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How To Become A Millionaire In Two Years Buying One House Per Month – Real Estate Investing
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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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Read MoreHow To Invest Money In Your 20’s
user 0 Comments Retirement Planning Tips for Retiree's
Hey, what’s up guys? Kris Krohn here. Yes, it is winter. Yes i’m driving with the top down. It is one of my favorites. I am totally impervious to the cold. But today I want to jam with you in real estate and I want to talk about why 90% of all millionaires make it in real estate. And there’s very, very specific reasons why. and so what I want to do is break it down for you. I really want to give it to you in in like the deeper science than I have in the past. And I think you’re really going to appreciate it. So, check it out. I’m up here at my mountain home. It is snowy, it’s cold. But a super exciting day. You know, as I’ve started this YouTube channel, I’ve been really honing in. What is the information that would create the highest level of value for you? And today, I want to give it to you in one straight shot. How you invest in your 20s, so that when you’re in your 30s, not your 40s, not your 50s, not your 60s. You can really living be living life on your terms.
To me, it doesn’t matter whether you have money, whether you don’t have money. You have good credit, you have bad credit. Frankly, it really doesn’t make much of an impact at all to me. So, here’s what I want to help you understand. There’s a number of strategies when it comes to the world of real estate investing. In fact, there’s 32 main strategies out there. The first thing I need you to understand is that most strategies, they’re not good. You shouldn’t do… There’s tax deedsm there’s flips, there’s a lot of things that are popular.
There’s multifamily. There’s rentals. And I don’t do those things and I don’t think you should do those things. I think you should do what makes the most money that takes the least time in the least effort and has the least risk. Because dude, no one likes to start over, no one likes to lose and when you invest, there is some risk. The reason why I retired at the age of 26 is because I followed a very specific formula. And I want to detail it out very specific for you because there are 3 things that you do need to know about making money in the game of real estate. And if you follow these 3 things it’s gonna be a total game changer for you.
So, let’s head over to the whiteboard and I want to document this for you. Because I want you understand that when you get in the game of real estate, you want each property to be a win. When I found out that you could make 50 to 100 thousand dollars per deal, I got to tell you. That was something that was super exciting for me. Because I realized if I want to make a million dollars, then I just need to be able to count to 10, right? I got 10 finger. So, so much easier than some of the other ways and methodologies are out there. And so I want to ask you how many deals do you need to do before you’d say, “Wow, I’ve made it. I’ve arrived.” And with what I’m about to show you.
I don’t want you to be thinking in terms of like, you know, “I want to be a millionaire so I need a million dollars. I need to do 10 deals.” it’s actually a lot simpler. You don’t need a certain amount of money. What you need is a certain amount of properties producing a certain amount of residual income. You’re not striving for a certain net worth. You’re striving for your real estate to perform in a manner to give you enough residual income that you don’t need to work.
When I say I retired at 26, truth is I didn’t really retire I just became financially independent. And I quit my job and I got to live life on my terms. And it’s because of what I’m about to show you. There are 3 things in particular that you need to be aware of. Every time you do a deal in your backyard and it doesn’t have to take money. Some of these deals take nothing or maybe 1,000 or 3,000 dollars.
Very little. And the first thing that I want you to know is that you should be making around $5,000. just for consummating the deal as in finding $5,000 is what you get paid up. Now, up front is really important because who wants to be in the game of real estate and say, “Hey, I’ll work today but I want to get paid in years.” You need to get paid now. The second thing that’s important is that when I buy single-family homes, I buy them underneath the median. I buy them with my specific system. Which by the way it’s in a book that you can get for free. You can download it. If you click the link or the one that’s popping up on the screen right now, you can get my book for free that will go into deep detail on this. What I want you understand is that you get paid 5 grand up front and then you’re getting 500 on average freedom dollars every single month.
