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The #1 Wealth KILLER


Albert Einstein once referred to compound interest as the 8th wonder of the world. Saying he who understands it earns it; he who doesn’t pays it. And he couldn’t have been more right. Today we’re going to be looking at the miracle that is compound interest and how can protect my retirement as it relates to the #1 killer of your wealth. Let’s get started. So the #1 wealth killer is debt. Yeah, I know, big shocker. But it’s really true and today we’re going to look at why that is.

The truth is, having too much debt can put a limit on your greatest wealth-building tool – your income. While it may be tempting to invest rather than pay off your debt, compound interest is a force to be reckoned with. In fact, I recently dedicated an entire video to its power. Financial advisors often use the example of Jane, who invests $100 per month ($1,200 per year) from the age of 18 to 25 and earns an average of 10% per year on her investments. By the time she stops investing at age 25, her nest egg will be worth just over $15,000.

However, before you start investing, it’s important to consider your debt load. Here are some reasons why paying off your debt first may be the smarter choice:

High-interest rates: Many forms of debt, such as credit card debt or personal loans, carry high-interest rates that can negate any potential investment gains.
Risk: Investing always carries some degree of risk, and if you have high levels of debt, taking on additional risk may not be advisable.
Stress: Debt can be a significant source of stress and anxiety, which can have negative impacts on your overall financial well-being.
Freedom: Paying off debt can give you a sense of freedom and control over your financial situation, allowing you to make better long-term decisions.
That being said, paying off debt doesn’t mean you can’t invest at all. Here are some steps you can take to balance debt repayment and investing:

Create a budget: Determine how much money you can allocate towards debt repayment and investing each month.
Focus on high-interest debt: Prioritize paying off high-interest debt first, as this will save you the most money in the long run.
Consider employer-matched retirement accounts: If your employer offers a retirement plan with a matching contribution, take advantage of it. This is essentially free money that can help you save for the future.
Seek professional advice: A financial advisor can help you create a personalized plan that takes your unique financial situation into account.
In conclusion, while compound interest is a powerful tool for building wealth, it’s important to consider your debt load before investing. Paying off high-interest debt should be a priority, but that doesn’t mean you can’t invest at all. By creating a budget, focusing on high-interest debt, taking advantage of employer-matched retirement accounts, and seeking professional advice, you can balance debt repayment and investing to achieve your financial goals.

Over the course of the next 45 years, those investments will continue to grow. Assuming that it continues to grow at an average annualized rate of 10% per year she will end up with $1.1 million in her portfolio at age 70. That’s all achieved with eight years of investing $100 a month. Jane becomes a millionaire by investing $9,600 of her own money. On the other hand, we have John. John doesn’t start investing at age 18. Instead, he starts at the age of 26 (just after Jane had finished all of her investing). He also invests $100 a month. However, unlike Jane, he does it from the age of 26 all the way until the age of 70. John invests $54,000 of his own money over the course of those years and ends up with a nest egg of just under $950,000. So John ends up with approximately $150,000 less than Jane. This is in spite of the fact that he invested six times more of his own money than she did.

It’s no secret that excessive debt can put a damper on your ability to build wealth using your most powerful tool – your income. While the concept of compound interest is widely known to be an effective way to grow your money over time, paying off debt may seem like a counterproductive move. However, it’s important to remember that not all investments are created equal, especially when you’re dealing with debt payments.

Let’s take a look at an example: Jane invests $100 a month for 7 years starting at 18 and ends up with a net worth of $1.1 million at the age of 70. Now, let’s say John starts investing $100 a month at the same age and earns an average of 10% per year, just like Jane. Even if John continues to invest until he’s 100 years old, Jane would still have more money than him, and her lead would only increase with time. In fact, at the age of 100, Jane would have $19.2 million to her name, while John would have $16.7 million. This just goes to show the power of compound interest, as famously called by Albert Einstein as the 8th Wonder of the world.

However, when it comes to investing, it’s important to consider the context of one’s financial situation. Comparing someone who is debt-free to someone who is not will not provide an accurate comparison. While Jane invested $100 a month for 7 years, John was dealing with debt payments and didn’t invest anything for those first 8 years. But what if John managed to free up an extra $200 a year, or less than $17 a month, by paying off his debts? In that case, he would come out ahead of Jane by the time they’re both 70. And if he freed up more money than that, he would pass Jane even earlier.

So, what’s the takeaway? While compound interest is undoubtedly a powerful tool, it’s important to also consider the impact of debt on one’s ability to invest. Paying off debt and freeing up funds for investment can ultimately lead to greater financial success in the long run.

And given the state of the average American debt situation, $17 a month in payments is a remarkably conservative estimate. According to articles in business insider,
CNBC, and Forbes the average American debt situation looks like this: About $9,000 in credit card debt which is
often split between several cards. $30,000 in student loan debt. And assuming a used vehicle was bought a little
over $21,000 on a car loan. That’s around $60,000 in total debt. If we assume 18% interest on the credit cards
and 4.5% interest on the other loans and terms of 5 and 10 years on the car loan and student
loan respectively, the minimum payments could be roughly $900 a month. Freeing up that much cashflow could make a
tremendous difference in the previous example. Let’s look back at John’s situation from before
and assume that his household’s debt situation was that of the average American. John uses his $100 a month of excess cash
flow to pay off these debts.


Based on the numbers it would take him roughly
six years to become debt-free. This is assuming he did not work any extra
hours or sell anything to get out of debt faster. Once he was debt-free he would have almost
$1,000 a month left over to invest. If he starts the process of becoming debt-free
at the age of 18 when Jane was starting to invest he would have become debt-free by his
24th birthday. If he then turned around and started investing
the full $1,000 a month he would actually be further along in his investments by his
25th birthday then Jane was. Granted this is largely because he has invested
more money than Jane has at this point. Jane by her 25th birthday had only invested
$8,400. That’s quite a bit less than John’s $12,000
but think of the potential payoff of this down the road if John keepS investing that


He’ll also likely be able to lead a much
better lifestyle than Jane in the present due to his lower monthly expenses. Jane may eventually equal him in that regard
if she gets her debts paid off, but for those first several years after John is debt-free,
it is worth noting. Remember, compound interest is an incredibly
powerful mathematical force. But it can work just as hard against you as
it can for you. So it’s important to make sure that compound
interest is your ally in your finances, not your enemy. So with that being said how do we avoid this
killer of wealth? First, if you’re lucky enough to not have
any debt right now research some ways to ensure that you keep it that way.


If you’re planning to go to college look into
ESA or 529 plans. They are ways to start saving for college
while lowering your tax burden (which is always a nice perk). Also, look into scholarship opportunities
or PSEO. Don’t be afraid to have a summer job and work
during the school year part-time. For the record, this can also be a good option
in high school to give yourself a head start financially so long as it doesn’t take away
from your studies too much. Make sure that you always have an emergency
fund. It should contain three to six months worth
of expenses so that you don’t have to take on debt for those moments when life happens. Make sure you have insurance for those catastrophes
that you wouldn’t be able to cover with your savings. Catastrophic health emergencies are a good
candidate for this.


If you’re already in debt, learn about how
people have paid off their debts. Then choose the strategy that is most likely
to get you (and keep you) completely out of debt. Three of the most popular strategies are the
debt snowball, debt avalanche, and debt tsunami. I have done videos on all three of those and
they will be linked in the description. The debt snowball is the one made famous by
financial personalities such as Dave Ramsey. It has you order your debts from smallest
to largest balance and pay them off in that order regardless of the interest rates on
those debts. The plus side is the momentum you can build
up for yourself by quickly wiping out those bills. The downside is it isn’t the most mathematically
efficient way to get out of debt, all else being equal.


The debt avalanche is the more mathematically
efficient option if you can stick to it. It has you order your debts from highest to
lowest interest rate and pay them off in that order. This is regardless of the size of the loan
itself. The upside is the fact that you’ll be paying
less in interest. The downside is in some situations it may
take quite a while to get rid of that first bill. For those who are more motivated by seeing
the balances of the debts themselves going down this may not be much of an issue.


For those that are more motivated by the lowering
of bills, this could be an issue in some situations. The debt tsunami has you order your debts
from the most emotionally stressful to the least emotionally stressful and pay them off
in that order. In some cases, this could mean paying off
the largest balance that also has the lowest interest rate first. However in my experience that is not commonly
how it goes. Most of the people that I’ve seen use this
strategy tend to use it because there are personal loans between family or friends that
are causing a lot of stress in the relationship. The person with the debt uses the tsunami
to get rid of that loan first and then often switches to a different strategy such as the
snowball or avalanche. Which is another viable option for many people. There’s nothing stopping you from starting
with one strategy that will help get you going and then switching to another that will work
for you longer-term.


I know a lot of people who have started with
the snowball to get themselves some momentum and then switched to the avalanche once they
were on a roll so that they could save on interest. Another thing I would recommend looking into
is the power of the debt snowflake. If you haven’t heard, the debt snowflake is
a strategy where you find ways to free up money (or just happened to find the money)
that you can put towards your debt payoff strategy. The nice thing about it is it works well with
any of the other three strategies I mentioned. While by itself it isn’t game-changing it
does help your primary strategy do its job a little better. And as we know every little bit helps. If you need more motivation make sure to check
out Dave Ramsey’s YouTube channel and their debt-free screams playlist.


It’s filled with a lot of amazing stories
of people paying off loads of debt on various levels of income and getting to see their
relief when they are finally debt-free is very inspiring. You might also find their Turning Points playlist
interesting. It is essentially interviews of people who
have become debt-free talking about what made them decide to go through that process and
achieve that lifestyle. I’ll leave a link to both playlists in the
description as well..

As found on YouTube

Retire Wealthy

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The 4 phases of retirement | Dr. Riley Moynes | TEDxSurrey

Transcriber: Zsófia Herczeg
Reviewer: Peter Van de Ven Everyone says you have to get ready
to retire financially. And of course you do. But what they don’t tell you
is that you also have to get ready psychologically. Who knew? But it’s important
for a couple of reasons. First, 10,000 North Americans
will retire today and every day for the next 10 to 15 years. This is a retirement tsunami. And when these folks come
crashing onto the beach, a lot of them are going to feel
like fish out of water without a clue as to what to expect. Secondly, it’s important
because there is a very good chance that you will live one third
of your life in retirement. So it’s important that you have
a heads up to the fact that there will be significant
psychological changes and challenges that come with it.

I belong to a walking group
that meets early three mornings a week. Our primary goal is to put
10,000 steps on our Fitbits, and then we go for coffee
and cinnamon buns – (Laughter) more important. (Laughter) (Applause) So as we walk, we’ve gotten into the habit
of choosing a topic for discussion. And one day, the topic was, “How do you squeeze
all that juice out of retirement?” How's that for 7:00 in the morning? So we walk and we talk, and the next day,
we go on to the next topic. But the question stayed with me because I was really having
some challenges with retirement. I was busy enough,
but I really didn’t feel that I was doing very much
that was significant or important.

I was really struggling. I thought I had a pretty good idea of what success looked like
in a working career, but when it came to retirement,
it was fuzzier for me. So I decided to dig deeper. And what I discovered was
that much of the material on retirement focuses on the financial
and/or the estate side of things. And of course, they’re both important
but just not what I was looking for. So I interviewed dozens
and dozens of retirees, and I asked them the question, “How do you squeeze
all the juice out of retirement?” What I discovered
was that there is a framework that can help make sense of it all.

And that’s what I want
to share with you today. You see, there are four distinct phases that most of us move through
in retirement. And as you’ll see,
it’s not always a smooth ride. In the next few minutes, you’ll recognize
which phase you’re in if you’re retired, and if you’re not, you’ll have a better idea
of what to expect when that time comes. And best of all, you’ll know
that there is a phase four – the most gratifying,
satisfying of the four phases – and that’s where you can squeeze
all the juice out of retirement. Phase one is the vacation phase,
and that’s just what it’s like. You wake up when you want,
you do what you want all day.

And the best part
is that there is no set routine. For most people, phase one represents
their view of an ideal retirement. Relaxing, fun in the sun – freedom, baby. (Laughter) And for most folks, phase one
lasts for about a year or so, and then, strangely,
it begins to lose its luster. We begin to feel a bit bored. We actually miss our routine. Something in us seems to need one. And we ask ourselves, “Is that all there is to retirement?” Now when these thoughts and feelings
start to bubble up, you have already moved into phase two.

Phase two is when we feel loss, and we feel lost. Phase two is when we lose the big five – significant losses
all associated with retirement. We lose that routine. We lose a sense of identity. We lose many of the relationships
that we had established at work. We lose a sense of purpose. And for some people,
there is a loss of power. Now, we don’t see these things coming. We didn't see these losses coming in
because they happened all at once. It’s like, poof, gone. It’s traumatic. Phase two is also when we come
face to face with the three Ds: divorce, depression and decline – both physical and mental.

The result of all of this is that we can feel
like we’ve been hit by a bus. You see, before we can
appreciate and enjoy some of the positive aspects
associated with phase three and four, you are going to, in phase two, feel fear, anxiety
and quite even depression. That’s just the way it is. So buckle up and get ready. Fortunately, at some point,
most of us say to ourselves, “Hey, I can’t go on like this. I don’t want to spend the rest of my life, perhaps 30 years, feeling like this.” And when we do, we’ve turned the corner to phase three. Phase three is a time of trial and error. In phase three, we ask ourselves, “How can I make my life meaningful again? How can I contribute?” The answer often is to do things
that you love to do and do really well. But phase three can also deliver
some disappointment and failure.

For example, I spent a couple of years
serving on a condo board until I finally got tired
of being yelled at. (Laughter) You see, one year the board decided
that we were going to plant daffodils rather than the traditional daisies. (Laughter) And we got yelled at. Go figure. I thought about law school,
thinking perhaps of becoming a paralegal. And then I completed a program
on dispute resolution. It all went nowhere. I love to write. So I created a program
called “Getting started on your memoirs.” That program has met
with “limited success.” (Laughter) It’s been a rocky road for me too,
and I told you to buckle up. Now, I know all this can sound bad. But it’s really important to keep trying and experimenting
with different activities that’ll make you want
to get up in the morning again because if you don’t, there’s a real good chance
of slipping back into phase two, feeling like you’ve been hit by a bus. And that is not a happy prospect. Not everyone breaks through to phase four, but those who do
are some of the happiest people I have ever met.

