I wrote killing sacred cows. Calling out 401ks in 2007. Then time magazine called them out. And 60 minutes. They are overhyped and they underperform. Grow a business. Get great at real tax savings. Grow your money with cash flow and cash flowing assets. Yeah, I put in a yard. Too many people never utilize or enjoy their 401k.
I got enjoyment and value. If you have zero plan to benefit because you defer and hate paying tax, how will you benefit from the account in the future. Tax deferral destroys utility. I have my wealth in my businesses, real estate, and intellectual property. Started in a coal mining town as a fourth generation coal miner family, and have far outperformed any 401k. So yeah, the yard wasn't the real investment. I just realized what a problem these plans were and invested differently.
lol this dude cashed out his 401k to “put in a yard” but calls himself a financial expert. 100% chance he sells whole life insurance, but his delivery is certainly better than most.
But that is only where I save money. I invest in businesses and intellectual property and a small amount of real estate. Not a 401k fan as they give people a false sense of security and have not provided nearly the benefits people have been promised for retirement.
Yeah, Whole life/IUL/VUL is the account you get killed with fees. That's why every salesman says "when structured correctly" and omits "when overfunded to the max". And they quickly become insolvent if you have borrowed money on it. But to be fair 401k loans are a terrible idea as well. People should consider Roth and/or brokerage accounts depending on their situation before putting more than the required amount for the match into a traditional 401k if early retirement is in the cards.
Pension, 457b, Roth IRA, and PM stacking have done extremely well for me! I don't want to run a business or be a landlord. You can take that headache and your yard. Withdrawing every year from accounts to keep from having a high tax rate at RMD age is how to do it. Taking 150k from accounts yearly equals 38k taxes...about 25% tax rate. My retirement accounts and pension will keep my investments from ever depleting. It's all about knowing your future plan.
I know plenty of entrepreneurs who are old and broke because they invested all their income into their businesses that went bust. I know no one that invested adequately in their retirement account and is old and broke. Building wealth is all about mitigating risk. You can save for retirement and pursue entrepreneurship at the same time.
The news is out that these oaks haven't created enough retirement income. They might have merit for part of the plan but alone haven't performed enough. Look at the data.
And yes. Pursuing entrepreneurship and investing at the same time is great. Turning business wealth into personal wealth. But relying solely on a plan controlled by the government. And tax deferred has its issue. I'm outlining them here.
If you’re old and broke because of a business, it’s safe to say you weren’t an entrepreneur. Entrepreneurs create new things and if they don’t work, or stop working, they create something else that does. You are not simply an entrepreneur because you’re a business owner. Business owners often just create ‘jobs’ for themselves rather than an employer. They never adapt. They never think of better ways to change to meet the demands of the market. Giving up complete control of your economic energy to the government is literally the WORST financial decision anyone can make!
I have met plenty of people disappointed in their 401k and not adequately prepared for retirement. Thinking they would be. I've met people with high interest rate credit cards funding their 401k instead of the guaranteed savings of paying off the loan. Read some articles on how underprepared Americans are and how few have adequate amounts to provide enough cash flow to sustain their lifestyle at retirement. I've read dozens of articles. There are plenty of news reports with Time magazine. With 60 minutes. The US department of labor says 95 percent of 65 year olds are not financially independent. Yet 75 million Americans have a qualified plan.
@ None of that means 401(k)s are bad. It could be because people's income hasn't kept up with inflation. It could be that people's expenses have risen much faster than inflation. It could be because healthcare costs have gone through the roof. It could be a million different things. A 401(k) is simply a type of ownership for an investment account sponsored by an employer. I have a hard time believing that it is "Making people poor." Would you support legislation that got rid of 401(k)s?
@@GarrettGundersonTV it’s not because of the 401(k). It’s Because they waited until they were 55 to start. Where have you been living? Are you even aware of what’s going on in the real world? If you’re pretending to be a fiduciary, you are violating every tenant of what that means. Why don’t you just share with us what you’re trying to sell? “ don’t put your money in 401(k). Buy my product for my course instead” Shameful
Garrett is smart. For people with no creativity to do anything else with their money than to lock it up with some extra benefits to use when you're older... Then by all means... .if you want to really benefit, get some hustle going on the side with the money you stuff into your 401k. If you are under 50 youre going to need 5 million to have any lifestyle at all when your 60 let alone if you live to 80.
