Sometimes on my first watch I'll pause the video after the short intro and say out loud "Brian IIII am so excited" and then I hit play to see if Bo copies me. Nobody believes me when I say I haven't watched the video before.
Thank you for addressing life insurance. I’ve sold insurance for nearly 15 years and I’m sick of these social media agents pushing this garbage that life insurance is an investment.
as someone who has been advising people on their finances for close to 40 years and made my own share of mistakes I have to say I have seen nobody on the internet who comes close to these guys. Listen to them. PS: I retired at age 63 and I do not need a side Hustle
Awesome man! I'm a senior is Highschool right now. Wanting to get an accounting degree, CPA and CFA. I want to be a financial advisor or work for a company like fidelity. I have $3,000 invested right now, mostly into the S&P 500, a little bit international and a little in some bluechip companies like PG. I've read books, One up on wallstreet, the psychology of money, and the big short. Currently reading the intelligent investor. I don't really know why I'm saying all of this, but I will be like you someday I promise!
Good for you! I'm hoping your clients are in the same boat (to the extent they actually follow your advice of course) ;) Re Side Hustle: What do you do to keep from going stir crazy?
@@JohnPaul-yh8ld If you know you are going for the CPA (and still know this in a few years) I would recommend for you to push as hard as possible early in college so you only have major specific courses in later years. Government and NFP is killer. If possible then you may even be able to find the free time in your final semester to take a CPA exam (might depend on state but I was only allowed to take one during school and before showing my degree (IL)). I took advantage of this last year with BEC. Plan early and often. You'd be shocked the amount of people hoping for CPA that I just graduated with that had no plan for the CPA exam, no idea what it took to study for it (currently studying ATM), and worst of all, couldn't use Excel or any kind of spreadsheet apks
@@JohnPaul-yh8ld I am proud of you! First of all, you are looking toward a career that is in demand and will pay well. Too many people your age major in things that will NOT lead to jobs. Secondly, investing early (especially in the S&P). I recommend not buying individual companies - it is nearly impossible to predict which ones will outperform the market. In fact, 80% of professionally managed funds underperform the S&P500 - and these are trained professionals who do this all day every day! you might want to diversify by having some in the Nasdaq, some in a good midcap fund, and some in a good small cap fund. I have some international funds for 10 years and finally got rid of them, as US equities almost always outperform. I know that is not conventional wisdom, but the numbers did not add up. (do your own research). also, I recommend ignoring people who say to put bonds in your portfolio - the market will consistently beat bonds by a LOT! But do your own research! Also, Fidelity is a good company. I hope it works out for you! Sounds like you are a young person who uses his head!
A coworker of mine bought an investment property. His first tennant moved in and squatted there destroying the property while awaiting eviction. He spent 30k fixing the property with little chance of recouping his loses from the tennant. Not every tennant is going to do that. Ive been renting for years with almost no issues. Sometimes i forget to send my rent in on time. One time the post office ate my rent check, it was returned 3 weeks after it was due with a huge chunk of the envelope missing.
No kidding. I used to rent a house out and it's a huge pain even when you pay someone to manage it. Decided to just up and sell it and not deal with the headaches.
Yeah and most of these guru's have only entered the market after the latest downturn. I'm interested to see how leveraged they are once a downturn happens.
Been there, we had a rental in Vegas from 1996 to 2018. You have to treat this as a part time job. You will need money, credit and nerves to make it happen. Many people lost out in 2008, but we hung on and now fully invested in equities. We sleep better at night.
One of the many things I like about Brian and Bo's work is that they will laugh a bit at the absurd financial advice given online and then turn it into an opportunity to educate us on how to achieve our goals in a better way.
@mrjuvy49 I told them no. I said, "That's how people get in trouble." They said."Well, most people take it out to pay off their debt." They were shocked when I said I had no other debt.
If everyone has 40 houses, who is going to live in them? It's not possible to replicate this for every single individual because there isn't 40 units of housing per person to buy.
