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Dave Ramsey’s Retirement Planning Advice Is Flawed: Here is How

Dave Ramsey is fantastic if you are needing some 
simple financial help to get out of debt maybe   you've been irresponsible with your money you've 
racked up toxic Consumer Debt and you're looking   to implement some basic strategies to eliminate 
that debt and to create new habits for yourself   when it comes to your money Dave has impacted 
millions of people when it comes to getting out   of debt when it comes to understanding money on a 
very basic level uh in a better way the challenge   is what has happened is Dave has helped millions 
of people get out of debt and in that process he's   built a lot of trust up with that people and so 
then therefore they start listening to him for   retirement advice for planning for the retirement 
future and in this video what I'm going to do is   I'm going to cover the flaw the major flaw that 
is in Dave Ramsey's retirement strategies I'm   not gonna argue whether he's right or wrong 
about returns but I am going to point out the   massive flaw that most people are missing that 
he never talks about can't wait to get into it   if you haven't already make sure you subscribe and 
hit the Bell that way you're notified every time   I launch a new video Let's Go hey what's going 
on cash flow hackers it's Chris with life 180.   if you've been watching this channel a while you 
know how I feel about Dave Ramsey um but I want   to kind of take the conversation about Dave to 
a little bit of a different level in this video   um here's the deal Dave is really good when it 
helps you when it comes to helping you get out   of debt but his advice on retirement planning 
is is absolutely in my opinion atrocious one of   the biggest challenges that I have about Dave and 
his strategies is that he's been singing the same   song for 30 years right he has not changed his 
philosophies his strategies he hasn't really even   changed the numbers that he uses when it comes to 
retirement planning and the expectations that you   should have around your entire your retirement 
planning even though the economic environment   has changed metamorphically right so if you 
understand that there are variables that impact   your money and impact what you can expect in 
retirement you have to understand that there are   no simple rules that Dave tries to tell you like 
Dave tries to tell you to follow to execute now   I will say um that you know the advice Dave gives 
is like it's better than nothing like that I will   say it's better than doing nothing and it's better 
than what most people do but I also believe that   it's it's a problem that if you follow his advice 
expecting a certain result and then you get to the   end of the rainbow and there's no pot of gold and 
you're actually not anywhere near you where you   thought you'd be that's going to be a problem once 
again we're not talking about the debt elimination   stuff we're talking about which by the way is a 
phenomenal thing to understand that and get out   of debt like so from that perspective I applaud 
him now moving forward when we're talking about   wealth creation that's where he falls down when 
it comes to retirement planning what I did is I   built a spreadsheet because I think numbers say 
a million words spreadsheet you know we can go   through this and what I'm going to do is I'm going 
to share this so here's what I wanted to do here   I wanted to take a look at a household income 
of about a hundred thousand dollars in today's   money I want to save 15 of that income annually 
I'm going to assume an expected return of 10 per   year okay so what this does is like Dave is going 
to sit here and talk about the fact that you need   to save money based on retirement you need to to 
Target retirement account values based on your   hundred thousand dollars a year of income the 
challenge is Dave doesn't take into this into   account when he's ever talking about it I don't 
know why either I don't know why if he if he   thinks people just aren't smart enough to figure 
it out but to me this is just basic Financial   stuff that you need to know the understanding 
of you need to understand to be able to make an   educated decision if you don't understand how in 
inflation impacts your financial needs long term   you're never going to be able to make a good 
financial decision and especially that we're   in this environment right now where inflation is 
4.9 percent last year it was over nine percent   long term since 1971 inflation has been over 
four percent actually nearing four and a half   percent so like from that perspective looking at 
it from a long-term historical average this 4.9   inflation environment that we're in right now that 
everybody's freaking out about is not even high   it's just a little bit above average now a lot of 
people would argue that inflation is actually way   worse than what we're talking about right now 
because the actual impact on the calculation of   inflation uh the the impact is is much greater and 
worse on individual households uh than what the   calculation says because they've actually changed 
the calculation over the past 40 years on how they   determine the inflation numbers which to me is 
Criminal on its own but here's the deal we have uh   we have the hundred thousand dollars of income so 
what I have over here is I have um the retirement   account balance needed to live with a four percent 
rule so if you don't know what the four percent   rule is it's the rule of thumb that says you can 
distribute four percent of your retirement account   value and not run a significant risk of running 
out of money during your lifetime so that is like   the safe distribution calculation expectation so 
what this is showing is that if you had a hundred   thousand dollars of income you need 2.6 million 
dollars um actually it's a hundred four thousand I   didn't do it for year one if you get to year two 
and um you know your real need on four percent   inflation is going to be a hundred four thousand 
because your cost of living with inflation going   up it means you're going to need more money 
it needs your hundred four thousand dollars   next year with four percent inflation is gonna 
feel like a hundred thousand dollars of income   Fields today the challenge is household income 
historically is only going up in about three   percent so it's lagging actual inflation and this 
is why the middle class and the poor are getting   poor and there's this growing divide between the 
wealthy and the middle class it's not so much   other economic policies even though that has a 
play with it long-term inflation is the greatest   tax that is hidden to the American population and 
it has a hugely negative impact uh on the middle   class and lower class the most right so ultimately 
this column is what I would call your freedom   number your freedom number is simply the amount 
of money that you need in an account to be able   to retire to be able to be completely financially 
free and so right now use using traditional four   percent rule methodology and now I'm not taking 
into account Social Security or pension or   anything of that nature so if in fact you did 
have a pension if in fact you want to lean on   social security for any reason you'd have to look 
at your calculation and reduce those off of this   number and then you divide that by four percent 
and that will give you uh this number so if you   said let's say you had fifty four thousand dollars 
of pension and social security you'd subtract that   out that'd be fifty thousand divided by uh divided 
by the uh four percent and that would get you what   your uh Freedom number would be it would tell you 
how much money you need in that account to be able   to kick off passive income for you for the rest 
of your life now here's the challenge as I said   household income is only going up at three percent 
and Dave is saying hey you need to save 15 even if   we earn 10 which is by the way wildly unrealistic 
right I'm showing this at at 10 and it shows you   at 6.561 million here but really that's because 
of the fact that it's assuming that you're going   to have a 281 thousand dollar uh need for annual 
income now here's the deal your income is going   up at three percent per year that 283 35 years 
from now because I'm assuming it's a 35 year old   retiring at 65.

Dave doesn't talk about the fact 
that if you earn 100 Grand right now you're going   to need 281 to be able to maintain your standard 
of living that's not 281 000 in today's money   that's 281 000 in future money right I just did 
a video the other day talking about uh inflation   and the inflation crisis and ultimately how that's 
going to impact you um and and how that's like the   history of this inflation and and where it looks 
what it looks like moving forward into the future   um but this 281 by the way is assuming only 
a three percent increase at a four percent   historical average of inflation if we look at 
it that way you're going to actually need 394   000 and if you back that out you're going to need 
9 million 865 000 and the problem is all of your   Social Security cost of living adjustments cost 
of living increases they don't keep up with the   actual rate of inflation so the need for you 
to take more responsibility for your retirement   planning is becoming greater and greater and 
greater and as as inflation keeps going up this is   a way if you think about it from a social security 
perspective this is a way that the government's   able to kind of save Social Security if they 
can inflate the currency of four percent and   devalue the currency but then only give you cost 
of living adjustments at two percent that means   they're recapturing that money and saving the 
program simply by the way they're doing that but   ultimately they're stealing that money from you 
through a hidden tax the problem is Dave doesn't   talk about all this and what he does is he talks 
about your need for this money he talks about   saving a million dollars and I got news for you 
you could save three million dollars and if you   get to uh retirement and you have three million 
dollars but you need to live on 281 000 a year   you are going to be up the creek without a paddle 
you're not going to be prepared and you're not   going to be in a position um you know ultimately 
where you're you know going to be able to uh   have a a solid situation you know that's that's 
really what it comes down to you're not going   to have any kind of predictable income you're not 
going to have any stability uh you know and you're   ultimately going to have a lot of risk especially 
when it comes to Market risk sequence of return   risk and and just Market volatility risk when 
it comes to your retirement if you if you follow   his plan you're going to be under saved when it 
comes to retirement simply because you didn't give   enough credibility to the impact that inflation 
is going to have on your future needs because   think about it this way everything I just showed 
you was a 10 assumption I could show you a lot of   ways that 10 is completely unrealistic especially 
when you talk about actual real returns I would   say six to eight percent is is the more realistic 
expectation and even then there's some risk   involved right so if we if we back that out what 
what that would look like at even eight percent   which is I think the more I guess traditional 
method that most financial advisors would say   you could get from a long-term perspective if 
you look at eight percent you're only going to   have just over four million dollars that's about 
at retirement 35 years from now for a 30 year old   right when you hit 65 so in that scenario you're 
still looking at only accumulating about half of   the money that you're going to need just to 
maintain your standard of living I don't care   how much you have in Social Security or pension 
it's probably not going to make up that Gap   and you're going to have to take a reduction in 
standard of living even if you follow his advice   and have no car payment and have no mortgage or 
anything like that it that that doesn't matter   that that's not gonna make up for the Gap that in 
inflation has caused for a problem for you and so   that's something that you need to consider so my 
encouragement to you is to go through your plan   figure out what inflation is going to do to your 
retirement planning needs and if you want help   with this I've got a team I've got a certified 
financial planner on the team that's happy to walk   through this give you a consultation walk through 
your needs walk through your current plan and and   give you an analysis and an evaluation on what you 
need to do moving forward to reach your goals on   a predictable basis one of the things I always 
ask I always ask people four questions first and   foremost doing what you're currently doing do you 
know what rate of return your money needs to earn   to be able to retire when you want and guarantee 
your standard of living for the rest of your life   if you don't know the answer to that question then 
everything else is going to blow up you can't plan   accordingly if you don't know the answer to 
that question second question is if you if you   don't know that number the question is do you know 
how much more money you have to save to be able   to retire at your desired standard of living and 
be able to retire when you want and if you don't   know the answer to that which most people don't 
I've literally met one person in my life that   actually knew those numbers ahead of time then 
you start backing it out and go okay how much   longer are you going to have to work if you get 
to retirement age and you haven't met that and you   still need to work well a lot of people they have 
to work an extra decade just to make it make ends   meet right people are thinking they're going to be 
able to retire at 65 but they have to work till 75   or 77 or 78 it's it's really just a sad situation 
but then the challenges our health a lot of times   sometimes sadly unfortunately fails on us we don't 
when you hit 65 there's no there's no promises   there's no guarantees heck there's no guarantees 
anyway but especially when you hit 65 our health   starts to fail like and for most Americans most 
people in this world Health starts to decline at   least and there's start to be different needs our 
bodies break down maybe your body isn't going to   be as capable of doing the job that you did for 
all those years to earn your income and so now   you have to start being like even if I wanted to 
keep working what is my real earning potential am   I really going to keep being able to do that or 
if I get sick what kind of reduction in standard   of living am I going to have to take just to be 
able to last the rest of my life and not run out   of money right and so these are the things that 
you need to consider if you haven't already like   I would encourage you to really do a deep dive 
because my favorite favorite quote in the world   I think and it's kind of tongue-in-cheek but just 
because the ostrich buries his head in the sand   doesn't mean the Lion's Den or plans have changed 
right this this is your problem this retirement   thing is a real problem it's a it's a thing that 
you need to figure out a solution to and you need   to create a plan for as good as Dave is at helping 
you get out of debt he's not great at helping   you plan for your future um and and his his 
information while it seems great because it's kind   of geared towards the masses it's actually in my 
opinion it's it's super detrimental to most people   that are listening to them because you're going to 
get to the end of the rainbow there's a going to   be no pot of gold you're going to find out you got 
to work longer if you're healthy enough to do so   or you're going to have to reduce your standard 
of living because you didn't take some of these   variables into consideration so anyway hopefully 
you found value in that if you did please like it   share it get it out there to people subscribe 
hit the Bell that way you're notified every   time I launch a new video until next time have a 
blessed inspirational day we'll talk soon see you