Now, this $500 is really important because if you buy 10 homes and those 10 homes are each paying you 500 a month. 500 a month times 10, that’s $5,000. You might not be able to retire on $5,000. But guess what you can do? You can walk away from a job that’s paying less. And if you figured that out, dude then why not do 20 more why not do 100. Especially when I show you how you don’t need to access your own money to make this happen. The third thing though that you do need to understand is while there is upfront money, this money is along the way.
You just keep on getting it. There’s another kind of money that you get when you sell this home in 2 3, 4 or 5 years. And it’s tens of thousands of dollars. If you’re buying it buildings the median, I’m guessing for all intents and purposes. And I use this as an example sometimes. $30,000. It could be 50,000, it could be 80,000. It could be 20,000. But probably not less. And if you start adding the upfront money, the $6,000 on average that you’re getting every year and this money, you start making 50 to $100,000 on every deal that you do. And my friend, that’s that’s the part of this whole game that I want you to have an understanding for. Is that if you’re getting paid upfront along the way and at the end, then the cool thing is…
And here’s the secret: You can multiply this. You do 2 or 3 or 4 of these deals. And it’s… So your ROI, your return investment is so high that you’re going to start attracting a very special kind of people. These people are called partners. And a partner is an individual that says, “Hey, I’m into my career. But I’ve been saving up some money. I don’t want to learn what you’ve learned. Can we go in 50/50?” And this is when you hit the big time and this is when you can do. Right now, I can do as much real estate as I want. I have a goal of becoming a billionaire. I want to be a billionaire philanthropist the second half of my life. And right now, I’ve got assets growing like crazy.
But I followed the system to get started to recreate my financial independence. And then my partnering system which you’ll also learn about in the book is what has taken me from independence to true financial freedom. Did you know there’s a difference between those 2? Financial independence just means you got out of your job and you’ve replaced it. But financial freedom means that you’re now living the lifestyle that you want. So, living where you want, donating the way that you want, giving to charities the way you want. You know, being able to take the travel and the trips and vacations. It’s a very real byproduct of all the real estate investing that we’re talking about here. So, what I want to do right now is I want to share with you how you can get my book for free. I want to share with you what’s in it and first of all, it’s called Unstoppable.
It’s a brand new book. And it’s different than any my others. Because I took out all the fluff and I Shrunk it really small. I just can grab a drink here by my absolute favorite drink. If you ever come visit me, just bring me a six-pack of apple beer. It’s not beer but I got to tell you it’s really tasty and I know the carbonation is not good for me but… So.. So, here’s the deal on the book. It’s called Unstoppable. And what it does is it documents your custom journey to get a particular realistic game plan to go from nothing to millions.
And here’s what I want you to understand about that: Whether you are… Whether you would say you’re too young or too old, whether you would say I don’t have enough money or I don’t have any money, dude that doesn’t matter. In my matrix of the book, I actually show how all those combinations of people can get in the game of real estate. And dude, it if you come out to my live events which you very well might, you’re going to meet all sorts of people, successful investors that are out there crushing it and doing it.
Right now, the book is free. We’re going to do that for a period. All you got to do is click the link below, get your hands on a copy of the book. And it’ll even come with a consultation if you want. You can talk to remember my team and basically say, “Okay. I’m reading this book. I’m getting my custom game plan. I’m figuring out my next steps.” And having a member of my team contacting you it’s just to make sure you understand the book in its principles. And if you get stuck then we want to finish customizing the process so that you’re completely clear on exact steps you need to do to make your next million or your first million in real estate.
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Read MoreTax Tips for Retirees – TurboTax Tax Tip Video
user 0 Comments Tips for Retiree's
Hello, I’m Jeremy from TurboTax with some tax tips for retirees. Now that you are retired and enjoying life, the last thing on your mind is likely to be your federal income tax. But there are still ways you can minimize the amount you owe each year. It’s likely you receive monthly social security benefits. But did you know that it is possible for the IRS to tax some of those payments. This only happens if the other income you receive is too high. Generally, if all your other income plus 50 percent of your social security benefits exceed a certain threshold for your filing status then you will end up paying some tax on your benefits. If you do pay some income tax on those benefits, there are other things you can do to limit the impact of those taxes. One option is to find some tax-exempt investments to replace some of the taxable ones you own. This way you reduce your overall tax and can possibly keep your social security benefits in lower tax brackets. An example of this type of investment is state and local municipal bonds. The interest you earn on those bonds are exempt from federal tax.