Phase four is a time
to reinvent and rewire. But phase four involves
answering some tough questions too, like, “What’s the purpose here?
What’s my mission? How can I squeeze
all the juice out of retirement?” You see, it’s important that we find
activities that are meaningful to us and that give us a sense
of accomplishment. And my experience is that it almost always
involves service to others.

Maybe it’s helping a charity
that you care about. Maybe you’ll be like the old coots. (Laughter) (Applause) Yeah. These folks took a booth
in the local farmers market and were prepared to give their advice
based on their vast years of experience to anyone who came by. So one of their first visitors was a kid
who wanted help with his math homework (Laughter) on his tablet. (Laughter) They did the best they could.

Or maybe you’ll be like my friend Bill. I met Bill a few years ago
in a 55 plus activity group. In the summer, we golf together
and walk together and bicycle together. And in the winter, we curl. But Bill had this idea that we should exercise
our brains as well. He believed that there was
a tremendous pool of expertise and experience in our group, and so he approached a number of folks and asked if they would volunteer to teach some of the things
that they love to do to others. And almost invariably, they agreed. Bill himself taught two sessions, one on iPads and one on iPhones, because we were smart enough to know
that a number of our members had been given these things
as gifts at Christmas (Laughter) by their children, and that they barely knew
how to turn them on.

The first year, we offered nine programs,
and there were 200 folks signed up. The next year, that number
expanded to 45 programs with over 700 folks participating. And the following year,
we offered over 90 programs and had 2100 registrations. Amazing. (Applause) That was Bill. Our members taught us
to play bridge and mahjong. They taught us to paint. They taught us to repair our bicycles. We tutored and mentored local school kids. We set up English-as-a-second-language
programs for newcomers. We had book clubs. We had film clubs. We even had a few golf clubs. Exhausting but exhilarating. That’s what’s possible in phase four.

And do you remember the five losses
that we talked about in phase two? The loss of our routine and identity and relationships and purpose and power? In phase four, these are all recovered. It is magic to see, magic. So, I urge you to enjoy
your vacation in phase one. (Laughter) Be prepared for the losses in phase two. Experiment and try as many different
things as you can in phase three, and squeeze all the juice
out of retirement in phase four.


As found on YouTube

Retirement Planning Home

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Growing wealth by going bigger – 0 to over 3000 doors in 3 years.

Intro: Hi! My name is Rod Khleif and I'm 
the host of the “Lifetime Cashflow through   Real Estate Investing Podcast”, and every 
week I interview Multifamily Rockstars.   We talk about how they built incredible 
wealth for themselves and their families   through multifamily properties. So, hit the 
“Like” and “Subscribe” button to get notified   every Monday when a new episode 
comes out. Let's get to it. Rod: Welcome to another edition of “How to Build 
Lifetime Cashflow through Real Estate Investing”.   I'm Rod Khleif and I'm thrilled that you're 
here. And I know you're going to enjoy my   friend who I'm interviewing today, his 
name is Darin Batchelder and Darin and   I actually got to know each other a little bit at 
a mastermind event we went to in Jamaica recently   but Darin is a GP in 300 doors a KP in over 
150 doors but he's an LP and almost 4,000 doors   and so he brings a wealth of experience 
to the show.

Welcome to the show buddy. Darin: Hey Rod, I appreciate 
you having me on, it's an honor. Rod: Oh, thank you. Well this will be a lot of 
fun today and you know, it was a blast in Jamaica   jumping into holes of water and going out on boats 
and all kinds of crazy stuff that we did but–   so in fact I'm seeing posts come through right 
now on. It's kind of funny on my right screen   here but so maybe you could tell my listeners a 
little bit about your story.

How you got started,   how you got into real estate like we do, you know 
normally and then we'll drill down on some topics. Darin: Sure, so I'm a little older 
than a lot of the folks out there,   I'm 50. I didn't get involved with real 
estate until about three years ago. So,   I own another business that I started back 
in 2007, trading loan portfolios residential   multifamily and commercial real estate 
loans, bank-to-bank larger transactions   and about three years ago, I decided I really 
wanted to get involved with actually purchasing   real estate and when I did that, when I made 
that shift, it's a big honor being here today   because when I made that shift, your podcast 
was one of the podcasts that I spent a lot of   time listening to people and trying to learn 
from other people that have already done it   and so here we are three years later.

it's an honor to be on the other side of it. Rod: Well I really appreciate 
your kind words, buddy. So,   three years, wow you've done a lot in three 
years. So, how did it happen so quickly? Darin: A few things, one I finally decided 
to get in the game and I did with what a lot   of people do, a lot of people getting involved 
in a single family. I decided to buy a duplex,   it was a new construction duplex my wife and I 
entered into that contract in October of 2017   and you know, it was new construction 
so it was going to take a year to build.   Once I entered into that contract I realized, look 
I'm going to make some money on this deal but it's   not going to be life-changing and it's going to 
take forever to really build wealth going duplex,   fourplex, aplex. So I wanted to find another way 
to go. Now, I wanted to go bigger, I wanted to   go faster. So I reached out to different groups 
and met other people that were in the industry   that had already done what I wanted to do and 
I started surrounding myself with other people   that had done it and they gave me 
guidance on how to move forward.

Rod: Nice, yeah. That really makes all the 
difference in the world that's why, you know,   our students in our Warrior Program just kill it 
because they're doing deals between each other,   investing in each other's deal,s co-sponsoring 
each other's deals and you know, the strength   in numbers, a rising tide lifts all ships. So I 
know that you know we talked before we started   recording that you did a lot of unlimited passive 
investing and I mean you're in almost 4,000 doors   with other investors.

Can you talk a little bit 
about that? And maybe some of the trepidation   you had, some of the things you went through, some 
of the due diligence you went through, maybe make   some suggestions to my listeners who might be 
thinking about getting into passive investing,   maybe they're scared, they haven't done their 
first passive deal, and so maybe give you know   give them some counsel as to what they might 
look for and think about and yeah let's do that. Darin: Absolutely. So in my loan training days, 
I just saw the performance on multifamily loans   and you know, how banks that could get comfortable 
with buying multifamily loans just loved them   because they performed very well. So I became very 
familiar with the asset class and so when I moved   over and decided to get involved in the limited 
partner side, I pulled a bunch of capital out of   the stock market and I decided I wanted to become 
a limited partner for a few different reasons.   One, is I really liked the asset class and I felt 
like it was a better place to put my money as   compared to the stock market.

I felt like it was 
from a capital preservation standpoint and also   from a wealth growing standpoint, it was a much 
better place for me to park my capital. Secondly,   my end-goal was that I wanted to become a general 
partner. I wanted to become a lead sponsor   and so I wanted to understand what it felt like 
as a limited partner. I wanted to understand the   documents I had to sign. I wanted to understand 
the communication that I get on a monthly basis so   that's why I made the decision to pull money out 
and start doing a bunch of limited partner deals. Rod: So, talk about some of the things that you   look for in a general partner. Some of the– 
I mean, I've got a resource that I'm going   to share with you guys as well.

I've got 
a list of 50 questions that, you know,   to ask a general partner in a syndication 
before investing and if you guys want that,   just text “GP Questions” to 41411. That's 
“GP Questions” to 41411 if you're interested   in potentially pursuing this but I'd love to get 
your feed on this as well, just some of the things   that you look for when you're evaluating someone 
that you're gonna give your hard earned money to. Darin: Absolutely. So look, when I started 
doing it I didn't have a document like you   just offered up to your listeners so I would say 
take advantage of that if you guys are interested   in your first deal. Look, I would have loved to 
have read a document like that so I did not have   that resource but here's kind of the way I looked 
at it was, I wanted to– I kind of followed the   recipe that a lot of people talk about, you 
know, “Know, Like and Trust”.

So I wanted to   get to know the person I wanted to understand 
that they had a track record and I want, you know,   some people you just click with and some people 
you don't, even if they have a great track record,   you know, maybe the personalities are just off and 
so I wanted to pick people that I know, like and   trust. And I talked to a lot of other people 
that were limited partners in other deals and   asked them their feedback as to, you know, “Who do 
you like working with and why?” And so from that,   I that kind of narrowed down the gap for me and 
then I focused on people that I actually had,   you know, the opportunity to interact with 
either at conferences or meetup groups or   you know, individual one-on-ones over the phone or   coffee meetings and I focused 
on that set of group. I also– Rod: So you went with your gut quite a bit and 
really your referral network, I mean you went   with testimonial really referrals from other 
people and where they shared their experiences. Darin: Absolutely.

Referrals, my gut and also, you 
know, I was looking because I was looking to be   a GP. I wanted to spread it out and partner with, 
you know, in a number of different deals so I did   seven in 2018. I did seven limited partner deals 
and I did it with all different sponsors because   I wanted to see the communication styles from each   partner and I wanted to mold my own style from 
that. So, I would take what I liked from one   and what I didn't like, I would leave that alone 
and then pick up a piece from somebody else. Rod: Nice, yeah. And of course you're learning 
along the way. I know, you know, in our deals with   our investors, we try to educate them as much as 
we can and do webinars and have them show up for   due diligence, you know, inspections and things 
of that nature.

I mean, we had like 20 at the last   last dollars deal, we just got another nice 
dollar deal under contract but, yeah. So guys,   get this list of questions it will really help to 
be you know, I mean you need to trust your gut,   no question. You need to do your homework and ask 
for referrals but, you know, these questions get   into more specifics, you know, regarding,you 
know, they have an operating reserve,   you know, what kind of financing are they 
getting, what's your whole term for the property,   you know, what's the capex budget, who's going 
to manage the renovation, who's going to manage,   what happens if something happens to one of the 
KP’s, you're going to be doing cost SAG I mean,   on and on and on. So there's a bunch of questions 
here, again just text “GP Questions” to 41411. So   now, let's talk about– well let me ask you this, 
did you have to push through any fear? Was there   anything holding you back? Because I know some 
people are like, you know, “I want to do this but   I'm kind of scared to do it.” Was there any 
of that? Can you speak to that just a little   bit? I mean, it's a little more ethereal 
but I mean, give me your feedback on that.

Darin: Absolutely. I think that there's 
fear, for me there was fear all along the way   and so I just had to push past that fear and 
you know, I had seen so many other people   grow their wealth and met so many other people 
that grew their wealth through multifamily   investing that I had to force myself to go 
forward. So I remember my first passive deal,   you know, it's different than just buying an 
investment in the stock market where you go on buy   shares and click, you know, done and boom you're 
done and your brokerage account just takes care   of it.

Here, you know, there's a LLC agreement 
you have to sign, a private placement memorandum   you have to sign, a subscription document, an 
investor questionnaire. So one, I wanted to get,   you know accustomed, to those 
documents because when I'm a GP,   I wanted to be able to be familiar with 
that so I've read all the documents, Rod: Wow, stayed awake through it, huh? Darin: Yeah, and it took me a little time but 
then, here’s when the fear really came in is when,   you know, I thankfully, I'm a little older I had 
capital and so it wasn't looking at the first deal   wasn't going to change my life either way but when 
I wired the money, you know, in my other business   when loan portfolios trade, the wire happens and I 
get confirmation from the receiving bank that same   day, “Yup, we got the wire”.

So I thought it was 
going to work the same way so I wired the money   I went and emailed the sponsor and said, “Hey, I 
just wired the money. Can you confirm receipt?”, I   got no response. I'm like, “Holy cow, what's going 
on?” So then I sent a text message, no response. Rod: Oh, boy. Darin: So about a half hour later, I actually 
called the sponsor. Sponsor picks up he's like,   “Hey, Darin man. I got your email, got your text.” 
I can see a number of different deposits coming in   but I can't see who it's from until the next 
morning, the bank gives me the details, and   I actually used this on my first indication deal 
the same bank as that sponsor did and true enough,   it was that's exactly the process.

So what I did, 
because I remember that fear as a limited partner,   I told every one of my limited partners in my 
first syndication, “Hey look, this is the process,   you're going to wire the money but I 
can't confirm until tomorrow morning”. Rod: Oh, that's smart, pre-frame them that's– Darin: Yeah, and so then, they were like, 
“Okay, thank you for telling me that”.   You know, and once they knew 
the process they were okay   and so— but there was fear there, and then the 
next day, you know, the sponsor emailed me saying,   “Hey, confirmed receipt.” And I was good to go. 
And then you know, the next six I wasn't worried,   you know, I had already done it. 
But that first one, there was fear. Rod: Yeah, okay and so, you know, let's talk 
about that first deal you did as an operator,   you know, because there's fear 
around that too I'm sure and– Darin: Absolutely.

Rod: So why don't you talk about the 
deal, I think you handled all that,   is that the 76 one you were telling me? Darin: Yeah. Rod: So you found it, you 
did the whole nine on it. So   take us through that, take us through that deal. Darin: So, here I would say, you know, one 
critical component for your listeners if you're   looking to be active and be a lead sponsor is 
definitely, you know, develop relationships with   the brokerage community in your market so the 
way I got this deal was, I actually was bidding   on another deal in South Dallas the month prior 
and I was, I basically ended up runner-up on that   deal but I thought I was going to win the deal. 
It was the first time I was working with this   particular broker and we developed a really good 
relationship and I just felt like I was going to   win the deal. And when he told me that somebody 
else outbid me, you know, I was disappointed but,   you know, you pick yourself up and you 
go off to the next one.

