11 months of investing. $67k saved, debts cleared, and a portfolio just shy of a quarter million. Taking my finances into consideration last year was worth it in retrospect. I can see a comfortable retirement on the horizon.
I didn’t have prior investing experience. A CFA, Herman W Jonas has taken all the guesswork out ever since I got into his program. My initial capital of $5k invested in stocks, over the short term yielded me huge profit plus bonuses. It’s all about accumulating wealth through compound interest investments.
Do not forget that when it comes to investing, prices can be erratic, rising and declining quickly, often in relation to companies' policies, which individual investors or “experts” do not influence.
To attain upper-class wealth, a wise individual recognizes that building financial success requires smart investments, strategic tax planning, and informed decision-making. Although the stock market offers growth potential, effectively seizing these opportunities demands both skill and expertise.
Stock investments can offer great potential, but it's essential to approach them with caution. I recommend consulting a financial advisor who can help you determine the optimal times to buy and sell.
I agree , I assumed I had a hang of the market at first, I gained $500k one year and I was super elated, not until I stumbled upon a portfolio-adviser whose been guiding me since the market's been sham after the pandemic, to my utmost surprise I netted a whooping $280K during this dip, that made it clear there's more to the market that we just don't know
My advisor is Melissa Terri Swayne , a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market
insightful comments, I searched Melissa Terri Swayne by her full name and found her page, no sweat.. already sent an email to schedule an appointment, she seems well matched for the job.. thanks for putting this out
I'm favoured only God knows how much I praise Him, $230k every 4weeks! I now have a big mansion and can now afford anything and also support God’s work and the church.
Only God knows how much grateful i am. After so much struggles I now own a new house and my family is happy once again everything is finally falling into place!!
I remember giving her my first saved up $20000 and she opened a brokerage account with it for me, it turned out to be the best thing that ever happened to me.
I dont know how it works in the US but were i live in Europe .... If you buy a real estate you still have to pay a Tax on the value of the purchase irrelevant if the cash to buy is from a bank loan.
Another advantage of real estate is leverage. You can buy a $1M building with about 200K + a loan. If the building appreciates 20%, it's worth $1.2M. That's a 100% return on your investment of 200K. I bought a distressed property for a little over 200K in 2012. Over the years, I have invested an additional 200K in repairs and upgrades. It's now worth about $1.2M, and it's made a lot of income over the time I have owned it in addition to the appreciation. If I had bought the right stock and stayed in it, I could have done better. But real estate fits my personality. If I make 20% on a stock, I tend to sell it, so I miss out on the 1000% returns over 10 or 20 years. Real estate is less liquid (which is good for me), and provides income along the way.
@DJStroble yes, you can do a cash out refi or a HELOC. You can also use it as collateral for a private loan. For instance, I might loan you the down payment for your next investment, but I would want to secure my loan with a 1st position mortgage against the property you own free and clear. I might not be comfortable loaning you the money in second position on the new purchase. Be careful not to over borrow and create unnecessary risk.
Driving around Los Angeles, it seems as if one out of three businesses has been shut down for over a year and nothing has replaced it. Thousands upon thousands of empty commercial buildings
sometime these loans are perpetual in nature, the bank will have the right to seize your assets like stocks if their value relative to debt is too low. Therefore if the debt is at a rate of 5%, but you’re assets are a mix of bills and shares returning an average of 7% your will never have to pay off the debt because the capital is appreciating faster than the debt.
Love the clarity in explaining these complex strategies! Using leverage and cash flow for tax-free borrowing is such a smart move. Definitely motivates me to dig deeper into real estate investing.
You're a living legend Ken. You've taught me so much about investing and life in general. Your 3 books are pride of place on my shelf. Thank you and happy new year.
In the uk, if you borrow from your company, 9 months after the end of the tax year, you loan switches to a dividend so you pay income tax on the money.
@ for many years. Do you have director loans from your company that are beyond 9 months after the end of the financial year? What does your accountant say about that, if you do?
@@tomloftus3236 You can lend money to someone who is not part of the company interest free such as your sister but you as the owner cannot touch it for more than nine months. Ridiculous but true
I think this only works for cashflowing assets. Let's say I have a tonne of gold. I manage to get a loan out of it. How am i going to pay off that loan?
Good question. You would make monthly payments, but the property/equity would be appreciating on average more than you are paying back monthly. So say it’s a 5 million dollar property or stock with no debt. Say you take out a $200,000 Home Equity Loan or a HELOC or loan against a stock portfolio at 5% interest… for your annual spending money. It’s tax free, no income tax or capital gains tax. You have a monthly interest payment of $833 ($10,000 annually) plus whatever principal you will pay depending on the loan terms. However, that property will be appreciating $150,000 a year at a conservative 3% annual appreciation rate. So there is typically a big margin between property appreciation and your monthly payments. Even if there isn’t a huge margin, you can spend that money recklessly and basically just spend up to about $4 million of that $5 million dollar property over time and then just sell it and keep $1 million if you wanted to, there are a lot of options and flexibility. The big bonus is that the money you’re spending doesn’t get hit with capital gains tax before you get to spend it. Definitely works best in low interest rate environments.