And, in some cases it may also be exempt from state income tax. One other way to reduce your tax liability is by claiming the tax credit for the elderly and disabled. As long as you are at least 65 years old, file a joint return if married, and meet other income requirements it can be a valuable tax reduction tool. For more tax tips and guidance, visit TurboTax.com. .
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Read More7 Core Elements of Retirement Planning
user 0 Comments Retirement Planning
Everyone bill Lessman here for money evolution calm in today’s video I’m gonna be talking about what I call the seven core elements of retirement planning so if you’re somebody that wants to get more serious about the planning that you’re doing for retirement then I think you’re really going to enjoy this video now if you’ve watched any of my other videos maybe on my blog or my youtube channel or Facebook page then you probably have already heard me talk a little bit about some of these seven core elements individually what I plan to do in this video is really bring them all together really show how each of these seven core elements are all interrelated and hopefully at the end of this video you’re going to have some information to help you make some more well-informed decisions about your own retirement but real quick before I get into the presentation I wanted to draw your attention to a free guide that I put together it’s the seven core elements of retirement planning guide and in this I have all of the information or a lot of the information that I’m going to cover here in today’s video plus there’s some great worksheets that you can complete on your own to really help you get a good start towards putting together some of this planning for yourself so to get access to that guide I’m going to put a link right below this video if you click on that link it’ll take you to a page just put your email address in there and we’ll go ahead and send you out that guide I’ll wait here and I’ll see everyone back here as we get into presentation okay so welcome back so if you’re starting to do some planning for your retirement whether retirements may be coming up in the next year or two or even if retirements still a few years off into the future you probably realize already that there’s a lot of different aspects of your retirement and that’s what we’re gonna be talking about here so let’s take a look at these seven core elements so number one on the list is we need to understand how much your retirement could cost and what we call identify your gap the second thing on the list is we need to know where to save money obviously there’s lots of choices there’s Roth IRAs there’s 401k plans traditional accounts so we need to know where to save the money based on your own personal situation and your own individual tax situation we also need to talk about Social Security obviously that’s going to be a big component for many of you watching this video is when to collect Social Security how to coordinate your Social Security benefits with your spouse if you’re married so that’s very important health care that actually may be what I think is one of the most underestimated or overlooked retirement expenses that’s out there and there’s a lot of information that you need to understand about health care so we’re gonna talk about that a little bit here we also need to look at 401k plans so you might have a 401k you might have a 403b plan at work or some other employer sponsored retirement plans we need to know how to best take advantage of that 401k plan there’s a lot of features that a lot of people may not fully be aware of that could be inside your 401k plan so how to take advantage of that is certainly very important we need to create a plan for income so if you’ve been investing for your lifetime and while you’re working you were in what we call the retirement accumulation phase once you go into retirement we need to think differently we need to look at how to plan for withdrawals on your portfolio we need to look at things much much differently for that and then finally the last item on the list is investments choosing the investments that are gonna fit within your individual retirement plans and to help you achieve what your retirement goals are unfortunately this item here that we list as number seven on the list is oftentimes the one that people look at first in fact if you turn on the business channel you look at CNBC or you open up the Wall Street Journal or read pretty much any financial publication if you flip through the pages a lot of the discussion a lot of the advertisements are all pushing you towards certain investments they’re talking about returns and the performance of this fund versus that fund they’re talk about mutual funds they’re talking about annuities exchange-traded funds they may be talking about costs you know in looking at low-cost options and they would have you believe that really this is the most important thing that you need to be thinking about regarding your retirement and certainly the investments are absolutely very very important but we want to look at these investments after we’ve already addressed these other seven core elements and if we start here with investments a lot of times we can kind of get distracted we can get thrown off course a little bit because we really haven’t put into thought here how those investments are gonna fit within your your own individual retirement plan but once we’ve addressed those seven core elements and we start choosing investments now we have a clear vision for what we need those investments to do and what we want them to do to create your plan for income and to create the retirement lifestyle that you want so we’re gonna get into each one of these