Real Estate vs. 401k


Dude, check it out. I set money aside in
my company and they match it and then it grows and it’s this thing called a 401k.
And then my buddy was telling about this crazy thing called real estate investing.
There’s no real program for that. You have to take risk do it all on your own.
Friends, today we’re going to take 401ks, IRA’s. We’re going to put them up
neck-and-neck talk about the pros and cons of each. And see ultimately, if we
can help you come up with the better strategy for your financial future. Have you watched that movie Dumb and
Dumber? I kind of wonder if in hindsight in this video is going to feel like that.
Because there’s this movie where like I can’t remember who was but one of the
dumb guys turns to the pretty chick and they were at the like the gasoline
Phillip thing and like the dog was lifting its leg and he was putting gas
in it. And he turns to the the hot girl and he says, “Hey.” She’s like, “Hey, okay.” He’s
like, “Those are skis?” She’s like, “Yes.” And then he says, “Both of
them?” It’s like the funniest line in the world for me. And I kind of feel like
even talking about 401k’s compared to real estate is like Dumb and Dumber
speak. Listen, I want to be fair here. Like honestly, a 401k is a really smart thing
to do if you don’t have a plan like. If you don’t know how you’re going to get
where you want to go, a 401 K does a couple of really great things for you.
Number 1 it’s like a for savings account. It actually gets you putting
money aside because heaven knows most people are just not doing that. And
number 2, it does earn something, right? It earns 4 or 5 percent which
again is better than nothing. So, I look at it kind of like a
worst-case scenario that says, “You clearly haven’t read financial books.
You’re clearly not taking your own financial future in your own hands. And
you’re leaving it up to Society.” And if you’re going to do that, then a 401k is
probably a good move. But if we fast-forward 30 years, your 401k will
likely be enough money to live off of for 2 or 3 years at the point of
retirement. What’s the point we’re tyring after 30 or 40 years if 3 years
later, you have to go back in the workforce? Now, some of you like, “What are
you talking about Kris?” Let me tell you what I’m talking about. Let’s say that your
custom to living off of 70 grand a year. And let’s say that you put $200,000 away in a 401 K after all those years. 200 grand it’s
going to last you not even 3 years before it’s all eaten up. So again, what’s
the point of working for 40 years to retire for 3 years and then go have
to get a job? Doesn’t really make sense, right? So, that’s why we actually have
this whole conversation of comparison. Because even though some of you are like,
“No, Kris. The match is awesome. The company gives me free money. You’re right.
But can you invest it? Well, no. Does it produce a return for you? No.
Okay, good. Then is it doing you any good? If it’s your plan and it’s how you get
to 200 grand and you want to retire for 3 years, great. You’re covered
but if you’re starting to do the math and say, “Wait a second. I’ve got problems
like I don’t know if this is actually going to work out
the way that I want.” Then you shouldn’t put money into something that you know
can’t get you where you want to go. It’s not even a tool of diversification, I
want to be clear. Locking up your money in 3, 4, 5, 6 percent returns
that can accumulate to what you need. It’s it’s broken and it’s not enough. So,
it can’t really get you where you want to go. The alternative is to find a
different choice that’s going to do better for you. Now, many of you know that I do
the game of real estate. We could talk about the risks of real estate. We could
talk about what kind of strategy, buy and holds, flips. And you know, tax liens and
stuff like that. But at the end of the day, real estate comes down to one thing.
When I get at a complicated pro forma with like hundreds of numbers summing up
an entire property that I’m thinking about doing. I only look at one number to
know whether I’m going to do it or not. And that’s the ROI. And on average those ROI
is are over 25%. So when I say, “This is perusing 4 or 5 percent,
this is producing 25%. Hmm, it’s 5 times bigger than that.” Now,
5 times bigger doesn’t make it better alone. It’s 5 times bigger than I can
put into real estate that will give me a 5x leverage point. Meaning, a hundred
grand will buy me 500 thousand dollars of real estate. So, wrap your mind
around this. Not only am I making 5 times more money but real estate gives
me extreme leverage. If you take that money and you compound it, you can find
out that inside a decade or 2. if you buy enough properties, you can retire.
401ks or… You know let’s talk about 401k’s. Just say it’s any kind of
investment pretty soon 4 or 5 percent. Let it compound and in 40 years
it’s not going to be anywhere near what you need. So today’s conversation guys is
really not about is a 401 K good or bad as real estate good or bad? It’s just are
you doing the math and are you figuring out what will get you where you want to
go and what won’t get you where you want to go. Because ultimately if you do the
math, that’s what should motivate you to ask. Now by the way, when should you be taking
action? The younger, the better. Put time on your side. No matter what age you are,
you need to get your money working for you at 25% rates or 20% rates or even 15.
Maybe even just 10%. Because 10%% compounding is way huger than 5%
compounding. So, at the end of the day, those are your options between 401ks and
real estate. If you want the real guide on the hoax of the 401k and what real
estate can really do for you, it’s all found in my book. This is The Straight
Path To Real Estate Wealth. It’s updated for today’s economy and the upcoming
crash which gives me excited. And we sold over 50,000 copies of it. This book has
created millionaires. In fact, they just you know decided to miss a call from
sterling one of my buddies who was calling me about his next multi-million
dollar deal I’m going to be doing with them. I’ll started from principals right
here in this book. Now, the cost of this book is normally 20 bucks and to you
today is free. Cover the shipping. My team will put it in the mail. Technically my
13 year old daughter will do that because I’m teaching a principal
entrepreneurship. And this book possesses the knowledge that can financially transform
your life. So, get yourself a copy of this. Make sure your subscriber and I will see
you on tomorrow’s video.

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