U48 – Bashing the IRA, 401K ETC
0:02
I’ve talked to a lot of people over the years and I tried to be neutral many times.
0:06
And if I’m not, I explained that I’m not, so there are times when I talk about the individual retirement account type situations, IRAs, 401 K S, things like that.
0:18
And I’m doing this video because I’m really intending to to bash these things. All right, and I don’t, I’m doing this separately, so I’m not talking to someone individually.
0:27
I’m just gonna give you my opinion on these types of investment accounts.
0:32
Um, and so I’m gonna continue in my one-on-one consultations.
0:36
I’m still going to try to tell you that I’m biased, but I want to try to honor the purpose for which you decided to put your money aside in an IRA or a 401 K?
0:47
Because you’ve probably had some pretty good plans, and most of the time, I tell people, stick with your plan, unless you’re too young or OK.
0:55
So, that means if you have so many years, I don’t know how many that would be for you. It could be 10 years could be 15 years before you’re going to retire.
1:04
You may want to consider not putting, you know, committing so much to an IRA, and I think those days are coming to a close, but just let’s assume they’re not for the sake of this conversation here.
1:15
But, generally speaking, an IRA is a trick, It’s a trick, an individual retirement account, is not, I mean, I know the word investment is associated with the IRA, the 400 K when I say IRA, I mean all of them for one, K, all these 4, 3, B, whatever.
1:33
If someone else is making decisions about where that, that money, that you, that came from you? That came from your labor?
1:41
That came from your idea, OK? If someone else is making decisions about where to re-invest or invest or manage or how to manage that money, then it’s not really yours.
1:48
It’s not your investment. It’s someone else’s investment. Someone else is making those decisions based on whatever criteria. And chances are, it’s going to be for his or her own interests or the interests of an another institution. Not your family’s OK, that’s the, that’s the first thing.
2:01
But if you make a decision to set aside cash, you’re saving cash. You’re setting it aside in an economy that you’ve seen for the last, the last 40, or 50 or 60 years. You’ve witnessed this now.
2:12
If you’re 30 years old, you can you have a chance to go back and look in in the seventies and sixties, through history, you can see what’s happened in 60 years. I don’t care for 30, You can still see what’s going on for the last 60 years.
2:24
So the IRA is this concept that you can put money aside and save it for retirement.
2:33
Your assumes you’re gonna get a certain return on the money, and you just have to know that.
2:40
I mean, you can go look and check the numbers yourself, but you’re pretty much getting negative return. You’re pretty much giving money away.
2:45
Not only that, You’re missing opportunities. So, for example, if if you’re gonna get, let’s say you’re gonna get 12% of a year, which is outrageous. No, one’s getting 12% a year on an IRA, I don’t think correct me if I’m wrong.
3:00
Um, that’s nothing compared to what you could get on your own, including making mistakes.
3:06
I can tell you, my friends can tell you, that we could take 10 grand, 50 grand, and we can put it somewhere.
3:14
We’ve done this before, we, we’ve lost it, OK, and then, we go and figure out how to get another 50 grand, or 25 grand, and we put that somewhere else, and we make a million bucks out of it.
3:23
Or, we make 500,000 out of it, and we do that again, and we keep doing that again, and you have all these chances to keep doing this, and so you just have to use traditional principles, alright? Don’t invest the rent money, right? Use other people’s money.
3:39
Use other people’s resources, joint ventures, you know, these are traditional principles that you’ll want to follow, and it’s exciting, and yeah, it takes them learning. And it’s, sometimes you lose sleep over it. Especially when you’re new at it. You know, you think the world is over.
3:56
If you, if you lost money, then, maybe hopefully in a few months, you look back and you decided that that was your tuition, all right, that’s what we call it. If you lose money in something that’s your tuition, but I would much rather have the freedom of using my own money.
4:11
And I think most entrepreneurs, and people who become investors would want the freedom of using their own money and not solely for the purpose of putting their money aside For a tax benefit way, way, way down the road.
4:22
Who knows if you’re gonna live that long, right?
4:24
So, it’s just, it’s a trick.
4:26
It’s a way to get you to have less cash, set it aside, and keep it out of play, right?
4:36
Not only are you keeping it out at play, but the people behind the IRA scheme, as I call it, are using your money for their own purposes.
4:46
Where you are thinking, you’re told, this is for your retirement. This is a responsible thing to do. My dad would say, that is the responsible thing to do. Put money aside for your retirement.
4:56
And I remember in, gosh, I think I was, I think it was 20 years old, and I had this job, as it tell it, credit, and it was a Division of Equifax. I think it ultimately became, but anyways, it was kind of like a risk management insurance type industry.