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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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How to Retire by 40

Hey everybody welcome in on this snowy snowy Wednesday wherever you’re joining us from let us know where you joining us from today hey everybody welcome in to the investing in real estate show today we’re gonna have some fun talking about how to retire at 40 how to retire by 40 Sean says hello from Brooklyn New York how much snow are you getting out there Sean we get this massive nor’easter once again and once again so the kids are off school just I’m over it I am over it I know there’s gonna be people are there I’m right in here and say they’re there joining us from there out in California and they’re living living large yeah Aaron is running us from Miami Florida there you go Wong from Miami thanks so much rub it in rub it in rub it in everybody so we’re gonna get this show started in just about three minutes South Africa Indianapolis Moses welcome Pottstown you’re getting hit with some snow right now Matthew Bishop Lakeland Florida hey Matthew yeah I guess California you guys are getting hit with some crazy stuff out there today too huh yeah they cancelled school last night I don’t know I you know growing up I don’t ever remember them canceling school like the night before did you guys ever have that growing up it was like he’d wake up and he would sit and listen to the radio and you would wait you know I was in Pennsylvania I would be all be waiting to listen for our school if it was canceled I’d be in one-hour delay a two-hour delay and you were hoping that they would cancel it but I never had the night before they send out a text message letting you know that hey your school was cancelled and that was never the case for me never never did you do all right we’re gonna get started in just a moment here it’s gonna pull up this today we’re gonna talk about how to retire by 40 and we’ll start here in just about one minute one minute one minute Jerome aramid says hey a guy you talked to me more than two weeks you never came back to me you can take care of this later I know you’re alive nobody emailed me the first appointment Jerome who did you talk to on my team let me know and we’ve got some people in from our team right here in the chat thread as well we can Mike you know a lot of times people will send follow-up emails it goes to your spam folder sometimes people when they initially signup for phone calls with our team they put in the wrong phone number and then they later writes it well I put the wrong phone number in and so our team will be calling and they can’t get ahold of you so I apologize for that and Rudy Rudy please check your spam folder please please please because our team is very good about follow-up and we have hundreds of clients around the world so I apologize for that you know because if someone sends you a PDF it might go right to your spam folder and then you’re like oh I never emailed me just check your junk folder and who are you talking to please let us know we’ll make sure we get you all squared away we have a waiting list for people to get on the phone with us for like a few weeks so I don’t ever want anyone to feel like we don’t get proper follow-up from our team that’s very important so I’ve got our team right now who is in our chat thread we’ll go through and make sure that we get you all taken care of so I apologize for that all right so we are live it is it is a.m.