here in a little bit more detail and I’m gonna again start to show you how each one of these seven core elements are gonna be interrelated with one another okay so let’s start right here in the middle what we want to do here with this very first core element is we want to try to understand how much your retirement is going to cost or could cost and we also want to identify how much of a gap you have between where you want to be for those retirement goals versus where you are today and what I like to refer to here what I like to think about is begin with the end in mind so here’s your retirement and what I want you to do is start thinking about what it is that you think your retirement is going to look like for example what will your housing situation be do you plan to stay in your current house do you plan to downsize homes do you plan to spend winter someplace warm you also want to think about the things that you want to do in retirement so you can have a lot of free time you’re not gonna have to go to work anymore so think about the hobbies that you plan to do you plan to play golf every day or do you like to travel and start thinking about how much some of those expenses are going to be and you also want to look and see okay so basically what is your current situation how much are you saving for your retirement how much money do you already have saved for retirement and what we want to look at here and I think this is very important that a lot of people may tend to overlook essentially is that we have a trade-off basically we have our lifestyle that we have today versus that lifestyle that we want to have in retirement and if we think about this for a second here if we spend all of our money today we don’t save anything for retirement we’re gonna have a great lifestyle here today but that retirements not going to look very good contrary to that we could be saving a whole bunch of money for retirement putting away all kinds of money but that may be sacrificing that lifestyle that we have here today so I want you to think about that a little bit in terms of what are you trading off and I think there’s a lot of people because they haven’t maybe done some of these calculations they could be in a position where they’re saving almost too much money for the retirement they’re really sacrificing and giving up a lot of things today and there’s a couple of different categories of this there’s there’s things that of course we have our money that we’re saving so if we save more money today that’s less money that we can have for the future for that retirement but we also have time as well and so what I mean by that is we may be working ourselves putting all kinds of stress on our on our health on our situation by maybe working a whole bunch we’re saving a lot of money for retirement but we’re really sacrificing that quality of life here today and so be thinking about all of these different aspects not just the financial aspect of how much you’re saving but think about that think about like I said your health – and are you taking care of your yourself from a health standpoint as well because by the time we get to this retirement we want to have healthy bodies we want to be able to go out and do those things be able to play golf in and live that retirement lifestyle so again this is at the very center of these seven core elements and everything else is going to be interrelated to what this retirement gap is actually going to be and and how that’s going to affect that future retirement lifestyle okay so now that you’ve hopefully uncovered what this retirement gap is and you’ve really kind of gotten an idea of what your retirement cash flow is going to be and cash flow is something that we refer to a lot here on some of the videos that we do but really it is the lifeblood of not only your retirement situation but also your current financial situation it’s basically money coming in versus money going out and almost everything else on this list here is going to in some way or another affect cash flow the other thing that I want to talk about here before I start getting into each one of these seven core elements and a little bit more detail are taxes now when I created the seven more elements I thought a lot about how to include taxes should that be its own separate element and what I ultimately decided was that taxes are certainly very important and it’s a big part of what we do here in terms of some of our planning but what we’re going to talk about is we started looking at these seven core elements as we’re gonna look at how taxes are going to influence a lot of these different categories here okay so let’s start right off the bat and let’s talk about where to save money and obviously we have lots of choices we have Roth accounts like Roth IRAs you even have Roth’s 401k plans now and you have traditional accounts and and for retirement savings those are probably two of the most primary areas and basically that’s a big decision for a lot of us and what we really need to uncover is what is our tax situation likely going to be in the future versus what is that tax situation going to be today and again it goes right back here to this cash flow and understanding what those gaps are and what does our current situation today versus what is that situation going to be in the future so the Roth is going to be favorable if we think we’re going to be in a higher tax bracket in retirement than we are today and the traditional account is going to be more favorable if we think we’re going to be in a lower tax bracket in the future so we want to look at that the other thing we want to take a look at and I’ve actually got a entire video on our YouTube channel where I talk about this is investments for retirement in non retirement