You don't pay it back, your tenants do...the original property you bought has to have cashflow, i.e. rentals, otherwise you lose....rental money does not pay taxes because of tax benefits, so you save on that.
With Roth IRA, the money you are contributing has already been taxed. At any time for any reason, you can withdraw your contributions tax-free and penalty-free. Additionally, any earnings on investments can also be withdrawn tax-free and penalty-free, Not sure how much to contribute, I'm still at a crossroads deciding if to liquidate my $338k stock portfolio.
For the average person, the strategies are fairly demanding. In actuality, most professionals who have the necessary abilities and knowledge to complete such occupations do so successfully.
Cant really do this in Australia.. as soon as borrowed money is spent by me, its considered taxable income. If i leave it all in my company, and make the company buy a house or a boat, or anything at all, if i use it, its condsidered a fringe benefit, and is taxed. I wonder if the US has any similar provisions anywhere...
@@darthdaddy6983not completely accurate. Business expenses are tax write offs, staged deprecation is a thing & we don't pay capital gains on our primary residence. The real difference in the USA vs Aus tax systems is the latter is kinder in the tax exempt & low income brackets.
Here is a stock portfolio comparison ken. If you have 5 million dollars in a brokerage account you borrow 1 million dollars you have 4 million equity 1 million debit at 5% to 6% used to be 3% before interest rates went up. Instead of selling 1 million dollars of your stock portfolio every year and paying 250 thousand in taxes you just pay the interest on your debit 250 thousand to 300 thousand and you never have to pay the actual interest your debit unless you get a margin call does not cost you anymore than selling 20% of your .portfolio every year. My point is your not any worse off buying on margin than you would be selling buying something else because you avoid taxes you can instead expand your stock portfolio without selling any stocks. by borrowing against the increasing value of your stocks..
I bought a quadplex. If i borrow, who pays the EMI of borrowed money ? I will need money to pay the emi isn't it ? And if i do, i need an income. What am i missing here...
Im a little confused, you said that the wealthy dont take out money from their business' because then the IRS taxes them on it but Dave Ramsey says it gets taxed weather you leave it in there or take it out. Sooo who is right?
Yes you make a company and built its credit EIN separate from your own. You don't secure your investments with personal property or assets. Look into it.
How would you borrow against an S-Corp business with assets, and take the money out for personal use with out it being a distribution more than your salary of your salary is $1 for example
Interest rates are high and housing prices are high. I have real estate with low interest rates and I don’t want to refi at a higher rate. What would you suggest? Should I refi and buy more housing at peak prices and higher interest rates? That just doesn’t make sense to me…..
No do not do this! We were promised that rates were gonna come down. We basically got screwed out of $90,000 out of our home. Don't let anybody tell you that.
Rent or business income pays the loan. If you run a business in the property, you can make much higher returns than the interest rate. So the loan becomes essentially interest free. For example, if I buy a $1M building, and run a business in it that makes a profit of $300K a year, and pay the bank $50K a year in interest, I do not really feel the cost of the interest. The real question is: where do you get the money for the down payment. The answer is: savings. Save money to invest in income producing assets.
Thank you, Ken! I will run this back again. Maybe I can use these strategies to start making more money with the job income I have coming in. I have a cash-value insurance policy already.
I got a question. I always hear its wasted to live in your first house. Better let tenants pay off the debt. Cant i just as well live in the house and pay it off through the saved rent i would have to spend elsewhere? Borrowing against that house should still be possible. Or is it about a cashflow generating asset? Does the bank factor in the rent you would earn when you rent it out and therefore increase the money you can borrow against it? Thats at least how i understand it so far. Im from germany btw. So sorry for my imperfect english. All the best for the new year.
I think if you can pay off your house faster than the typical 30 year mortgage here in USA. And you love your house, then you’ve won. Stay and live in your fully paid off house. This would not be a business though. Just your home
If you want to build a real estate business using your home you have two options in your scenario. First option, get a HELOC. Stay in your house. Use the HELOC money to buy income producing properties. The cash those properties produce, should cover the Heloc monthly payments, the loan on the income properties and give you some income
Option 2 is refinance your mortgage, move out, rent the house. Your tenants pay the new bigger mortgage. Use the cash left over to buy a new house for yourself and rinse and repeat every couple years until you build your empire.