And we’re gonna kick off the show after the show I’m gonna do you know to talk about this article talk about how to retire at 40 and then after the show we’ll kind of open it up for a few minutes of Q&A if that works for all of you and we’ll just kind of answer some real estate questions some of the things you’re struggling with you’re hoping to achieve and we’ll talk we’ll do that all right Forrest wants to knows are still owners software coming out for Morrison fest yes indeed in fact we’ve been working on it for for since like August it’s all custom it’s been a lot of tweaking we want it to just be perfect Peter Cook says I’ve had very good follow-up thank you Peter appreciate it and James Frederico o1r from our team is right in here he says hey Jerome I got you all reach back out to you and take care of you good good good all right so we’re gonna get started here and we’re going to talk about this in a second so first so again at the end of the show we’ll take some QA and we’ll do that as well let me just get this all dialed in we’re recording we got the audio up and running is everything sound ok guys you guys can hear me give me a thumbs up you guys are all good Brandon yes absolutely because some of those beat class properties you’re asking about the verb method absolutely because you know buying those 60 70 thousand dollar homes those the banks love they’re able to do you know easy refinances on those because there’s easy comps to pull in the neighborhood because there’s retail sales so I would stay away from like the 3040 thousand dollar stuff if you want to really do like a solid brr-brr method stuff if that’s what you’re looking for all right sounds good alright so we’re gonna get started all right all right and let’s get this show started all right today on today’s show we’re talking about how to retire by 40 a news article from the mainstream media it’s kind of total garbage that’s today’s show let’s dive into it hey everyone I’m Clayton Morris longtime real estate investor founder of Morris invest if you’re new to the channel thank you so much for joining us and subscribing I hope that you’re a subscriber because there’s where we talk about passive income building legacy wealth for you and your family that’s the goal right and the vehicle that we use is buy and hold real estate but I don’t care about the real estate right I don’t care about the four walls and a roof I just bought 15 houses this week that we’re about to rehab okay I don’t care what they look like because once we get them it doesn’t matter what I’m buying as a tax shelter and that’s what you should be focusing on buying a tax shelter that’s what this show is all about on today’s show I want to talk about how to retire by 40 and I want to preface this by saying that I got this from an email from a listener a viewer of our show who is getting involved in real estate investing Jesse Daley sent me this email and he said hey Clayton I hope you’re doing well man I thought you’d find this article interesting especially how the writer literally doesn’t mention anything about investing in real estate there’s only a one quick mention of a condo adding to net worth and nothing else in this article I’m so happy that your podcast teaches people how to truly invest properly and retire by the age of 40 this they should have interviewed you for this article so thank you Jesse I promised I would give you a shout out here on the show and I want to go into this article so again I have lampooned some of these CNNMoney articles over the past few years have done shows about these things because I just find them ridiculous I find them ridiculous that they’re telling people to invest in their 401k and then that’s the way that you build retirement that’s the way that you’re able to retire by 40 years old I mean how many people are you know you just like a show of hands you’re listening right now how many of you think you could actually retire by 40 years old just with your 401k of course you can it’s ridiculous the average 401k retirement in this country guess what according to Time magazine is 90 thousand dollars can you retire on that no way so I want to go through this article because it’s a lot of fun and Jesse sent it to me so these are tips from CNN money on how to retire by forty three proven tips three proven tips so let’s go Chris reading isn’t your average retiree he said goodbye to his working years at 37 and is now financially independent living his life on his own terms that’s great now he had 4500 dollars in debt and when he started working he got through all of that he finally found a well-paying job working cyber security took out a mortgage bought a condo and financed a BMW okay alright took out a mortgage on a home bought a condo and financed a BMW on our way to success but then he started to wonder is this all there is he finally said I can’t do this for 40 years in his late 20s he started searching for alternatives and he read the book your money your life by Joe da Menendez and Vicki Robin and he said look there’s other ways of becoming financially independent so he then felt that he had enough to live the rest of his life on his savings and investments without having to work again it took two more years of showing up the cubicle for him to be sure than a 37 he finally walked away so what did he do okay here were his strategies here where his strategies for becoming financially independent and retiring at 40 years old number one save more save more okay so his strategy according to the CNN Money article is cut he cut back on going out to dinner and he cut back on buying lattes so he just started saving more really so let me get this straight that’s the way that you can sustain yourself for the rest of your life by retiring at 40 years old from your job it’s just having enough in the bank you think that you’re gonna have if the average 401k retirement is ninety thousand dollars can you really live the lifestyle that you want so now you’re cutting back on dinners in order to save some money you’re not buying coffee so what Natalie and I’ve talked about here on the show repeatedly is the idea of not having to shrink your lifestyle why not find out what your freedom number is using real estate find out what your freedom number is and actually have enough passive income every month coming in the cash flows you’re creating a tax shelter for yourself and enabling you to live the life that you want so you can’t go buy a latte I find that ridiculous you know David Bach wrote about that in his book the automatic millionaire a years ago and look if you’re $40,000 in debt yes maybe not buying a five-dollar coffee every day is probably not a smart strategy you know also if you’re a smoker you know spending ten bucks a day on cigarettes or whatever it’s probably you know not a smart strategy if you want to claw your way out of debt I get that part of it but as a way of sustaining yourself and retiring at forty years old just saving more savers are losers that money in a bank account is doing nothing for you what about buying performing assets that are actually producing cash flow I mean come on so when he says look where people get into trouble with savings that they think they have to use reusable toilet paper and eat chicken broth but real basically you just you’ll never spend zero dollars find a level of living that you’re come with and work on earning more without increasing your expenses so he’s just saying earn more save more cut out lattes and you can retire at 40 I don’t buy that for a second number to earn more okay that’s his second tip earn more great so let’s save more and earn more again a paycheck job the tax code is written for wealthy people the tax code is written for entrepreneurs who own businesses who own real estate that’s what the tax code is written for it’s not written for a w-2 employee so earn more so what he says is your actual jobs only part of your work in order to earn the kind of money where you can live on only half or less of your salary so take that extra money socket away that’s what he’s saying so work harder right work for a paycheck get taxed as like in the highest tax bracket by the federal government right because we know that paycheck employees under the new tax code or hurt the worst he says this career-boosting work can include earning advanced degrees oh that’s great so his other bit of advice on this is go out and spend a hundred thousand dollars on getting an advanced degree so go get your master’s degree that’s only what a hundred thousand dollars that’s only a hundred thousand dollars right just go get it a master’s degree so that’s smart so save more earn more by spending more on getting an advanced degree or certifications and then that way you’ll have people who will look at you more favorably in the office and be able to elevate you higher that’s great so it’s important understand the weak areas and he says look I finding mentors okay that’s good yes definitely finding mentors as a very smart move finding mentors who can help propel you and then number three he says invest more so he says the most powerful mechanism for investment right now it’s built into their job it’s the 401k invest in your 401 K and a two or three percent return contributing at the level where you get the employer match is a must and that’s your biggest benefit and that’s how you can retire by 40 that’s the article unbelievable so okay ridiculous right that’s how you could retire at 40 no no that’s not how you can retire it 40 and that’s not how you could live comfortably and live the life that you want and be able to produce legacy wealth for your family for the rest of your life so he’s now retired he’s living off of savings but he’s got no assets that are actually performing for him for the rest of his life he’s got a V BMW that he bought financed and he has a mortgage on a condo that he lives in he has no performing assets that is not financial intelligence any way you slice it wouldn’t it have made more sense instead of saving that money while he was working for that cybersecurity company to take that money and invest it in real estate by a performing asset that cash flows that’s how you control and move your family forward that’s how you can build true legacy wealth for you and your family but actually taking money and buying a BMW buying a liability remember all you need to remember is if you’re buying liabilities a liability is something that does not produce cashflow now if he bought that BMW and used it as an uber driver that was producing cash flow that’s a different scenario or if he rented out that BMW that’s a different scenario but I love these I love these articles and again this is all sort of couched around the idea of the mainstream media right the mainstream media wants you to believe that a paycheck employer job is the way to go that getting a 401 K having their company sort of automatically do it for you because you’re too dumb to do it yourself have them handle it have them streamline it and that’s how you that’s how you have a strong safety net we’ve been trained to believe that being secure is having a paycheck job you know again I come back to the I keep seeing this commercial and I’m sure so many of you have seen this commercial over the past few weeks I saw it first during the World Series and they continue to run this stupid thing where it shows a couple you know they’re in their late 60’s and they’re sitting there with a how it’s a Merrill Lynch advisor and the Merrill Lynch adviser says well it looks like the plan worked and you’re gonna be able to have that retirement you wanted and I looked at you look on the iPad app that they’re handing to the couple and he’s like honey we did it we can do it we can live that life we wanted retirement and it shows that their income is enough they’re gonna have about seventy thousand dollars to work with like if you look at if you actually look at the numbers on that screen seventy thousand dollars so now they’re almost at retirement and then the next clip it shows them in a boat with their granddaughter right there sailing off into the sunset like some small little boat with their granddaughter and the little girl says aye aye captain you know and she she’s driving the boat so this is their retirement they finally did it right they had a wait till they’re 70 to buy a boat and to be able to sleep in and spend a little bit of time with her grandkids be all because they had their month their money managed by a financial advisor that was taken out big fees and investing in a stock market and not investing in real estate and cash flowing assets so there you go that’s my frustration there you go that’s my my little my little two cents my little rant about these types of mainstream media articles and when you see them on TV just roll your eyes think about it for a second saving more earning more get an advanced degree spend $100,000 on a master’s degree and then use a 401k that’s how you’re able to retire at 40 that is total garbage that is total garbage unless maybe the guy wants to go live in like Thailand by himself with no kids and he wants to live like in a hut somewhere for the rest of his life and he doesn’t care about actually having any income or cash to be able to buy anything or any food or live the life that he wants I find it to be total garbage I’d love to hear your comments and your reactions to this please send them to us and I really thank you so much so that’s gonna do it for that and thank you so much for subscribing to the show I really appreciate it this is the investing in real estate show you can please subscribe share it with your friends and and you know please go out there take action become a real estate investor because I believe it’s the number one way to build wealth we’ll see you next time everyone all right now with that that’s the show so anyone who wanted to get just the shortened version of that but hey now we’re gonna open up this agree to some Q&A here in the show we got so much so I saw so many chat threads coming through here asking questions alright so fire them up here alright alright Joel says I’ve also had an email a few times hit reschedule my call but no response and said ok Joel no worries we’ll get you all straightened out I apologize like if people miss their phone appointments cuz like I said we Deanna with our team we have like calls are booked out I think about two weeks and so if we call them like goes to voicemail and then we’re trying to reschedule it so we really try to make sure we can get on the get on the same get on the same on the same page Jinger I’m sorry again what’s going on Jinger we’ll get to the bottom of this so I’m gonna make a list of anyone who didn’t get a call back so I apologize alright so can you guys tell me Arum says Glen and Nicole from your team have been great awesome ok so we will dial some of the stuff in ginger and I’m sorry I will get some of these people on your on your team to make sure we get it all taken care of thank you guys let’s see all right you know I’m glad you’re not upset no I just you know we if sometimes emails get back and forth and we’re trying to make sure that everyone gets taken care of okay are Tuffle get you back on your property okay let’s the ad tapper says what do you think about joint ventures they have the money I do appraisals marketing and brother does the renovations hey jayvees are great right you need to build a great team for real estate investing that’s very important you have to have a great team to do real estate investing well Kelly just uh Kelly Cheatham says I want to hear more about your program great just booked a call with our team Kelly and Morris invest comm we’re doing some great things and I’m really excited about some of the new properties that that we purchased that we’re about to do we’ve already designed our contractors to dive in and start rehabbing see Charlie 18 says our new Hara Sean wants to know one of the price of the new house is being built our new houses the three-bedroom two-bathroom right around seventy seventy thousand okay Charlie eighteen I’m gonna answer this question how does it LLC save you on your taxes on your rental how does it LLC save you taxes on your rental properties a lot of the stuff I’ve been reading times about pass-through income I never thought I thought that that was taxed the same way as a sole proprietor yes however remember that under the new tax law as a pass-through entity as a pastor entity you’re now getting an additional 20% deduction 20% and remember when you have your your properties in an LLC you’re being taxed as a business and you’re able then to depreciate spread that money over all those other your w-2 income and those other things so I’ve just an all series of videos on understanding tax shelters and remember what you’re buying as a tax shelter so forget about buying real estate you know I have talked about Lane I like for repairs so repairs add to your tax shelter helps mitigate your overall cash flow because remember what you’re buying in the beginning in a 3-stage is a real estate investing right buy own and cashflow what you’re buying in the beginning you’re adding to your net worth so I don’t care about the cashflow necessarily until years later but you’re buying and adding to your net worth you’re creating a tax shelter for yourself you’re able to mitigate your w2 income you’re able to offset all of those things so I would love to hear what you guys thought about today’s show and the article please let me know I’d love to hear you which you you know what you thought about that Kelly are speaking of the computer program Oh Kelly yeah we’re building a personal owner portal for our clients that the software I mean it’s just it’s and make it much easier so that we don’t like our team doesn’t have to send out Purchase Agreements it’ll be right there because we have so many clients it like we’ll have like three or four clients and want the same house and so a little like yeah give you a purchase agreement and it’s kind of like first-come first-serve and then our team has to send out a purchase agreement wait till it’s signed and all that BS so this will make it very easy for them to be able to click right on it and then open up DocuSign and be able to do it and pretty great Ryan Millie says okay what are the mechanics after purchasing one property to purchase another property or two and repeat the process over and over again where does that money come from well ideally it could come from a bank right or it