accounts and I go into a whole huge explanation as to why I think that is really just wasting a lot of money when it comes to to taxes there so again uncovering what those gaps are is going to help us to figure out where should we be saving money what’s going to be the most optimal for that future cash flow situation and for our current tax situation let’s look over here to Social Security again that’s going to be a very big component we could take Social Security benefits as early as age 62 or we could delay Social Security benefits to as late as age 70 and basically there’s a lot of decisions to make there again it’s going to come back to understanding that cash flow so there’s a lot of be out there talking about how to maximize social security benefits there’s even some calculators that you might be able to find out on the web what often times is missing from some of those calculators is how that decision as to when to collect Social Security is going to impact that cash flow situation and contrary how that’s going to affect your tax situation as well so we need to look at that and there’s also gonna be a coordination of benefits that you need to take into consideration if you’re married and you have a spouse because you might decide that one of you collects Social Security benefits early to get a little bit of cash flow coming in but maybe the other spouse is going to wait and delay those Social Security benefits whether or not you’re going to be working in retirement is also going to impact that and impact the potential taxes that you’re going to have on Social Security health care I talked about this here a few moments ago where health care I think is one of the most underestimated expenses in fact according to a recent survey or study by fidelity investments they determined that an average couple retiring this year that 65 years old could expect to spend two hundred and forty five thousand dollars on health care related costs over their retirement lifetime so that is a huge number a quarter of a million dollars just to cover and fund our health care and that does not include by the way any potential nursing home expenses or long-term care expenses so that’s a big deal we also need to consider health care for any of you that may be planning to retire before Medicare that starts at age 65 so you need to look at how your maybe employer benefits if you have any that are going to continue into retirement how that’s going to come into play or if you have to go out into the exchanges and go out into the Affordable Care Act in fact actually according to the Kaiser Family Foundation they put together some great research on this health care stuff but they actually said that a 64 year old couple could expect to spend about seventeen thousand dollars a year on their health care premiums for a policy that kicks in before Medicare starts and that still leaves them with about a sixty six hundred dollar out-of-pocket expense that they could have in addition to that $17,000 so that is by no means a top-of-the-line gold playing effect that’s actually a silver plan kind of in the middle there but you can see if you want to retire prior to age 65 that that can start to get pretty expensive the other thing here too again taxes are going to also influence your health care as well because your Medicare premiums are going to be largely dependent on what your taxable income what that adjustable gross income is for the year so the higher that is the more likely you are to be paying on your Medicare premium so again understanding that cash flow and understanding what that future cash flow is going to help you hopefully make some better decisions regarding healthcare as well your 401k plan is going to be another one of these seven core elements that you’re going to want to optimize unfortunately in my opinion I think a lot of 401k plans have really kind of watered down some of their investment options here over the last several years but there’s a couple of things that you can still do to hopefully optimize or maximize some of the benefits that you have on your 401k plan so one of those things is you can go all the way up to eighteen thousand dollars a year in contributions if you’re under 50 years old and if you’re 50 years old or older that number can be as high as twenty four thousand dollars a year and most people probably just understand that these are the limitations of the 401k plan but some 401k plans in fact more and more are offering this feature you may have access to an after-tax savings account within your company sponsored retirement plans and that could allow you to go all the way up to as much as fifty four thousand dollars a year in total retirement account contributions and that’s going to be a combination of your contributions plus any employer match that you might be getting can be as high as fifty four thousand dollars so that can allow you to extend even further some of the contributions that you’re making inside the 401k the other thing that a lot of 401k plans are offering now is something called a self-directed account and that is an option that you could have inside your 401k plan that could give you access to literally thousands of additional investment options that are not of the main 401k menu so again not every 401k plan is gonna have these features but you want to definitely look into it and see if that’s something now your self-directed account that may not be for everybody either because there’s going to be a little bit more research and a little bit more due diligence that you’re going to have to do on choosing investments but it could be a great option for somebody to get some additional resources in that 401k plan and then the last thing what will the second the last thing we want to talk