We invest in apartments (partial ownership of 28 complexes or abut 4K units). The occupancy runs around 90%. There are plenty of families that need a place to live. Sadly, 57% of Americans do not have $1000.
You should link part one in your description... UA-cam suggested part 2 but I want to see part one. 30 seconds for you would save 30 seconds for me... And anyone else who gets served part 2 first
18:04 my favourite thing i learned this week. A distributor that I know, had bought a kebab shop. As he was sick of paying out money for dinners and drinks for lunches and dinner meetings. So he grabbed a cheap spot, got a cheap refurb, with extra for some rooms at the back. Got a guy that runs several existing shops, to manage the shop, on a base and share rate.
Saying that term life insurance involves throwing your money away because you don't get anything back when you survive the insured term is like saying that you're throwing your money away each year by insuring your house to find that it didn't burn down.
I have been an account and tax advisor for more than 20 years. I am shocked that those UA-camrs advertising these deductibles are not fined by IRS. Key word for clothes if you can wear anywhere else besides work YOU CANT DEDUCT THEM. Clear and simple. It has to be a uniform and gear that you can’t wear anywhere else
If you write stuff off that comes out of your profits. You lose that money and the time invested. You never want to write stuff off because it means you worked twice for nothing.
On a several occasions, I have gotten a cash-back refi (not a HELOC) on an investment property. It is like a tax free cash infusion to invest elsewhere. BTW, I also have a couple chainsaws.
I know a lot of BRRRR landlords. They have been stressed out the last 5 years. I only have debt on my primary. I have so much less stress even though I have a lot less properties. However, my cash flows are amazing. We did just use a heloc to fund our newest rental. However it was less than half our heloc and instead of paying down the mortgage we will now focus 2-4k a month in paying down that heloc. Worst case in a year when the interest rates fall and the rental is seasoned I can get a mortgage on the newest rental but I don't think I will.
@@motofreak2772 Mortgages take too long for me to do as my finances are complex. Especially on an investment property. I would rather get the mortgage next year when I don't have to worry about the time crunch. Plus with the investment bump in interest the rates would be similar. Next, after a year I can get a mortgage based on value instead of price. Finally the HELOC is interest only so it is more flexible. OOh and the house needed some work so banks might not even give it.
A tax write-off only benefits you at the marginal tax rate... ABOVE your deduction. So while your rate might be 30%, you'll get even less than that in most cases. It's different if you have millions+ in revenue, but for your everyday person, it's pure nonsense.
Love the Ferrari tax write off. What a great idea, lets spend $1 million to lower my tax rate on $50k income. I guess the next tax year is can write off the debit and repossession of the Ferrari . 🤣
If people want to watch more videos about lies on social media for avoiding taxes, watch Jasmine DiLucci. She is a JD and CPA and discuss the actual court rulings on all these ideas influencers think are new. Her channel is basically a bigger version of the first 20 minutes of this video.
I BRRR not BRRRR: I use my income to buy the next one, never leverage my current investments. If I can't afford it, it's not time for the next one. Slower but safer.
Taxes are incredibly complicated. But for some people, having a business entity does makes sense. I'm a long-haul trucker, and there are a lot of tax advantages I can utilize as an owner operator but not a company driver. Per diem will get me about $20,000 deduction this year. But anything that's a deduction, has to be for the business. A reasonable business expense. Although there's one lady I've read about who got audited for a million dollar yacht and won the case because she used it to show properties in the bay area. Wild.😂
Abbot and Costello got in trouble with the IRS. One of the issues that they were charged with was deducting their clothing as a business expense. If the clothing can be worn in everyday life, it is not deductible. If it had a big Abbot and Costello logo, for example, it MIGHT have been deductible. Everyday suits, no.
Insurance? Better scenario... you own 100 rent houses. 12 are empty due to turnover renovation, 5 are waiting to be rented, 3 have squatters who have filed lawsuits against you, 18 are behind on rent, 7 need some work done but you can't find good subcontractors, and you're working a day job to cover the missing mortgage payments. "But its passive income!"