could come from private money it could come from you know we we talked about a company that we work with called fund and grow less you know if you go to our if you go to our website Morris and vest com slash funding you don’t pay them any money until they actually if they get you money zero percent Interest but why would look at okay so let’s just take the mechanics of that to answer your question so I would say you know buying like a sixty seventy thousand dollar rental property and then leveraging that right so maybe putting or or if you have the cash to do that right that ideally if you could come out of the gate you have the cash to purchase your first one free and clear that’s more of a B Class play you know that’s sort of B minus like 60 65 70 K place play that’s kind of maybe you know it’s transitioning up to sort of an a-class neighborhood and it you know coud appraised in a few years at 80 or 75 that’s the play right so buying that if you could buy that with cash right and then refinancing a pull some equity back out of that and then be able to roll that next amount of cash the bank just gave you into your next property into your second property and then into your third property a buddy of mine here in New Jersey started and did that on an eighty thousand dollar property he now has over two thousand units here our DNA and money when he started and he bought that first property that first property allowed him the snowball and all of these other properties and identity jjh yeah unfortunately JJ was said you purchase second property in Indy in November we’ll hopefully get an answer for you an update on where we’re at with the rehab and we’ll also make sure we connect you with the right management team if you’re having some issues you know we work with a 8 different property management teams so what gets you sort it out so just you know email our team you know the team you know our team at Morris invest email us we had a really really really unusually harsh winter that set us back about four or five weeks on construction this year with like a deep freeze we had stuff all the way through Michigan into Indiana down into Pennsylvania where we just had all kinds of problems Ryan you are absolutely welcome thank you so much Sean says you weren’t able to pull cash off the cards they got through funding to grow yeah that’s unfortunate we have literally funny grows enabled our clients to raise over 20 million dollars for purchases of real estate so I’m not sure why that person had an issue they’re very very good at walking you through step by step I just would say reach out to them and make sure that you’re working with them they they have a thing with gold money so basically they use the cards to buy gold and then you transfer the gold into cash it’s like a little bit of a few hoops to jump through but hey it’s 0% interest for a year you know hey beggars can’t be choosers right we were able to get a hundred and seventy six thousand dollars in cash because of them in order to purchase real estate so it’s an amazing strategy so again and you’ll save like five hundred bucks if you go through our website because we’ve asked them to do that for people who watch us and who listen to us so if you go to Morris invest com slash funding check it out it might not be for you if it is great just check them out you know I have a phone call with them Joe Joe wants to know what appliances do you provide actually I don’t do any appliances in our properties now that is to say if we move into some of the b-class properties we some we will sometimes put in a fridge and stove and things like that but far as a washer and dryer we have I made that mistake when I first started in Michigan I bought all appliances and found out that I didn’t need to that it’s commonplace that tenants will provide all of their appliances they will usually typically go down to a local you know like a little scratch and dent company etc or that’s where I bought my first appliances when I had my first condo in Florida I went to a local scratch and dent place they’re brand new that may have like a tiny little little scratchy scratch on the side and you get a great deal on a bundle of appliances so that’s what most client most tenants will do and then they’ll keep them for many many years so you don’t have to worry about it so Daniel wants to know what’s the fee for you guys to do investing for me there is no fee with us at all I know some other companies charge like ten percent all that stuff we don’t do that you’re just buying the house we just you know and try to get it all stabilized for you with property management team and cash flowing so you don’t have any additional fees you own the property free and clear Jimmy says how do you organize your banking system for your real estate business great question Jimmy you know we have a couple of podcast episodes Natalie and I do where we talk about how to run your you know your family business and finances for real estate investing if you want to check out the investing in real estate podcast you can do so and we have some of those episodes you know the short answer is that you want to have bank accounts set up for your taxes you want to have bank accounts set up for your LLC that owns your rental property and personally so I have LLC’s that own my rental properties those LLC’s have their own bank account so when the cash flow from the tenant comes in I Clayton Morris don’t touch that money that goes into the business then I can pull that money out but you can’t commingle money like you don’t if it’s a business that owns your real estate you don’t want that money coming in to your personal bank account that’s called commingling that’s illegal the IRS does not look favorably upon that so you want to do everything aboveboard making sure that everything is flowing the way that it should Bobby yes what’s the best way to start a property management team no cash but at the time and looking to help investors well I would say to start a property management company takes about a hundred and fifty thousand dollars I know this to be the case so right away to be spending one hundred and fifty thousand dollars to set everything up okay you’re gonna need you’re gonna need to pay for software things like rent manager appFolio those types of things you’re gonna want to hire an accountant you’re gonna want to hire an office manager you’re gonna need to hire leasing agent you also need to get a brokerage right you need to have a brokerage license to make sure that you can manage property so all those things cost some money so to start a property management company that’s what about that’s what it roughly costs and then about if you have more than 100 properties the rule of thumb is for every hundred properties or so you’re gonna want to add another human being to your to your company to facilitate those properties that came to me as a friend of mine who ran his own property management company those are the exact numbers that he used James wants so what’s the area oh it’s just on the website to find the gold funding option so just go to Morris and Vess comm slash funding it’s sort of a hidden page because we don’t like promote it but it’s there if you sign up like I said you’ll save 500 bucks once they get you the money you don’t pay anything until they get you the cards Peter said spoke briefly with your guy Justin have a self-directed IRA I was interested that was a month ago he was going to keep an eye out for a property and haven’t heard back Peter I will follow up with Justin or you can just you know feel free to reach out to Justin as well from our team because we we can set up a whole dashboard for you for the self direction so I’ll make sure that Justin gets back to you Peter I’ll have our team make sure we go through this comment thread to take care of it okay how can you cash out on a $40,000 property well so $40,000 homes are tricky because banks are lazy or appraisers are lazy so a bank is going to hire an appraiser to go in and they’re going to those types of properties they’re being sold every day to investors like I might buy thirty of them right but guess what they’re all off market so they’re not being sold on a multiple listing service like you buy a house for a hundred thousand right with a realtor and so when an appraiser goes to pull comps in order to appraise the property they don’t have any comps to work with the only cops they have are ones that are on the MLS the ones that they end up pulling end up being ones that are like foreclosures or pre rehab so you might have a forty thousand dollar house and you know it’s worth forty forty three forty two but they might appraise it at twenty because the only thing they could find that sold recently on that street was a foreclosure that’s not been rehabbed yet so you can’t you kind of at a crapshoot if you’re planning to do a refinance here’s my suggestion it’s just move up into those sixty sixty-five seventy thousand dollar homes and then you’re putting like you know then you’re able to pull almost like the full equity out of that house or close to it if the bank then cuts you a check for fifty fifty five great then you can roll that into your next property so I just would say told code don’t try to go super cheap if you’re planning on doing a refinance banks are lazy and you’re frankly just at the mercy of these banks you know I can pull up sales disclosures with hundreds of sales where the house is selling for forty three forty five but guess what the appraiser will not look at that and so then you’re at the mercy of like a foreclosure that’s on the Multiple Listing Service and unfortunately it’s it’s just difficult now we’ve had people who’ve done refinances on forty thousand dollar homes and you know like one of our clients recently bought one for forty three it appraised for fifty five but again it’s a crapshoot he could have just as easily had the appraiser come back and say you know well we think that house is worth twenty two so remember what you’re buying is cash flow when you’re buying that low and you’re trying for that high of are a lie you’re you’re sort of like the investor that’s buying 50 properties like that they don’t care about ever refinancing they just want the ROI they want the cash flow I hope that makes sense sure our Lara says I’ve got a shooter I think I missed it sorry zip past it Ahmad it’s kind of invest the United States if I’m not a US citizen yes you can you know just book a call with our team we have people I mean we have a lot of investors Canada and New Zealand all over the world who invest with us do I see Florida getting to California prices within 10 years seeing a lot of new construction and price hikes there in Tampa yeah a lot of those coastal areas you know Tampa those types of places Clearwater Miami of course I don’t see them getting to California craziness you wanted let me tell you a California story the reason it’s ridiculous so like the same house that I might do in Michigan or Indiana and then our clients would buy maybe like a 3-bedroom 1-bath in the $50,000 range right well there was a 3-bedroom 1-bath last week on the market in the bay area for $900,000 and guess what it was condemned it’s a condemned house selling for $900,000 in the bay area that’s California it’s crazy absolutely crazy Mario says I was thinking about buying houses in my name under a HELOC on my primary residence and then when I get to three to five houses to a portfolio loan and all three to five and an LLC is that okay yeah I mean but why would you need to buy them if you’re using a HELOC to buy them just buy them in an LLC now you know there’s no reason you should buy them in your own name at all ever buy them buy them in an LLC if you’re using the HELOC it doesn’t matter how you use the he lock key lock is cash right you could go out and buy a boat if you wanted to with your he lock the bank doesn’t care you’re just writing a check from your he lock so why not buy them in your own name now I’ve started buy them in an LLC today you’re using the he lock on your primary residence it doesn’t matter the bank doesn’t care what you’re doing with that money you just have to pay it back but I to me having a HELOC is one of the killer strategies I love a key lock on my primary residence I use it to buy properties all day long Michele says what are your thoughts on using quicken loans to buy a house I’ve never done it you know hey if you can get good rates and good terms from a bank to buy to buy a house great go for it I don’t see why not video teaching can you recommend a bank for a HELOC on a New Jersey property lakeland la ke Lakeland Bank we love them they’re fantastic smh ninja on the funding Grove fees no notice he you’re refinancing very quickly so you’re gonna refinance very very quickly by that fifty sixty thousand dollar home and then get it into a long-term 30-year note and you pay off the you pay off the zero interest credit cards and then you recycle them so that’s what fund and grow does they recycle and get you more zero percent and then you can just rinse and repeat that’s why it’s a great strategy so you’re not keeping those cards for you know with like you bought a house on a credit card for twenty years you’re refinancing it within that first twelve eighteen months and yes you can quit claim deed you can move a property to an LLC Kevin wants to know thoughts on an umbrella insurance versus LLC well that’s well I say you have both I mean I would definitely have insurance and also have your properties in a limited liability company the reason you have your properties in a limited liability company is so that people will come after you personally that’s the key right you don’t want people if tenant slips and falls because a handrail wasn’t fixed on your one property and this happened to a buddy of mine in Philadelphia he has a property and a girl was drinking one night she came home to the condo she slipped outside because the sidewalk had like this much of a differential and sued him fortunately you know he had insurance but fortunately the case got dismissed or dwindled down where he only had to pay like seventeen thousand can’t come out of pocket seventeen thousand to pay for this girl slipping and falling at his property because he had the property at his own name so don’t put properties in your own name if you don’t need to there’s no reason to forest so to have a bank you recommend for refine 50k rentals I guess it just depends yeah I mean there’s a couple you know State Farm actually the insurance company has a refinance program a national program Northpoint Bank all one word with an e at the end North Point also has a refinance program they’re a national company as well you could look into them Daniel says how do you tell if a property is a B or C class that’s a great question I’ve got a whole video series here on our YouTube channel about how to understand that so you can if you want to look that up right here on the channel it goes more deeply into that but the short answer is an a-class neighborhood I like to avoid an 8 class neighborhood or those two you know two hundred three hundred thousand dollar homes two-car garages maybe they have a swimming pool they’re in the best neighborhoods I stay away from those as an investment property because you’re gonna have the most moving parts that break you’re gonna have the most entitled tenants that cause the biggest headaches and cause you the biggest problems so garage door openers that break garbage disposals that break multiple heating and air systems that break you know avoid those those also have the most volatility those tend to be the areas where those in a big recession lose their job the a-class neighborhoods we saw that across the country right these a class neighborhoods where people lost their jobs and all these houses went into foreclosure and people couldn’t pay their rent or the value plummeted significantly so let’s say they’re renting it from you for $3,000 a month in an a-class neighborhood and everyone loses their job all around that a class neighborhood now the rent is you know you’re gonna have to go down like 20 2022 hundred a month or even 1800 a month we saw that in Manhattan right people renting Manhattan apartments for thirty five hundred bucks a month the recession hits and guess what all these Wall Street people lose their jobs etc and those went down significantly you could rent a place in Manhattan for eighteen hundred a month instead of the 35 that you could before the recession but guess what those C class neighborhoods say the same those C and B class neighborhoods roughly stayed the same it’s consistent cash flow those are the people that tend not to lose their jobs those are the people that are working blue-collar b-class is kind of moving towards an a-class it has better schools slightly lower ROI but I’ve been buying a lot more B class properties lately personally because you know when you get to a point of having find enough cash flow you really want to start thinking about buying those more expensive B class because you’re creating more of a tax shelter for yourself you’re creating that bigger spread that bigger tax shelter and you’re adding to your net worth more significantly so but C and B are my favorites so I’ve been a lot of C and I’m starting to buy a lot more B yeah lisa says that’s why I like condos no outside maintenance but then I don’t like the associations right I do not like HOA fees and I’ve got a whole video on HOAs because HOAs honestly you’re sort of at the mercy of these people I mean you’re literally at the mercy of these people and you never know when they’re going to decide to change the bylaws and make it so that you can’t rent the place or they’re gonna hit you with a big roof assessment you’re gonna have to pay you know $5,000 for a new roof on the property you have no control over that so homeowners associations I’m not a fan of Daniel we don’t we don’t have a number for you to call us because we want to be able to schedule it with you so just go to our website click on the schedule a consultation button you literally answer like eight questions like your first name last name best email address to get a hold of you make sure you type in your phone number correctly and then we just ask you a few quick questions like how many properties do you currently have what are your goals and then you pick on the calendar the time that you want to schedule a call with us it’s very simple so it’s up to you you know that you got the kids from to p.m.