Been doing as such for years. But there is diminished tax treatment of mortgage interest paid on investment property. Pull out $100,000 and the mortgage goes from $500,000 to $600,000. If you use that $100,000 to buy other investment real estate you can still use the interest on that additional $100,000 as a write off. But if you use that $100,000 to finance life or buy a business or stock or make hard money loan, the interest expense cannot be deducted. Yes the $100,000 comes tax free, but all is not without tax implication. At least my cpa advised and real estate in personal ownership, not an LLC etc
Thank you very much KEN for this spectacular video...can you kindly share the link for free webinar in the comments section I guess it can be easy for us to access 🙏😊
Hey risky is this? I can see one failing where all the collaterals collapse like a house made of cards. If another 2008 style real estate crash happens things can end very very badly
There’s risk to everything we do in life. When you get into your car and drive to the supermarket you have a greater risk of being seriously injured or killed than staying in your home and not coming out
When you borrow from a bank, the bank will make you increase the insurance coverage to the max which increases your expenses. This happened to me. I went from paying $3,000 per year for insurance to $35,000 the following year. It was a bad deal.
Yes!! Because now your re-valued home has appreciated. I said this earlier...my spouse pulled 90,000 from our home, ran up a bunch of cards & then refinanced us at 7.5%. It increased my home mortage 2,300 + new taxes and insurance. I was devistated. It stole our retirement & my sons future. We might not even make it anymore because he was promised rates would drop, they never did. We might be homeless this time next year. The rent does not cover the mortage at all in case your wondering. 😢
Rent or business income pays the loan. If you run a business in the property, you can make much higher returns than the interest rate. So the loan becomes essentially interest free. For example, if a buy a $1M building, and run a business in it that makes a profit of $300K a year, and pay the bank $50K a year in interest, I do not really feel the cost of the interest.
My understanding is that unless you reinvest the borrowed money, you can't deduct the interest on the loan/mortgage. Essentially being taxed on the amount of interest paid because it cannot be deducted. Is this correct?
Easiest way to accomplish this is to take out a heloc on your primary and use that to do 20% on a dscr loan. Now it's 100% leveraged and you have the asset...but be careful with your numbers and make sure you're buying a great deal.
@@soundsnags2001 thanks that is what I was thinking of doing my mortgage is paid off so I just got a HELOC to use for a down payment. Hoping the deals start hitting this spring
Find someone who has money, tell them your business plan show them how you’ll pay them back and give them interest for the loan 5%. Make sure you write a contract and be ready to move quickly.
Risk is how that works. Yes, the bank will lian you money and ty hey can make a garrenteed profit, but you must make more on that money with almost always involves risk. Only live once, go for it.
So what are you living from? You borrow and re-invest and get no salary from the cash-flow generated by the assets. If the assets generate more yield than the cost of borrowed money, you are growing but what are you living from? How do yo extract money for daily needs?
OK, you buy, then borrow against…how you pay your debt?where do you get the money to pay it because the money you borrow is for your expenses so you need another income to pay the debt+ interest
Wouldn’t your mom get a 250k tax exemption if single or 500k if married if she sold her house? Meaning she would only pay capital gains on 560k if sold for $800k? If single?
Technically yes but it's not taxed as simple earned income like a salaried job with a w-2 because if managed as a business e.g. LLC the gross rents will be offset by operating expenses, depreciation, mortgage interest and other deductibles which will mitigate your tax exposure.
@@INTERNETVID thank you but still taxed. I understand what you saying. Still need some fancy tax work. People should explain it better. Like you did. Still thats real estate what are other assets you can burrow against. He was too vague
This is everything that is wrong with the economy. Buy borrow die. Who pays your debt when you die. Other people suffer when others dont pay back debt. This mindset needs to change and shift to self sovereignty. If you cant produce your own money you shouldn't be able to borrow so much money. Can't borrow anything anymore
I've learnt that the debt is paid when the appreciated assets are sold by the heirs. The goal is to have enough assets that are always appreciating to cover the debt and interest. Then when the original asset owner dies and the assets are inherited by the next person they can sell, pay off the debt and keep the profits. It's a win for everyone. As long as the assets keep appreciating the strategy works. That's my current understanding.
Ken, you mentioned you’re doing 5 1031 exchanges. With the tight timelines of a 1031, how are you finding properties that actually make sense in the current low inventory?
So people use to do this with non real estate (section 1245 property) until section 1031 was amended to disqualify non real estate. They are now screwed (eg auto leasing companies). Sec 1031 for real estate has been targeted by the dems (see Biden budget) but has not passed and likely will boy under Republican control. Well, what about in 15 yrs, 20 yrs, etc.? Dems have also targeted "step up in basis". Lastly all of these "bonus depreciation/cost seg" proponents nver say the reclassed items will taint/not qualify for the 1031
If you needed to buy something, an exact brand and quality from two different stores, one selling at $10 and another one at $25. Which one would you pick?
If you are borrowing money against the asset to live and not selling the asset. What do you use to pay the loan? Do you borrow all the equity in the asset?
How do you pay your debts when you’re getting these large loans? “The Rich” must have large debts and large payments, where do you get the cash flow to service that debt and make those payment payments you have to have some sort of income or rapidly appreciating assets that you can sell to pay off debts otherwise you won’t be able to service your debt…
Hypothetical: have 1 billion $ in equity that does not pay dividends. I want to take a loan against it to buy a billion $ yacht. Who is going to pay the interest on the loan?