My idiot brother jumped into the real estate market in 2007. “Hey, market is hot! How can I lose!” Had sold his house and taken all the equity and bought three townhomes. Lost all three.🤦♂️
I only opened a Heloc to cover my existing debt and it was only like 1/16th of the value of my home at current values. Credit card rates are so bad in 2024, that it made more sense at 11.5% apr. But, I would only suggest doing something like this if you are disciplined and understand that you will not allow yourself to accrue more debt.
Hey money guy team, great content as always. You say that there's very few people for who permanent insurance makes sense. Could you shed some light on a case where it does make sense? Which billionare bobby would you recommend permanent insurance for?
I used leveraged debt to make some money .. when the interest rate spike came, the rent couldn't go up as fast as the mortgage payments (in Canada 🇨🇦 we don't have 15 ~ 30 year fixed mortgages) .. what I'd suggest to anyone doing this is to limit their leverage to max 50% .. Canadian regulations won't allow banks to loan greater than 80% anyways .. besides the interest rates the key risks that liability insurance won't cover are failure to pay rent (legit - life happens), major repairs, management expenses, and time commitment (if you have 40 of these and each Tennant calls you with a problem once every 6 months, kiss your weekends goodbye)
"convert equity to cash" is IMHO a really misleading way to think about what's happening with a HELOC. It is just borrowing money at whatever interest rate. Your equity is merely what gives the bank the confidence to lend you that money at that rate. You might get a lower rate than other loans that way, but any cash you're taking out is new cash you're BORROWING, not cash that you're "converting".
On a several occasions, I have gotten a cash-back refi (not a HELOC) on an investment property. It is like a tax free cash infusion to invest elsewhere.
Not a CPA or tax professional, but have some accounting experience. I believe it would only be deductible up to the percent that you are there on business. E.g. if you travel to film a review on a hotel that might be deductible. Although if you take your family on vacation and film one video reviewing the food and then that’s it, then no. Again not a tax professional.
@@jeremycox7505you need to be prepared to fight for it. Dont think youre going to disneyland to try the ice cream. But maybe you can go to maui to " review the hotel". But youll need some actual work product, whipping out for phone for a 15 sec tic tok isnt going to be convincing.
The way we bought our foreclosed condo in a downtown metropolitan city with a fabulous view for under 50 K was because there was a downturn and the entire USA mortgage market was underwater🤣🤣 there were literally high rise condos that had just been finished brand new with no one moving into them. There were fenced off pits for high-rise buildings that stayed fenced off for the next decade until the market recovered. I still remember those tattered fence wraps advertising those spectacular high-rise apartments with their beautiful images, all faded from year after year of sun damage while nothing happened. This is the type of crap that tricks young people who have never seen housing downturns last more than five years. homes across America are going underwater as we speak.
He's doing an Eric Trump cosplay event. Seriously, put the two of them in the same room and it's creepy. Bo is the handsome, intelligent one, obviousy.
Great video! I always enjoy seeing both of your takes on various financial myths. I would be interested in seeing the team's take on Variable Universal Life insurance. VUL insurance lets policyholders participate in the market fully. It would be more appropriate to compare VUL insurance (not IUL) to purchasing term and investing the difference. Obviously there will be fees but perhaps the tax advantages of the VUL could make permanent insurance make sense for more individuals.
I agree, would love to hear their thoughts. I also don't necessarily agree with them comparing IUL as an equity alternative. Certainly more of a bond component.
Never understood permanent life insurance. If you plan on building wealth, you don’t need your insurance policy to pay you back when a “term” runs out (your death). Meanwhile, you are paying for that payout at a penalty by not being able to invest those extra premiums over the course of a lifetime.
I don't know if you guys take video suggestions. I would like to start putting $100 a month into the stock market. I've never bought a stock before. I really don't know how to do it. Can you make a video with step by step instructions?