about here are planning for income and again we talked about this a little bit earlier that you’re in a much different stage of life once you start going into retirement and you’re gonna start withdrawing or taking money out of some of these investment accounts and something we call the sequence of return starts to become a very important factor so if you think about it like this you know the market obviously is going to go up and down over time and when you are in the retirement accumulation stage of your investing as the market was maybe going through these these these motions as the market was maybe going down you were continuously hopefully making new investments into those accounts as the market was dropping and but the opposite happens though when you go into retirement if we go through a downturn and you’re withdrawing money out of those portfolios that’s going to have a very negative effect or can potentially have a very negative effect so we definitely need to take that into account but what we need to do before we do that is we need to understand what this cash flow is and understand where those gaps are so once we understand where those holes are in your financial plan and we know that in certain years you need to take a certain amount of money out of your retirement accounts then we can plan for that accordingly and sometimes what we do is we use what we call a bucket strategy and we just usually divide the portfolio into three buckets and we want to have some cash reserves maybe one to two years worth of cash needs in a very liquid very safe bucket so that when you do need to take money out you’re not having to withdraw money from volatile investments that could be invested in the stock market you also may want to have kind of this mid-range thing maybe three to four years or three to five years worth of money that’s in a my liquid bucket that’s still going to be on the more conservative side and maybe some of those investments are going to pay some dividends or some interest to help you refill that that first bucket and then finally over here is your long-term bucket and that’s gonna be investments that are gonna hopefully keep up with inflation provide you with some growth that hopefully if you’re in retirement for what could be 20 years or maybe 30 years in length that you’ve got some growth vehicles there but we want to think and break down this down so that you have a plan for income and keep in mind that if you don’t have a plan for income the government has one for you it’s called the required minimum distribution rules and so you may know that after you turn 70 and a half you need to start taking mandatory distributions every year from your IRA accounts in your 401k plans as part of this RMD so having your own plan is usually going to be better than reverting back to the government’s plan and then finally we talked about this earlier the last thing that we want to look at is the investments that we select and again once we’ve answered all of these other issues we’ve looked at the six other core elements then actually choosing the investments becomes pretty easy because now we know what investments are gonna fit into our buckets as an example which investments are going to be able to provide that income or those distribution needs which ones are going to be appropriate for your tax situation that are gonna you know help you you know plan for your Social Security your health care and all of that and then we can start looking at different investments that are going to fit into that retirement plan okay so there you have it those are the seven core elements of retirement planning and hopefully you’ve gotten some great information here out of watching the video here today and hopefully you’ve gotten a pretty good idea of how these seven core elements are all interrelated to each other and how making a decision about one item such as social security or healthcare or choosing investments why that doesn’t necessarily live in a vacuum and how maybe tweaking something over here might have an influence on something over there and so really bringing everything back to cash flow is really very critical so you understand how you know making a change in one category of your retirement planning you know might impact something else so again hopefully you’ve already downloaded the guide take your time look through some of the information in there we try to be very thorough with some of that we’ve got again some great worksheets that are gonna help you really get a good start on putting together some of these retirement plans and certainly think about what you want that retirement to look like also – for some of you you may want a little bit more help and of course we do that we offer a comprehensive cash flow based financial plan that can take a look at this and we will address not only your cash flow today but what that cash flow is likely to be in the future based on what you’re currently doing and we can also start to look at each one of these seven core elements and look at how each one of those is going to help you achieve those retirement goals and even if retirement still a little bit more often in the future if you’ve been saving money or maybe you’ve been putting off some of the planning that you’ve been doing again this is something that can help put you on a good track towards making you better well informed about getting retirement planning done
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Read More5 Easy Tips To Save Money Saving Hacks
user 0 Comments Tips for Retiree's
