Jul 15, 2022
What's Your Exit Strategy? Build Your Tax Free Plan Today
- BRT S03 EP32 (131) 7-15-2022 – Wealth for Life
Things We Learned This Week
- Disruption – No more 100 year old companies, people jump companies and even careers in their lifetime, need new retirement strategy
- Creation of the 401K in 1980, slowly phased out Pensions & Financial Security of yesteryear was the 3 legged stool - Pension, Social Security, & Savings
- Offense / Defense Strategies - Offense is stocks, asset that appreciates, want asset to go up so you can sell, Appreciating & Harvesting Assets– Stock market is not Efficient at capturing gains, have to sell at the right time to gain the value of the asset – harvesting Assets can also appreciate while giving off income
- No Easy Path to Retirement, many choices to put money or invest / No Perfect Asset - Further investor removed, lesser ROI from deal
- 3 Pillars to Scale Wealth: Tax Protection, Financial Leverage, Income Streams
- Financial Leverage – can finance your retirement, do not have to do it all on your own
Co-Host: Denver Nowicz, President - Wealth For Life
https://wealthforlife.net/brt/
https://twitter.com/denvernowicz
Denver is an advisor with nearly 20 years experience working with clients in investments and insurance, designing retirement plans with a combo of both. He takes us through different strategies for clients to get the best allocations for their money over the long term. It is the Combo Strategy of both Offense and Defense, the synergy of the mix, not ‘All or Nothing’.
Notes:
EXIT STRATEGY
Disruption - No more 100 year old companies
1980 – creation of the 401K, slowly phased out Pensions
Financial Security of yesteryear was the 3 legged stool -
Pension, Social Security, & Savings
Stock Market Crash of 1987
The first contemporary global financial crisis unfolded on October 19, 1987, a day known as “Black Monday,” when the Dow Jones Industrial Average dropped 22.6 percent.
Black Swan – disruption – in a 20 yr. period, 4 Crashes
DOTCOM of 2000, 9/11, Financial Crash of 2008, Covid 2020
More on Crashes:
https://www.cnbc.com/2020/04/09/what-happened-in-every-us-recession-since-the-great-depression.html
401(k) plans hold $7.3 trillion in assets as of September 30, 2021, in about 600,000 plans, on behalf of about 60 million active participants and millions of former employees and retirees.
Ted Benna, the Father of the 401k Covers It All, History, pensions, Fees & More
Link to 401 K Ted Benna – FULL SHOW: HERE
What if your 401K crashes, S&P earned 0% from 2000 – 2010, Lost Decade
The “lost decade” from January 2000 through December 2009 resulted in disappointing returns for many who were invested in the securities in the S&P 500. An index that had averaged more than 10% annualized returns before 2000 instead delivered less-than-average returns from the start of the decade to the end.
401K has your money $ in the Market, hence Market Risk
Stock Options from Company you work for, if issue with that co., Company Risk
Exit Strategy – people today can have 2 - 3 career changes
Work to have an Equity position in the company
Equity positions in Company – stock options
Company sells, & get big paycheck or bonus
Offense / Defense Strategies
Offense is stocks, asset that appreciates, want asset to go up so you can sell
Appreciating Asset – buy low, sell high, buy an asset and hope it goes up in value – ie Stocks,, Gold, Art, Real Estate, Crypto
Harvesting Assets – Assets that give off income, or cash flow - ie Real Estate rental property, owning a business, dividend stocks, REITs, etc.
Stock market is not Efficient at capturing gains, have to sell at the right time to gain the value of the asset – harvesting Assets can also appreciate while giving off income
“One Thing” Retirement Plan – 401K & stocks, hope it goes up and no volatility (market risk), 90% of people are on this plan
No easy path to retirement, many choices to put money or invest
No perfect asset - Further investor removed, lesser ROI from deal
Real Estate Developer creates the deal and manges the deal, and make most $ from the deal
Liquidity Risk – money is tied up in an investment deal fro years, cannot access the money
Defense - IUL, Cash Flowing Business, Real estate, bonds, dividend stocks
Defense – income, liquidity, track record
High Net Worth Investors view assets differently
Ie – invest in real estate, could be storage facility, rental real estate, or RV Park
Predictable income, with a safe asset
Most people create wealth thru one thing initially, successful business or career, then invest money to grow their wealth
Hard to Sell a Business – 90% may not sell or sell at value owner wants
3 Pillars to Scale Wealth: Tax Protection, Financial Leverage, Income Streams
Business owner – do not save enough. Need capitol in business
Business gives best ROI, vs investing in real estate or stock market
Use money and leverage (financing) = bigger exit / retirement
Carve out small portions of your capital, 10 %, and use financing to big a better retirement, and safer
Business Owners deal with tax issues, so need defensive tax strategy
90% of financial advice does not apply to a business owner earning over $150K / year
Top 10% of income is $150K and up
25% down on investment
Put in $1, have $3 - $4 working for you, control $4 with $1
3 to 1 Tax Free Matching program, acts like a no limit ROTH
What are the best assets out there that are acceptable, can get growth, but conservative strategy
Build assets – digital brand
When you have more wealth, there are more opportunities to grow the wealth
Financial Leverage – do not do it all on your own, use loans
Trust strategies with loans
Disclaimer – these strategies are not simple to understand, and can overlap with other plans
Income of $250K out you in Top 5% of income earners, so 95% of financial advice do not apply
Need a Team of Advisors to grow and protect wealth
4% withdrawal rule
More efficient use of money
Never go back to Vegas with scared money. Chasing losses.
Segment defense money
Secure future income with 20% of capitol. Frees up capitol for offensive strategy
Tiger Club – how does the wealthy invest?
Tiger 21 Club - Follow this super investor group for ideas, and how they diversify their investments. Allocation usually has 25% in real estate, 25% in stocks, 25% in private equity, 10% in cash, and the rest is Bonds or other investments.
More Info on WFL and Tax Free Matching: HERE
Wealth For Life Topic: https://brt-show.libsyn.com/category/Wealth+For+Life
Link to Taxes Show on 10/31/2021 w/ Denver: Here
Link to Offense / Defense Show on 6/6/2021 w/ Denver: Here
Link to Shows, Denver was a Guest: Here
Investing Topic: https://brt-show.libsyn.com/category/investing
More - BRT Best of: https://brt-show.libsyn.com/category/Best+Of
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