Each broker will be slightly different, but mostly the same. First step: choose a broker : Fidelity, Schwab are the ones I use, I know there are a bunch of other good ones out there. Go to their website and choose the open an account and you will have to go through that process setting passwords and stuff. Then you will need to fund the account. To do this they will need your banking information and will often send a test transaction to your bank and you will then have to answer what the transaction amount was (it will be less than a dollar). This can take a day or two to go through. Its a safety precaution to make sure you are actually the owner of that bank account. Then you should be able to go into the broker website or app and transfer the money from your bank acct to the brokerage account. In that transfer button there will probably be an option to do a recurring transfer every week or month or whatever timeframe you want it to be. Lastly you will go to the buying stocks section of the website or app. You will choose a stock or ETF to buy. There are a ton of good ones, VOO, VTI, SCHX, FSKAX whatever flavor of ETF you'd like; there are a ton of them out there. I believe most brokers allow you to set up automatic buying of stocks/ETFs as well. Its good to note that this would come after the steps of paying off high interest debt, maxing out your 401k employer match and your roth IRA on the money guy order of operations. Probably a step 6 or 7? But if your situation is unique then maybe it would be different, not trying to give any advice on that. The steps for opening a roth IRA would be pretty similar to the above, you would just also note that its an IRA when you open the acct. But you would want to make sure that is what you want to do before you do it, ie that you qualify to open an IRA.
STOP pushing owning multiple properties as a path to wealth! A residence and maybe commercial property that YOU operate your business from) Yes, absolutely. Own your residence and own your placd of business if at all possible. The moment you start buying other properties for others to pay you for, you just made life worse for others for your profit. There are some exceptions to this for a few reasons, but man.
Guys, terms expire a 30yr old getting a 30tr policy will need to renew in their 60s when they are no longer eligible for another term and now have to get a whole life at a much higher price.
@_justuni2266 And a valid point it is. Unless you have not been a financially savy person your entire life and now you find yourself in need of a way to make sure your kids don't get hit with the $15,000 bill.
@VergeXT Just voicing the reasoning that's usually behind the advice. But I hear you, sometimes you just do the best you can with the situation you have!
@_justuni2266 That was usually the situation of people that would be looking for quotes. I get it 100%, my dad doesn't need life insurance but I probably will lol.
I commend you for acknowledging myth 1 can work but is risky. I myself have made a million dollar net worth by leveraging real estate. I have lots of equity in my properties and many people say pull out the equity and buy more, but I can’t stomach it. I have been 90% real estate and now at 52 I am selling some properties and locking in some of the gains by paying down my primary residence and getting back to contributing to my simple ira.
That first guy has the build of someone who eats tren sandwhiches but doesnt put in real effort at the gym or in the diet. Which lines up with his easy life shortcut videos.
Stop saying borrow from yourself. People don't understand life insurance. You are borrowing from the insurance company. They are giving you an advancement of your policy. The person that showed you infinite banking didn't know what they were doing. You guys really need to understand how it works.
I have a friend who's goal is to be 2 million dollars in mortgage debt and it just kind of makes me sick that they somehow got convinced that being leveraged like that is a good idea. "Well what do you invest in then?" "Index funds? Bonds? Literally anything that doesn't require me to manage half a dozen properties." And the properties are like in rural Oklohoma. None of that is appreciating.
When it rains it pours with stocks, bonds, real estate, businesses, etc. Diversity matters. Being an informed professional matters! Whatever the investment is, it is for the long term. Using debt to purchase appreciating assets has created wealth for me. HELOC is NOT an option. Save the 20% down on top of 6 months of expense savings and continued mutual fund investing. Robbing Peter to pay Paul to leverage the equity on appreciating assets is a really bad idea.
You have a Georgia Helmet and what appears to be a model tesla cyber truck sitting behind you..... How am I supposed to take anything you say seriously? PLEASE tell me what renovations you are doing (apparently wiht banked cash) that is raising the value of your home that you already put 50k down on (assuming thats supposed to be 20% please correct me if you using some silly money guy show math i dont know about) by 100k.