We don’t write so we want you to pick the time that best serves your needs it’ll go on your calendar we’ll send you an email reminder about ten minutes before your call and we’ll jump on the phone with you and talk to you for like thirty minutes Chad boys wants to know how is Capp West you know I heard good things about them years ago but then I think I heard things kind of fell off and I haven’t really actually heard many people using them so I don’t know I’ve never used cap West what if you want to live duplex a class neighborhood your thoughts well Rodney I mean some few if you want to live in the property that’s up to you right because that’s a different animal than investing in a property but if you want to live in a duplex than in a class neighborhood great you buy it I would rent out the other side so that they’re paying your mortgage that’s an investment right that’s an investment property in a class neighborhood so you know go for it you know just a matter of whether if you’re in an a class neighborhood are you likely to have a higher turnover on the rent because people want to have their own single-family home they might not necessarily want to split a house with somebody if they’re in a class neighborhood you know when I was younger I was fine kind of having a shared wall with somebody but now that I’ve got three kids and I’m an adult there’s no way I want to share a wall with somebody else you know I want my own place I want my own yard what do I think about a land trust well it’s funny you mention that as our tax accountant thinks that they are a total mistake so I do not do anything in the land trust sam says I spoke to Glenn a few minutes ago awesome

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How to Replace a $70,000 a Year Salary with Real Estate Investments and Rental Property

How can I replace $70,000 a year in annual income with rental properties that is the subject of today’s video hi everyone I’m Clayton Morris the president of Morris invest let’s dive into it so how do we replace seventy thousand dollars a year in annual income with passive income with rental property income from tenants every month providing cash flow from the properties that we own you might think that that sounds like a tall order but it’s not and I’m going to show you how simple it can be to actually replace that annual income you know a little story about me that’s in fact how I got started I was frustrated sitting down with my wife one night I said we were frustrated with our bills and I said how come at the end of the month where we still have more bills to pay and we don’t have enough paycheck to cover it aren’t we doing well what are we doing wrong the problem was that we weren’t putting the money to work for us to start creating cash flow in our lives and creating passive income so I put together and it was really the foundation of my freedom cheat sheet it’s the number that changed everything for me by the way that link you can download a free pdf it’s like three pages long sit down with your husband or wife and go through it totally free the link is right below this video and it’ll walk you through step by step with some numbers and figures on exactly how to figure out how many houses it will take for you to recover that annual income but I want to tackle the $70,000 question specifically most of the houses that I buy and that my company rehabs and sells are in that forty to forty five thousand dollar range okay single family homes two bedroom one bath three bedroom one bath and some duplexes okay duplexes or you know door on each side typically and two bedrooms on each side or three bedrooms on each side those are the types of properties that I buy now I buy them low and I fix them up and I place a great tenant in the property each of those properties will cashflow about $700 let’s just say for round number $700 okay now think about how much is $70,000 a year how much are you probably making per week well let’s bring out the calculator so $70,000 a year let’s divide that by 52 weeks that’s about thirteen hundred and forty six dollars a week that you are earning from your paycheck okay thirteen hundred and forty six dollars a week so now let’s figure out how many houses it would take us to replace seventy thousand dollars a year in passive income seventy thousand dollars right it’s a simple formula if each of our houses is bringing in seven hundred dollars a month that’s a simple formula right seven hundred times 12 gives us $8,400 okay now let’s take that 70 thousand dollars and let’s divide it by eighty four hundred that’s eight houses that is eight point three properties eight houses bringing in seven hundred dollars a month now imagine if you’re buying a forty thousand dollar house if you had to bring a little bit of money to put down as a down payment or deposit you were able to reach out and get private financing or seller financing on a property then you’re able to accrue these properties very quickly now some of the things I didn’t talk about in this video and I can dive a little deeper now that we always want to take out money for for vacancy and repairs on our numbers right so that eighty four hundred dollars a year let’s multiply that now times point six so we’re gonna remove forty percent for vacancy repairs and expenses this is just to be totally conservative with your numbers so let’s take that eighty four hundred dollars and let’s multiply that times point six so we’re bringing in about five thousand and forty dollars per property per year okay so now let’s take that five thousand and divide it by seventy thousand so this will be a totally conservative number but this will help us really make sure that we’re totally covered should something go wrong maybe we have a vacancy for a few weeks or a month or two in one of our properties this will take in that into account so seventy thousand dollars let’s divide that by five thousand forty that gives us thirteen point eight properties so let’s round that up fourteen properties fourteen properties would bring you about seventy thousand dollars a year in net income that would replace that $70,000 paycheck that you’re making every year then in other videos in this series I’m going to go through exactly how to find properties how to acquire properties but just for the sake of this video I wanted you to start to put your mind in a place where you can begin to reverse engineer that number for a lot of people you don’t think that you’re going to be able to create passive income or bring in that much cash every year hogwash I do it hundreds of thousands of other investors out there do it every day they do it exactly the way that I do it some buy residential properties some buy commercial properties it doesn’t matter it can be done that’s what I do I’m Clayton Morris

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Dave Ramsey’s Retirement Planning Advice Is Flawed: Here is How

Dave Ramsey is wonderful if you are requiring some.
basic financial aid to leave financial obligation perhaps you'' ve been careless with your cash you''
ve. racked up harmful Consumer Financial debt and also you'' re looking to carry out some fundamental methods to remove.
that debt as well as to produce new behaviors for yourself when it pertains to your cash Dave has affected.
numerous people when it involves venturing out of debt when it comes to recognizing cash on a.
very standard level uh in a far better means the challenge is what has actually happened is Dave has aided millions.
of people leave financial debt and in that process he'' s built a whole lot of depend on up with that said individuals therefore.
then as a result they start listening to him for retirement advice for planning for the retirement.
future and in this video clip what I'' m going to do is I ' m going to cover the imperfection the significant flaw that.
remains in Dave Ramsey'' s retired life strategies I ' m not gon na argue whether he'' s appropriate or wrong.
concerning returns but I am mosting likely to mention the large flaw that most individuals are missing out on that.
he never ever talks regarding can'' t wait to enter into it if you sanctuary'' t already make certain you subscribe and.
hit the Bell this way you'' re informed every time I release a brand-new video clip Let'' s Go hi what ' s going. on cash money flow cyberpunks it'' s Chris with life 180. if you'' ve been viewing this channel a while you.
recognize exactly how I feel about Dave Ramsey however I desire to type of take the discussion concerning Dave to.
a bit of a different degree in this video um below'' s the bargain Dave is truly good when it. helps you when it concerns helping you get out of financial obligation yet his recommendations on retired life preparation.
is is definitely in my opinion shocking one of the greatest difficulties that I have regarding Dave and also.
his approaches is that he'' s been singing the same tune for 30 years right he has actually not changed his.
approaches his techniques he hasn'' t truly also transformed the numbers that he uses when it pertains to.
retirement planning and also the expectations that you ought to have around your whole your retirement.
preparing although the financial atmosphere has altered metamorphically right so if you.
understand that there are variables that affect your money and also influence what you can expect in.
retirement you need to recognize that there are no simple regulations that Dave tries to inform you like.
Dave tries to tell you to follow to perform currently I will certainly say that you understand the advice Dave provides.
is like it'' s much better than absolutely nothing like that I will certainly state it'' s better than not doing anything and it'' s better.
than what lots of people do yet I additionally think that it'' s it ' s an issue that if you follow his advice. expecting a particular result and after that you reach the end of the rainbow as well as there'' s no pot of gold and.
you'' re actually not anywhere near you where you believed you'' d be that ' s going to be an issue as soon as. once again we ' re not talking regarding the financial obligation elimination stuff we'' re speaking regarding which incidentally is a.
sensational thing to comprehend that as well as go out of financial debt thus from that point of view I applaud.
him currently moving on when we'' re chatting regarding wealth creation that'' s where he drops
when. it involves retirement planning what I did is I built a spread sheet since I assume numbers state.
a million words spread sheet you recognize we can go via this and what I'' m mosting likely to do is I ' m going.
to share this so below'' s what I intended to do here I wanted to take a look at a family revenue.
of about a hundred thousand dollars in today'' s money I intend to save 15 of that earnings annually.
I'' m mosting likely to presume an expected return of 10 per year all right so what this does resembles Dave is going.
to sit here as well as speak about the fact that you need to save money based on retired life you need to to.
Target pension values based on your hundred thousand bucks a year of income the.
difficulty is Dave doesn'' t take into this right into account'when he ' s ever before talking regarding'it I put on'' t. know why either I wear ' t recognize why if he if he believes people just aren ' t smart enough to number.
it out but to me this is simply basic Financial stuff that you need to know the understanding.
of you need to recognize to be able to make an educated decision if you don'' t recognize just how in.
inflation effects your monetary demands lengthy term you'' re never going to have the ability to make a great.
economic choice and also particularly that we'' re in this environment now where inflation is.
4.9 percent in 2015 it was over 9 percent long-term because 1971 inflation has actually mored than.
4 percent really nearing 4 and a fifty percent percent so like from that viewpoint looking at.
it from a long-lasting historical standard this 4.9 rising cost of living setting that we'' re in now that
. everyone ' s freaking out around is not even high it'' s just a little bit above average currently a great deal of.
people would certainly argue that rising cost of living is really way even worse than what we'' re speaking about today.
due to the fact that the real effect on the estimation of rising cost of living uh the the impact is is a lot higher as well as.
worse on specific houses uh than what the estimation claims because they'' ve in fact changed
. the computation over the previous 40 years on exactly how they identify the rising cost of living numbers which to me is.
Wrongdoer by itself yet here'' s the offer we have uh we have the hundred thousand dollars of revenue so. what I have more than here is I have um the retired life account balance required to live with a four percent.
guideline so if you wear'' t know what the 4 percent rule is it ' s the guideline that
claims you can. distribute 4 percent of your pension value as well as not run a significant risk of running.
out of money throughout your lifetime so that is like the safe distribution estimation expectation so.
what this is showing is that if you had a hundred thousand bucks of revenue you require 2.6 million.
bucks um in fact it'' s a hundred four thousand I didn'' t do it for year one if you get to year two.
as well as um you understand your real requirement on four percent inflation is mosting likely to be a hundred four thousand.
since your cost of dealing with rising cost of living going up it indicates you'' re going to require even more money. it needs your hundred 4 thousand bucks following year with four percent inflation is gon na. seem like a hundred thousand dollars of income Fields today the challenge is home income.
historically is only going up in concerning three percent so it'' s lagging actual rising cost of living and this.
is why the center class and also the bad are getting poor as well as there'' s this expanding divide between the.
well-off and also the middle course it'' s not so much other financial policies also though that has a.
have fun with it long-lasting rising cost of living is the best tax obligation that is hidden to the American populace and also.
it has a widely adverse influence uh on the middle course and lower class one of the most right so eventually.
this column is what I would certainly call your freedom number your flexibility number is just the amount.
of money that you require in an account to be able to retire to be able to be totally monetarily.
cost-free and so now make use of utilizing conventional four percent policy technique and currently I'' m not taking.
into account Social Protection or pension plan or anything of that nature so if in fact you did.
have a pension plan if actually you wish to lean on social safety and security for any factor you'' d need to look
. at your estimation and decrease those off of this number and afterwards you separate that by four percent.
which will give you uh this number so if you stated allow'' s say you had fifty 4 thousand dollars.
of pension plan and also social security you'' d subtract that out that'' d be fifty thousand divided by uh split. by the uh 4 percent which would get you what your uh Flexibility number would certainly be it would tell you.
just how much money you need in that account to be able to start passive income for you for the remainder.
of your life currently below'' s the challenge as I stated house revenue is just going up at 3 percent.
as well as Dave is saying hey you require to save 15 even if we earn 10 which is incidentally extremely unrealistic.
I'' m showing this at at 10 and it shows you at 6.561 million right here however actually that'' s because. of the truth that it ' s thinking that you'' re going to have a 281 thousand buck uh need for yearly.
revenue currently here'' s the deal your income is going up at 3 percent per year that 283 35 years.
from currently since I'' m thinking it ' s a 35 years of age