It is a matter of responsibility or risk. When people think that handing money over, neglecting cash flow, trusting Wall Street and the government, waiting for decades, all to one day someday hopefully enjoy life...they will be surprised. I know it is easier to defend our actions than question them. To set it and forget it rather than invest in ourselves. And judge the people who call out the BS, but that's ok. It is part of the game. So thanks for your comments and being the first or second person bold enough to say there might be a point here.
A lot of 401Ks have employer matches, not taking the employer match is free money you are leaving on the table. People should at least take the employer match.
Maybe. Unless there is a vesting schedule longer than you'd work there or if you have double digit interest rate credit cards. Not saying it is a bad idea, but makes sense to look at the whole picture. And I'm taking to entrepreneurs that are providing the match more than am employee looking for it. Just have other assets and distribution diversification so you can take from other accounts if taxes increase or the market dips.
@@GarrettGundersonTVyou're not doing the analysis correctly. Yes, your ordinary income tax will go up, but it will go up proportionate with growth in the account. The income tax deferral is a wash if tax brackets are the same. If you compare the after tax returns of a traditional 401k to a general taxable account the 401k does better. It's hard to explain in a comment. I'm happy to send you a spreadsheet that illustrates the math if you're interested.
@@GarrettGundersonTV if you think the tax rates will be higher, do a Roth 401k. It doesn't negate the fact that you avoid capital gains and interest. And yes, it is quite common to be in a lower tax bracket in retirement. It's especially true if you do some planning and have some in pretax, Roth, and a regular brokerage account.
You do know you can use them to eliminate taxes you pay later. You can use the traditional 401k to lower your taxes to fund a Roth IRA. And using both these accounts you can make it so you pay little to no taxes in retirement. You also have the 55 rule if you want your funds before 59.5. Other than that it is not good to pull money out of your retirement funds you want to get to your first 100K as fast as you can. The Fees are very very low lower than most products and is not an issue. They are far lower than using life insurance gimmicks for retirement funding. And they are far lower than fees for rental properties. The 401k and IRA is a very powerful wealth building tool for the last 10 years my returns from my monthly investments is 210%
401k is tax deferral. You pay tax when you pull it out. Yes you can take after tax dollars to fund a Roth and avoid tax on the gain. Admin fees. Legal fees. Expense ratios. 12b-1 fees. A myriad of fees.
@@GarrettGundersonTVgive me some data. This used to be true but most 401k fees i see are pretty reasonable and certainly do not negate the benefits of a 401k.
Most companies figured out a way around the rule of 55. They require you to take all the money as a single distribution. That means you are either hit with a tax bomb or you have to move most of the money into an IRA where it is locked until 59.5 (or you have pay penalties). The 72t provision is a safer way but it requires proper planning with a CPA.
I did a 401k challenge when I wrote killing sacred cows. Focused on tax savings and interest savings over risk and it far outperformed their 401k. This advice isn't for everyone but the warning is. Some people are going learn the hard way. That's fine. Hope they have more of a plan than being one dimensional and have downside protections with volatile investments and an exit strategy a f way to offset tax.
Clearly this guy doesn’t realize the government has played a shell game and moved the money to retirement plans while over on the other side, inflating the money supply to the point of nearly destroying the purchasing power of your dollar…
I wrote and sell books. Is that bad? I own a lot of life insurance. I sold whole life from 1998-2006. I refer people to insurance advisors. It is a great fixed income alternative. Has outperformed bonds and all savings based assets over any 30 year period of time. It isn't an investment and shouldn't be treated as such.
You’re preaching financial malpractice This is the worst advice you could ever give. Don’t listen to this guy. And I would debate him any day of the week. Too many people I work with have fallen for this kind of nonsense and now they’re 65 and have nothing because they let people like this take advantage of their vulnerabilities . Disgraceful. I’m the one who has to sit in front of a 65-year-old couple who’s worked their tail off for the last 30 years and tell them there’s no way they can retire the way they’ve always envisioned because they fell for someone like this with a hidden agenda Makes me sick when I hear this stuff
95 percent of people in the US aren't financially independent at age 65. Yet 75 million have 401ks. Let me guess, you sell them. They aren't enough. They have issues. People paying consumer debt while finding them. Neglecting cash flow. Ignoring financial intelligence. How is a 401k the solution. Maybe a small part but not enough. You many issues. No cash flow. Volatile accounts. A myriad of fees.