I’m going to do a video on 5 simple things you can do to help your financial situation and I realized that I need to do a follow-up to the retired at 40 story video because there’s a huge need for financial education in this country and really everywhere it pertains to every single person doesn’t matter what your financial status is you can always use help and there’s always little tip tips and tricks that and things that you can do to better your status it always amazes me how scared people are to talk about their finances to put something on paper to basically take a look at where their money is going what’s getting saved and how everything is getting spent and I’ve met people time and time again that are highly educated very smart people but they know nothing about finances and they are terrible with money management so before we get into the 5 tips I want to strongly urge you to make a financial statement for yourself figure out where your money is going currently and figure out how much you’re saving and basically figure out where you can trim the fat for so many people a financial statement or just finances in general is like a bad word they’re just terrified of it but the only way that you’re gonna be able to improve your finances is to face the music alright so now that you’ve had a chance to go through your financial statement you definitely know where your money is going but how can we save more and what you really need to aim for is about 6 months of reserves especially if you’re getting ready to invest money into something or if you’re doing some kind of career change or some life-changing thing
and all of these five tips will more than likely be a line-item on your financial statement so let’s go to financial tip number one hey I’m going to have to call you back I’m shooting a video right now so this first thing is something that we’ve all become very very accustomed to in the last 10 to 15 years and that is a cell phone and people tend to spend absurd amounts on their cell phones whether it’s the bill or the cell phone itself mainly the cell phone itself so that’s my first financial tip is shop on eBay or Amazon for a cell phone that’s refurbished or used or one this may be just a couple years old I actually just purchased a cell phone on ebay because I’m having trouble with my current one and I got on to my cell phone providers website and the most expensive phone that’s like mine now is $1,200 that’s insane to me so I got on eBay I found one that’s similar to the one I have right now it’s new but it’s a couple years old and I got it for less than $200 another thing that you can do is ask for some kind of loyalty benefit from your cell phone provider cell phone providers are constantly trying to earn your business and if you’ve been with them for a long time and you can convince them to keep you around by offering you some kind of benefit they’ll jump on the chance just by going into my provider recently I have a cell phone bill that was about a hundred and ten dollars a month I told them that I’ve been with them for close to 15 years they knocked it down to sixty-seven dollars and I have unlimited everything now tip number two is what I call going to youtube University or getting a YouTube education
we live in the most amazing time ever right now there is information everywhere and it’s so easily accessible don’t ever stop educating yourself it’s so easy to find out how to do things these days you’re doing yourself a huge disservice if you don’t take advantage of that so how does that pertain to saving money well you can save money by doing tons and tons of things yourself instead of paying someone else to do it just look at the platform that you’re watching right now for instance you’re watching a video on how to do something so that how-to can be anything from changing brake pads on your car to changing the oil on your car to fixing a leaky faucet or the toilet flapper not working on your toilet all the way to how to the meal which brings me to my next point number three so food is a necessity in life but is it a necessity to go out to eat or go to Starbucks once or twice or every day the amount of money that people spend on food and going out to eat fast food Starbucks McDonald’s it really adds up quick and I don’t think that people realize how much money they’re actually spending on it because it’s just five or six or seven dollars here and there but if you add that up over the course of a month or a year or five years or ten years I think the result would be pretty staggering cook your meals at home pack your lunch for work make that fancy coffee at home it’s not that tough to do there’s so many great ideas and resources on YouTube and Pinterest and vlogs and blogs this channel included if you need a place to start scroll through my channel I have lots of cooking videos if you want to take that a step farther you can start growing your own food and if you don’t have a big green house like this you can grow a lot of food just in five gallon buckets even on a little deck if you don’t know where to get started see tip two number four is something that really hits home for me because me and my wife are both self-employed and we have been for 15 plus years so number four is insurance and although I don’t like insurance companies because I think they’re a giant scam it’s a necessary evil and you can also use that to your advantage you can put them against each other insurance companies much like cell phone companies are begging for your business and they’re constantly trying to outdo each other with with certain benefits or promotions so make them put their money where their mouth is and put them up against each other constantly and not just insurance companies you can do this with all kinds of different companies you should always be price checking these companies the ball is in your court make them earn your business