Well he called me   and he said, “Hey Darin, I got this other deal 
in South Fort Worth and in town called Crowley,   you know, it's the same amount of units. 
They were both 76 units, why don't you go   check it out?”. Well I did, I did a drive by, 
I went by and I actually called him and I said,   “Hey man, I appreciate the opportunity 
but I'm going to pass on the deal,   you know, I just didn't know that sub market that 
well and, you know, the property wasn't as well   maintained as I would have liked”. Well he called 
me back like three days later and he said, “Darin,   you have to meet me at the 

And I was like, “Why?”. Rod: The one you didn't like? Darin: the one I didn't like. Rod: Right, okay. Darin: I said, “Look, you gotta sell 
me on why I should go back out there”   And he did, you know, and he just 
gave me a couple high-level points,   one was, “Do you know what the median household 
income is of this area in Crowley?” And I said,   “I didn't” and he said, “It's like 
60,000”. I said, “Wow!”, you know like,   I've been bidding on a lot of properties that have 
been kind of mid 30s median household income so   it sounds like there's an opportunity there. And 
then, secondly, he's like, “Look, you need to step   inside the units because they're townhomes, they 
have larger ceilings and maybe from the outside   they don't look as nice but once you get inside, 
I think you're going to have a different feel.”   So, he told me enough to get me to go out there, 
I went out there and when I was in the units,   sure enough I was like, “I would much 
rather live in a townhouse like this   with these higher ceilings than live in an 
apartment with somebody living right above me”.

Rod: Yeah. Darin: So I said, “I'm sold on the property now I 
just have to make the numbers work, go visit other   properties in the area and see what we can do 
from a business plan but my point to all of that   is that, had I not gone on the other property 
in South Dallas, met the broker, developed a   relationship, went after the deal, that broker 
would never have even known to call me back. Rod: Yeah, right. Darin: And if he had not called me 
back and convinced me to go out there,   I never would have had that deal. Rod: Yeah, so talk a little bit about–I mean, 
I know you told me you brought in someone I know   quite well, Raj in to help you sponsor that deal, 
and guys, that's how you do this, is you bring   someone that's done it before to be a sponsor for 
you, maybe lend their resume, their balance sheet,   their liquidity, maybe just experience, maybe net 
worth, whatever it is and guide you and help you   and that's how this game is won, is as you do it's 
a team sport, you do it together and at some point   if you want to do it yourself, you can but most 
people stay with a team approach to this.

And so,   you know, talk a little bit, though let's 
go back to that broker relationship because   this business is a team sport, it's all about 
relationships. Maybe you could talk a little   bit about relationship building in general and 
then maybe some of the things you do to stand out   with these different relationships 
that you need to build be it brokers,   being investors be it whatever it, you 
know, whatever else, property manager,   whoever else you're building relationships 
with. Can you speak to that a little bit? Darin: Yeah, absolutely. So as I mentioned, I 
have another business and when I got involved   with this business, you know, it was all 
new and I was doing it really to grow,   you know, my wealth but one of the things that 
really charged me up after doing the first   syndication deal was that I realized that this 
business is different than my other business. My   other business, all the profit flows down to me 
and my family, and with the syndication deals,   you know, on that 76 unit deal I partnered 
with Raj Gupta and you're absolutely right,   he was the experienced guy and he's still 
kind of like my board of directors to date.

Rod: Right. Darin: But we also had 44 limited partners 
in that deal and so what I realized was   as we grow the value of the property and we 
end up having an exit strategy at some point   whether it be a cash out refi or sale, it's 
not only Darin Batchelder and my family that   you know, is benefits from that but it's my 
business partner Raj Gupta and his family   and the 44 limited partners. So, I love 
the idea of getting involved with something   that impacts so many different people. 
And so, that’s part of the business that I   really fell in love with is helping other 
people grow their wealth through multifamily. Rod: So talk about how that 
translates into relationship building   because I want you to go somewhere with this and 
if you don't, I'm gonna– I'll kick you there but. Darin: Alright, you know, point 
me in the right direction. Rod: Well, because when you come at it 
from that place and you sincerely mean it,   people will feel it okay and and and that's kind 
of where I was going with this.

If you're building   a relationship and they know you truly care 
about them as much as you care about yourself,   people feel that and they feel that 
authenticity and that genuineness and   and so you know, that's kind of 
where I was going with that but so,   let's circle back to relationship building 
because I know it's something you're good at,   you did a great job with me in Jamaica. So 
talk about, you know, and don't feel like   it's rudimentary anything that you're gonna bring 
up but if you're approaching potential investors,   you're approaching brokers, what might you do to 
start and build and nurture that relationship? Darin: So you know there's a number of different 
facets, you know, let's talk about, just getting   something that I'm passionate about is trying 
to impact more people and reach more people and   look, I was not on any social media until I got 
involved in real estate three years ago.

So I   was not on Facebook, I was not on Instagram I was 
on Linkedin from from my business perspective but   when I got involved, I started seeing the power 
of connecting with people all across the country   that had interest in doing this and so I attend 
a lot of multifamily conferences but also a lot   of entrepreneurial conferences and I had a lot 
of people that were telling me, you know, “You   really need to be on Instagram”, and I was like, 
“Instagram that's like a toy app for my kids”,   and so I started looking at it and I was like, 
“Really? Do people actually do business off this”,  And so then I went to a conference I told my wife, 
“Look, I'm gonna go there and I'm looking to meet   somebody that actually knows what they're doing 
on Instagram and that can help me” and so I did,   I found a guy who had like 300,000 followers and I 
hired him as a consultant and I had– I wasn't on   instagram so I had zero followers, and I told my 
kids, “I'm gonna get on”, they were laughing at me   and what I found through doing it, okay.

And there 
was fear here too, it's funny because like with   people that are not involved with putting out 
media on social media, there's a fear in the   beginning of posting. You know like, “What are 
people gonna think of me”, and you know, “What   are they gonna say?”, and all of that, you know, 
and just have to push past that fear and post. And what happened was all of a sudden, 
somebody from Las Vegas or Chicago or Spain   would reach out to me on Instagram and 
say, “Hey, can we get together on a call?”   and I'd be like, “Yeah”, and all 
of a sudden I realized, “Look,   that's who I'm doing it for”, I'm doing 
it for the people that I don't know yet,   that this is a way for them to be introduced 
to the concept and that gets me excited.

Rod: Interesting. Let me give 
you some feedback and some of it,   honestly maybe a little constructive and a little 
raw here as it were and I'm on instagram as well.   And I thought it was really important and I mean, 
I've done– I have to look at my thing I was just   looking you up as you were talking on Instagram 
but I've done, for me personally let me see how   much posting I've done it's been prolific.

1,756 posts, okay. Adding value and so on and so   forth but you know, I started thinking about this 
Darin and you've got I think about 8,000 people on   yours, I've got like 24,000 because I haven't 
worked it properly, you know, on Instagram. The best thing you can do is from what I 
understand is do stories and they, “Hey I'm   having breakfast”, or “I'm doing this”, you know, 
and just let people see behind the scenes see your   life but I started thinking about the demographic 
on Instagram and by the way, guys, I'm a huge   proponent for building reach using– I mean, Darin 
has a podcast, using Podcasts, using Facebook,   using you know all these social media, Linkedin 
and even Instagram but I started thinking about   who my avatar is from an investment standpoint, 

And looking at the age demographics between   Instagram Facebook and Linkedin to me it was no 
question that I needed to hammer on Facebook and   Linkedin because of the age demographic 
so I'm just giving you a little feedback   take it or leave it but even for my coaching 
business, my avatar in the coaching business is   someone in the I.T field or an Engineer background 
or someone Analytical and this is not everybody.

But this is like, you know, 70 percent maybe in 30 
years to 50 years old and I just don't know that   they're as prevalent on Instagram as some of these 
other social media platforms. So just two cents   for take it for what it's worth but guys, those 
are you listening, to build this business requires   you to create reach in some fashion and so like, 
with my warriors, my coaching students, I've got   a couple dozen that have started podcasts, meetup 
groups, you know. In fact, people like Raj started   with a meetup group. I'm pretty sure most of 
the people that have been around a while that   have thousands of doors like he does and the 
people in my multi-family boardroom mastermind   did it through meetups because it was pre-social 
media really and now, you know, it's so easy to   create reach and you don't need tens of thousands 
of people you just need, you know, a few hundred   that have some money that are ready to invest 
as it were if you're looking for investors. So anyway, just I'll stop babbling but you know, 
I do suggest that, you think about who you're   trying to reach and hone in on that medium, that 
vehicle, that site as it were and and I, you know,   and I just came to this realization on Instagram 
so I'm just sharing you what I just went through   and I'm like, you know, what I don't want to put 
as much effort there as I'm doing in the places   where I think it's more target reach as it relates 
to investors with money, as it relates to people   that want to do this business as an operator. 
So anyway, you know, please take that for what   it's worth but, so as it relates to relationship 
nurturing, what do you do– I mean you go out you   meet these people on Instagram or wherever you 
know with your Podcast, I know I was looking   on Instagram you've got your podcast episodes 
there as well, do you put them on youtube also? Darin: So today, I did not put it on YouTube 
because the platform that I use is audio only.

On   going forward, I will start to. Rod: Yeah. I did that when I started too. I'm you 
know, for those of you thinking about starting a   podcast and I do a lot of coaching on this just to 
my students but let me give you some some feedback   right now, so if you're going to go out there and 
you're going to create reach, there's two things   you have to remember. Number one, you have to add 
value, period. You got to add value if you put   crap out there you're, you know, I had somebody 
tell me, if you put out crap, you are crap.   So add value, number one. But see you can add 
value by interviewing experts, right. So that's   one number. Two, is you have to be consistent. 
Those are the two key things if you're going to   start one of these things just commit that you're 
going to do it for a couple of years, period. Okay now, Darin I'm going to give you 
some more feedback, okay. And that is,   so if you're going to create some content, if 
you're going to do a video like we do on zoom,   it needs to go everywhere so you should have the 
video, you should have the content transcribed,   because people take in information 
differently, some people are auditory,   those are the iTunes folks.

Some people are 
visual, those are the Youtube folks. and then   there's some people that are visual but they 
like to read their content and so, you know,   I was blown away because we transcribed 
my podcast and we put it on Youtube. I   was blown away when I found out last year, my 
youtube videos got watched for 30,000 hours– Darin: That’s crazy. Rod: I was like, “Holy shit”, I couldn't 
believe how much it was and it's more this   year and so and it was just, it's 
just the simple act of taking those   recorded content on those podcasts and 
putting it on Youtube.

Occasionally,   I did a video there specific to Youtube but very 
few, honestly. And then, so taking the content,   putting it there. Then taking the content, 
putting it on Facebook. Taking the content,   putting it on Linkedin. So whatever you're doing, 
you want to cross-pollinate, okay. And you want   to put it everywhere you possibly can because 
you've already gone, you've done the hard work   which is recording it and so, you know, you can 
get it transcribed very inexpensively there are   even apps that do it now, Otter is one and 
then, you throw it on a blog on your website.   Again, you do the video, you do the audio ,you 
do all these different pieces and you let people   take it in the way they like to take it.

That is 
really the point but cross-pollinate for sure. Darin: And another way to say 
that is, go where the people are. Rod: Right, well that too. That you want 
to go where the low-hanging fruit is. Darin: Some people are on Linkedin, some people 
are on Youtube and so go where the people are. Rod: That's true, everyone has a favorite platform 
and so, you know, or most people do and so if   you're hitting them all, I mean you're golden 
and it's just a matter of, you know, little extra   work to post there so there's my two cents for 
those of you listening as well. If you're gonna,   you know, start one of these things, if you think 
you're gonna do a podcast, well first of all,   reach out to me I'll help you. I do that anyway, 
I'll give you some information that'll help you.   And secondly, you know cross-pollinate but 
remember, those two things, consistency and   adding value and it doesn't have to be your own 
value, it can be interviews it can be people   you bring in and that's a beautiful thing,
you know, you can act as if “You can fake   it,’ till you make it” as it were in, as it 
relates to creating reach because what you   can do is just interview other people that 
are experts and by very virtue of the fact   that you're hosting whatever it is, the meetup, 
the Podcast, you know, the group in Facebook,   the group in LinkedIn or whatever, you know, 
you you can do it through interviews and you're   perceived as an expert even though, you know, 
you may just be the one guiding a conversation.

So anyway I'm stealing your entire 
interview here, buddy. I apologize. Darin: No, no worries. Look, hey again, I'm 
honored to be on here and I learned from you   in the beginning and I'm continuing 
to learn from you, look thank you.   I was on a call earlier today and I asked you 
know the person I was talking with the exact   same thing he has podcast also and we were 
talking about how we can help each other and   you know, he's on LinkedIn and Instagram and I 
was talking to him about which one do you think,   you know, adds more value and you gain more 
business from.

And so because I have heard from a   number of people that you know LinkedIn has been a 
really good medium, so you know, you just added– Rod: Yeah, we've been– we just really started 
ramping up our LinkedIn presence. We failed   miserably up ‘til literally a few months ago 
and Instagram, yes we're still posting there   just because it's easy to throw content there but 
it's really not our avatar, you know, and that by   the way guys, an avatar is you create this persona 
that you're going after. So if it's investors in   the multi-family space, you try to figure out, 
you know, what age group do you think they are,   what do they do for a living, you can even 
name them.

Ours is named Bob, you know,   so you can name that avatar and then you focus 
your marketing efforts on Bob or on that avatar,   whatever that description of that person is and 
like I said in my thought leadership business   and coaching, it's a 30 to 50 year old person 
primarily male, although we have lots of females   but the majority are male and and a lot of 
couples as well. But that's the age group   and just a lot of people in Analytical type 
positions, Engineering, I.T, so on and so forth. So again, I'm sorry I got off track again, so 
nurturing these relationships that you build with   brokers, how often do you call them? What– 
you know, talk about that a little bit.

Darin: Well, the brokers, you know, this year has 
been a little different because of Covid, right? Rod: Yes. Darin: So I was, you know, hot and heavy last year   and into the beginning of this year and 
then February, I was very close on a deal   and then when I lost that deal, I ended 
up shifting strategy to the Podcast and so   you know, through Covid this year, I have not been 
as active, you know, reaching out to brokers– Rod: Okay. Darin: Because I've been looking at the 
deals and in DFW, it's been difficult,   you know, making the numbers work 
and I've been focused on the Podcast. Rod: I see, okay. Fair enough. Well, you 
know, I think that–so let me answer the   question because I don't want to leave that 
out there and that is, guys if you're going   to start these relationships and build them, 
you need to be consistent as much as possible   so that they know you're still there. You're 
calling them, emailing them, texting them,   you know I'd say, every two or three weeks 
saying, “Hey, you know, if you get anything I'm   I'm here raising my hand” and not be obnoxious 
with it but, you know, I mean really, you're just   creating friendships would you agree with that? 
I mean that you're just building friendships.