retiring at 65. Dave'doesn ' t talk about the reality. that if you make 100 Grand today you'' re mosting likely to require 281 to be able to preserve your standard.
of living that'' s not 281 000 in today ' s cash that'' s 281 000 in future cash right I simply did.
a video the other day speaking about uh rising cost of living and the inflation dilemma and also ultimately how that'' s. going to impact you um and and just how that'' s like the background of this inflation as well as and where it looks.
what it looks like relocating forward right into the future um but this 281 incidentally is presuming just.
a three percent boost at a 4 percent historical average of rising cost of living if we check out.
it that method you'' re going to in fact require 394 000 and also if you back that out you'' re going to need.
9 million 865 000 and the issue is every one of your Social Safety and security expense of living changes price.
of living boosts they wear'' t keep up with the real price of inflation so the demand for you.
to take even more responsibility for your retired life planning is becoming higher and greater and also.
higher and as as inflation maintains increasing this is a means if you consider it from a social safety.
point of view this is a way that the federal government'' s able to type of conserve Social Security if they.
can pump up the currency of four percent and decrease the value of the money but after that just offer you set you back.
of living modifications at two percent that implies they'' re recapturing that money and saving the.
program merely by the way they'' re doing that however eventually they'' re taking that cash from you.
with a covert tax obligation the trouble is Dave doesn'' t discuss all this and what he does is he talks.
regarding your need for this cash he discusses saving a million bucks and I got information for you.
you might save 3 million dollars and also if you get to uh retired life and also you have 3 million.
bucks however you need to reside on 281 000 a year you are going to be up the creek without a paddle.
you'' re not mosting likely to be prepared and also you ' re not going to be in a position um you understand eventually.
where you'' re you understand mosting likely to be able to uh have a a solid situation you recognize'that'' s that ' s. actually what it boils down to you ' re not mosting likely to have any kind of'sort of foreseeable earnings you ' re not. mosting likely to have any type of security uh you'recognize and also you ' re ultimately mosting likely to have a lot of threat specifically.
when it involves Market risk sequence of return risk and and simply Market volatility threat when.
it pertains to your retired life if you if you follow his strategy you'' re going to be under conserved when it.
pertains to retired life merely due to the fact that you didn'' t provide enough reliability to the impact that rising cost of living.
is going to have on your future requirements due to the fact that think of it this way every little thing I simply showed.
you was a 10 presumption I could reveal you a lot of methods that 10 is entirely impractical especially.
when you discuss actual genuine returns I would certainly claim six to 8 percent is is the a lot more reasonable.
assumption and also then there'' s some threat involved right so if we if we back that out what.
what that would certainly look like at even 8 percent which is I believe the more I presume traditional.
technique that a lot of financial experts would certainly claim you could obtain from a long-term perspective if.
you take a look at 8 percent you'' re just going to have just over four million dollars that'' s concerning. at retired life 35 years from currently for a 30 year old right when you struck 65 so because situation you''
re. still looking at just accumulating concerning fifty percent of the cash that you'' re going to need simply to. maintain your criterion of living I wear'' t treatment just how much you have in Social Safety and security or pension. it'' s possibly not mosting likely to make up that Gap and also you'' re mosting likely to need to take a decrease in. standard of living even if you follow his suggestions and also have no car payment and also have no home loan or.
anything like that it that that doesn'' t matter that that'' s not gon na make up for the Space that in.
inflation has caused for an issue for you therefore that'' s something that you require to consider so my.
motivation to you is to go with your plan identify what inflation is going to do to your.
retired life preparation demands and also if you desire help with this I'' ve obtained a team I ' ve obtained a certified. financial organizer on the group that'' s delighted to stroll with this give you a consultation stroll via.
your demands go through your current plan as well as and provide you an evaluation and an assessment on what you.
require to do moving onward to reach your objectives on a foreseeable basis among the things I always.
ask I always ask individuals 4 concerns initial and also leading doing what you'' re presently doing do you.
recognize what price of return your cash needs to gain to be able to retire when you desire and also assure.
your standard of living for the remainder of your life if you wear'' t know the solution to that inquiry after that.
whatever else is going to explode you can'' t plan as necessary if you put on'' t recognize the answer to. that concern second inquiry is if you if you put on'' t know that number the question is do you recognize.
just how much even more cash you have to conserve to be able to retire at your desired standard of life as well as.
have the ability to retire when you desire and also if you wear'' t know the solution to that which many people wear'' t. I ' ve actually satisfied one individual in my life that really understood those numbers in advance then.
you draw back it out as well as go fine just how much longer are you mosting likely to have to function if you obtain.
to old age and you sanctuary'' t satisfied that and you still require to function well a lot of individuals they have.
to work an added decade just to make it make ends fulfill right individuals are thinking they'' re going to be. able to retire at 65 but they need to function till 75 or 77 or 78 it'' s it ' s really simply a sad situation.
After that the difficulties our health a great deal of times often sadly unfortunately fails on us we put on'' t. when you'struck 65 there'' s no there'' s no assurances there'' s no warranties heck there ' s no warranties. anyway yet especially when you hit 65 our health and wellness begins to fall short like and for many Americans most.
people in this world Health starts to decrease at least and there'' s start to be various needs our.
bodies damage down perhaps your body isn'' t going to be as with the ability of doing the job that you provided for.
all those years to gain your earnings and also so now you have to begin being like even if I intended to.
maintain functioning what is my actual making potential am I really going to maintain having the ability to do that or.
if I get ill what type of decrease in requirement of living am I going to have to take just to be.
able to last the remainder of my life as well as not go out of money right therefore these are things that.
you require to think about if you place'' t currently like I would motivate you to actually do a deep dive.
because my preferred favored quote worldwide I assume as well as it'' s sort of tongue-in-cheek however just.
since the ostrich buries his head in the sand doesn'' t indicate the Lion ' s Den or plans have changed.
This this is your trouble this retirement thing is a real trouble it'' s a it ' s a thing that
. you require to determine a service to and you require to produce a prepare for like Dave goes to assisting.
you leave financial debt he'' s not excellent at assisting you prepare for your future and also as well as his his.
info while it seems terrific since it'' s kind of tailored in the direction of the masses it'' s really in my.
viewpoint it'' s it ' s extremely harmful to lots of people that are listening to them due to the fact that you'' re going to. obtain to the end of the rainbow there ' s a mosting likely to be no pot of gold you'' re mosting likely to figure out you obtained.
to function longer if you'' re healthy and balanced enough to do so or you'' re going to have to reduce your standard.
of living since you didn'' t take some of these variables into factor to consider so anyhow with any luck.
you found worth because if you did please like it share it get it available to people subscribe.
hit the Bell that way you'' re notified every time I introduce a new video until following time have a.
honored motivational day we'' ll talk soon see you.

Then the difficulties our health and wellness a great deal of times sometimes regretfully regrettably stops working on us we wear'' t.

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How to Retire in 9 Years Starting With ZERO (A 5-Step Guide)

are you over the age of 50 with no plan in sight for your retirement don't worry there's still hope it's never too late to get started hey guys welcome back to the channel in today's video we're going to teach you some tips on how to plan for your retirement even if you are starting late in life first of all you need to know that retirement is freedom which means that when you retire you should be able to do whatever you want whether to travel to your favorite destinations spend more time with your family or work on your own projects so let me take you through the steps of your journey to financial freedom first step is to cut your expenses write down all your monthly expenses think of your main fundamental expenses as your running cost as if you're running a company things like rent builds groceries internet so you can watch more of our videos and car payment remember that you could always find cheaper alternatives for some of your main expenses for example you could always move to a cheaper house and save on your rent or if you have a rental car you could rent a cheaper car that also matches your needs the key here is not to minimize your quality of life but to minimize the amount you spend on that quality now write down the other expenses that you could survive without this might differ from one person to another it could be your netflix or amazon prime subscription or it could be the designer clothes that you usually buy these are the items that you could totally scratch from your expenses the more you cut the more you save and in the fifth step i'm going to tell you how we are going to use all this extra money to get you even more money always remember that it's not about how much you earn is what you keep you could be earning much more than others but you're also spending much more than they do keep monitoring your expenses you can do this through a simple written list or even through apps such as zoho expense or expense point second step is to set your expectations remember when we said in the beginning of our video that retirement is freedom well you need to think of your freedom figure which is basically the amount of money you expect per year after your retirement now multiply this number by 25 i'm sure you will get a crazy seven figure number this is going to be your goal i bet you're thinking now that it's impossible but please don't close the video yet because in the last two steps i'm going to show you how you can make this possible you need to lower your expectations for the time being in order to get those results in the future it's a match a fight if you will wealth versus cash flow set your own goals for now and for the future not based on what you see around you or on social media it doesn't have to be a 25 million dollar mansion in beverly hills a huge yacht and a supercar but that doesn't mean you shouldn't be enjoying your retirement it's about being realistic and aware of your situation what you can achieve in the future third step is to consider working longer now i know what you must be thinking i'm watching this video to know how to retire early but bear with me you may retire by the age of 60 or even 65.