I don't like that you didn't explain what the actual benefit that permanent insurance provides for rich people. Returns on the cash value of your insurance policy grow tax-preferred to the returns in your non-registered investment account if you are in the highest bracket, meaning for those looking to pass wealth onto the next generation it can be profitable if the tax advantage outweighs the premium costs. I get that doesn't apply to the 99% but at least give the case instead of just bashing it.
As I recall he suggest a 15yr mortgage - that is leveraged debt. What you are likely referring to is that he lost it all in the 80 because he had callable loans, and they called them. That is very different from mortgages used by investors for residential RE. Also different than Agency loans for multifamily. Ramsey's rules are for the lowest common denominator offering the lowest risk. There are folks that are willing to take on some risk for higher returns. For a person that can handle a credit card, it is not the end of the world.
So people are listening to a guy, The Money Guy, who got caught in the real estate nonsense of 2008 that average smart people saw coming and easily avoided. Think abut that, he's no better than the ones he's criticizing.
Bring Stephanie Janis Stiefel on the show. She changed my life Financially I managed to grow a nest egg of around 120k to over a Million. I'm especially grateful to Stephanie Janis Stiefel, for her expertise and exposure to different areas of the market.
Well her name is 'STEPHANIE JANIS STIEFEL'. Just research the name. You'd find necessary details to work with a correspondence to set up an appointment.
The thing is people often doubt the prospects of financial advisors like Stephanie Janis Stiefel in business/markets today. Well it gives me more time to get ahead while they stew in their own pity and doubts as they childishly complain about those spreading the word
One of my fave saying from Brian is "Everything's a write off until the IRS comes knocking" lol
I see more and more videos about over-leveraging to build your assets. We are gunna see sooo many “neked” people in the water on the next downturn.
Which means for us, we are going to get some insane deals on homes soon if that's the case!
Good, can't happen fast enough.
sharks come out when they smell blood. i like being a shark
When the tide goes down you see who is swimming naked.
All that means is those of us who actually make money and pay taxes will bail these fake wealthy people and their banks out. Just like last time.
Sometimes on my first watch I'll pause the video after the short intro and say out loud "Brian IIII am so excited" and then I hit play to see if Bo copies me. Nobody believes me when I say I haven't watched the video before.
YES I'm waiting for someone to make a "Every Money Guys video, basically" parody because that will absolutely be in it
Also "WumbologyPHD" is a great handle, nice work
Thank you for addressing life insurance. I’ve sold insurance for nearly 15 years and I’m sick of these social media agents pushing this garbage that life insurance is an investment.
"Well first of all you didn't die"
I cackled at that lmfao
as someone who has been advising people on their finances for close to 40 years and made my own share of mistakes I have to say I have seen nobody on the internet who comes close to these guys. Listen to them.
PS: I retired at age 63 and I do not need a side Hustle
Awesome man! I'm a senior is Highschool right now. Wanting to get an accounting degree, CPA and CFA. I want to be a financial advisor or work for a company like fidelity. I have $3,000 invested right now, mostly into the S&P 500, a little bit international and a little in some bluechip companies like PG. I've read books, One up on wallstreet, the psychology of money, and the big short. Currently reading the intelligent investor.
I don't really know why I'm saying all of this, but I will be like you someday I promise!
Good for you! I'm hoping your clients are in the same boat (to the extent they actually follow your advice of course) ;)
Re Side Hustle: What do you do to keep from going stir crazy?
@@JohnPaul-yh8ld If you know you are going for the CPA (and still know this in a few years) I would recommend for you to push as hard as possible early in college so you only have major specific courses in later years. Government and NFP is killer. If possible then you may even be able to find the free time in your final semester to take a CPA exam (might depend on state but I was only allowed to take one during school and before showing my degree (IL)). I took advantage of this last year with BEC. Plan early and often. You'd be shocked the amount of people hoping for CPA that I just graduated with that had no plan for the CPA exam, no idea what it took to study for it (currently studying ATM), and worst of all, couldn't use Excel or any kind of spreadsheet apks
@@JohnPaul-yh8ld I am proud of you! First of all, you are looking toward a career that is in demand and will pay well. Too many people your age major in things that will NOT lead to jobs.