Point made, but not a great hypothetical because it's inconceivable that having a billion in equity somewhere you wouldn't also have sufficient resources in other assets from which to draw for paying interest. Plus bottom line having a billion you couldn't be an imbecile so you'd buy a 100 million yacht instead rather than be overleveraged and the Saudi King sails in a 100 million dollar yacht so that should suffice for you too.
As an investment enthusiast, I often wonder how top-level investors are able to become millionaires through investing. I have a significant amount of capital to start with, but I'm unsure about the strategies and direct I should take to help me generate substantial profits like some people are this season.
Here in Brazil we have inheritage taxes: that 2 million house passed on to my children would make them pay taxes on that! // I managed the option of a trust...
Yes barrow against your assets do 1031 exchange you don't pay taxes the loan is paid by the appreciation real estate grows in appreciation with inflation you can hold the title of ownership thrust land trusts then transfer to heirs tax free real stock assets if you 100k a million a billion a trillion it's all the same never over leverage unless you can pay off that leverage with rents cor poration credit or other assets you can sell, attorneys real estate brokers and CPA are needed in some cases ken is correct 💯 no b.s. ❤
11 months of investing. $67k saved, debts cleared, and a portfolio just shy of a quarter million. Taking my finances into consideration last year was worth it in retrospect. I can see a comfortable retirement on the horizon.
Wow that's impressive. I don't mean to be all nosey but can you share how you're doing it? Everything about investing seems quite complicated.
I didn’t have prior investing experience. A CFA, Herman W Jonas has taken all the guesswork out ever since I got into his program. My initial capital of $5k invested in stocks, over the short term yielded me huge profit plus bonuses. It’s all about accumulating wealth through compound interest investments.
Do not forget that when it comes to investing, prices can be erratic, rising and declining quickly, often in relation to companies' policies, which individual investors or “experts” do not influence.
I can't seem to get it right with investing. I don't know what I might be doing wrongly. Can he help me?
Hermanw jonas that’s his gmail okay
This is exactly why I started reading books like The Secret Doctrine of Wealth. They teach you skills and strategies that college never will.
goated book
Where can I find this book?
@WindsongSoundBath nixorus
To attain upper-class wealth, a wise individual recognizes that building financial success requires smart investments, strategic tax planning, and informed decision-making. Although the stock market offers growth potential, effectively seizing these opportunities demands both skill and expertise.
Stock investments can offer great potential, but it's essential to approach them with caution. I recommend consulting a financial advisor who can help you determine the optimal times to buy and sell.
I agree , I assumed I had a hang of the market at first, I gained $500k one year and I was super elated, not until I stumbled upon a portfolio-adviser whose been guiding me since the market's been sham after the pandemic, to my utmost surprise I netted a whooping $280K during this dip, that made it clear there's more to the market that we just don't know
that's impressive!, I could really use the expertise of this advisors , my portfolio has been down bad....who’s the person guiding you
My advisor is Melissa Terri Swayne , a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market
insightful comments, I searched Melissa Terri Swayne by her full name and found her page, no sweat.. already sent an email to schedule an appointment, she seems well matched for the job.. thanks for putting this out
I'm favoured only God knows how much I praise Him, $230k every 4weeks! I now have a big mansion and can now afford anything and also support God’s work and the church.
Only God knows how much grateful i am. After so much struggles I now own a new house and my family is happy once again everything is finally falling into place!!
Wow that's huge, how do you make that much monthly?
I'm 37 and have been looking for ways to be successful, please how??
I remember giving her my first saved up $20000 and she opened a brokerage account with it for me, it turned out to be the best thing that ever happened to me.
The fact that nobody talks about the book Forbidden Money Behind Closed Doors talks about how people attract money
Where can I find this book?
@ google
@ on google
I dont know how it works in the US but were i live in Europe .... If you buy a real estate you still have to pay a Tax on the value of the purchase irrelevant if the cash to buy is from a bank loan.
Another advantage of real estate is leverage. You can buy a $1M building with about 200K + a loan. If the building appreciates 20%, it's worth $1.2M. That's a 100% return on your investment of 200K. I bought a distressed property for a little over 200K in 2012. Over the years, I have invested an additional 200K in repairs and upgrades. It's now worth about $1.2M, and it's made a lot of income over the time I have owned it in addition to the appreciation. If I had bought the right stock and stayed in it, I could have done better. But real estate fits my personality. If I make 20% on a stock, I tend to sell it, so I miss out on the 1000% returns over 10 or 20 years. Real estate is less liquid (which is good for me), and provides income along the way.
I paid off my rental duplex and it's worth around 220k. Can I somehow use it to buy another house?
@DJStroble yes, you can do a cash out refi or a HELOC. You can also use it as collateral for a private loan. For instance, I might loan you the down payment for your next investment, but I would want to secure my loan with a 1st position mortgage against the property you own free and clear. I might not be comfortable loaning you the money in second position on the new purchase. Be careful not to over borrow and create unnecessary risk.