But if you retire by the age of 70 you are increasing your social security check to nearly double plus there's also more money going into your 401k what's 401k oh you didn't know well i will explain this in the next step if you can't bear the thought of staying at your current job any longer than you need to then you should look into quitting your current job and finding another one something that you will enjoy more you you'll be surprised at the amount of companies that are currently looking for workers with experience be aware of your physical health keep up with your regular medical check-ups eat healthfully do any form of physical exercise could be something as small as taking a relaxing walk every day all this keeps you energetic so that you may continue working at the top of your game fourth step is to open an investment account this account could be funded by the money you save as a result of cutting expenses remember step one or you could open a 401k account if you don't already have one a 401k plan is a company sponsored retirement account where employers can contribute their income and employers usually match contributions up to a certain amount there are two basic types of 401ks traditionally and roth which differ primarily in how they're taxed with a traditional 401k employee contributions are pre-tax meaning they've reduced taxable income ban withdrawals are taxed during retirement employee contributions to rough 401ks are made with after tax income there's no tax deduction in the contribution year but withdrawals are tax-free so if you don't have a 401k yet what are you waiting for start one and make use of all this non-taxable income now it's time to invest your money which takes us to the last step the fifth and last step is to increase your income well you can always ask for a raise in your current job if the thought of asking for more pay sounds daunting then you can try looking for a new job with a better salary which may not be as challenging as you think there are many ways to promote your skills and experience to other companies you can upload your resume to sites such as or let the companies come to you but there is an even easier way to increase your income through a side hustle one of the easiest ways to do so is through creating an amazon individual seller account it's free to create but you need to pay a commission of 99 cents for every sale that you make on amazon not intrigued yet hear this according to a recent survey of amazon sellers twenty percent make between one thousand dollars and five thousand dollars per month which i believe is great for a side hustle or even a decent second income you can even sell your own private label products on amazon around 67 percent of all amazon sellers run their business using the private label method private labeling is a process of manufacturing a pre-existing item preferably with product improvements putting your branding and logos on it and selling it to consumers sometimes it is referred to as wide labeling or brand creation the process has been around for years and is common in countless retail stores targets mainstays brand and walmart's great value are two examples of private label brands your site hustle could also be building websites or content writing there are millions of ways to start a site hustle it's all based on the set of tools that you possess be sure to check out my videos covering this topic and i'll post a link in the description below and remember you can always learn a new skill and this skill could be your next source of income so never stop learning another way to increase your income is by creating a passive income stream passive means you don't actually need to actively trade your time for money you are basically making money while you sleep there are three ways to earn passive income stock markets you don't need to call a local broker anymore there are plenty of applications that you can use to trade stocks that's what makes it the easiest way to gain passive income i'll post some links in the description below for some of my favorite exchanges that i use to trade stocks and crypto cryptocurrency is part of the new modern era with many ways for you to earn passively if you are willing to accept its high risk prices of cryptocurrencies including bitcoin have been falling in 2022 amid a worldwide crypto price crash this could also mark a perfect opportunity to buy with prices being so low check out this video i made where i go over the top five cryptos that billionaire kevin o'leary from shark tank is currently investing in but remember be wise when investing in crypto never put in more than you are willing to lose other options include real estate it's harder to get into it as you need to save up enough to pay for a down payment once purchase you can then get a tenant to rent out the house which will cover payments on the mortgage and hopefully a bit more use any cash flow to pay down the principal faster after a few years you will have paid off the house and can now enjoy some free cash flow from your rental property the earlier you start doing this the sooner you can pay off the mortgage debt now that we have been through each of the five steps of your journey to freedom keep this in mind your life is not going to change unless you take the initiative a nine to five job alone is not enough to build wealth have faith in yourself have faith in your abilities you're not alone in this situation and if other people can do it so can you improve your physical and mental health this will keep you more focused and energetic to work on your goals and it saves you from spending a lot of money down the road on treatment and medications this is it for me today i hope this video has given you as much hope as it did to me don't forget to hit the like button and subscribe to our channel watch our previous videos you never know what piece of information could change your life

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Top 5 Wealth Killers Only 1% of Rich People Know

Virtually 6 in 10 Americans don'' t have. sufficient cost savings to cover a $500 or $1,000 unplanned expense. That’s definitely.
horrible because if something fails, you will certainly need to take unneeded lendings.
or, god forbid, pay a bank card passion. They might rise 20 and even 30 percent..
You have to be a moron to pay that much rate of interest. What else can you.
do if you have nothing else option.
Even those who actually.
conserve some cash apparently said they don'' t have much in their financial savings account. Certainly, cost savings went considerably higher during the pandemic age because we were compelled.
to remain at home and also collect stimulation checks yet that’s currently hunting us down with the greatest.
Regardless of the fed'' s best efforts to keep increasing prices, that hasn'' t helped.
never ever recognize that considering that we don'' t have a machine that can take us to a different truth. When virtually 60 percent of the population says that they have less than a thousand.
dollars in their interest-bearing account, you recognize that we have a problem because a thousand.
bucks is probably not enough to cover the rent. What occurs if you get ill, enter into an.
mishap, or obtain discharged? What do you do? I obtain, its hard to save when.
we are bordered by so many things pushing us to spend.Even before

the video clip.
begun, you probably saw an ad that called you to visit their website and also spend some cash. Let me make clear something, spending cash isn'' t bad. There is absolutely nothing wrong with getting things you.
requirement or want. At the end of the day, what’s the point of generating income at the end of the day. On.
top of that, spending is what drives the economic situation forward. Without enough costs, we will certainly have.
depreciation that will reduce economic growth. What I see often takes place is that People typically.
grumble that they can'' t conserve due to the fact that they need to cover their standard costs yet wind up acquiring.
5-dollar coffee as well as avocado salute every early morning. Once again, there is absolutely nothing poor keeping that, as long.
as you are saving an excellent dimension of your paycheck.I don’t truly support the suggestion of saving every. penny feasible since life isn ' t practically conserving money. It'' s concerning experiences. And also component. of that is having a good time with friends and spending cash. If you are at the start.
of your journey, you can'' t manage to spend every cent you gain. You need to construct that.
funding that will certainly deal with your part of you. The issue is that there are few riches.
awesomes that drain your budget plan one of the most. If you can get rid of them, you will certainly be able.
to conserve a ton of money as well as develop that lot of money. If you prepare, give this video a thumbs.
up, as well as let'' s start with the initial one. Vehicle. If you have actually ever possessed an auto, you most likely recognize just how expensive it is to.
have a car.In truth, a lot of people that drive don'' t recognize exactly just how much their cars and truck costs. The average monthly payment on a brand-new car was $575 in 2020. That'' s much from the real cost of.
possessing a cars and truck. Which’s back in 2020. It’s far more than that given that there is a lack of.
chips and also high rising cost of living. Which’s simply your regular monthly repayments without taking into account.
insurance, gas, and particularly upkeep. What I also realized when I got my very first auto was.
how commonly I started to drive.I began driving anywhere, also when it wasn ' t essential. Gas is not inexpensive, specifically now, and also being embeded traffic daily can.
cost a lot of money. However if you have a household, certainly owning a car makes good sense, specifically.
when public transportation is not a choice. But if you are solitary, for god'' s purpose, save that.
You will thank me later on.
as an example. A fortune! 20 bucks here or 30 bucks there don’t appear like a lot, yet if you include it.
up throughout a month, it will add up. According to the Bureau of Labor Data,.
Americans invest regarding 1 percent of their gross yearly revenue on alcohol.For the average. household, that’s$ 565 a year, $5,650 in one decade, or a whopping $22,600 over a 40-year duration. That.
doesn’t appear much. However do not be tricked by this number. It takes right into account all Americans,.
consisting of those who don’t drink and those who consume once to twice a year. If you just.
take into account those who consume alcohol routinely, that number would certainly be much greater. A couple of hundred.
bucks a month is normal for regular drinkers. The same goes for cigarette smoking, gaming, and various other bad.
routines. The ordinary price of a pack of cigarettes is $6.28, which means a pack-a-day routine sets.
you back $188 per month or $2,292 per year. These numbers could not tighten you, however if.
you also count the opportunity price, you will possibly do away with these behaviors right away. If you toss that 2292 bucks yearly right into an index fund with a 7 percent return,.
with the power of compound rate of interest, you can expect to have $365,883 in 40 years. Add to that the medical expenses that you will certainly get as a result of your bad habit, as well as.
you might as well declare bankruptcy. 3.

Spending money on impressing individuals Back when I remained in institution, my self-confidence was.
really reduced since I was doing badly in college, yet as social animals, we want to be appreciated.
by the people around us. We want to be valued because we have so lots of insecurities..
As well as often, when we put on'' t understand how to fix these insecurities, so we spend cash.
to show everybody that we are comparable to them. Why do you think people acquire.
Rolex watches. Allow'' s be honest, a Rolex watch is actually solving one issue,.
which is informing the moment, but even Rolex holders typically utilize their phones to have a look at the.
time.But people still spend loads of hundreds of bucks on them due to the fact that they have effectively.
branded themselves as a deluxe brand that is used by well-known and also effective individuals. We buy them.
to send out a message to people that – look men, I make a great deal of money. I can afford a Rolex. Most.
individuals acquire that type of watch to impress people, which is not a problem if you can quickly pay for.
that. However if you can barely afford a Mercedes as well as still decide to get it, you have just.
tossed yourself into a massive financial trouble. 4. Paying high-interest prices. Bank card are great. It'' s possibly the best. means to build your credit report and also preserve it. It is extremely essential due to the fact that it will.
aid you to obtain finances and lower interest. Here is when things obtain awful. When you use.
a credit score card to pay for things you can not afford, what winds up happening is that, you.
will not be able to cover your credit scores card debt at the end of the month.
They might go as high as 20 or 30 percent. 41 percent of credit rating card customers reported that
they are failing to pay their. 5.
There will. constantly be a woman around you who will attract you, as well as if you can not control yourself, you are.
screwed. The world is filled up with them, but what ' s additionally particular is that your time and.
sources are restricted. Even if you have 100 million bucks, it is very easy to spend that.
cash on a lady in a glance of an eye. What ' s more vital than money is time, the. time you might invest building your'company, side rush, or whatever will certainly produce
. actual wealth.Unless you discover just how to regulate your desire to go after females, you will. never get to financial freedom due to the fact that there will constantly be a lady on whom you.
Thanks for.

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How To Become A Millionaire In Two Years Buying One House Per Month – Real Estate Investing

Joe: Hey, it’s Joe Crump. I’ve got another video here for you. This one is from Karen Smith in Columbus, Indiana. Karen: “Joe, can you explain the millionaire matrix? Does it really work and can you do it without down payments or using your credit?” Joe: Absolutely, it works. The Millionaire Matrix is a structure that I teach that shows people how they can actually make a million dollars in equity and in cash within 2 years by buying just one property per month using no credit and no down payment.

And instead of just me explaining it in this video with a talking head, I’m going to pull up a little power point here and show you exactly how this process works. Joe: I created this little power point to show you what the Millionaire Matrix is and how and why it works. Joe: Before you can understand how it works, you need to understand the principles behind it and why it works. That brings us to the idea of businesses in general. 90% of all of the businesses that start up fail in the first year, whereas 90% of all new franchises succeed. Why is that? Why would franchises succeed and businesses in general, not succeed? And the big answer is — systems. Franchises have step by step systems to show the business owner (the person who’s implementing the tactics in the strategy of the business) how to do each little system in the business.

Joe: Let’s take the ultimate systematization — McDonald’s. If you go to a McDonald’s, everything is done the same at every McDonald’s that you go to because each of their processes is spelled out in a specific system. They have a system for making a Big Mac. They have a button to press when it’s time to flip the burger. They know how many burgers to put on there, they know what order to have with a picture of a hamburger, and how to put it together where it shows you that that’s where the bun goes and that’s where the hamburger goes and that’s where the lettuce goes and that’s where the special sauce goes. And it makes it very easy for people that are not very skilled to put together a hamburger consistently all over the world. Whether it’s here in Indianapolis or whether it’s in Wisconsin or California or Berlin or Paris or Ireland — it doesn’t matter — wherever you go to a McDonald’s, you’re going to get the same burger — it’s going to be put together the same way by the same skill level of people.