Secondly, investing early (especially in the S&P). I recommend not buying individual companies - it is nearly impossible to predict which ones will outperform the market. In fact, 80% of professionally managed funds underperform the S&P500 - and these are trained professionals who do this all day every day! you might want to diversify by having some in the Nasdaq, some in a good midcap fund, and some in a good small cap fund.
I have some international funds for 10 years and finally got rid of them, as US equities almost always outperform. I know that is not conventional wisdom, but the numbers did not add up. (do your own research).
also, I recommend ignoring people who say to put bonds in your portfolio - the market will consistently beat bonds by a LOT! But do your own research!
Also, Fidelity is a good company. I hope it works out for you! Sounds like you are a young person who uses his head!
@@JohnPaul-yh8ldyou are way ahead of your peers. Keep it up
'you own 40 or 50 or 100 homes' No, thank you. I would just like one.
One the size of 40 or 50 homes? GENIUS, now that's a billionaire mindset! Hurry get 18 loans and quit your job now
A coworker of mine bought an investment property. His first tennant moved in and squatted there destroying the property while awaiting eviction. He spent 30k fixing the property with little chance of recouping his loses from the tennant. Not every tennant is going to do that. Ive been renting for years with almost no issues. Sometimes i forget to send my rent in on time. One time the post office ate my rent check, it was returned 3 weeks after it was due with a huge chunk of the envelope missing.
I have enough trouble managing just one household 😂
When ever i hear some one say the path to wealth includes renters. I think how much id rather just be poor than deal with that.
Fr Id rather deal with people as little as possible
No kidding. I used to rent a house out and it's a huge pain even when you pay someone to manage it. Decided to just up and sell it and not deal with the headaches.
I cackled.
I'll never own a rent house after what happened during covid.
Using debt to leverage wealth only work if everything go as plan, but we all know that rarely go as planned.
Yeah and most of these guru's have only entered the market after the latest downturn. I'm interested to see how leveraged they are once a downturn happens.
Been there, we had a rental in Vegas from 1996 to 2018. You have to treat this as a part time job. You will need money, credit and nerves to make it happen. Many people lost out in 2008, but we hung on and now fully invested in equities. We sleep better at night.
One of the many things I like about Brian and Bo's work is that they will laugh a bit at the absurd financial advice given online and then turn it into an opportunity to educate us on how to achieve our goals in a better way.
“Brian is an expert, he has been a CPA for like the last 45 years” 😂😂😂
Soo funny. I was contacted today by my bank and offered a home equity line of credit.
They were acting like they were doing me a favor.
Be careful with these.
@mrjuvy49 I told them no. I said, "That's how people get in trouble." They said."Well, most people take it out to pay off their debt."
They were shocked when I said I had no other debt.
Everything is tax deductible until you get caught.
Did Brian even notice the "CPA for the last 45 years" comment? lol
Brian looks good for a 60+ year old CPA, not a white hair on the guy.
If everyone has 40 houses, who is going to live in them?
It's not possible to replicate this for every single individual because there isn't 40 units of housing per person to buy.
We invest in apartments (partial ownership of 28 complexes or abut 4K units). The occupancy runs around 90%. There are plenty of families that need a place to live. Sadly, 57% of Americans do not have $1000.
You know how many people the democrats are bringing here and giving free money, food and housing for future voters. Millions.
@@charleslemaire8137that has nothing to do with what the op said…
You should link part one in your description... UA-cam suggested part 2 but I want to see part one. 30 seconds for you would save 30 seconds for me... And anyone else who gets served part 2 first
Thanks for the idea! You can find part one here: ua-cam.com/video/SbNPyi6Sz3I/v-deo.html. We'll add it to the description, too!