Right now commercial real estate is collapsing
@timothygibney159 unfortunately it's still overpriced here in Atlanta. I do see a little weakness. Hoping for some good deals in 2025.
Driving around Los Angeles, it seems as if one out of three businesses has been shut down for over a year and nothing has replaced it. Thousands upon thousands of empty commercial buildings
When you just borrow do you have to gove it back? I think i might not really get it?
Yes, you need. You would pay it from your income.
This is crazy...... but extremely useful info .....
If you borrow, you need to pay it off, if you need to pay it off, to pay it off you need to have income. Income=tax.
That's pretty obvious, but as he said, the cost of money can be deducted when a company borrows - basics of accounting.
Not if that income is coming from rentals...you pay no tax
sometime these loans are perpetual in nature, the bank will have the right to seize your assets like stocks if their value relative to debt is too low. Therefore if the debt is at a rate of 5%, but you’re assets are a mix of bills and shares returning an average of 7% your will never have to pay off the debt because the capital is appreciating faster than the debt.
How can I get an appointment with your CPA for a few hours?
Love the clarity in explaining these complex strategies! Using leverage and cash flow for tax-free borrowing is such a smart move. Definitely motivates me to dig deeper into real estate investing.
You're a living legend Ken. You've taught me so much about investing and life in general. Your 3 books are pride of place on my shelf. Thank you and happy new year.
Can you please share the book names
I didn’t realize if you sell the inherited asset immediately the entire sell would be tax free, that’s great! Thanks for sharing
In the uk, if you borrow from your company, 9 months after the end of the tax year, you loan switches to a dividend so you pay income tax on the money.
Since when? I'm from uk and I've not heard this ever
@ for many years. Do you have director loans from your company that are beyond 9 months after the end of the financial year? What does your accountant say about that, if you do?
A certain threshold has to be surpassed aswell
@@tomloftus3236 You can lend money to someone who is not part of the company interest free such as your sister but you as the owner cannot touch it for more than nine months. Ridiculous but true
Thank you! I needed this information! wish u have a peaceful day
So borrowing against assests, then the loan gets paid back from cash flow. And it's a non taxed event. Even though you've paid it back?
Hey Ken, on your next video can you touch base on DSCR Loans?
I think this only works for cashflowing assets. Let's say I have a tonne of gold. I manage to get a loan out of it. How am i going to pay off that loan?
But when u borrow, u have to pay back. How do u not pay back?
Good question. You would make monthly payments, but the property/equity would be appreciating on average more than you are paying back monthly.
So say it’s a 5 million dollar property or stock with no debt. Say you take out a $200,000 Home Equity Loan or a HELOC or loan against a stock portfolio at 5% interest… for your annual spending money. It’s tax free, no income tax or capital gains tax.
You have a monthly interest payment of $833 ($10,000 annually) plus whatever principal you will pay depending on the loan terms. However, that property will be appreciating $150,000 a year at a conservative 3% annual appreciation rate.
So there is typically a big margin between property appreciation and your monthly payments.
Even if there isn’t a huge margin, you can spend that money recklessly and basically just spend up to about $4 million of that $5 million dollar property over time and then just sell it and keep $1 million if you wanted to, there are a lot of options and flexibility. The big bonus is that the money you’re spending doesn’t get hit with capital gains tax before you get to spend it.
Definitely works best in low interest rate environments.
You don't pay it back, your tenants do...the original property you bought has to have cashflow, i.e. rentals, otherwise you lose....rental money does not pay taxes because of tax benefits, so you save on that.
But what about the interest you pay when you borrow vs paying taxes 🤔
“Sorry mum, but I sold you instead of your house” 😂 Truly 💯 dealer who always put money first. Not a compliment at all)
What are some good investment options using equity from home?
This is all well and good, but what no one ever fully explains is HOW DO YOU SERVICE THE DEBT AND INTEREST?
@taxleverage can u do a response video on this?
With Roth IRA, the money you are contributing has already been taxed. At any time for any reason, you can withdraw your contributions tax-free and penalty-free. Additionally, any earnings on investments can also be withdrawn tax-free and penalty-free, Not sure how much to contribute, I'm still at a crossroads deciding if to liquidate my $338k stock portfolio.
For the average person, the strategies are fairly demanding. In actuality, most professionals who have the necessary abilities and knowledge to complete such occupations do so successfully.
Thanks, ken
Cant really do this in Australia.. as soon as borrowed money is spent by me, its considered taxable income.
If i leave it all in my company, and make the company buy a house or a boat, or anything at all, if i use it, its condsidered a fringe benefit, and is taxed.
I wonder if the US has any similar provisions anywhere...
🤮 sickening
You borrow, not your company e.g. Musk personally borrows against his shares and lives on the borrowings.
@@darthdaddy6983not completely accurate. Business expenses are tax write offs, staged deprecation is a thing & we don't pay capital gains on our primary residence. The real difference in the USA vs Aus tax systems is the latter is kinder in the tax exempt & low income brackets.