5:12
And I was promoted, and I went to the orientation for all the new full-time employees, and I was the youngest guy in the room with Alzheimer’s like 20 I think everyone’s like 35 or something like that and there’s like eight of us and we’re being told about all these different things we can get into like life insurance and IRAs and all this stuff, and even then, I didn’t even have a clue back then. But I just knew, I’m not going to let these tools use my money for anything. I don’t care what you promised me. I would rather give my whole check, and it’s I’ll just barely let you take out Social Security. I didn’t know how to, you know, get out get around that back, then.
5:44
And I remember after the meeting, I felt really out of place at the meeting because I was I kept being presented with these contracts. The sign-up sign here, sign here. And they were sending all these documents out on this big boardroom table. And I would just not do, I would just read them, and I go, yeah, I’m not going to do that.
6:00
And when the person conducting the orientation realized I was participating, like everyone else was, she started focusing on me and asking me, Hey, are you sure? John? Don’t you want to you know, consider this? It’s going to be a good thing, And I was like, no, thanks, I’m fine. I just want to get my paycheck, and I could decide what to do from there.
6:19
I’ll figure it out, and I went back, I remember it was like a four hour orientation.
6:23
I went back to my, um, my area and my boss called me in her office.
6:28
And, apparently, the person doing the orientation had called her now. My boss is great. I love her. She just did a great job, she’s one of my favorite people to work with, and so, I really respected her. So, she called me in the office.
6:38
And she said, You know, Joan, these things are for, you know, she was 20 years older than me, too, and so she’s trying to tell me, just like. my parents would tell me. You know, Do these things and sign up for this life insurance and all this, which, I’m not saying, life, interest is a bad thing but when you’re 20, You’re invincible right. So, what who cares about life insurance. When you have no dependents or anything like that? So as she tried to get me into it too, and she meant, well, she meant well, but I never did that. So, I just remember that. And I, you know, since then, I’ve never really gotten into the stock market. I never have actually gotten to the stock market ever bought stock. I feel like that’s gambling always did. I always knew there was something wrong with it. Now, don’t get me wrong. People have made lots of money in the stock market, and you can certainly make lots of money in the stock market. It just takes a certain knowledge base.
7:16
For me, for myself, I would just rather develop a knowledge base that I found more challenging and interesting, which involves joint venturing, taking my cash or trying to get someone else to use his cash for my idea. And just, it’s a lot of fun. I mean, use my cash for someone else’s idea. Joint venture. Take my knowledge base to a contract. You know, I’ve just found that to be a lot more rewarding over the years. So back to bashing IRAs. Again, an IRA is someone else’s investment. Your funding, it, that does not make you the investor. Whoever decides what is being purchased with the IRAs is the investor.
7:55
Usually it’s an institution, OK, these evil ones, you’ve been even lighting all these years. You’ve been not logging, I should say, used to be. You’d be criticizing all these years OK for causing the financial collapse or witnessing right now. These are the creatures that have been using your IRA money.
8:13
The IRA Pension Fund idea, that’s worldwide, OK.
8:17
And it’s similar in all the countries So let me just point something out to you.
8:24
You guys talked about the mortgage foreclosure crisis.
8:27
We’ve had a series of those, there was a big one I think it was in 2008, 2009.
8:35
What’s behind that?
8:37
Well, what do you have? Here are the players.
8:39
You have pension funds, the largest collections of people’s wealth. Let’s call it cash, billions and billions of dollars, hundreds of billions of dollars.
8:48
That’s being set aside by consumers that work, that they are productive, it’s being set aside all over the world in different countries for those individuals’ retirement.
8:59
Well, it’s being parked so that they don’t get to use it.
9:02
But the bankers are using it because the bankers tricked everyone into setting aside their money for an investment that’s not an investment for a tax benefit that might come 40 years from now maybe.
9:16
So, if you’re a pension fund manager, that’s managing $27 billion or one point five billion dollars, you’re a prospect for investing in funds that are making money, right?
9:30
You’re the fund manager, let’s say, or your firm is the fund manager for all these pension funds, IRAs, whatever they call them in Ireland and England. I don’t know, they have all these different IRA type, you know, retirement accounts.
9:42
So, someone is managing those funds.
9:44
And that someone is accountable, and he has to make decisions about where to spend that money. He has to take those pension fund, that pension fund account, that money, and he has to allocate it into assets.
9:55
Well, if an organization, let’s say Wall Street over there and America, is creating has created a return on investment that’s higher, gives more yield than most other investments as a pension fund manager in the United States and other countries. It behooves you to take your pension money and put it in that fund.
