Manage episode 195830976 series 1265475
Wall Street is an interesting place. A lot of arbitrage is happening out there which means a lot of people make a lot of money, and a lot of people don’t. There are also a lot of fees and taxes. There is a place in some portfolios for it, but we love taking you off of Wall Street.
Today, I have an amazing guest partner who runs our Financial Freedom Day Company. This is where we teach you how to get your wealth off of the radar screen. Not just off of Wall Street, but off of the radar screen too.You can find Robert here:
- [01:32] How amazing and smart Rob is when it comes to the game of money.
- [01:48] He has been a financial professional for over 20 years. He has a lot of different financial licenses.
- [02:12] He has expanded his practice into strategies about taking money off of Wall Street.
- [02:33] How traditional financial advisers just ask about your age and divide up your asset allocations into stock and bond plans.
- [03:08] We have come up with a strategy called red, blue and green to help clients understand a lot of the other products that are available that they may not be used to. I'm excited to share how this can happen.
- [03:43] The pain point of traditional financial planning. The bell curve of planning for people to get poorer as they get older.
- [04:06] Hidden fees and taxes. How a lot of people don't understand these hidden fees.
- [04:43] Fees can eat up a portfolio. As your assets grow, so do your fees. Mid America puts most of their money in qualified plans. These started in the 70's when the highest tax bracket was 70%. The strategy was to defer taxes when your bracket will be lower.
- [06:06] Tax rates went down from high to low. The tax deferred strategy isn't the best now.
- [06:40] Taxes will have to come up sooner or later. Paying taxes now is a better strategy.
- [08:21] Talking about redepositing assets. Clients are often all in red in Wall Street and 401ks. This is bad for taxes and something that is volatile.
- [09:01] Red, blue, green. Putting your portfolio together. All in the stock market is red money. One of the few investments that can be dramatically affected by rumors.
- [10:00] Doing things differently. Blue money is alternate investing. It has no correlation to the stock market. Oil, gas, gold, cannabis, or other investments.
- [11:32] Once you start going in one asset class you just get more interested in is. Once you are excited about real life investing it is a game changer.
- [12:45] Blue money is about mitigating against loss and risk.
- [13:19] We are looking for niches with decent returns that can mitigate risk along the way.
- [13:37] Green money are investments with contracts with guarantees. Insurance companies and companies have to put money into the reserve. A decent rate of return with protection against loss. Some of these products have tremendous tax advantages.
- [14:57] Clients often go from 90% red money to 10% red money and the rest in blue and green based on their risk tolerance.
- [15:32] Blue objections are about understanding risks and liquidity, and how they will make money. They want to feel comfortable with the investment to know that it is real. Having an overall understanding of how the investment works and why aren't more people doing it.
- [17:02] The new tax regulations should be positive for investments and the economy.
- [17:43] The importance of not postponing tax and converting traditional IRAs into Roth IRAs. Pay the tax now at the lower rate. Taxes will bounce up as time goes on.
- [20:15] Life versus death insurance. Term insurance is the only way there is a benefit is if someone dies. There is a whole tax code written about life insurance section 7702. There are tax advantages to using cash value life insurance. Making a great rate of return and not losing money. Using it as a wealth account.
- [22:00] This is the classic example of using other people's money with life insurance loans. Then setting things up for tax free income down the line. This is life insurance for the living.
- [22:49] Buy the least amount, but put the most money into it. It is so important to set this up right. If you don't know the tax code, you will miss out on a lot of money.
- [23:59] Using debt as an asset as opposed to a liability. It can become like a bank for yourself. Being like a bank and creating velocity of money.
- [25:07] Downsides of 529 plans. Life insurance doesn't have to be disclosed and doesn't have to be used for a specific purpose. It can also be used as a protection vehicle. It even comes with free long-term care. The money can be used throughout your lifetime for other investment opportunities.
- [27:18] The people who got wealthy during the crash were the people who had access to cash.
- [28:01] Making an educated decision about doing things differently and setting your family up for generational wealth and using life insurance to become your own bank.
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