We often feel an urgency to start saving for retirement at a young age. “Start saving in your qualified plan (401k) now or you won’t have enough money for retirement!” Maybe we should change our thinking and accept that the economy is changing, and what worked for our parents and grandparents might not necessarily work in this developing economy. Join Daniel Ameduri, of Future Money Trends, and WTR as we discuss why having a passive income could be what you need for building wealth and living the life you thought was merely an illusion, and what you can achieve if you adapt to living in the present.

Ingenious tactics to accumulate wealth, for people who see things differently.

Daniel Ameduri

Website:https://www.futuremoneytrends.com/

Facebook:https://www.facebook.com/FutureMoneyTrends/

Twitter:https://twitter.com/FutureMoneyTren

YouTube:https://www.youtube.com/user/FutureMoneyTrends

Notes:

• Kevin: Daniel is the author of the new book “Don’t Save for Retirement” and the founder of Future Money Trends
• Clearly, you tend to think outside of the box. What inspired you to get to where you are today?
• Daniel: I’ve always had a fascination with money
• Unfortunately, when you make a lot of money in a bubble when you’re young, you’re destined for a blowup which happened to me
• Kevin: Robert Kiyosaki says “The poor way of thinking is ‘I can’t afford that’, whereas the wealthy way of thinking is ‘How can I afford that?'”
• Daniel: The biggest thing that you can to cut spending is moving (either out of state, out of the country, or to another part of the state you reside it)
  • Can reduce the expenses by about 50%
  • Buying for cash flow instead of buying for appreciation