Now, McDonald’s has a 200% employee turnover every year. That means that they’re constantly trying to train new people. For them to get that consistency, they have to have a system in place to make that business work. Joe: And that’s what I’ve created in the Push Button Method and the mentor program. I’ve created systems so that I can take new people (people that have never been real estate investors before) and give them a system and say, ‘Step 1, do this. Step 2, do this. Step 3, do this.’ Joe: That takes us to the next question in the process here, which is what types of deals make you money.

You need to understand that as well. In real estate, there’s only two types of deal that’ll make you money. One is properties that you buy substantially under market value, either for cash or as an assignable cash offer. And two is properties that you can buy at market value or below but you can buy them on terms. Now, by terms we’re talking about zero down structures that I teach; subject-to, multi-mortgage, land contract, contract for deed, lease option, assignable cash deals. Those are terms and if you can buy properties on terms like that, then you can make money even if you buy them very close to market value. Joe: That’s going to take us to the next step which is the beginners Millionaire Matrix. Now here’s what we want to do with the Millionaire Matrix and the goal of each system. We want to be able to make $5,000 per deal. We want to be able to do one deal per month. We want to be able to work 10 hours per month. That means hours per week. We want to be able to have $200 residual income per deal.

That residual income I’m talking means every month you’re going to get $200. We want to buy 10% under market value; it doesn’t have to be dramatically under market value because you’re buying on terms, and I’m going to show you why that makes the difference. And you’re going to want to sell it for 10% over market value and I’m going to show you how to do that. Because we’re selling it on terms as well so we can sell it for more than it’s worth. So this is the basic concept for the Millionaire Matrix. Joe: Now let’s take an example deal — how the Millionaire Matrix and an example deal would work within it. Joe: Every deal is going to be a little bit different and you’re going to make a little bit different amount of money on each one, but this is sort of the model that we’re going by. I used the $100,000 as sort of the market value of the property simply because it’s a nice round number.

I know that the market value across the country is all over the place. You should probably go by percentages rather than this but I want to show you, even on a lower end market, that you can still make this kind of money. On a higher end market you’re going to make more money. So let’s start with a lower end market and then you can extrapolate from there. Joe: Let’s say you’ve got a purchase price of $90,000. The market value is $100,000. The financing — you’re not putting any money down, you’re not getting a new loan — you’re buying it subject to the existing loan. Which means that the property is going to be deeded to you and you’re going to take over the payments on the loan — without qualifying on that loan (remember that).

You’re going to sell this property for $110,000 to a new lease option buyer. You’re going to sell it on a one year lease option or maybe a 2-5 year lease option if you choose to do that. At closing you’re going to make $5,000 on the lease option fee at closing of this deal. The equity left after the lease option fee is about $15,000. You’re taking $110,000 sale price, you’re taking $5,000 from that, and that means you’ve got $105,000 that they still owe you for the property. You only owe $90,000 so that means there’s $15,000 in equity. Now the monthly loan payment on this 90,000$ loan that’s there — let’s say its $900 a month and you’re going to lease this property for $1,100 a month. This is an example deal. Joe: Let me also reiterate — you’re buying this property subject to the existing loan. That means that you’re not putting any money down and you’re not qualifying for a loan. They’re deeding you the loan. You have complete control of the property but it’s subject to that loan that’s existing on there.

You’re buying it for a little bit under market value but not that much under market value. You’re selling it for a little more than market value but not that much over market value. You’re selling it on a lease option which the buyer may or may not exercise. You’re getting a lease option fee at closing — you’re making $5,000 at closing. And you’re going to have that equity left in the property, and if they exercise that option, you’re going to make that other $15,000. You’re going to have that loan payment that’s on that existing loan of $900. And you’re going to get a lease income on that property of $1,100. So you’ve got $200 of positive cash flow every month. So that’s sort of the model of this whole thing. Joe: So let’s go to the next frame here. This breaks down to doing one deal per month over the first year. I’m going to show you how to become a millionaire basically over a 2 year period.

Month one — let me bring my little arrow up here — cash at closing, making $5,000, that’s the lease option fee. The $200, remember the difference between the $1,100 and the $900 a month payment so that you made $200 a month on that. Equity payoff this month, you didn’t make anything. It hasn’t paid off. Nobody has exercised their option. Equity buildup — you’ve got $15,000 because you bought that property and there’s $15,000 of equity. Remember the spread — you bought and sold it for $110,000, you got $5,000 and they still owe you $105,000, and there’s a $90,000 mortgage. That leaves $15,000 on there that’s your equity. Joe: And then a tax benefit based on $100,000. This is depreciation. If you take this property and you depreciate it by years, and then you divide that by 12, you’re going to end up with an actual tax savings in your pocket of about $106 based on about a 30% tax bracket. And these are just general numbers here but they’re pretty close.

Joe: Month 2 — you’re going to do the same thing. You’re going to do another property, make another 5 grand, make another $200 a month and so now your monthly residual income is going to go up to $400 a month. You’re not going to get any payoff because the year hasn’t passed yet. You are going to build another $15,000 of equity in the property. And now your monthly tax benefit is going to be $212. Month 3 — $5,000 -same thing – it just goes up every month for the whole year. Let’s go all the way down to the bottom of the year. At the bottom of the year you’ve made $60,000 in cash at closing from just doing these 12 deals. And believe me, I’ve got people that are doing 5 or 6 of these a month on a regular basis because they’ve set up the systems that I’ve given them to do that.

Joe: The next thing is the monthly residual. Just from what’s going on here, you’ve made $15,000 the first year in that; residuals. Equity payoff — nothing’s paid off the first year yet because nobody has exercised their option yet. Equity buildup — you’ve built $180,000 worth of equity in the deal and you’ve made $882 in taxable savings during that first year. So in that first year in the Millionaire Matrix, you’ve made a total amount of cash of about $83,000. You’ve made total equity of about $180,000. So you’ve just made $263,000 in the first year doing only one deal per month. Joe: Now with these deals, if you have 8 or 10 hours of work into these deals, that’s a lot of time in these deals. So remember there’s a startup learning curve. And there’s going to be the time that it takes to set this process up, to get this system going; all of that stuff. But the actual time of the deals is very, very low. And once you learn how to do it and once you get it going, it’s going to be easy to keep it going.

Joe: So let’s go to year two, and look at the second year. Things start to change dramatically in year two, if you’re going by this model. And we have different models that we go by. You don’t have to go by this one. But I’m just taking a simple model and how it can expand your income very, very quickly. Let’s look at month one. You’ve got $5,000, your residual income is now $2,400 a month because you’ve got 12 deals (and you only have to keep 12 deals like this because they’re going to be paying off as they exercise their options).

So as the first one pays off and you get your equity out of the property because they exercised their option, you made $15,000 equity payoff in cash plus you bought a new property, so you’ve got $15,000 new equity buildup and now you’ve got 12 months’ worth of tax savings over 12 properties. So you’re going to be making about $1,200 a month in tax savings, which is pretty substantial when you start making this kind of income; it’ll save you a lot of money. Second month — same thing. Joe: Now, keep in mind — this is the big variable — how many properties are going to actually exercise their option? It’s going to be much less than the total amount, so you may not make this full amount. There are ways to optimize this process and get more of the people to exercise their option, and I show you how to do that.

I’m not going to spend the time on this video to do that. Joe: But let’s look at the bottom line on the second year. $60,000 – same as you made last year on the cash flow. Monthly residual — it well over doubled. Equity payoff — assuming that they exercised their options, just made a nice chunk of money on equity payoff. Equity buildup — you make another $180,000 on top of this $80,000. You made $15,000 in real cash money in your tax savings through depreciation, so it was a really nice year two. Then your second year on the beginners Millionaire Matrix is total cash at $284,000, and total equity of 180,000$. The grand total of year two is $464,000. I add that to the $263,000 and you’ve got $750,000 in your first two years, not quite the million that I promised you but pretty darned good. Joe: Let’s say you get better at what you do, that you get a little bit better at the process. As you’re doing this, how much will you improve? Will you get 100% better? Will you get 75% better, 50% better, 25%? How much better are you going to get at this process after one year? I venture to say that it will be more than you think.

But let’s say that you only get 25% better. If you get 25% better at better price from the seller on your property, instead of getting 10% under market value, you get 12.5% under market value. Not very much — next to 2.5% better on your price. Let’s say you get 25% down from your buyer so instead of getting $5,000 down you get $6,250 down. Let’s say you get 25% more lease money monthly and your $200 goes to $250 a month. Let’s say you get 25% higher price from your buyer — instead of getting $110,000, your price goes up to $112,500; not that much more. And you do 25% more deals a year so instead of doing 12 a year you go up to 15 deals a year. Now this is very realistic to think that you can get just 25% better. I have people that get 100% to 500% better at what they do and their production goes up with that statistic. The ability that you have and the talent that you have in this grows as you do it.

This is a skill and you build that skill through this process. Joe: So let’s look at the second year Millionaire Matrix if you’re 25% better. Now you’re making $6,200 instead of $5,000 so that jumps that up from $60,000 to $93,000. That just increased your income by 50%; right in the first column. The second column goes up a good deal as well. Your equity payoff went up almost $100,000. Your equity buildup went up by $100,000. Your tax benefits, well, they didn’t go up at all. But still, you just increased your income by a substantial amount of money. So just getting 25% better at the second year of the Millionaire Matrix — now you’ve made $730,000 that second year. You made $260,000 the first year, so NOW you’re at the million dollars. Joe: This is a realistic model and it can work. Again, part of the biggest downfall of this process is the amount of people that exercise the option which is less than we would like, but keeping these properties — you also continue to build your equity and you buy down the notes.

You get the depreciation and those other things start to grow. So that’s not a bad thing, either. Joe: So this is a great way to do it. This required no money and it required no credit. All it required is your effort to follow through with the step by step system of putting together subject-to deals, of finding buyers for those subject-to deals and filling those properties.

And you do this all without risk because you’ve got so many contingencies in the deals that you’re doing that and if you don’t find a buyer for the property that you buy, you don’t close it. I think the whole beauty of this system is that you never have to close a deal until you know that it’s going to make you money, so instead of everybody doing zero down (which everybody talks about and I talk about as well) you’re not really doing zero deals.

What you’re doing is cash out deals, all the time, without using your credit. So it’s very exciting stuff. Joe: That’s the Millionaire Matrix. it’s a very powerful way to buy properties. It creates cash flow for you upfront so that you can have a sustainable business and it also creates that long term growth and wealth building that anybody needs if you want to retire from this business and be wealthy. It’s an exciting process. This, by the way, is what I teach in my six month program. It’s what I teach in my Push Button Method. So, either one of these programs will get you into more detail about exactly the step by step process of how to put all of that together.

I’d love to work with you and to help you and make your business and your dream come true on this. Thanks. Bye. .

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