great
for people but you're on Limitless Wealth TV here because you're
formulating a plan. I hope you have a plan. If you don't have a plan, you got to
click the link and say, Kris and Steven, get me a plan.
Us, our team, we'll get in contact with you and we'll give you a plan because
once you have a plan, you're going to start realizing that putting money into 401k's
and IRA's, it's not this that they're bad because
we believe in in low-yield or investments or low-risk investments but
I don't believe in stupid, okay. 401k is stupid,
can't touch, penalize you if you try, can't direct it, it doesn't pay you
dividends like, what kind of investing is that? - Who decided that this is a good
idea? - It's because it replace the whole pension system, we could talk about the
family farms. - A lot of you are asking questions, you want to know you know, sure
you keep talking about how 401k's are bad and IRA's are horrible but what about the
company match? I don't know so let's talk about the match though. Will you ever
actually see the match? - You'll eventually see the match but you can't touch your
money for a really long period of time and it's true, someone else is
contributing and when you factor that in, that is the reason why people are
doing it. I want my my maximum match. There's a principle that debunks the
whole match and it's called opportunity cost.
There's an economic principle and it basically says what are you missing out
on by the choice that you're making? Hey, my money, I'm getting a match so I'm
dedicating 3% 5% 7% of my money. Every year, I put up my 401k, I get a match on
up to 3% or 5% or whatever it's going to be and that's going to be my
retirement. First of all, broken, it'll never be
enough which means number 2, you have to do something different. If you have to do
something different, it's hard to do something different. If you don't have
the money with which you need to do the thing that is different, did it make
sense? So the opportunity cost us, what are you missing out on with the choice
that you're actually making? Which is, alright, if I wasn't contributing money
in my 401k, where could I put it? Well 401k, do the math. 401k is going to make me
on average 4% and I've got the double so let's just say that I'm
doing, it's all factored in let's say, I'm doing 6%. If you're doing real estate
earning 12%, is that good-er? Because if it's good-er, then you need to take that
an account with the decisions but there's one other thing that makes it
good-er, it compounds. One deal today earning 12%,
2 or 3 years from now could give birth to two more deals doing the same
and now my original investment is earning me 30 or 40 percent. Oh my gosh, I
took Steven and Kris' course, I'm partnering then I started buying these
properties, started using their money, now I'm making an infinite %, we'll try to
assign an arbitrary value, I'm making a 100% of my money, 200%
of my money, 400% of my money. Is that realistic
in real estate? Yeah, if you're going to use 401k as your lifelong retirement plan
and you were to do the same thing in real estate and line those those up
parallel? You got to check out, we've got a special report posted on how 401k
performs to real estate. You got to select the option to meet
with Steven to actually do a game plan. As for people that have $35,000 or more
and they're buying their first investment property and we'll send you
the reports and show you exactly what that looks like and it's mind-numbingly
different, one will never get you where you want to go and the other one can get
you where you want to go. - I want to give a little bit of a different angle
on the match here because although, yes, you may receive it, there are times where
no, you may not ever receive it and I want to talk about that because we
experienced this in 2007 and 2008. We've talked about how these markets are
cyclical, right? We experienced these rises and we experienced crashes
as well and if the markets are cyclical and the markets are constantly going up
and down, then let's just talk about this mathematically, right? If you got, if
you've got a dollar and the market goes down 50%, what do you
have? - If you have a dollar and the mark goes down 50%, you have 50 cents.
- Okay, so if you got 50 cents and the market goes up 50% again, what do
you have? - 75 cents. - Right, you don't have a dollar. - I didn't get my dollar. - Right, you
don't get your dollar back. - So the market goes down 100, I got to have
the market go up 100% just to actually break even. - Right, so you so you've got
these different fluctuations, you've got to be aware of and this is
really critical, we're talking about your 401k and your max because your 401k is
tied to the markets, it has tied to the fluctuations in the market place and
what happened with a lot of people in 2007 and 2008 is they had their money but
they lost 40% 50% 60% of what they had. That match that they had, it
didn't just go away, it went away plus their own puts the money that they put
in, a lot of that went away too so I'm just saying that there are instances
where you may never see your match but if that same money was in real estate by
the way, if that same money was in real estate that is
paying you monthly, if that same money was in real estate that was giving you
some amazing tax advantages and that same money was in real estate that was
growing and expanding over time, it would be a different outcome, that's a real
retirement, that's a smart retirement as opposed to a stupid retired. - Alright so
let's just wrap this up on stupid versus smart. If you are going to use IRA's,
annuities, 401k's and traditional qualified funds and vehicles just like
that, I'm just going to tell you right now.. As long as you have done an appropriate
financial allocation of how much you put into those, sure, then maybe those are
just your savings buckets but if you're relying on them to retire you, that's the
problem so by the way, if for example you're saving 10% or 20% of your
income outside of your 401k, then keep your 401k. You're setting enough money
aside that you can invest but if you're only having enough that you got to
choose. Oh man, this 401k or actual investing that might win? Then the choice
is really simple, we hope that becomes more obvious for you, keep the 401k, keep
the IRA, keep all that. If you're an amazing saver and you're really good at
allocating a lot of excess income towards investments that will actually
make the difference in making enough money that you can be retired and then
that would be called smart. And that's how the retirement plan crumbles, it's
been crumbling, it's going to keep crumbling but now you know it and you can do
something about it, you've got options. Check out the link, hit up our website,
see the nearly billion dollars worth of real estate that we've done
and let us show you what some of your alternatives will look like that
compound and grow and can take care of you and get you where you actually want
to go.
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