Darin: Absolutely, people like to do 
business with people that they like,   right. And it goes, you know, that holds true 
on the limited partnership standpoint too and so   how do you stay in front of limited partners 
because, you know, if after a while you don't   get your second deal or your third deal then 
the investors are like, “Alright, well hey,   if I don't hear from Darin, I'm gonna have 
to invest my money someplace else”, right? Rod: Right. Darin: So, you know, what's a way to get 
in front of them while having a podcast or   having a newsletter, having a blog some way of 
keeping in communication with your investors   I think is key and it allows them to, you 
know, “Look, I just went to a holiday party   this weekend and I had a number of people 
come up to me” and they're like, “Man,   I've been listening to your podcasts”, “I've been 
you know reading your blogs”, and they like, know   a lot about what's going on in my life without 
me even having that conversation over the phone.

Rod: Nice, yeah that's another benefit for sure. 
Fantastic. So let me ask you some more general   questions, knowing what you know now with, you 
know, your investing career to date, is there–   if you were to go back to your younger self, 
is there anything you might do differently? Darin: Yeah, absolutely. One is I would start 
investing in Real Estate earlier for sure,   just the compound wealth building effect of real 
estate is just huge, right. And then secondly,   I would say on the– I've had active investors 
that are looking to get their first deal   that have asked me, “Hey, would you have done 
anything different now that you've got your first   deal?”, and I said, “Yeah, I would”.

My philosophy 
when I was going after my first deal was,   I would only reach out to the broker and go on a 
property tour when I had underwritten the deal and   the deal looked like it was something I was 
going to actually put a letter of intent on   ,okay. And that slowed down the process 
of me meeting the brokerage community. Rod: Yeah. Darin: So, I would recommend, you know, looking 
at your first two months and say, “Okay look,   week one, I want to go out on a property 
tour with somebody from Marcus and Millichap.   Week two, I wanna go out on a property 
tour with somebody from– all right.   Week three ,I want to go on–”.

Wou don't 
want to do it with all the same brokerage   company everywhere because then you're going 
to get a bad name for wasting everybody's time   but if you break it up and visit like eight 
properties over two months with eight different   brokerage companies, now you've got eight brokers 
that are thinking about you and talking about you   in their shop and you do that in a very short 
time frame. That's what I would have changed. Rod: Okay well, that's great 
advice. And on all fronts and   just want to hammer home one thing he 
just said that is, you don't want to hit   more than one person ideally in the same office 
because you're going to piss them off it's like,   you know, they they all kind of work together 
but they are competing with each other and   so that very sound advice to pick different 
brokerages and go and how are you going to   really get to know someone unless you meet them? 
and by the way guys, if you're going to invest in   a market that you're not living in, then you start 
these conversations over the phone but you must   go there and meet them, you must go toward the 
properties, buy them breakfast, lunch, dinner,   whatever.

Get to know them because that's when the 
relationship really opens up and I've heard this   from–you've pretty much stayed in your backyard 
but I've heard of some numerous people that buy   outside of their backyard because you've got to go 
spend a few days there and you literally need to   be booked morning, noon and dinner for meals 
and appointments and showings and on and on. So, well listen brother, I really appreciate 
you coming on. It's good to see you again and– Darin: Absolutely. Rod: And you know, I appreciate 
the kind words about the Podcast   and good luck with your Podcast and 
just good to have you on, my friend. Darin: Absolutely. Thank you very much, you know, 
it's nice to have a leader in the space that   helped me get in and also is helping me level up,   you know and it's a great industry of people 
helping each other, so thank you very much. Rod: That's what life's about, brother. Alright,   well it's good to see you. Happy holidays.
If I don't talk to you before then, my friend.

Darin: Absolutely, right back at you. Alright. Ads: Rod, I know a lot of our listeners are 
wanting to take their multifamily investing   business to the next level. I know you've been 
hard at work helping our warrior students do   just that using our ACT methodology which is 
Awareness, Close, and Transform. Can you explain   to the listeners how they can get our help?

Rod: You bet. Guys, we've been going nonstop   for three years building an amazing 
community of like-minded people   and our coaching students which we call our 
warriors have had extraordinary results.   They've purchased thousands and thousands of units 
and last year we did over a thousand units with   our students.

And we're looking to grow this group 
and take it to the next level. We're looking for   people who wanna follow a proven framework that's 
really step by step and then leverage our systems   and network to raise equity, to find and close 
deals, and to build partnerships nationwide.   Now our warrior community is finding success in 
any market cycle. So, if you're interested in   finding out more about how you can become more 
of our incredible network and take advantage of   the incredible opportunities that are coming very 
soon, apply to work with us at “mentorwithrod.com”   or text “crush” to “41411”. That's 
“mentorwithrod.com” or text “crush” to “41411”.

As found on YouTube

Retire Wealthy Home

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Tips for saving money for retirement

Have you started saving
money for retirement? Day-to-day expenses can make it challenging to think ahead if ye trying to figure out
how to get started. ABC's Lindsay Watts shares some advice from the experts. No matter how old you are, you might want to consider investing in your retirement. And although it may seem premat, financial expert Farnoosh
Torabi says that young people should look io alternative retirement plans ind of relying on Social Security. e days, it's really important to save for retirement on our own. For many who are maybe in their 20s or just starting out, a Social Security is not a guarantee. Tarabi suggests considering all of the different investment options in the workp. Like 401K accounts or traditionl plans such as Roth IRA's and brokerage accounts. The good thg about a 401K or other
sort of workplace retirement account is that you n always adjust your contribution. Start with something small. Start with, you know,
2% or 3%
of your paycheck.

People in their 50s might want to consider different types of insurance options, like long term care insurance, which covers services that your basic health plan does not, including assistance with everyday tasks. People who. Invest in this starting
in age 50 will very likely use it by
the time they reach their 70s and older. And for those approaching retirement, it's not
too late to start saving and investing on your ow. Torabi says it's best to have a backup plan for unexpected costn the years ahead, including potel out of pocket health expenses. Lindsey Watts, ABC News..

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Retirement Planning Home

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3 Legged Stool of Retirement Planning: Social Security Plan / Pension Plan / Investment Plan

– One of the most fundamental concepts in retirement planning is the concept of the three-legged stool. We're gonna get into that in this video. (upbeat music) So what is this three-legged stool? Maybe you've heard about
it, maybe you haven't, but just go ahead and
imagine a three-legged stool. Now, for a three-legged stool to work, it's not a four-legged stool,
it's a three-legged stool, for it to work, every one of those legs has to be perfectly aligned. If you shorten one, what's gonna happen? You're gonna tip over, right? If you make one too long,
you're gonna tip over. Same thing goes for retirement planning. And what the three-legged stool is is three different things.

Leg number one is Social Security, and almost everyone has
it in the United States. There's a few pension plans
that made you opt out, but, for the most part, almost everyone has that first leg. And there's a lot of people
who don't have the other two, which makes retirement a little tricky. But the first leg is Social Security. A lot of times, people say, okay, yeah, I know about Social Security, I can take it at 62 or 66 or 70 or whenever it is. Well, yes and no, because it depends, when you should take your Social Security depends on a few different factors. And we've done some
videos on Social Security, and we're gonna go ahead
and link it up here. So if you wanna find out
when you should take it, you can go ahead and click that. But it also depends on the other two legs. The second leg is guaranteed income. And traditionally, the guaranteed
income came from pensions.

Well, as you know, not many people today have pensions. Back in the 50s and 60s and 70s pensions were very common to have. Now, they've become less and less common. Why? Because people are living too long. And because they're living so long, that's what can hurt a
pension plan, longevity. And because not many
people have a pension plan, sometimes they'll look for other forms of guaranteed income. Some people will use annuities, some people will use life insurance, some people will use some type of guaranteed CD or something like that. But they'll use that as
their guaranteed second leg. And the third and last
leg is retirement savings. So this will typically come from IRAs or 401(k)'s, or just money that you've saved up throughout your life towards retirement.

And so that leg is pretty
commonly neglected. People say, well, I've done
a really good job at saving, or I've earned a lot of money, or my interest rate is really good. And they think that that's
all they need for that leg, but that's not true. That leg is the most
important part to adjust based on where the other two legs are. So my recommendation is take a look, and you wanna make sure that your pension leg, your Social Security leg, and your retirement asset leg all match up so you have a
balanced three-legged stool.

A lot of financial advisors don't really talk about the other two because they don't really
get paid on it, right? Most financial advisors get paid on the money that they manage, so the other two are more of a burden. But to have a true retirement plan, you need to make sure
that all of those line up. And sometimes the account that earns the most in your investments is not the one that will keep the rest of your plan balanced. So my recommendation is, if you haven't looked at how all three of those legs combine, look for a financial advisor, and say I want the three-legged stool, and figure out how that fits
in to your retirement plan.

Thank you so much for watching my video. If you wanna see more, you
can click here to subscribe, or you can click right here for a video that YouTube
will think is best for you. It's their algorithm,
don't blame me for it, but I hope you enjoy..

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Pay This Off Before You Retire – Retirement Planning Tips

in this video we'll look at what expenses you should think about getting rid of before retiring and a few mistakes that retirees make when it comes to expenses in retirement there's a few things that you may want to say goodbye to before you say goodbye to that wage or that work income we're going to cover this in three parts it's going to look like this first we'll go over needs and wants and then what i'd call highway robbery and then also what to ear mark in retirement we've seen that the retirees that can get rid of these expenses before retiring have a little bit more breathing room and they feel better about their retirement plan because when you're planning for retirement we usually think about really two types of expenses it's the needs which are the essentials the absolute must-haves to just live you know as you think about my maslow's hierarchy of needs those things at the base layer and then there's the wants which are the the nice to have things but then there are other types of expenses that really don't fit into that category of needs or wants those are the things that we need to be done with before retirement and by the way i'm dave zoller and me and my team we run streamline financial it's a wealth management firm focused on retirement planning and we've been helping people personally for 13 years and streamlines been around for 22 years and we created this channel to share what's working with our clients so that you can benefit too so if you're close to retirement be sure to subscribe because i share one new video each week to make your retirement a little bit better i also put some free resources in the description below like my favorite diy retirement planner if you're more of a do-it-yourselfer so let's get into the list and then as you're watching if i leave something out please share it in the comments below i'd love to hear from you and then also i'll try to reply back to depending on how many comments i get so the first two you will probably agree with but you might not be thinking about the other ones and i want to show you ways to prepare and just make sure that your retirement is a little bit smoother by using our retirement planning software the first one which you already know is to pay off high interest debt which i sometimes think of as highway robbery it's when those interest rates are just so high and they're charging people it just seems unfair right that high interest debt i'm referring to is usually credit card debt and sometimes it's student loan debt and you'd be surprised at the number of people who in their first year of retirement they still have a large monthly payment towards credit card payments or student loan debt and this should be the number one thing that we should focus on to really reduce before we say goodbye to that job income or that wage because if you retire with credit card debt and then you get serious about paying it off in retirement then that means you've got this bigger amount that you got to take from investments which could alter your retirement plans i helped a woman recently who's not a client but she was looking at her plan and she wanted some help and she had about 20k of credit card debt she also had over a million dollars and her regular expenses adding on this 20k of a lump sum expense to her plan it really made quite an impact and once we looked at that together it gave her the motivation to work a little bit extra and extra hard to get this debt payment down to zero or get the credit card debt down to zero before retiring because she'd have a greater peace of mind and it would just increase her confidence as she was going into retirement that peace of mind it's key right i'm sure you're feeling the same way i actually want to share a little bit more about how to achieve this before you retire and during retirement and i share that at the end of this video so stay tuned the next ones are expenses that you can either pay early or at least you want to earmark these in your retirement plan and i'll show you what i mean when i say earmark that just means setting aside funds for specific purposes and either not including those funds in your retirement plan or including them but at least showing the specifics within the plan and i'll show you some images coming up of a retirement plan and how to do this number one thing to earmark is any big travel expenses that you're looking forward to that first year of retirement or really the first few years of retirement a lot of people kick off retirement and they'll really have a big special trip that they've always wanted to take or a place that they've always wanted to go to and lots of times that vacation it's going to cost more than the typical vacation that you might take on a regular year it's really that cap to uh ending work and then really doing a bigger than normal trip some clients choose to take one of those european uh river cruises that are pretty popular and they can cost 10 to 20k or more and knowing that this is a bigger than normal expense or a lump sum expense coming soon into retirement you can either pay that ahead of time like actually many of the cruise places make you do or you can at least earmark it in the plan and make sure that it all works with everything and i'll throw it in there as an example coming up soon here's an example of a retirement plan that's based on annual expenses going up each year three percent regular inflation rate and then over on the left side we can add some expenses that are bigger and irregular you know not the regular every year expenses but things we can earmark so that we can see the impact of on the plan before actually spending the money and doing it this way we can add some peace of mind to your retirement plan and your confidence as you're spending money and so you can just feel that it's a good decision and feel good about that vacation or whatever it might be a few other bigger than normal one-time expenses we've seen are related to your adult kids if you have them whether it's final college expenses or maybe a wedding that you want to help out with or future gifts maybe towards a home purchase or something like that for those you're not really able to pay those before you retire because we don't know when they're going to happen so earmarking them is the next best step and setting funds aside to make sure that these potential expenses that you might have in the future are ready and available ready to deploy when needed one mistake that we've seen some retirees make getting close to retirement is not factoring in these one-time expenses and then getting caught a little off guard when it's time to pay for them especially if we're in a market like we are now now you might be thinking one big expense that i did not mention and before i share that one if you enjoyed watching this video so far and you found it helpful please click the like button so this can hopefully spread to other people who are like you and might find it helpful as well so that one big expense that you might be thinking of that i didn't mention yet is paying off your whole mortgage before you retire and this is a big one for many people as you've heard before behind every financial decision there's also an emotional one as well and many people they feel very strongly or maybe adamant on on being debt-free in retirement and that's a really good feeling for for many people for others depending on their financial decision it actually a mortgage could actually make sense in retirement some people see it as a fixed expense which doesn't go up with inflation it actually gets cheaper as everything else increases with inflation and as one dollar can buy less and less over time which is basically what what inflation is it may be at really attractive interest rates as well and some people want to have a little bit more flexibility in their retirement accounts by keeping some funds available in their non-retirement accounts versus using that money to pay off the mortgage the more important thing to to think about when deciding whether this makes sense whether to pay it off or not is try to measure first just the emotional feeling or comfort with debt you know yourself and then also your spouse if you're married and then step two is map out both scenarios what does it look like that plan that we're just looking at over here what does it look like if you pay off debt early or don't pay off the mortgage at all look at the difference see which one's okay lots of times it comes down to the strength of the emotional feeling around debt for one person in the relationship or if it's just you then it's just whatever you prefer when we're thinking about paying off expenses or earmarking things in retirement get help from a financial professional a cfp could be a great place to start but i'd like to hear from you what did i not mention as we're thinking about these different expenses in retirement i'd love to hear your thoughts about these expenses and especially the thoughts on mortgage having a mortgage in retirement and i want to share another video about how increasing peace of mind and making sure that you get both parts needed for a successful retirement the sad thing is that in this industry the financial industry most of the time they focus on one thing but here's a video to watch that'll help you think about and prepare for both sides of retirement so hopefully i'll see you there and if you haven't already subscribe and then i'll see you in future videos take care you

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Top 5 Super Growth Strategies for Approaching Retirement

My name is Katherine Isbrandt from About Retirement.
I'm certified financial planner and you are watching About Retirement TV. The place that I created for everyday Australians who are
preparing for retirement or those who have already retired and would like to improve their financial outcomes income growth of assets tax and government benefits and so much more. Hello in this video I want to show you how and why to salary sacrifice to superannuation and your immediate financial benefits of salary sacrifice to Super in a way you most likely have never seen before.