10:21
Because if you don’t, you might get fired.
10:25
Makes sense, right?
10:26
So, Wall Street sets all this up, creates this world where in which pension fund managers around the world have to get into it well, in order for Wall Street to get other governments to let Wall Street offers securities offers come into those countries. Those governments have to approve it. Well, What’s in it for those governments to approve it? Well, they got tax money, all this stuff, right?
10:51
Well, the other part of it is that if governments are going to let a foreign government business organization come into in a highly regulated financial market, let them come into their country.
11:02
They’re going to say, well, if you’re going to let you come in here and get a piece of the action here, you’re going to make good on it.
11:10
You are going to pay, if we’re gonna let you do that, oh, and by the way, we want a piece of the action, which they get, right.
11:17
So, the Wall Street funds are sold two foreign pension funds.
11:24
So, the foreign pension funds buy into the Wall Street funds, they have to mortgage backed securities, asset backed securities, they have to, your IRA has two.
11:33
This is, I’m talking from the, really, from the seventies, but seventies, eighties, nineties, 2000 up to 2010 or so, start changing.
11:42
So now you’re in there, right?
11:44
So now what’s all this money is, all these pension funds are invested in this fake market, mortgage backed securities, or whatever, this consumer stuff.
11:53
Consumer debt really, um, it can be stolen, poof.
11:59
As it has happened so many times, right?
12:02
This is what they did.
12:04
The mortgages.
12:06
We’re used to steal pools of money where they couldn’t have done it without the pools of money.
12:10
You have to promise somebody something that he thinks is valuable before he’ll make that financial decision, right, Which they did retirement.
12:18
Yeah, it’s the right thing to do, and this thing will get you’ll get out of it.
12:22
And so, you will then put your money aside, then that money can then be accessed by the people, the same people. That sold you on the idea of putting your money aside. You see how this works?
12:32
So you take your money out of play, the evil people that convince you of doing that, are playing with your money.
12:38
And, yeah, they’re going to steal it.
12:41
So, the IRA, it’s just a mechanism that was part of the mortgage backed Security scam, crisis, whatever you wanna call it.
12:51
There’s another segment of the market called Asset backed Security. You guys can look this up, asset backed security, basically, is consumer debt.
12:57
Mortgage backed securities is a specific kind of consumer debt which is secured, secured debt, and so, in order for Wall Street to promise this, yeah, we’ll make good on it.
13:08
They had to make arrangements with our court system here in the United States, and I’m not talking about other countries.
13:12
I’m just saying, as it turns out here, the mortgages, the instruments, themselves, are fraudulent, the whole market is, it’s all fake, There’s no money out there.
13:25
There’s just labor, there’s just people that actually work in the real world, and so, we can speculate on that. In order to do that, we have to create all these documents, which is what the game was bought. To make good on it, you actually have to take the property. so when you when you rob the pension fund, or when you you create an economic situation, that causes the foreclosures that’s in fact, that’s what happened.
13:43
They created a market situation, the bankers, creating economic situations that cause foreclosures, OK?
13:52
The courts have to be on board with this, and the courts have to agree to, uh, honor, the mortgage instrument, whether it’s fake or not, whether it can be proven, valid, or not, they are going to allow the mortgage holder, whoever claims to be the lender.
14:12
They’re going to allow him to foreclose no matter what.
14:15
And I can tell you firsthand, I’ve had cases where we caught them.
14:18
We caught red handed and they just ignored us and went on and took the house.
14:25
So this is me bashing, IRAs.
14:28
IRAs are a way to make consumers chumps so that the other evenness that we all like to criticize can be carried out.
14:38
So we’re criticizing something that we’re participating in.
14:41
That’s what your IRA is doing.
14:46
Um, yeah, so let’s see.
14:50
The time value of money.
14:52
If you just set aside money, and this is what I figured when I was 20, I didn’t know exactly how I was going to do this.
14:58
But I figured, If I’m, if I would normally contribute $150 a month, let’s say, to some of these funds, and I paid myself $150 a month, I think I could make a lot more money than the fund could ever promised me or ever even come out to be, right? I just thinks, I just thought that. And I did, It actually worked out that way. I didn’t have any plans.
15:17
I just figured, well, OK, maybe it might take me some work. Or whatever, some new learning and I’ll figure it out. So, I kinda did that, and I really, to this day, I believe that you can make a lot of money. Like, you could pick a 10 year period.