I'm only learning about this strategy and was wondering if it was possible in australia. Do you think even if it's a personal loan it won't work?
Do you pay tax on the repayments of the mortgage, surely you’d have to take that and pay tax before you repay it?
Here is a stock portfolio comparison ken. If you have 5 million dollars in a brokerage account you borrow 1 million dollars you have 4 million equity 1 million debit at 5% to 6% used to be 3% before interest rates went up. Instead of selling 1 million dollars of your stock portfolio every year and paying 250 thousand in taxes you just pay the interest on your debit 250 thousand to 300 thousand and you never have to pay the actual interest your debit unless you get a margin call does not cost you anymore than selling 20% of your .portfolio every year. My point is your not any worse off buying on margin than you would be selling buying something else because you avoid taxes you can instead expand your stock portfolio without selling any stocks. by borrowing against the increasing value of your stocks..
@ Ken McElroy can you speak more about gold and silver in a portfolio
Only for property
Does all of this apply to England UK ?
Since This video like many others are USA 🤷♂️
I bought a quadplex. If i borrow, who pays the EMI of borrowed money ? I will need money to pay the emi isn't it ? And if i do, i need an income. What am i missing here...
I do not see any properties in DFW area that would generate enough money to pay for the mortgage
GREAT VIDEO THANK YOU
And how will you justify to the taxation agencies your personal need to borrow the money from the business every month?
Im a little confused, you said that the wealthy dont take out money from their business' because then the IRS taxes them on it but Dave Ramsey says it gets taxed weather you leave it in there or take it out. Sooo who is right?
Please make a video about how to borrow from the bank? Like making a company or what? and many thanks
Yes you make a company and built its credit EIN separate from your own. You don't secure your investments with personal property or assets. Look into it.
@@polygon2744
Thank you for your reply, but what type of loan does the bank give to new companies or those that do not have a big history?
Just got my Adaxum token ADX during the presale. Get yours while you can..
Wait you pay interest on borrowed money also?? Less than business taxes?
How would you borrow against an S-Corp business with assets, and take the money out for personal use with out it being a distribution more than your salary of your salary is $1 for example
Borrowing is OK. But how to manage repayment of loan with heavy interest?
I thought you didn’t have to pay tax on gains from primary residence?
Interest rates are high and housing prices are high. I have real estate with low interest rates and I don’t want to refi at a higher rate. What would you suggest? Should I refi and buy more housing at peak prices and higher interest rates?
That just doesn’t make sense to me…..
Equity line of credit
No do not do this! We were promised that rates were gonna come down. We basically got screwed out of $90,000 out of our home. Don't let anybody tell you that.
So where do you get the cash to pay back the loan?
Your heirs sell enough to pay it off. They don't have to pay the tax because of the step-up cost basis.
He said the 10,000 people paying him rent
If you made a good decision on the r.e. you bought, the cashflow from the r.e. pays the principal and interest on the loan
Rent or business income pays the loan. If you run a business in the property, you can make much higher returns than the interest rate. So the loan becomes essentially interest free. For example, if I buy a $1M building, and run a business in it that makes a profit of $300K a year, and pay the bank $50K a year in interest, I do not really feel the cost of the interest. The real question is: where do you get the money for the down payment. The answer is: savings. Save money to invest in income producing assets.
Did you even watch the video?
Thank you, Ken! I will run this back again. Maybe I can use these strategies to start making more money with the job income I have coming in. I have a cash-value insurance policy already.
I got a question. I always hear its wasted to live in your first house. Better let tenants pay off the debt. Cant i just as well live in the house and pay it off through the saved rent i would have to spend elsewhere? Borrowing against that house should still be possible. Or is it about a cashflow generating asset? Does the bank factor in the rent you would earn when you rent it out and therefore increase the money you can borrow against it? Thats at least how i understand it so far. Im from germany btw. So sorry for my imperfect english.
All the best for the new year.
That’s more than one question
I think if you can pay off your house faster than the typical 30 year mortgage here in USA. And you love your house, then you’ve won. Stay and live in your fully paid off house. This would not be a business though. Just your home
If you want to build a real estate business using your home you have two options in your scenario. First option, get a HELOC. Stay in your house. Use the HELOC money to buy income producing properties. The cash those properties produce, should cover the Heloc monthly payments, the loan on the income properties and give you some income
Option 2 is refinance your mortgage, move out, rent the house. Your tenants pay the new bigger mortgage. Use the cash left over to buy a new house for yourself and rinse and repeat every couple years until you build your empire.