Real examples that you can implement into your life. I really
hope it will open your eyes to the incredible benefit of it and how to grow your super for your retirement fast. What is salary sacrifice and how does it work? Salary sacrifice is your agreement with your employer for
some extra voluntary contributions you want to make to super rather than receive that portion of
income in your bank account after paying income tax.

The normal income arrangement and payment between
employer and employee is very simple: You earn your gross taxable income Employer first deducts the tax payable to a Tax Office and Net income after tax is paid to your bank account. Under salary sacrifice arrangement: You earn your gross income First employer deducts your salary sacrifice and pays it to your super fund Then the balance of income becomes your new taxable income Employer then deducts tax payable to the tax office and Net income after salary sacrifice super contribution and
after tax is paid to your bank account. So your saving benefit comes from the difference of tax rate
between your MTR and superannuation contributions tax of 15% Salary sacrifice is a type of concessional contribution to the super. If you are unsure what concessional contributions are, have a
look at that video explaining what types of contributions we have in Australia So let’s now see the real-life examples.

The average income in Australia is almost $85,000,
but to be on conservative side, for the purpose of this exercise I picked the income of $70,000
to show you my comparison. We have two friends –Mary and Susan – both nurses, both on $70,000p.a, and both wanting to save $10,000pa for their future. Salary Sacrifice Australia, Tips, Traps and Benefits. A
completely different view of benefits of salary sacrifice Well let’s be honest, what we all really want from our super fund is the lowest fees, best returns with minimum risk, a super fund that looks after
your interest as members, and provides us with a free advise.

Well Sorry to disappoint you, but none of the super funds do that. So, unfortunately as with anything else in life, to make a good
choice, you need to do a bit of work and research. But I am here to help you and give you some
suggestions how to make this process easier. But first, let's start with the most important thing about superannuation in Australia, which I can see, is still quite a confusion. From 1st January 2021 the Super Choice law was extended
giving more Australians ability to choose their own superannuation fund, so you no longer are locked into your employer's super fund. So every employer needs to offer their employees a CHOICE OF FUND. I will leave the link to the tax office page where 
you can find more information about that decision. There are lots of videos and articles you can find 
that give information about "the best" super fund,   but mainly what I see is the advice to 
choose the fund based on level of fees and   well..

What the government has been advertising,
based on performance. As important as those two are, there is no such thing as "the best" super fund. There are over 500 superannuation funds in Australia and
thousands of different investment choices, so choosing one, can feel like a daunting task. Choosing the super fund that will best suit your needs, as I said before, is pretty complex and requires a bit of work on your part, so I will go over the steps that I take when 
choosing and recommending a fund to my clients.  So first let's go over the types of superannuation funds that you
can choose from because this is quite important.

1. RETAIL FUNDS Those are funds run by financial institutions. They are generally open to anybody. The general belief about the retail funds is that they tend to be more expensive.
Well that's not the case due to huge competition in the market. Retail funds have come down with pricing and they can provide you with
great investment choices, so they are really worth your consideration. 2. INDUSTRY SUPER FUNDS These funds are generally designed for people who work in a particular industry, but some industry funds will allow anyone to join. But just because your employer provides you with 
this option doesn't mean you have to accept it. You can still choose your own fund. Industry funds are regarded as less expensive or "cheap". As I said, industry has changed, has matured,
there is a lot of competition within the industry, therefore there is hardly these days a difference in pricing
between many retail funds and industry super funds. 3. PUBLIC SECTOR FUNDS Those are funds generally only open to government employees.

4. CORPORATE FUNDS These funds are usually only available to employees working for specific employer, so if your employer provides you with this option,
you can take it or you can request your own. Now, corporate funds tend to be more expensive, but they do have very good investment options in most cases, and before you dismiss it please always check your insurance options
as they tend to be some of the best. 5. SELF MANAGED SUPER FUNDS (SMSF) These are funds where you decide to run your own fund as a trustee. You take on all the responsibility of administration, compliance
and investment decisions. SMSFs they tend to be complex
and they are most certainly outside of the scope of our discussion here, but if you decide to have your own SMSF
you can always request your employer to make all superannuation guarantee contributions,
together with any salary sacrifice contribution to your fund. It is super fund like any other and it is your choice. At the commencement of your employment your employer
will likely provide you with SUPERANNUATION STANDARD CHOICE form.

Alternatively you can download this form from
the Australian Taxation Office website, but I actually listed the link below this video,
just to make it a little bit easier for you. So what steps should you take in order to choose the 
most suitable fund for yourself? Watch how to choose super fund, best fund really? Whichever way you choose is best for you, get the full financial and retirement advise. Most people once they get to the age of 50 or 60 
start thinking: "Do I have enough money saved for my retirement?"
"Is it too late to save enough?" And you might have a reason to worry, because superannuation in Australia,
which is our best form of saving for retirement, is filled with rules, regulations, and contribution limits. But I might have some great news for you today.
I would like to explain a little known contribution opportunity, that might help you:

1 – to Catch up on all those lost years of not contributing enough, No. 2 – Grow your super and ultimately retire better and, No. 3 – Get tax benefits in the form of tax deduction for your contributions. Carry Forward Super Contributions otherwise known as Superannuation Catch-up Concessional Contributions, but first let's review very quickly. What concessional contributions actually are? Those are your deductible contributions,
so contributions for which someone claims tax deductions, when money is being contributed to superannuation. And that includes superannuation guarantee contributions or SGC, which are your employer contributions and obviously that's your 
employer who is eligible for tax deduction.  Your salary sacrifice contributions. If you are self-employed, all your self-employed contributions for which you wish to claim tax deduction, or even right now a private person, you don't have to be self-employed anymore, but a private person can contribute to super and still claim tax deduction.

But we all need to play by the rules. The annual limit of this type of contribution is $25,000. Well, I'm assuming that you have checked that you are actually eligible to contribute to super in the first place. If unsure, have a look at this video. If you need to get familiar with superannuation contribution rules including SG Contribution have a look at this video. If you would like to understand benefits of Salary Sacrifice,
here is another video for you. And now, let's dive into this.
What are Carry Forward Contributions? Carry Forward Contributions, so-called Catch-up Contributions, 
or as the proper industry naming is:   Carry Forward Unused Concessional Contributions, are not any special type of contributions really. They are often overlooked contribution opportunity, 
allowing you to contribute to your superannuation fund the amount of Concessional Contributions that 
you have not used in your previous years. You can only contribute up to Concessional Contribution limit
and up to five years.

If you are thinking of your personal contributions this is the
video to watch Catch up Carry Forward Concessional Super Contribution where you will find out exactly how to calculate
your maximum benefit for this strategy Well, I can bet my life that most people in Australia these days,
have majority of their savings within the superannuation,  whether in accumulation stage or in a pension stage.  And the size of superannuation investing 
will only be growing over time.  So, what are the 20 biggest 
superannuation funds in Australia?  Based on funds and their management 
therefore, how much money each superannuation fund is looking after. Well the biggest superannuation fund in Australia is AustralianSuper, with and just wait for it, $191,423,158,000 that they are looking after.   The second biggest super is Aware Super, 
with QSuper following, Public Sector Superannuation Scheme, Unisuper, Colonial First State, MLC, Sunsuper,
Retirement Wrap which is part of BT, CSS fund which is a public sector fund therefore,
it's not for everyone.   Super Directions Fund which belongs to AMP. 
Military Superannuation & Benefits Fund which is also a public fund.

Wealth Personal Super which belongs to AMP.   Retirement Portfolio Service which is part of One Path,
it used to belong to ANZ but ANZ decided to sell it to IOOF,  and then it follows with IOOF Portfolio Service Superannuation Fund,   Mercer Super Trust and Care Super. So is your superannuation fund listed here?  As you can see some superannuation funds are public,
some are industry funds, others are so-called retail funds.    If you don't know really what is the difference between them and what they all can provide you with as a benefit and what are negatives, have a look at my video 
"Best Super Funds – Really? How to choose super fund. " So right now let’s check who made the most money
out of the total fees paid by members in 2020. This is based on information that I gathered from APRA site.  The superannuation fund that received the most of total fees
paid to super fund by members in 2020.

Is AustralianSuper with $804,638,000 in 2020   followed by REST Super, HOSTPLUS, Sunsuper, MLC, Aware Super, Retirement Wrap which is BT. AMP Superannuation Fund, Super Director's Fund, HESTA, OnePath Retirement Portfolio,   CBUS, Colonial First State First, QSuper, 
Unisuper, Wealth Personal Superannuation, that belongs to AMP, IOOF Portfolio Service, National 
Mutual Retirement Fund, Mercer Super Trust,   Care Super and Commonwealth Essential Super. Is you super fund listed in the second table?  So why am I showing you those numbers? I really want you to remember that superannuation is a big business    with amount of money and profits that 
are beyond comprehension of a normal person.   Total assets invested in superannuation system 
is already over 3 trillion dollars and it is only growing. So, no wonder every super fund and 
every investment house wants a piece of pie.   What I would like you to take out of this video 
is to make sure that you can get your piece of pie and eat it too.

And not to be a casualty of 
superannuation business or fees grabbing. [Music] Fees are inevitable but pay those that bring 
you benefit, that assist you with smart planning,  and smart investing, that improve your investment 
returns minimize volatility if this is what worries you and try to reduce fees that are not for your benefit. And please do not get emotionally attached to your Super Fund it is a business for your fund and this is how you should  treat it as well. Superfund Fees and Charges Explained It is essential that you understand what fees
are being charged and where they you are getting a good deal How to get an immediate 50% return on your investment – guaranteed? If you are a low or a middle-income earner and you make and after-tax
contribution to your super fund, and you do not claim a tax deduction for that
part of your contributions, you might be eligible for a government co-contribution
of up to $500.

So, if you total income is equal or less than $39,837 for the financial year 2020/21 and you make a non-concessional contribution of $1,000, you will also receive government a co contribution of $500 – so basically with 0 risk No investment has even been made you’ve just
contributed $1,000 to your super, government will add extra $500 – as far as I can count, that is a guaranteed, zero risk return of 50% on your $1,000 contribution If your income is slightly higher, between $39,837 and $54,837 this
financial year, your co-contribution will reduce progressively, but it is still worth
doing, as co-contribution is your free money. But one thing is contribution, the other is what to do
with my money and how to invest it.

I have created an eBook: “12 Principles of Investing”,  I've listed a link to this ebook in the description below this
video so feel free to download it and apply to your investing decisions How you can make 50% capital return immediately. Are you curious? Well you better stick around then to find out. If you enjoyed this video please give it Thumbs Up And subscribe to this channel not to miss my next video If you wish to learn more just visit my
website AboutRetirement.com.au where you can find lots of videos and articles about preparation for retirement and how to improve it if you are already there.