• Most retirement savers are just speculating and hoping things go up, but my book focuses on how you can rethink that
  • If it doesn’t bring you a check don’t buy it
• Kevin: I find it interesting in you saying not saving for retirement because typically, when people are talking about money in terms of retirement, people say they’re going to save for retirement and put money into their retirement savings account, which usually is a 401K or another IRA
• We make a distinction when we talk about money where you have two tanks for money
  • Investment tank that has risk (you could lose money)
  • Savings tank that is relatively safe
  • If you put your money in a 401K or an IRA, it’s in a mutual fund and in the market, meaning it has risk (not a savings account)
• Daniel: So many people don’t know what they’re invested in and they continue to hope that it pays off
• It’s time to start asking ‘Is this even working?’
• According to VanGuard, the median account holder who is 65+ with a 401K is only $58,000
• Kevin: How could you survive with $58,000? For most people, that would get them by living a minimal life for approximately 2 years or so
• Daniel: It is very minimal. Perhaps they’re dependent on social security now
• You wonder what the lost opportunity was that they had just bought something that would pay them a dividend or pay them a yield, let’s say whether they’re investing in real estate or maybe they want to buy a single family home
• Kevin: I’m assuming that you would invest those dividends back in maybe to another property or expanding into other investments?
• Daniel: It depends what stage of the game you’re at
  • If you’re young and you have great active income then go for it
  • Later in life you may decide you want to use half of the passive income to pay for your vacation, your bills, your house, a change in career, etc.
• Kevin: So in terms of passive income, investing in two things that deliver a check to your mailbox or into your account, are there other options that are useful other than passive income from real estate?
• Daniel: The easiest ones are private RIETs; private equities tend to do better than public
  • There’s a 30% markup on public traded stocks because you have that market pricing where you can sell it anytime, but those RIETs might only pay 7%
    • With public RIETs, do you want to own some house or rental property that’s a C+/B+ property? The advantage is that you have the leverage, but if you’re not leveraged, owning private RIETs mean you’re upgrading your assets when you get involved with these types of investments
  • You can get a private equity RIET, where most of the institutional money is, along with wealthy investors and insurance company banks, which you could get a 10-12% rate, but if you want to sell it, it would take 30-90 days (considered to be only for the rich and happy)
    • Thanks to crowd funding, there are plenty of non-accreditive investor options (ex: FundRise, RealtyMogul)
• In the end, you want to be like Warren Buffett: The number one rule is don’t lose money, rule number two is to not forget about rule number one
  • If you look at how the middle class and the poor invest, they speculate and hope things go up
  • The rich are already rich (focused on preservation and cash flow, not worried about how to get rich overnight)
• People accept the financial world and conventionalism for what it is, but keep in mind all of this is new (retirement savings, 401K plans, stock markets, a currency not backed by commodities except for the last 50 years of the world)
• Focus on simplifying your life – focus on things that bring checks to your mailbox, and you can either take that check and compound it back into that investment or another one, or you can take that check and spend it
• Kevin: Right, you have options
• People don’t always plan for major expenses. You’ll need access to money right away, and if you don’t, that’s a problem
• Daniel: And for those of you who are younger out there, don’t speculate what the income tax is going to be in the future (today, the federal income tax is as low as it was since 1931), because taxes will just continue to rise due to the significant debt we are in
• Kevin: The average tax bracket since 1913 has been about an average of 58%. For years, it was well above 70%, and we have a lot more debt now than we did back then
• Every single person my brother and I have had come to our office, we ask them where they think taxes will go in the future, and every single person says that they will go up
• If you’re younger, your tax bracket is probably low (less than 20%), and you’re putting your money into your 401K. Then, what happens when you get out to retirement, tax rates went back up to let’s say 58%,and  now you’re paying 58% of what you could’ve when you were at 20%, which sounds like a loss to me
• Daniel: It totally is. There also is the huge opportunity cost there. You could’ve put money toward something else/another investment
• Why would you put money into something where you call it your money, but if you make a withdrawal, you pay a 10% penalty? That’s ridiculous.
• Kevin: Right, it’s a government controlled entity. It’s not your retirement savings account, it’s the government’s
  • They decide all of the rules and regulations (what you can do, how much you can take out, when you can take it out, and if you’re not taking it out that you need to so they can start collecting their taxes)
• Daniel: Right now is a great opportunity for Millennials or Gen X’s, because the economy is changing and there’s so much change coming in the freelance economy, and this is a great opportunity to sell your skills online
  • The good times are coming and they’re here, but people need to embrace them
  • Some people are failing because they’re so focused on what worked in the past into the present economy and it’s not working
• Kevin: We all want to learn from the past, but times change, everything has changed (ex: technology)
• Daniel: Most college graduates aren’t even working in a job that meet the college degree
  • 46% of college graduates are not even in a job that requires a college degree
  • 50-60% of college graduates got a degree in something they don’t currently work in
    • People need to embrace adapting
    • If you want to start a great business, start giving your services for free to the clients that you most desire to have (could be your referrals one day)
• Kevin: Instead of looking to rely on someone else to maybe someday do something for you, the people who become wealthy are self-made
• Daniel: They are self-made in the sense that they chose to become rich, but all wealthy people need advisors and mentors
• No matter where you are in life or what country you reside in, you have to make this decision that you’re going to attract these types of things into your life to achieve success
• Kevin: Instead of just saying ‘This is what I have to do’ and sticking to that, think ‘I want something else, how can I get there?’
• Daniel: The fact that people who are listening to a show like this already means they’re open minded to actually stepping outside of the rat-race
• Most people will just live, passing time until death (scared to go out of the norm because we somehow tend to think we’ll be hurt by it)
  • The norm is actually the thing that will hurt you
• You only get one shot at life, don’t be scared to move and be mobile
  • Many opportunities exist in different countries and regions of the U.S. (be willing to explore)
• Kevin: The ability to be mobile due to technology (as long as they’re producing well, doesn’t matter where they are located)
• Daniel: We’re so hardwired in to an immobile society that we don’t embrace all of the opportunities (mimicking the 1950s lifestyle)
• You don’t have to be a millionaire to be happy
• Kevin: As people start to learn, they start to give back and open other people’s eyes
  • One of the reasons for developing this podcast
• Daniel: I don’t have a college degree, I was broke 11 years ago (being successful is very do-able)
• Kevin: Can you give a couple other examples of what has worked for you?
• Daniel: To this day, I’ve only done owner-seller financing deals
• You have to go out there and look
  • When I bought houses, I bought houses that no one else wanted to buy
  • Find things that you’re passionate about and invest in things you’re interested in
  • If you have a job and like it, then stay with your job and still build a passive income (become a great investor)
• A lot of these things we’re scared of (ex: health care insurance) is very easy to get (private nonprofit institutions rather than government
• If you’re going to re-allocate capital into investments, start thinking about bringing that income in, and stop thinking about doing everything that your neighbor is doing
• Kevin: That is good advice: To get out of the box and start thinking differently about what you want to accomplish and finding a way to get there
• Daniel: For you listeners, we have a page set up at futuremoneytrends.com/save where you can read an intro to my book and the first chapter, and you can receive my weekly digest that states everything my wife and I did and what we’re doing right now
• Kevin: What should our listeners look to avoid doing and something they can do about that?
• Daniel: Never be in a hurry to buy anything
  • If you feel rushed to buy an investment, you are going to lose money with certainty
  • Often times doing nothing is better than doing something

The post WTR Discussion With Daniel Ameduri, Stop “Saving” for Retirement appeared first on WTR Podcast Website.