Been doing as such for years. But there is diminished tax treatment of mortgage interest paid on investment property. Pull out $100,000 and the mortgage goes from $500,000 to $600,000. If you use that $100,000 to buy other investment real estate you can still use the interest on that additional $100,000 as a write off. But if you use that $100,000 to finance life or buy a business or stock or make hard money loan, the interest expense cannot be deducted. Yes the $100,000 comes tax free, but all is not without tax implication. At least my cpa advised and real estate in personal ownership, not an LLC etc
In Europe does not work …
Not a good place to do business then ;-)
Thank you very much KEN for this spectacular video...can you kindly share the link for free webinar in the comments section I guess it can be easy for us to access 🙏😊
Presale participation locked in. Adaxum bonuses are a sweet deal for early adopters!
Hey risky is this? I can see one failing where all the collaterals collapse like a house made of cards. If another 2008 style real estate crash happens things can end very very badly
There’s risk to everything we do in life. When you get into your car and drive to the supermarket you have a greater risk of being seriously injured or killed than staying in your home and not coming out
@petrolo72 exactly no risk no reward people who scared to take risks end up broke
When you borrow from a bank, the bank will make you increase the insurance coverage to the max which increases your expenses. This happened to me. I went from paying $3,000 per year for insurance to $35,000 the following year. It was a bad deal.
I don't get how that relates to the video?
Insurance for what?
Yes!! Because now your re-valued home has appreciated. I said this earlier...my spouse pulled 90,000 from our home, ran up a bunch of cards & then refinanced us at 7.5%. It increased my home mortage 2,300 + new taxes and insurance. I was devistated. It stole our retirement & my sons future. We might not even make it anymore because he was promised rates would drop, they never did. We might be homeless this time next year. The rent does not cover the mortage at all in case your wondering. 😢
@@camkirby2913 For Liability, windstorm, etc.
Another video i love! I learned something new again! Step up-basis! Thanks Ken!
I dont get it. You have to pay interest when you borrow or buy something with a loan.
Doesn’t matter your debt is supposed to fund your business assets to make more money.
Rent or business income pays the loan. If you run a business in the property, you can make much higher returns than the interest rate. So the loan becomes essentially interest free. For example, if a buy a $1M building, and run a business in it that makes a profit of $300K a year, and pay the bank $50K a year in interest, I do not really feel the cost of the interest.
Pay 12% interest but avoid a 35% tax bracket
Thank you very much
No problem at all
Great content. Thanks
Whats when the banks crash? I am really interestet what happens then..
Don't have all your money in one bank ;-)
Got my ADX tokens during the presale, feels like I’m ahead of the curve! Adaxum could be one of the best DeFi projects of the year
Great video! ❤❤❤❤
Diving into Adaxum's whitepaper as we speak. The innovation and technology behind this project are mind-blowing!
It works unless valuations reset and everything goes down 90% then you buy borrow and FRY!!!!!
I need to get in U.S....
How do they pay back the borrowed money?
That's the die part.
With the extra cashflow from buying assets or paying off debt
Bullish on the alt run? Projects like Adaxum are the reason why I’m confident this season will outperform expectations!
My understanding is that unless you reinvest the borrowed money, you can't deduct the interest on the loan/mortgage. Essentially being taxed on the amount of interest paid because it cannot be deducted. Is this correct?
You are correct. However, Ken has tenants paying the interest via cash flow rents.
How can I buy a duplex with no out of pocket money can I use the dscr loan or something like that
He talks about using other peoples money like investors etc
Easiest way to accomplish this is to take out a heloc on your primary and use that to do 20% on a dscr loan. Now it's 100% leveraged and you have the asset...but be careful with your numbers and make sure you're buying a great deal.
@@soundsnags2001 thanks that is what I was thinking of doing my mortgage is paid off so I just got a HELOC to use for a down payment. Hoping the deals start hitting this spring
Find someone who has money, tell them your business plan show them how you’ll pay them back and give them interest for the loan 5%. Make sure you write a contract and be ready to move quickly.
Risk is how that works. Yes, the bank will lian you money and ty hey can make a garrenteed profit, but you must make more on that money with almost always involves risk. Only live once, go for it.
Rebalancing for diversification is a thing.
So what are you living from? You borrow and re-invest and get no salary from the cash-flow generated by the assets. If the assets generate more yield than the cost of borrowed money, you are growing but what are you living from? How do yo extract money for daily needs?
OK, you buy, then borrow against…how you pay your debt?where do you get the money to pay it because the money you borrow is for your expenses so you need another income to pay the debt+ interest
You have to buy an asset that is worth more than what you pay for it
Awesome job on the thumbnail 🔥 I’ve been wanting to learn more on this concept
What happen to the money that borrow from the asset, will the people inherited the asset pay?
Yeah but anything over 7.5 gets taxed property or not, happened to me when my father died. Maybe it was 11. But we got taxed on the other 29
You go Kenny and your beautiful wife. God bless you and your prosperity! Thank you for teaching Sir.
Wouldn’t your mom get a 250k tax exemption if single or 500k if married if she sold her house? Meaning she would only pay capital gains on 560k if sold for $800k? If single?
Thank you! I NEEDED this information!
I did not know that after I die I could transfer my assets (tax free) to my heirs!
You can't - because of inheritance tax
@ are you cappin on me rn?