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Why Investors Are Moving Their 401k To A Gold IRA

in a world where Financial Tides air and flow unpredictably there emerges a beacon of stability a golden Lifeline ever wondered why astute investors are trading the familiarity of their 401K for the glint of a gold Ira let's unravel this golden tale together embarking on the path to a Secure Retirement let's Journey Through the radiant Realm of the gold Ira transition the road map to a prosperous retirement m is peppered with decisions and each choice can sculpt your financial Legacy so why are so many turning to Gold IRAs the answer gleams with promise Beyond mere investment this move fortifies your nest egg against the unpredictable storms of the market transitioning means your conventional 41k evolves into a realm teaming with the Allure of tangible gold Envision reduced fees a wealth of divers I ification and a steadfast guard against Financial whirlwinds as you approach the golden horizon of retirement ensure your Investments radiate with the Brilliance you deserve looking for more information with a team dedicated to finding the latest news and information for gold and precious metals Ira the retired veteran is your s One Source to help you with your investment Journey Don't forget to check them out you can find the link below what is a gold IRA rollover ever heard Whispers of the gold IRA rollover and wondered what it's all about let's dive in at its core a gold IRA rollover is a transformative Journey think of it as re-rooting assets from traditional retirement accounts like that 401k of yours directly into a gleaming gold Ira why make the switch diversification is key with a gold Ira your portfolio is enriched exclusively with gold silver and a select array of precious metals it's a refined approach to retirement planning shining with promise to put it simply the gold IRA rollover is your ticket to a retirement paved in Gold when the goal is stability and diversification this could be your golden opportunity the truth about a gold IRA rollover you've heard whispers about it now let's unveil the real story behind the gold IRA rollover it's no secret a gold IRA rollover has become the go-to strategy for many looking to diversify their retirement Nest Egg but what does it truly entail in essence this is your gateway to investing in tangible assets like gold silver and other precious metals why to armor your savings against the unpredictable tides of inflation and ensure economic stability now let's be real a gold IR rollover isn't without its expenses and tax implications yet for the right investor the golden Allure of its benefits might just tip the scales engage with a trusted custodian who knows the ins and outs of precious metal Investments and don't skip that heart-to- heart with a financial counselor with the right re search planning and a dash of foresight a gold IRA rollover might just be the golden key to fortifying your retirement Treasure Trove what are the advantages of rolling over 401k to an IRA stuck at the investment Crossroads let's explore why rolling your 401k into an IRA might just be your golden ticket to a brighter retirement lower fees many 401ks can slowly drain Trin your funds with higher fees opting for an IRA that could mean more savings and a fuller retirement jar over the years cash incentives some institutions sprinkle cash incentives when you roll over a 401k to an IRA that's an instant boost to your golden years relaxed rules from more lenient withdrawal options to pushing the required minimum distributions its freedom is redefined more investment options while 401ks might have you pick from a limited shelf Ira open up a Marketplace of choices be it stocks real estate or those trusty mutual funds estate planning Ira make estate planning a breeze designate your loved ones easily and rest in the peace that your legacy is well charted what are the downsides of transferring a 401k to an IRA you've heard about the appeal of rolling a 401k to an IRA but like all good Tales there's another side let's delve into the potential pitfalls stable value funds your 401k might house funds promising guaranteed returns switching to an IRA could mean saying goodbye to that stability blanket higher account fees contrary to popular belief some IRAs might have higher account fees than 401ks so it's vital to weigh the potential cost to your returns withdrawal tax rules ready to withdraw brace for different tax rules when pulling funds from an IRA tax surprises aren't the fund kind unavailability of loan options emergencies knock unannounced while 401ks often offer loan options with IRAs you might find that door locked loss of creditor protection your 401k is like a fortress against creditors but IRAs they might offer a slightly thinner wall of Defense minimum distribution requirements IRAs start the withdrawal clock ticking at 72 potentially reshuffling your retirement income game plan so before you make the leap Ponder the pros and cons a wise conversation with a financial adviser can map out if a 401k to Ira switch aligns with your dreams and risk appetite 401k to Gold IRA rollover guide from the traditional 401k to the gleaming realm of gold IRAs if you're contemplating this golden transition we've got your back let's dive into a stepbystep guide find your gold Ira provider begin your quest by hunting for a seasoned provider you're looking for expertise in precious metal Investments and a glittering track record identify your self-directed IRA custodian once you've zeroed in on a provider find your trusted sidekick the custodian they're the Guardians of your gold Ira ensuring your Investments are handled with care open your account with your allies chosen it's time to lay the groundwork complete the required paperwork and remember it's all about dotting the eyes and crossing the te's execute the rollover initiate the rollover by liaising with your 401k plan administrator a seamless transfer straight into your new gold Ira Sanctuary purchase your gold funds secured in your gold Ira time to shop collaborate with your provider and custodian to cherry-pick Investments That resonate with your vision and risk appetite reasons to invest in gold for retirement securing ample funds for retirement is not just about you it's the Legacy for your family tree and the secret converting your retirement savings from the conventional 401K into the ever stable gold Ira gold isn't just a shiny object it's a steadfast guard against economic uncertainties while paper money dances with Market whims gold remains resilient but why gold for retire gold isn't just a metal it's a tradition of trust ensuring that your retirement Nest Egg not only stays intact but also grows so when pondering the future of your retirement savings remember this golden Mantra a gold Ira isn't just an investment it's a promise of aluminous tomorrow but before we wrap up today's discussion we have a special gift for you to help you make informed decision decisions and navigate the world of precious metals investing we've put together a comprehensive gold Ira guide and the best part it's absolutely free so make sure to pick up your free gold Ira guide in the link below this valuable resource will be a great addition to your investment Journey yet like all Adventures there are challenges to be mindful of navigating tax intricacies side M stepping hidden fees and ensuring your chosen provider and custodian Stand Tall in the realm of reputation with insight and meticulous planning a 401k to Gold IRA rollover might be your key to diversifying your retirement treasure and basking in the potential glimmers of physical gold and silver

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£0 to £100,000 in ONE Property Deal | Wealth Strategy 2021

If you want to sit back on your backside and 
moan about the nine to five job that you've got   carry on. 66 grand over seven years 
that's more than tripling your cash   good deal how many Bazoomers have you just put 
in your pocket. Further profit of 78 thousand   nine hundred and eighty two pounds BOOM! Hello there and welcome to this week's edition 
of money matters because after all money   does matter! How would you like to discover as we 
go through this video together, how you can make a   hundred thousand pounds in just one deal? So we'll 
go through the amount of money you would need   what guarantees you've got but the thing that 
i'm talking about this week is rent to buy.   I think this is the most little known and best 
kept secret in the property industry there's so   many challenges out there for both tenants and 
landlords and very often it's tenants against   landlords one get set against the other so let 
me just give you an example of what i'm talking   about.

Especially during pandemic and you know 
lockdowns everything else people really struggled   and i get that i'm very very sympathetic as a 
landlord to tenants problem but if a tenant gets   to the point where they can't pay in a normal 
world. In my world, what i think would be a   good solution would be the tenant goes to see 
the landlord they have a discussion they agree   you know a payment plan or give it so many months 
or whatever, but at some point decent human beings   don't want to freeload on other people so they 
would agree right well can you give me a month   i'm trying my hardest, i'm going to get another 
job or whatever or my mum's going to lend me some   money or whatever it might be and i'll get you 
your rent one way or another.

But tell you what,   if i can't do that a month from now i'll just 
move out. Now that in my world that would be   a normal good conversation and i'll tell 
you why that conversation doesn't happen,   because if a tenant did that according to 
the rules according to the legal system   according to the benefit system they'd have 
just made themselves voluntarily homeless.   Now that to me is completely absurd they didn't 
get themselves made redundant on purpose they   didn't want to not pay the rent but if you speak 
to shelter or if you speak to the local council   they will tell you stay there until that landlord 
evicts you because only then will be you'll be   entitled to benefits.

So for me that is complete 
and utterly mad but that is the fundamental reason   why landlords and tenants are at loggerheads. If 
you said to a tenant what's your biggest problem   they'd probably say the landlord and if you said 
to the landlord what's your biggest problem they'd   probably save the tenant but it's because of the 
system. So how about we change the system so here   is the new system the rent to buy system instead 
of renting it to a regular tenant you actually   rent it to a tenant who's got aspirations of 
owning their own home and they enter into a   contract with you for seven years and i'll explain 
why seven years shortly and they pay a normal rent   over that seven years but also during that seven 
years they pay a little bit extra every month.   It's called, we call it a top-up that goes into a 
separate client account so you the landlord can't   touch it but over the seven years they save up a 
ten percent deposit and they then buy the house   or flat from you and the figure we use for the 
annual increase is the Rich's royal institute   charts fairs recommended an average which is 
four percent each year they're in the property   the property goes up in value normally and over 
a seven year period it's probably going to go up   by four percent compounded seven times which is 
roughly 31 so it's almost a third so if you had a   300 000 pound house they would buy it from you for 
roughly 400 000 pounds if you had 100 000 pound   house it will be 130 000 pounds that is the core 
that is the nuts and bolts of it but what we're   going to do now is we're going to look at this 
from everybody's perspective from the landlord's   perspective from the tenant's perspective from the 
estate agent's perspective because there's there's   very very few estate agents in the in the whole 
of the country that do this and i mean the whole   of the uk when i say the whole of the country and 
finally we're going to look at some actual numbers   for a hundred thousand pound profit or just a 
little bit over a hundred thousand pound profit   from one property and i think you're going to like 
it so strap yourself in enjoy the ride here we go   down the ramp to buy roller coaster okay so let's 
go look at this from a landlord's perspective i   want to introduce you to a good friend of mine 
this is Karen bock.

She inherited some money   and she wanted to make sure that she made the 
money work for her as opposed to her having to   work for the money so listen in i think you're 
going to like this. Hi i'm Karen and i'm here at   touchstone today to go and view my first property 
that i've bought and it's for a rent to buy and   i'm really excited about going to see this one 
now my mother died earlier on this year and   when my sister and i inherited their property 
which we sold for a substantial amount of money   i needed something to be doing with the money 
not just sticking at a bank and leaving it to   rot so i'd often thought about doing property 
and was talking to Gordie about sourcing the   property for me which she did we went to look 
at this property and i said yes straight away   it was a lovely house three-bedroom property only 
needs a tiny little bit of work doing to it which   is a great thumbs up so i didn't have to do loads 
of work put an offer in and they that offer was   accepted and we're just waiting now for it all 
to go through with this solicitors and everything   massive wise to why i'm doing this which is my son 
he's 16 and he's disabled he doesn't walk he never   will walk and unfortunately i know our care system 
so well that i know he'll always he doesn't ever   want to be what i call a wage slave i don't want 
him to be a wage slave either don't fall on these.

I prefer to buy to let because once i've bought 
once i've put the people in who are going to   rent it it's basically their home so they will 
eventually own it i don't need to do anything it   takes out all the hassle of having a buy to let 
of thinking oh if they broke a tap or i've got   to come and fix and break tire i've got to find a 
plumber no it's their problem not mine so they pay   a normal rent and a top up which goes towards it's 
paid them deposit for their mortgage if they walk   away from that that's that one is mine plus the 
fact if they default on their rent i've got top up   i can take that money the rent money from them so 
it's a no-brainer it's a win-win all the way down   the line it's lovely i like it i think someone's 
going to make somebody a really nice home   really nice home it's such a lovely area as well 
it's got everything shops around the corner nice   small area activities for kids to do you know 
so but i would say to anybody that is looking   to do something with money if they have to 
come into money don't just stick it in a bank   make it work for you go and get a look go and have 
a go and you meet so many nice people they're all   on the same wavelength as you you don't get looked 
at like an idiot what are you buying property for   first oh no buy property it's you know why not 
it's there to be had if you want to sit back on   your backside and learn about the nine to five 
job that you've got carry on because i want out   of mine okay so how about that what do you think 
to Karen and her journey that's exciting stuff   isn't it so there's the landlord let's now go and 
meet a lovely couple with some lovely children uh   so let's go and hear from lee and Ashlynn of some 
rent by tenants but Gordie and myself we took him   a little bottle of champagne say welcome to your 
new home and this is what they had to say about   rent to buy hello and welcome to Rossington so the 
two of us have come out to welcome a new tenant   who just moved in here yesterday wow they got 
this lovely new home and they've agreed to talk   to us about what differences made to them i'm 
looking forward to it and to welcome them to   their new home because they will be buying this 
see you inside i'd like to introduce you to lee   and Ashlynn so you've got you've got three lovely 
baby and you've got a fourth one on the way yes feels amazing yeah yeah process was fairly 
easy right yeah it's been really easy the only   stressful part was moving well yeah what's 
this little one called angelica angelica   you're here you're looking good now yeah yeah 
does it feel like a family home yet already   yes just after like one night i think 
it's because we all muddled in we all   pitched in and we all did a bit even 
the kids what's the last few years.