all right I’d saved the best for last tip number five is taking advantage of bank account and credit card bonuses and this tip is begging for a separate video all on its own because I could go on about this for a long time but if you’re not taking advantage of credit card bonuses for sign ups or credit card cash back or travel miles or if you sign up for a bank account a lot of them will give you a large sum just for putting your money with them now I want to be clear I’m not promoting just going out and spending a bunch of money on a credit card but more putting the things that you already spend money on into the credit card it’s money that you’re spending anyways put your mortgage on a credit card if you can insurance is a good one it’s not super expensive but at least we’ll get you a couple hundred bucks on your credit card unless of course it’s health insurance and then you’re talking in my case thousand to twelve hundred dollars a month here’s another good one groceries it’s something that you always have to have and depending on how much you go to the grocery store it could add up to three or four hundred bucks a month sometimes six hundred maybe even more no-brainer here put your gas on a credit card you can always put your utilities on your credit card too if your utility company will allow it next from tip one your cell phone bill now depending on how much some of these are and if you are allowed to actually put them on your credit card you’re talking some pretty major money that you can get a bonus from if you’re getting two percent cashback that really adds up not only that but you’re increasing your credit score while you’re doing that so as long as you’re financially responsible and you pay this every month you’re reaping a large benefit a lot of credit cards will give you a 2% cashback
they’ll give you a $500 signup bonus that’s free money in my opinion the free bank bonuses or even better than the credit card in my opinion because the bank account is something that you have to have anyway a lot of them will give you $500 for a small deposit as long as you put your direct deposit with them all the way up to I’ve seen $1,000 before and if you have a little bit more money to play with some of the online money market accounts like Capital One will pay you up to 2% or some even up to 2.5% just for keeping your money with them so some of these things may not seem like it’s saving you a ton of money but when you take up those extra fives and tens and occasional hundreds and you put them to work for you as opposed to something that you’re normally spending you’re not only saving the money because you’re not spending it but you’re putting it to work and doing something else with it and you’ll find that your your finances will start to collect very quickly so if you found the video helpful and you enjoyed the content take a second to give me a thumbs up it really helps out the channel and it helps the YouTube algorithm get this video out to people who actually need to see it also don’t forget to subscribe we do some gardening some frugal living
some food preservation and cooking some gardening and you get to join me and my family on our retirement at the age of 40 after you’ve clicked subscribe click the bell notification also and it will notify you every time a new video comes out and it’ll keep you in the loop of the community all right I appreciate you sticking with me through this whole video so I’m gonna give you an extra bonus tip with an extra 100 or 200 or 300 or more dollars per month that you’re saving with just cutting back on a few things you take that extra money and you pay down debt with it the faster you get out of debt the closer you’re going to become to financial freedom
and whenever you’re paying off debt always choose the smallest balance first because it gives you that extra little boost and if you can pay it off faster it gives you that extra bit of confidence to rock into the next one so once you’ve paid down your smallest debt move on to your next smallest debt take that money that you’re saving from the smallest debt that you’re not having to pay any more and add it to the money you’re saving from the 5 tips that I’m giving you and apply it to the next smallest debt and when that one’s paid off you roll it into the next one you roll that one into the next one and so on and so on in the meantime this is retired at 40 check out these other helpful videos if you have a minute remember to live a life simple and we’ll catch you next week oh hey I’m gonna have to call you back and shooting a video right now this is right my god get out of debt
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How to Replace a $70,000 a Year Salary with Real Estate Investments and Rental Property
user 0 Comments Retire Wealthy Retirement Planning
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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When Require Legal action
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Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry’s standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.
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Insolvency Debt Collections
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Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry’s standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.
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Tips for Successful Debt Collection
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Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry’s standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.
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Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry’s standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.
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