15:30
Let’s say you just goof around here at 35. You don’t even take finances, seriously. And then, when you’re 35, you say, OK, I’ve learned enough, I’ve looked around, I have some experience here.
15:38
I know some people, I’m going to start trying to build something and my goal is to create a cash flow for myself that equals cash flow that triples what I need to live on.
15:50
This is very easy to do.
15:52
Let’s say I need $4000 a month to live on.
15:55
I can easily create $12,000 a month with the same effort, as it takes me to get $4000.
16:03
Does that appeal to you over saving money for a whole career lifetime, Just to get a tax break in a pension fund that someone else’s You’re the chomp, and someone else is using your money for whatever crimes they want to commit.
16:16
Just because you lack knowledge, well, you lack knowledge about the IRA.
16:20
But you went in that direction. You don’t know what the sinister underbelly is of the IRA industry or whatever. But you went into it? You, you bought into it, right?
16:29
Well, I didn’t know, I didn’t know anything about being doing joint ventures and being an entrepreneur.
16:35
Now, I do, and it wasn’t until I was in my thirties that I started making the money I want, you know, so, uh, here’s a couple of rules to follow.
16:45
Don’t make decisions, financial decisions, for the sole benefit of a tax, a tax break.
16:51
Generally, that’s not a good idea. I mean, you gotta run into problems.
16:57
If there’s something that you can get a tax benefit from in the matter of doing some other deal, by all means, do it and give it the tax break.
17:08
Just the same, If there’s a way to get a higher return on capital or do some venture and make money with your money or make your money work for you. And it costs you in taxes.
17:19
Do it anyways because your ultimate goal, your priority, should be a return on capital, not avoiding taxes, it’s just like this example.
17:27
If I’m going to start a business somewhere, let’s say I want to, let’s say I wanna open a donut shop.
17:32
I’m not going to have a conversation with my investors and my suppliers, and my employees, and say, OK, guys, I’m opening a donut shop, and our first objective is to reduce expenses.
17:43
That’s ludicrous.
17:47
You understand that?
17:48
So a business or an investment, is to make money return on capital.
17:55
If I can have a tax break fine, But that’s by this, by the way, if I can do that.
18:03
All right, So, there are a couple exceptions.
18:07
I like to respect the decision that you made to get the IRA because, you know, you had a family discussion and probably, or there was a good reason.
18:16
There’s nothing wrong with that.
18:17
But just know that you’re missing opportunities. The longer you keep money set aside for a tax benefit, which is years down the road, you’re missing many, many opportunities, but maybe that doesn’t matter If your net worth is so high.
18:29
Maybe your net worth is so high.
18:31
Maybe you’re been putting money aside, but you’ve been also smart about being an entrepreneur, maybe you invested in some real estate, maybe did these other things, right. So no problem.
18:41
You’re gonna not even not even gonna miss it, like, for myself.
18:44
Um, I probably, I think, I think I paid about 2.25 into social security.
18:49
Was it 9, 9 years, something like that? I filed returns for nine years, I think. So I had withholding for about nine years in my entire life.
18:56
So, I don’t know. Maybe I qualify for $150 a month in social security when I finally retire, maybe in 20 years or whatever. When I reach that age and 20 years or so, No, I don’t care. I’m never gonna ask that money. I think it’s blood money, and that’s just my personal view on it, and they can have it. I don’t want it.
19:14
So, I’m not going to miss that. And, same with no IRA money. I don’t have any that I never did want it. I’ve.
19:22
I’ve done pretty well avoiding all those things.
19:25
So that would be the only exception, though, if you’re very close, and this is kind of fluid. It depends on what you think very close to retirement age means to you.
19:33
If you’re pretty close to retirement age a few years, within five years, let’s say, I would say, don’t change anything. Just go with the plan that you started 30 years ago.
19:44
The other, there’s a couple other things that go on to some employers they weren’t doing, I don’t know if they do this too much anymore, but they were matching funds.
19:51
So that’s almost like free money that you pretty kinda can’t ignore. But still, it’s 100% on your money, which is pretty good.
19:59
But what’s the guarantee that you’re gonna get it?
20:01
So that’s kinda too good to pass up, though, and I’ve recommended that people over the years just keep it, just keep that matching funds, then going, grow your IRA. Keep in mind that maybe at some point, you can borrow money out of your IRA and use it for investing. So try to try to think of something like that if you can do that.
20:16
So anyways, That’s my, uh, bashing session on IRAs.
20:22
I will try to be neutral when I talk with you individually, but um, really, I just think you shouldn’t be in IRAs. It’s just another way to steal your money.
20:33
Thanks for listening.