Yeah it's always been down to landlords selling 
houses from underneath yeah but well you've   given us an opportunity but i love doing this i 
love doing the we call it going to buy yeah rent i think that was our issue having just put a bit 
of money aside as well as paying the rent and   the bills at least this way it's all done in one 
move and you don't miss it because it's not there   we're not very good savers are we if we do 
save it's like something breaks down or the   kids need someone needs to pay for school trip 
or whatever so you're dipping in and dipping in   so somebody out there watching this that fancy 
the idea breaks by what advice would you give them   do it do it do it yeah i think that's 
it that's as simple as that just what a fabulous family i mean they were so 
delighted to be in that house and uh you didn't   see in the video but they actually had a couple 
of dogs as well so there are all sorts of issues   with with previous tenancies that rent buy just 
ticks all of their boxes next up in this quickfire   series through what is rent to buy let's go meet 
the agent so let's go meet my friend business   partner gordy duffield and let's find out what 
kind of properties do you need special mortgages   paperwork you know all that stuff over to gauri 
okay so i would like to introduce you to my   good friend and business partner gordy very good 
very good so gaudy you run diamond estates yeah   and one of the parts of diamond states is rent to 
buy why do you think rent to buy is a good thing   for land or dental okay i think in property what 
we've seen over the years is tenants v landlords   it's always been in tennessee landlords send a few 
landlords and i truly believe this is a complete   win-win for both parties is there anything wrong 
with us making money and helping other people no   i don't believe so so i think the big thing is for 
rent to buy for landlords is to secure income for   a many periods of years and for the tenants to get 
an opportunity what they made never had before an   opportunity to own their own home that's cool yeah 
couldn't agree more if we're going to try and help   both parties here so you know tenants landlords 
they'll be watching this video so if a landlord   wants to get into rent to buy yeah what sort of 
what's the ideal property uh good question um i   mean just to be clear we filled one bed flats we 
filled seven bed houses we filled forty thousand   pound house we filled one point two million pound 
houses but i think the ideal property that we look   at is a two three bedroom house um either a terra 
seven detached or detached that's the kind of idea   two three bed house does the garden matter um not 
massively what we are seeing since the covered as   gardens are becoming more popular uh what about 
parking garages anything like that again doesn't   really matter on street pack it's fine so what 
you're really talking about these vast majority   of properties are probably going to be suitable 
correct but what i'm getting a feel for is that   probably a studio flat is the least suitable yes 
it's not somebody's forever home no no which parts   of the country do you cover which parts of the 
country don't we cover maybe one everywhere all   over so top of scotland to the bottom of england 
we've got stuff right up in neon which is stayed   on vanessa and we've got stuff right down in 
portsmouth um all right so almost anywhere in   the uk or anywhere in the uk and the vast majority 
types of property yeah what about from a tenant's   perspective where do you find tenants from are 
there many of them in fact let me change the   question okay have you got more tenants or have 
you got more property more tenants more tenants   not how many more tenants thousands more 
settlements so that there's thousands thousands   of people that want to buy their own property 
correct and when when people come through with   diamond estates and say i've heard about this rent 
to buy thing or whatever do they actually believe   it or do they think what the hell is going on it 
takes some convincing we had to really adjust this   at the very start as well because we had to figure 
out what they didn't understand about it but no i   think uh once is explained clearly to them yep 
they get it it's pretty simple you know it's   pretty simple well it is essentially yeah rent for 
the seven years save up a deposit and buy that's there has to be downsides what's the downside 
here um downsides it's funny this because i don't   know if i see this as the downside but if you're a 
landlord and the property does increase more than   what the pre-agreed price was um you'll lose out 
on the money in the sale price but i always ask   the question would you be happy with seven years 
guaranteed right and an increase in 31.6 in seven   years well the answer is yes yeah and so i don't 
really see that as a downside but i suppose that   is yeah i do get that i get that from property 
investors because Warren Buffett obviously not   really a property investor is a stocks & shares 
investor but he says his favourite holding period   is forever yeah and there's many landlords that 
just don't like the idea of selling correct yeah   but i get and i normally counter that by saying 
well if you've if you've got one property and it   goes up in value by thirty percent of seven years 
you can take that the original equity you had in   your original house you can take the sale price 
yeah and you can turn one house into two typically   so yeah what about from the tenants perspective i 
mean i guess there will be downsides i mean i know   one of our rented by tenants discovered um after 
a couple of years that the property just wasn't   right for them and they left yeah i think it's 
something to do with the relationship or something   yeah but they had to walk away from two years top 
up money yeah that is the day downside people's   circumstances do change uh and with regards to 
the contract they are contractually obliged to   stay there for the period of the rental term if 
they leave early they lose their top up but that   is fully explained to them beforehand they are 
adults so they understand that when they're when   they're moving in what i want to do is i just 
want to ask you a dead simple question with one   hundred thousand pound house you know around here 
you can still buy a house hundred thousand pounds   yeah with a hundred thousand pound house how 
much money realistically do you think a landlord   could earn over the seven year period from the 
hundred thousand pound down towards what their   total income stream is going to be if you take 
a four percent average which is what we take   and four percent times four percent 
point four percent seven times   uh works out at thirty one point something percent 
so let's call it yeah thirty one percent yep   thirty one percent on a hundred thousand pound 
house is obviously thirty one thousand pounds yeah   so that's your capital increase what's the monthly 
rent on this one you're talking about um it sets   600 pounds per month 600 600 a month so if we 
then say that all your bills and the mortgage   and everything else it's not even going to be 200 
credit but less than 200 so say 650 650 650.

So   let's say 450 quid times 10 it's four and a 
half thousand uh so that'll be 5 400. yeah so   i reckon let's keep it simple make five five grand 
a month on the rent five grand a year a month yeah   that's gonna be 35 000 pounds rental profit 
right and 31 000 pound capital profits it's   a human calculator isn't he jesus he 
said it was a simple question as well   66 grams here's the question landlords out there 
oh potential androids out there would you be happy   with sixty six thousand pound profit from one 
hundred thousand pound house because if you're   going to buy a hundred thousand pound house 
you can still get eight percent buy more yeah   so you'd have to come up with 20 grand yeah 100 
so how about that everybody you put in 20 grand   your 20 grand could be returned to you with an 
extra 66 grand over seven years so that's more   than tripling your cash good deal you might be 
out there thinking jesus i've got some rent i've   got some bicycle properties i want them to rent to 
buy it or i'm going to go and buy something yeah   what should they do give me a phone okay simply 
so uh so here's the details for diamond is his   phone number here's the website address so just 
crack on and uh get all the goldie oh or one of   the team yeah definitely i mean just a word of 
warning it's absolutely fine speaking of gordy   or diamond uh but there's actually very very few 
agents that do this isn't there there's a couple   agents to do we're by far the biggest and best 
that do do so yeah so if you're interested you   want to learn more crack on pick up the phone 
send an email whatever thank you very much   thank you take care thank you boom all right so 
thank you gory that was fascinating wasn't it and   something gory and i just checked with him 
afterwards just to give bit extra information   last week diamond estates took on 17 more rent to 
buy properties and most of them are filled already   so imagine if you'd you'd been that landlord 
that gave diamond estates your property last week   probably have a tenant in it already so 17 
a week we're taking on at the moment there's   a massive demand for this anyway enough of 
the chit chat and meeting everyone let's go   to the numbers room and crunch some numbers okay 
so welcome to the numbers room this is the numbers   board but before we get to that look at this 
house so this is the house that i'm gonna use   uh just walk through the numbers with you 
on uh so this is um elm green um conisbourgh   and it's a property i'll show you all figures 
but it's a it's a three bed house that we're   turning to a four bed house so as you've heard 
three four bed detached houses with gardens   absolutely ideal for rent to buy so let's get into 
the numbers i want to give you the full numbers so   this is actually a combination strategy that i'm 
giving you now this is buy refurbish remortgage   and then rent to buy on the end so quickly 
we purchased this one for 163 thousand pounds   that was purchase price on this one i had 
to get all the the legals uh the refurb and   everything else and i was putting it all in one 
number the total total total was thirty five   thousand pounds all up we're into this property 
for what's that 188 thousand okay so that's the   total cost of buying it next what's it worth 
after the refurbs we've turned it from a three   bed to a four bit we just rearranged some of the 
walls upstairs it was actually quite cheap to do   boom it goes and re-values at 250 000 
pounds which is sweet now if you want to   you can you can put 80 percent um vitamin mortgage 
on that so 80 of that is 200 000 pounds still   quite affordable mortgages but we've only spent 
188 000 pounds so end of stage one we have got   a house with none of our own money in it and 12 
000 pounds catching happy days everyone happy   with that so that is part one you the landlord 
if it is you the landlord you've got a 250   000 pound house and that's the starting price 
okay you've got 200 000 pound mortgage on it 250   so in addition to the money you've pulled out 
you've also got 50 000 pounds of equity in the   property so along comes a tenant buyer and says 
i would like to rent that property for the short   term and i would like to purchase it in the long 
term and just to remind you the two main reasons   why tenant buyers don't buy their own houses 
straight off the bat is they've either got some   sort of poor credit history uh CCJ something 
like that and believe it or not 25 of the uk   population is impacted by some sort of credit 
issue 25 and the other main reason is they got a   deposit so we need to look at two things how does 
it impact what all the numbers for the tenants and   what's the numbers to the landlord so first up 
you've decided to sell it in seven years time   so one two three four five six seven 
years time and each year rick's rolling   chief chart surveyor said you should assume 
that house prices increased by four percent okay so the department of hard toms has 
been hard at work and drumroll please   here we go the sale price will be 328 982 pounds which is a profit a further profit 
of 78 982 pounds boom but that's not the end of it   that's just your capital profit on the sale of the 
property and don't forget if you want to take 12   grand out so you haven't actually got any of your 
own money in here so you've already got money out   plus further capital profit seven years 
time of three hundred and twenty eight   thousand nine hundred and eighty two minus two 
hundred and fifty thousand pounds seventy eight   thousand nine hundred and eighty two pounds 
happy days you know i said that's not all of   it that's just the capital profit well let's add 
the rent shall we so let's move our money up here   boom still makes me happy every time i see that 
and now let's add the rent profit the rent for   this particular house in this particular 
area is one thousand one hundred pounds   per month we're going to look at two separate 
things now we're gonna look at what do you   the landlord make money-wise out of it and what 
does it actually cost the tenant to buy it okay   so let's do the what do you make out of it 
first in fact no let's have a look at how   much does the tenant actually pay for us because 
that's nice and easy they pay the 1100 per month   but they also need a top up the top hub goes 
towards the deposit so they can buy it so they   need to have a 10 deposit so they can buy the 
property in seven years time to be safe let's   round that up to 330 000 so they need a 33 000 
pound deposit we can divide that by 84.

Why 84   well that's seven years times 12 months so if they 
contribute in monthly in even amounts it's that   figure divided by 84 so get the trusty calculator 
out 392 pounds and 85 pence so let's round it up   to that the top up will be 300 and let's call it 
395 because you don't want a silly figure like   392 pounds and 86 pence or at least i wouldn't on 
top of their uh rent money of 1100 they're paying   roughly an extra 400 a month and in seven years 
time they've got 33 000 pounds because this top up doesn't actually go into your bank account 
because that wouldn't be right or fair or ethical   actually goes into a client account which means 
unless they breach their terms and conditions or   don't pay the mortgage or something you can't 
touch it so as long as they honour their side   of the contract you've got on your side of the 
contract and they get 33 000 pounds cash back   at the end of the seven year period they take 
that and then they go and buy the house okay   so hope that's nice and clear so let's wipe that 
slate clean shall we what do you the landlord get   because i said right beginning of this you can 
make more than a hundred grand in one div you've   got to ignore the top-up because that's not your 
money unless they mess you about so you're getting   1100 a month now we said didn't we on this one 
that it was a 200 000 pound mortgage so what's   the interest payment our 200 pound mortgage well 
interest only is normal for buy to let so we've   got 200 000 like that and i'm going to say we 
said this was an 80 mortgage so i've actually   looked just before i recorded this at yeah these 
sort of price comparison websites for mortgages   and it was just a little bit less than 
but i'm going to call it four percent   200 000 times four percent is eight thousand 
pounds a year so if we divide that by 12   that is oh that's a scary number that's the number 
of the beast look at that this is the beast of a   project 666.

666. do i need a cross or something 
when i write that number down is it scary isn't it   so that's your mortgage what else do you 
need to pay well uh you need to pay insurance   and landlord insurance you know building insurance 
is probably going to be about 20 quid something   like that so let's just make it a national number 
if i put 24 there that's going to round it up   and what other costs have you got well here's the 
great bit yeah normally i'd be saying oh you need   to put aside 20 for you know voids and maintenance 
and all that but you don't because it's a rent to   buy so all the money you would normally have 
to spend on the property you know paint it fix   the boiler if it breaks all that stuff well the 
tenants doing that because that it's their home   or it will be in seven years time oh it's their 
home now for goodness sake because this that's   what the contract says it's binding as long 
as they do what they say they're going to do   so 24 quid for insurance now because 
rent to buys are so simple to manage   many people would manage it themselves but let's 
say worst case you actually employed an agent to   do it you negotiate with the agent you said i'll 
pay you 10 to normal rate but it's so easy bloody   bloody blah so let's call it 100 pounds so this 
is for the letting agent yeah you know for letting   fees let's add all that up 790 pounds so your 
total costs are 790 pounds so your profit per   month you've got your 1100 pounds we need to take 
off 790 pounds which makes 310 pounds per month   profit what i now need to do to get to my seven 
years profit is very very simple i need to take   my 310 pounds multiply it by 84 which is 7 years 
and 12 months which gives me a further 26 and 40   pounds now let's go for the grand total shall we 
are you ready for the big reveal the grand total   how many Bazoomers have you just put in your 
pocket how much extra cash have you got on your   hip will your trousers fall down these are all 
important questions to ask because look at this   boom grand total 105 022 of your english 
pounds well British pounds actually   so just to go through that slowly 
so we all explain all you understand   so we started off at 250 000 pounds didn't we so 
it's not fair you actually get 50 000 pounds cash   more than this but you could have sold it at the 
start for 250 000 pounds couldn't you so we're   talking about extra profit from rent to buy the 
fair way to do it is not to deduct the mortgage   but to deduct the start value so we've agreed the 
sale price with the tenant 328 982 pounds that's   four percent four percent four percent seven 
times the start value was a quarter million so   the extra money you've made because of rent to 
buy is 78 982 so it's just that take away that   and then we said per month you make 310 pound 
profit well if you do that for 7 years 12 months   in a year obviously that's where the 26 040 comes 
from add them together socks off go and catch your   socks they're flying around the living room 105 
022 pounds with zero aggravation because i've done   about you many people i talk to a lot of people 
that's what i do i'm a professional speaker i talk   a lot of people tell me that time is the most 
valuable asset they'll agree with yeah yeah yeah   time's like a favourable asset pool and then they 
want to micromanage everything i don't i want to   put a tenant in send them a Christmas card every 
year and then make 100 grand profit that is far   far better for me than chasing tenant through the 
courts renting arrears fixing things i'm making   money i'm doing a really good thing because this 
is a lovely family home and a lovely family will   buy it in seven years time so it's a roof over 
somebody's head that they otherwise wouldn't have   and i'm making underground in the process 
and okay i showed you an example here where   we actually purchased the property we did it up 
we turned it to a four bed house you don't need   to do all that stuff you don't because you could 
just go my kids by the way this is what they call   it i'll just explain to you you could just go to 
the house shop because if we buy so many houses   jenny and judo youngsters they don't call it the 
estate agent they call it the house shop so you   could just go to the house shop don't do 
anything clever don't do anything you know   advanced that would need training just go and 
buy a property for quarter of a million quid so   yes you've got to put down 50 000 pounds but in 
seven years time you've tripled it so instead of   fifty grand you've now got 150 grand and 
now instead of one house go and buy three   just recycle that cash and buy three more anyway 
let's wrap this up hope you like the number   crunching room we'll be back here soon and that 
my friends is how you make money with rent to buy Oh sorry i forgot that's worst case because that 
assumes you don't put the rent up for seven years   and that's quite unlikely isn't it but you'd agree 
that at the start anyway speaking of up okay and   that my friends is a wrap one project dead simple 
hundred thousand pound profit if you like the   idea of rent to buy and you haven't quite go go 
watch it again with the best 15 minutes you ever   invest in yourself let us know how we can help 
you put your comments below make sure you have   subscribed and put the notification bell on you've 
been wonderful i've been Paul see you next week.