Saving tax is better than delaying it. Understating how to mitigate risk is required for sustainable wealth. Becoming a better investor. Not setting it and forgetting it and hoping it will be enough. It likely won't be.
Are there benefits to these plans. Of course. But what about the downsides. They are worse than a pharmaceutical commercial with side effects often undisclosed. I'm tired of the lowest common denominator advice that continues to disappoint. It is time to shed some light on these issues and look at alternatives or something more comprehensive and help people wake up to handling their finances.
My friend, this isn’t sound advice. Stocks and bonds together out preform pretty much any asset class. Talk with a financial professional preferably a fiduciary advisor perhaps a licensed banker who might be able to guide you.
I’m really glad to see that everyone is calling this guy an idiot. I was worried there would be people that bought this BS.
I wrote killing sacred cows. Calling out 401ks in 2007. Then time magazine called them out. And 60 minutes. They are overhyped and they underperform. Grow a business. Get great at real tax savings. Grow your money with cash flow and cash flowing assets. Yeah, I put in a yard. Too many people never utilize or enjoy their 401k.
What rate of return did you get on your yard in comparison to all the underperforming 401ks?
I got enjoyment and value. If you have zero plan to benefit because you defer and hate paying tax, how will you benefit from the account in the future. Tax deferral destroys utility. I have my wealth in my businesses, real estate, and intellectual property. Started in a coal mining town as a fourth generation coal miner family, and have far outperformed any 401k. So yeah, the yard wasn't the real investment. I just realized what a problem these plans were and invested differently.
@GarrettGundersonTV the vast majority of millionaires because millionaires by investing in a 401k.
He telling the truth
lol this dude cashed out his 401k to “put in a yard” but calls himself a financial expert. 100% chance he sells whole life insurance, but his delivery is certainly better than most.
I own whole life. I sold it back in the day. So yeah, you are right.
But that is only where I save money. I invest in businesses and intellectual property and a small amount of real estate. Not a 401k fan as they give people a false sense of security and have not provided nearly the benefits people have been promised for retirement.
@@GarrettGundersonTV a 401k is just a type of ownership. Open a Roth 401k and don't pay taxes on your growth. Invest it however you see fit.
Yeah, Whole life/IUL/VUL is the account you get killed with fees. That's why every salesman says "when structured correctly" and omits "when overfunded to the max". And they quickly become insolvent if you have borrowed money on it. But to be fair 401k loans are a terrible idea as well. People should consider Roth and/or brokerage accounts depending on their situation before putting more than the required amount for the match into a traditional 401k if early retirement is in the cards.
@@GarrettGundersonTVlol, whole life is such a scam
Pension, 457b, Roth IRA, and PM stacking have done extremely well for me!
I don't want to run a business or be a landlord. You can take that headache and your yard.
Withdrawing every year from accounts to keep from having a high tax rate at RMD age is how to do it.
Taking 150k from accounts yearly equals 38k taxes...about 25% tax rate. My retirement accounts and pension will keep my investments from ever depleting.
It's all about knowing your future plan.
Good for you. Hope knowing some of the pitfalls here can help you be even more prepared. Best of luck and good job.
That's a lie
@@JohnGibbons-g8l lol
I know plenty of entrepreneurs who are old and broke because they invested all their income into their businesses that went bust. I know no one that invested adequately in their retirement account and is old and broke. Building wealth is all about mitigating risk. You can save for retirement and pursue entrepreneurship at the same time.
The news is out that these oaks haven't created enough retirement income. They might have merit for part of the plan but alone haven't performed enough. Look at the data.
And yes. Pursuing entrepreneurship and investing at the same time is great. Turning business wealth into personal wealth. But relying solely on a plan controlled by the government. And tax deferred has its issue. I'm outlining them here.
@ How come you're acting like Roth 401(k)s don't exist? They're pretty common nowadays.
If you’re old and broke because of a business, it’s safe to say you weren’t an entrepreneur. Entrepreneurs create new things and if they don’t work, or stop working, they create something else that does.