Dont you pay taxes on income made off of rent
Technically yes but it's not taxed as simple earned income like a salaried job with a w-2 because if managed as a business e.g. LLC the gross rents will be offset by operating expenses, depreciation, mortgage interest and other deductibles which will mitigate your tax exposure.
@@INTERNETVID thank you but still taxed. I understand what you saying. Still need some fancy tax work. People should explain it better. Like you did. Still thats real estate what are other assets you can burrow against. He was too vague
New partnerships that Adaxum annouced will skyrocket ADX token soon.
This is everything that is wrong with the economy. Buy borrow die. Who pays your debt when you die. Other people suffer when others dont pay back debt. This mindset needs to change and shift to self sovereignty. If you cant produce your own money you shouldn't be able to borrow so much money. Can't borrow anything anymore
I've learnt that the debt is paid when the appreciated assets are sold by the heirs. The goal is to have enough assets that are always appreciating to cover the debt and interest. Then when the original asset owner dies and the assets are inherited by the next person they can sell, pay off the debt and keep the profits. It's a win for everyone. As long as the assets keep appreciating the strategy works. That's my current understanding.
Re leaving to heirs, if the 2mil is 80% financed your heirs really only receive 40k in equity. Pls tell me otherwise
I usually don’t jump into new projects, but after seeing the potential with Adaxum, I’m in. Time to diversify my portfolio!
Ken, you mentioned you’re doing 5 1031 exchanges. With the tight timelines of a 1031, how are you finding properties that actually make sense in the current low inventory?
You find candidate properties and run all the numbers before you decide to sell, not after
So people use to do this with non real estate (section 1245 property) until section 1031 was amended to disqualify non real estate. They are now screwed (eg auto leasing companies). Sec 1031 for real estate has been targeted by the dems (see Biden budget) but has not passed and likely will boy under Republican control. Well, what about in 15 yrs, 20 yrs, etc.? Dems have also targeted "step up in basis". Lastly all of these "bonus depreciation/cost seg" proponents nver say the reclassed items will taint/not qualify for the 1031
Ken has a pipeline of deals lined up. It's easy if you're buying multiple deals per year.Then you don't have to worry about tight timelines.
@@JointVentureCapitalist unless they all don't cash flow.
@@NutritionPolice for sure. I forget in multifamily the timelines are much longer than single family.
No tax on borrowed money. But loans are not free, people will pay tax or interest. Money on your hand will always generate a charge, tax or interest
If you needed to buy something, an exact brand and quality from two different stores, one selling at $10 and another one at $25. Which one would you pick?
Talks about 1031 exchanges but doesn't mention depreciation recapture. Does he really know how this stuff works?
If you are borrowing money against the asset to live and not selling the asset. What do you use to pay the loan? Do you borrow all the equity in the asset?
The key is having a good asset that continues to make more money vs what you owe on the loan. Due diligence.
Ah yes, there's nothing quite like passing on $750 million in debt to your children, what a gift. Would hate to be your son lmao.
How do you pay your debts when you’re getting these large loans? “The Rich” must have large debts and large payments, where do you get the cash flow to service that debt and make those payment payments you have to have some sort of income or rapidly appreciating assets that you can sell to pay off debts otherwise you won’t be able to service your debt…
Just found you!
The fact that nobody talks about the forbidden book called The Gilded Nexus of Prosperity speaks volumes about how people are stuck in a trance
I categorize this under financial engineering
Hypothetical: have 1 billion $ in equity that does not pay dividends. I want to take a loan against it to buy a billion $ yacht. Who is going to pay the interest on the loan?
Point made, but not a great hypothetical because it's inconceivable that having a billion in equity somewhere you wouldn't also have sufficient resources in other assets from which to draw for paying interest. Plus bottom line having a billion you couldn't be an imbecile so you'd buy a 100 million yacht instead rather than be overleveraged and the Saudi King sails in a 100 million dollar yacht so that should suffice for you too.
As an investment enthusiast, I often wonder how top-level investors are able to become millionaires through investing. I have a significant amount of capital to start with, but I'm unsure about the strategies and direct I should take to help me generate substantial profits like some people are this season.
Here in Brazil we have inheritage taxes: that 2 million house passed on to my children would make them pay taxes on that! // I managed the option of a trust...
How would she had paid tax on a homestead that high🧐
Dave Ramsey about to get a bunch of calls after this one
The integration of Adaxum with e-commerce, DeFi tech and global payments solutions has significant potential to enter top 100 cryptos. Well done!
Yes barrow against your assets do 1031 exchange you don't pay taxes the loan is paid by the appreciation real estate grows in appreciation with inflation you can hold the title of ownership thrust land trusts then transfer to heirs tax free real stock assets if you 100k a million a billion a trillion it's all the same never over leverage unless you can pay off that leverage with rents cor
poration credit or other assets you can sell, attorneys real estate brokers and CPA are needed in some cases ken is correct 💯 no b.s. ❤
Ken ❤