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Surprising Research: Retirees Can Spend More Money in Retirement

So today I want to talk about a
topic that doesn't get nearly enough discussion and that sets many retirees
actually should be spending more money than they're spending, or at least
they could be spending significantly more money than they're spending. I started thinking about this topic
because I had a client who has more than enough money to live incredibly
comfortably for the rest of her life. And she called wondering whether she could
spend a thousand dollars on a retreat. And at first I was kind of taken aback
because I thought you could spend a hundred times that and not blink, but
the more I began to kind of think about it, I realized I actually see this in
a lot of clients that they're afraid to spend money because they don't want
to outlast the retirement savings. And so I started doing some
digging and I ran across a really interesting article called guaranteed
income, a license to spend. And it's written by a couple of
academics who are doing research into why retirees don't spend more money. And so I thought I'd take that
articles kind of a jumping off point to discuss the problem.

And hopefully, maybe encourage
some of you that you should be spending more money, not less. That's always a fun problem to have. Hi, my name's Kevin Lum. I'm a certified financial
planner based in Los Angeles. And this channel is dedicated to helping
a million people retire without worry. So why do some retiree spend
less money than they could? In fact, in many cases they spend
significantly less money than they could. Partially the problem is financial
advisors, which I am one. But . Financial advisors for
years use Monte Carlo projections. It's this process that was
created after world war two.

And essentially it allows advisors
to give a probability number, the probability of success. It's highly likely that if you talk
to a financial advisor, you've been given the probability of success. So there's an 80% chance or a 90% chance
of your retirement plan being successful. And if it's 70%, you know, then
they begin to freak out and tell you need to save more money. The problem is, is that it's
a very imperfect solution. It does give you some idea of whether
you are on track for retirement or not, but it has a lot of challenges. And one of the challenges is the
assumption that it makes is that you'll have static spending plus inflation
for there for your entire retirement. But that's simply not the
way that people spend money.

When you research, how retirees actually
spend money, it looks more like a smile. So early in retirement, when
you're in your best shape. And you're most active, you spend
way more money and then as you age, you begin, it begins to dip. And then for some retirees, it will
spike back up at the end of retirement. With long-term care or health care
expenses, but for many retirees, it's just a constant decline. But when the Monte Carlo simulation
is created, advisors are assuming that you're going to spend the
same amount of money throughout the rest of your retirement. And in addition to that, they're going to
continue to increase it by inflation, but that's simply not how people spend money. So, let me break it
down a little bit more. One of the problems with Monte
Carlo simulations is they're binary. It's either pass or fail. So let me give you an example
of why that doesn't really work.

So we have just a very simplistic
Monte Carlo simulation here. You need a hundred dollars each year
over a 10-year period and we're going to run 10 different variables, right? So typically in a Monte Carlo
simulation, they'll run a thousand different variations. One with market goes up, one with market
goes down, we're inflation takes off or flight inflation, collapses, all
these different possible universes. And then it says, did it pat,
did you pass or did you fail? Did you reach your goal or
did you not reach your goal? And then it provides you an
average of whether what's the probability of success of your.

Plan. So for example, in this scenario,
in the first simulation, the first run-through and you're 10, you only have
$90 or eight only, you would pull out $90 of income as opposed to a hundred. Now, in reality, if that were to happen
in retirement, all you would end up doing is just pull back, maybe some of
your discretionary spending, but when the Monte Carlo simulation sees this,
it asks, is this a pass or is it a fail? It's a fail. Now in reality, you re you achieved
99% of your retirement goal. I would consider that a pass. But the computer says no it's yes or no. It's a zero or one it's binary.

It failed. And the second simulation. Year nine and year 10. You're only able to plot $80 in the
ninth year in $80 in the 10th year. Once again, you're at 96%
of your retirement goal. You could just pull back your
discretionary spending, but the computer just says, is
this a pass or is this a fail? If your advisor was to look at this,
they would say you have a 50% chance of achieving your retirement goals, but in
reality, you achieved 96% of your goal. But in a Monte Carlo
simulation it's pass fail. It's just not dynamic enough. And the problem is, is that it
scares a lot of people into being way more conservative with their
money than they really need to be. Now, some people do need to be
conservative with their money. They need to be spending less,
but many retirees could be spending more money on trips and on their grandkids and all the
things in life that they enjoy. But because an advisor is so consumed
with what's the probability of success using a very outdated model,
they end up being entirely too conservative in the retirement years. The second challenge to retirement
spending is the 4% rule.

So many advisors talk about the 4% rule. You know, you can pull out
probably 3.7 to 4% of your income. And the reason is, is because as
you age, there's the glide path. So advisors begin moving more
money of your money from equities. Into bonds. So you have more security and
retirement, but in an attempt to reduce volatility in a portfolio advisors
are reducing greatly the longterm expected return of the portfolio. And there's all kinds of
problems with the 4% rule. First of all, it's not a rule. The guy who created the rule recently
said, you could probably pull out 4.7% if you had a more diversified portfolio. And then it turns out the guy who
created it also has almost all of his money in CDs and a bank. It's very, it's very
odd, but that's not the. We can do a nother video at
some point about the 4% rule. But the problem is, is that
what you see is that people have their money in equities.

Tend to be more fearful, partially because
advisors tell them they can only pull out three and a half to 4% of their portfolio. And the other challenge is, is because
there's real volatility in the market. So even if you have a 60, 40, or 50 50
portfolio, As you've seen over the past year or two, you can end up having a
25% draw down in a very safe portfolio. So if you have a million dollars
in that portfolio and you watch $250,000 of that evaporate, Two years in your retirement, you're
going to be scared to spend money. And so one of the things that researchers
found is that people who have guaranteed income streams tend to spend significantly
more money throughout their life than people have their money in , stocks,
bonds, alternatives, whatever it might be. So the researchers did is
they took two groups of people. They both had essentially
a hundred thousand dollars. Except the one person had a guaranteed
income stream and the other one just had their money in a portfolio and they
found that the people had their money.

Coming from a guaranteed income
stream, ended up spending almost twice as much money in retirement. Not at the end of the day, they
both are probably going to end up having very similar returns. In fact, the person whose money is
in the portfolio will probably have way more money at the end of their
life, but they're more fearful to spend that money on in retirement
because there's so much uncertainty. And so people have fixed income coming
in are just willing to spend more money because they feel less anxious. In fact, one of the other
videos we made, we talked. About the regrets of retirees. And one of the regrets of
retirees was essentially not having more fixed income coming. In fact, two of the top five regrets
were not waiting until later to take social security, which would create a
higher amount of expected, fixed income from their social security payment. And the other was not having an annuity. There's really three main types of fixed
income that most retirees can have the first fixed income, the most popular,
the one that almost everyone will have is going to be social security.

When you retire, you're going to
receive some amount of money from the social security administration. If you take it at age 62, you're
going to receive a smaller amount. If you wait till age 70, you're
going to receive significantly more. And so the longer you wait to draw
on social security, the higher your income amount is going to be. The second type of guaranteed
income is a pension. So, if you have worked for a
legacy company or the government, there's a good chance that you're
going to get a percentage of your. Salary into perpetuity during retirement. So it might be 70% or for some people
up to a hundred percent of their salary. That they're going to receive
through the retirement. So they're going to
receive social security. Plus they're going to receive a pension the third type of guaranteed
income comes from an annuity.

So annuities are really controversial
topic among financial advisors. Now, I'm gonna talk about some
of the problems of annuities in a minute, but let's just talk for a
minute about how annuities work. There's really two basic types of
annuities that honestly you could, there's a hundred different rabbit holes. I can go down. So I'm simplifying this greatly,
but the first type of annuity is an immediate annuity. So you take a hundred thousand dollars. You put in an annuity and then you
get a guaranteed amount of money paid out to you for the rest of your life. The other type of annuity
is a deferred annuity. So you have to wait at least a year. Can be significantly longer before you
start receiving your annuitized payment. So you have an immediate annuity and
then you have a deferred annuity. Some people will use deferred annuities
that won't kick in until age 80, because they're most concerned about
guaranteed income later in life. Other people want
annuities to start earlier. So they'll use an immediate annuity.

So you have immediate annuities and
then you have deferred annuities. And then the other variable within
annuities is you have a single annuity or a single annuity. Where you have a joint life annuity. So a single annuity basically
covered you for your life. When you pass the nudity goes away. A joint life annuity will cover two
people through the end of their life. Sometimes there can be a
step down and benefits. You can structure it in different
ways, but essentially it is annuity for you and your spouse. And then you can also structure
the payout of the annuity. So you can have a life only
annuity that typically provides you the largest payment. But that means that if you annuitize say
a million dollars and you're going to get, you know, $50,000 a year for the
rest of your retirement, and then one year after annuitizing that money you pass.

All that million dollars goes
back to the insurance company. There are all these
other variables, right? A 10-year certain annuity. So that means that, you know, if you
annuitize a chunk of money and then you pass right away, your family will
still receive payments for 10 years. There can be a cash refund annuity. So there's all these different variables. And then you can also have a riders. For like cost of living
adjustments for inflation. And so you can play with and
mix and max annuities, but the most basic type of annuity is an
immediate payout fixed life annuity. Where you give a million dollars to the
insurance company, and then they guarantee for the rest of your life or the rest of
your life and your spouse's life, a fixed sum of money that you're going to receive
often those annuities are called a SPIA, a single premium, immediate annuity, right? You give them money to the insurance
company and then you get an immediate payment for a certain amount of
money for the rest of your life.

So let's talk a bit about
the problems of annuities. Because we, the research shows that they
can be really helpful to retirees because they can allow them to spend more money
because you're less concerned about market volatility, market fluctuation. The problem with annuities and
the reason that financial advisors are so divided over annuities
is they've been greatly abused. Anytime you have a commission
attached to a product. There's a lot of room for abuse because
pers the person selling the annuity has an incentive not to provide you with the
best annuity possible, but to provide themselves with the highest commission
possible and particularly the United States, we have what's called a variable
annuity, which pays out incredibly large commissions to the, the advisor
and opens the customer up to a lot of risks because it can be invested
in the market and just doesn't provide the protection that it's supposed to.

But there's also been a lot of
changes in the annuity market. Historically an insurance agent was paid a
commission when they sold you an annuity. So let's say they sold a million dollar
single life premium annuity to you. They might make 10% commission. And so they're going to make
a hundred thousand dollars or whatever the case might be. Now you can get no commission annuities.

And typically the no commission annuities
or no fee annuities have a much higher. Payout to the client. Now the problem is, is that the
advisors who sell these are often at fee only financial advisory firms
and they'll charge a management fee 1% AUM or whatever it is. So both sides historically have had
some ulterior motives and particularly it's problematic in the field. Only community. Because fee only financial advisors often
claim to be the ones who are working in your best interests, their fiduciaries. But they still have, if they're
working on the AUM model, they still have an ulterior motive to keep your
money invested in the market, as opposed to putting it in a new city. Now, with some of the fee only
annuities or the no fee annuities that is beginning to change a little bit, so finally, let's talk about
the practical implications.

In reality. If you leave your money in an equity,
heavy portfolio, you most likely are going to end up with a much larger chunk
of money at the end of your retirement to pass on to your friends and your
family or your favorite charity. Then you will, if you use an annuity On the other hand, if you have guaranteed
income, you're likely according to the research to spend way more money in
retirement on things that you enjoy than you are, if you have your money in the
market, because while you will probably end up with a larger chunk at the end
of your retirement, if you leave your money invested, you're always going
to have way more volatility, right? You can have times in your portfolio
can be down 20, 30, 40%, which is going to make you worry to actually
pull money out of your portfolio. Whereas if you put your money. Into an annuity, you have a fixed
income stream coming in and you know that no matter what happens,
you're going to have, you know, $10,000 a month in income coming in.

And so you feel comfortable spending that
money on things that you enjoy in life. And so part of the decision that
you need to make is like, what do you actually value and prioritize? Do you value having less
worry, having less volatility? And you're not as concerned with leaving
a chunk of money at the end of your life, then maybe you should create
some more guaranteed income through. An annuity or through maximizing social
security or through choosing a job that has a pension, if you're still working.

So you might want to lean that way. On the other hand, if you're like, I
want to leave as much money to future generations as possible, and I can
withstand the volatility, then you might want to go into a more equity, heavy
portfolio and just ride the equity wave. Now for a lot of people facing
retirement, it might not be an either or. Maybe you put some money into an
annuity that hopefully between the guaranteed income that you're going
to receive from social security, plus some of the guaranteed income you're
going to receive from your annuity. You can basically make sure that all your
fixed expenses are covered and then you can leave the rest of your money in an
equity heavy portfolio that hopefully will grow significantly over time. You can pull some of that money out
to do things you really enjoy doing. Buy a second home, take the whole family to Disneyland
or whatever the case might be. Or leave a large chunk of
money at the end of retirement. And so really it's one of these
decisions that can't be completely answered by an Excel spreadsheet.

If we're just going to look in an Excel
spreadsheet, the best thing you could do probably is just put all your money in
the market and just ride the volatility. But that also might keep
you from sleeping at night. On the other hand, if you want to
sleep at night and have guaranteed income, the best thing is probably
to put everything you have into an annuity, and you just have guaranteed
income for the rest of your life.

And you're able to spend
your heart's desire. But you have nothing to
leave for future generations. Probably neither of those
options are perfect. And so maybe finding a middle
ground of that, that blended option is best for you, whatever you do. I would highly recommend that you find
a financial advisor that's fiduciary. And honestly, it might be helpful to find
a fiduciary that has an AUM or a flat fee model, and also offers a annuities
either through no fee annuities or no commission annuities, or maybe has an
insurance license and can write annuities. And that way, if you have a fiduciary that
can also write an insurance policy, maybe there's a little bit more balanced. The other thing you could do is just
find someone that will advise you for a fixed fee, do a one-time plan and
that their money is made simply from writing the plan and not from selling
you an annuity or managing your money.

Um, lots of different options. As always, if you liked this content
and if you can ding that bell,.

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Key & Peele – Retired Military Specialist

[hinges creaking] – I WAS WONDERING WHEN
THINKING YOU'D DO IT. WE WERE–[clears throat]
– [sighs] – EVEN FASTER TOO.

[gun hammer clicks] YOU'RE GETTING PRETTY QUICK


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