You are not simply an entrepreneur because you’re a business owner. Business owners often just create ‘jobs’ for themselves rather than an employer. They never adapt. They never think of better ways to change to meet the demands of the market.
Giving up complete control of your economic energy to the government is literally the WORST financial decision anyone can make!
@Michael-vc2cs and how should people that are not entrepreneurs invest their money. You've just said 401ks are bad. What is your alternative?
I've never met anyone who was poor... because of their 401k...😂
I have met plenty of people disappointed in their 401k and not adequately prepared for retirement. Thinking they would be. I've met people with high interest rate credit cards funding their 401k instead of the guaranteed savings of paying off the loan. Read some articles on how underprepared Americans are and how few have adequate amounts to provide enough cash flow to sustain their lifestyle at retirement. I've read dozens of articles. There are plenty of news reports with Time magazine. With 60 minutes. The US department of labor says 95 percent of 65 year olds are not financially independent. Yet 75 million Americans have a qualified plan.
The average balance is 132,000 in Americans 401ks. Only about 500,000 have a million or more dollars. Not good enough to retire on for most.
@ None of that means 401(k)s are bad. It could be because people's income hasn't kept up with inflation. It could be that people's expenses have risen much faster than inflation. It could be because healthcare costs have gone through the roof. It could be a million different things. A 401(k) is simply a type of ownership for an investment account sponsored by an employer. I have a hard time believing that it is "Making people poor." Would you support legislation that got rid of 401(k)s?
@@GarrettGundersonTV it’s not because of the 401(k). It’s Because they waited until they were 55 to start. Where have you been living? Are you even aware of what’s going on in the real world? If you’re pretending to be a fiduciary, you are violating every tenant of what that means. Why don’t you just share with us what you’re trying to sell?
“ don’t put your money in 401(k). Buy my product for my course instead”
Shameful
Everyone that has it is poor
Garrett is smart. For people with no creativity to do anything else with their money than to lock it up with some extra benefits to use when you're older... Then by all means... .if you want to really benefit, get some hustle going on the side with the money you stuff into your 401k. If you are under 50 youre going to need 5 million to have any lifestyle at all when your 60 let alone if you live to 80.
It is a matter of responsibility or risk. When people think that handing money over, neglecting cash flow, trusting Wall Street and the government, waiting for decades, all to one day someday hopefully enjoy life...they will be surprised. I know it is easier to defend our actions than question them. To set it and forget it rather than invest in ourselves. And judge the people who call out the BS, but that's ok. It is part of the game. So thanks for your comments and being the first or second person bold enough to say there might be a point here.
A lot of 401Ks have employer matches, not taking the employer match is free money you are leaving on the table. People should at least take the employer match.
Maybe. Unless there is a vesting schedule longer than you'd work there or if you have double digit interest rate credit cards. Not saying it is a bad idea, but makes sense to look at the whole picture. And I'm taking to entrepreneurs that are providing the match more than am employee looking for it. Just have other assets and distribution diversification so you can take from other accounts if taxes increase or the market dips.
For the 1 year it is after that it not
Jesus came back as a whole life insurance
lol.
There's a lot of incorrect information in this video.
A traditional 401k defers income tax AND eliminates taxes on capital gains.
Anything that would be capital gains is now ordinary income. That's not good news.
@@GarrettGundersonTVyou're not doing the analysis correctly. Yes, your ordinary income tax will go up, but it will go up proportionate with growth in the account. The income tax deferral is a wash if tax brackets are the same. If you compare the after tax returns of a traditional 401k to a general taxable account the 401k does better. It's hard to explain in a comment. I'm happy to send you a spreadsheet that illustrates the math if you're interested.
If. That's a big if. 1944-1981 the top bracket was above 50 percent. 36 plus trillion of government debt. Is it a chance you'd take?
I have done the math. Many times.
@@GarrettGundersonTV if you think the tax rates will be higher, do a Roth 401k. It doesn't negate the fact that you avoid capital gains and interest. And yes, it is quite common to be in a lower tax bracket in retirement. It's especially true if you do some planning and have some in pretax, Roth, and a regular brokerage account.
Content like yours helped me make the decision to cut the cord. I haven’t looked back since and no regrets.
Thank you for doing the work. I love it.
Awesome!
You do know you can use them to eliminate taxes you pay later. You can use the traditional 401k to lower your taxes to fund a Roth IRA. And using both these accounts you can make it so you pay little to no taxes in retirement.
You also have the 55 rule if you want your funds before 59.5. Other than that it is not good to pull money out of your retirement funds you want to get to your first 100K as fast as you can.
The Fees are very very low lower than most products and is not an issue. They are far lower than using life insurance gimmicks for retirement funding. And they are far lower than fees for rental properties.
The 401k and IRA is a very powerful wealth building tool for the last 10 years my returns from my monthly investments is 210%
@@Jensen-Adventures what this guy said or this comment.
This comment is 100% correct, and you cannot disprove it
401k is tax deferral. You pay tax when you pull it out. Yes you can take after tax dollars to fund a Roth and avoid tax on the gain. Admin fees. Legal fees. Expense ratios. 12b-1 fees. A myriad of fees.
@@Chris-xt8iomy comment showed up in the wrong spot, lol. The guys comment is 100% spot on.
@@GarrettGundersonTVgive me some data. This used to be true but most 401k fees i see are pretty reasonable and certainly do not negate the benefits of a 401k.
Most companies figured out a way around the rule of 55. They require you to take all the money as a single distribution. That means you are either hit with a tax bomb or you have to move most of the money into an IRA where it is locked until 59.5 (or you have pay penalties). The 72t provision is a safer way but it requires proper planning with a CPA.
This is actively harmful. Dude should be ashamed.
I did a 401k challenge when I wrote killing sacred cows. Focused on tax savings and interest savings over risk and it far outperformed their 401k. This advice isn't for everyone but the warning is. Some people are going learn the hard way. That's fine. Hope they have more of a plan than being one dimensional and have downside protections with volatile investments and an exit strategy a f way to offset tax.
Not ashamed.
Clearly this guy doesn’t realize the government has played a shell game and moved the money to retirement plans while over on the other side, inflating the money supply to the point of nearly destroying the purchasing power of your dollar…
My guess is that this guy sells life insurance products
I wrote and sell books. Is that bad? I own a lot of life insurance. I sold whole life from 1998-2006. I refer people to insurance advisors. It is a great fixed income alternative. Has outperformed bonds and all savings based assets over any 30 year period of time. It isn't an investment and shouldn't be treated as such.
You’re preaching financial malpractice
This is the worst advice you could ever give. Don’t listen to this guy. And I would debate him any day of the week.
Too many people I work with have fallen for this kind of nonsense and now they’re 65 and have nothing because they let people like this take advantage of their vulnerabilities . Disgraceful.
I’m the one who has to sit in front of a 65-year-old couple who’s worked their tail off for the last 30 years and tell them there’s no way they can retire the way they’ve always envisioned because they fell for someone like this with a hidden agenda
Makes me sick when I hear this stuff
95 percent of people in the US aren't financially independent at age 65. Yet 75 million have 401ks. Let me guess, you sell them. They aren't enough. They have issues. People paying consumer debt while finding them. Neglecting cash flow. Ignoring financial intelligence. How is a 401k the solution. Maybe a small part but not enough. You many issues. No cash flow. Volatile accounts. A myriad of fees.
The message...rich people don't get that way with a 401k. Not investing is worse for sure. But relying on these simply isn't enough.
Saving tax is better than delaying it. Understating how to mitigate risk is required for sustainable wealth. Becoming a better investor. Not setting it and forgetting it and hoping it will be enough. It likely won't be.
Are there benefits to these plans. Of course. But what about the downsides. They are worse than a pharmaceutical commercial with side effects often undisclosed. I'm tired of the lowest common denominator advice that continues to disappoint. It is time to shed some light on these issues and look at alternatives or something more comprehensive and help people wake up to handling their finances.
This dude doesnt know what hes talking about. Do not take his advice
Read about 401ks. These are an accurate 15 points. Where is it not clear and how is it wrong? Would love to hear.
Richard your another jerk off that doesn't know what he talking about you should stop telling people lies
How do I get here?
Very inspiring video 😢
My friend, this isn’t sound advice. Stocks and bonds together out preform pretty much any asset class. Talk with a financial professional preferably a fiduciary advisor perhaps a licensed banker who might be able to guide you.
Yeah get a fiduciary to sell you loaded mutual funds and charge a fee for it. 90 percent of the time an index fund out performs over 20 years.