18:04 my favourite thing i learned this week. A distributor that I know, had bought a kebab shop. As he was sick of paying out money for dinners and drinks for lunches and dinner meetings.
So he grabbed a cheap spot, got a cheap refurb, with extra for some rooms at the back.
Got a guy that runs several existing shops, to manage the shop, on a base and share rate.
Saying that term life insurance involves throwing your money away because you don't get anything back when you survive the insured term is like saying that you're throwing your money away each year by insuring your house to find that it didn't burn down.
I have been an account and tax advisor for more than 20 years. I am shocked that those UA-camrs advertising these deductibles are not fined by IRS. Key word for clothes if you can wear anywhere else besides work YOU CANT DEDUCT THEM. Clear and simple. It has to be a uniform and gear that you can’t wear anywhere else
Honestly, the 'write-off' obsession is a trap. Just because it's deductible doesn't mean it's free money!
Its like when you are shopping and see a bunch of sales. You are still spending a ton of money even if the stuff is on sale. Lol
If you write stuff off that comes out of your profits. You lose that money and the time invested. You never want to write stuff off because it means you worked twice for nothing.
8:55 Using debt to make money is like using a chainsaw. You need to know how to use it, which trees to cut down, and which to leave standing.
On a several occasions, I have gotten a cash-back refi (not a HELOC) on an investment property. It is like a tax free cash infusion to invest elsewhere.
BTW, I also have a couple chainsaws.
Wow! Did Bo just add 15 years to Brian’s age or has Brian been a CPA since he was 5?
Both
He was just too excited.
We should make a TV Show: Young Brian.
The latter
As they say, when things are going good, stupidity gets covered up.
If Bo's excited I'm excited!
I know a lot of BRRRR landlords. They have been stressed out the last 5 years. I only have debt on my primary. I have so much less stress even though I have a lot less properties. However, my cash flows are amazing.
We did just use a heloc to fund our newest rental. However it was less than half our heloc and instead of paying down the mortgage we will now focus 2-4k a month in paying down that heloc.
Worst case in a year when the interest rates fall and the rental is seasoned I can get a mortgage on the newest rental but I don't think I will.
Why take out a heloc instead of just a regular mortgage on the new property?
@@motofreak2772 Mortgages take too long for me to do as my finances are complex. Especially on an investment property. I would rather get the mortgage next year when I don't have to worry about the time crunch. Plus with the investment bump in interest the rates would be similar. Next, after a year I can get a mortgage based on value instead of price. Finally the HELOC is interest only so it is more flexible. OOh and the house needed some work so banks might not even give it.
the sad thing is agents even tells them that you should not add more on your retirement accnt and instead do a perm insurance instead.
Cancelling uil insurance is the best decision i ever made
now if i have a buisness conversation while using the bathroom, can i write the toilet paper off as a tax deduction?
I'd consider it paperwork necessary for the deal
It depends on if the advice was shit.
Lol
I knew a guy who tried that tricked and he got wiped out.
A tax write-off only benefits you at the marginal tax rate... ABOVE your deduction. So while your rate might be 30%, you'll get even less than that in most cases. It's different if you have millions+ in revenue, but for your everyday person, it's pure nonsense.
Love the Ferrari tax write off. What a great idea, lets spend $1 million to lower my tax rate on $50k income. I guess the next tax year is can write off the debit and repossession of the Ferrari . 🤣
If people want to watch more videos about lies on social media for avoiding taxes, watch Jasmine DiLucci. She is a JD and CPA and discuss the actual court rulings on all these ideas influencers think are new. Her channel is basically a bigger version of the first 20 minutes of this video.
I BRRR not BRRRR: I use my income to buy the next one, never leverage my current investments. If I can't afford it, it's not time for the next one. Slower but safer.
Buy term, investment the difference (A L Williams)
Taxes are incredibly complicated. But for some people, having a business entity does makes sense. I'm a long-haul trucker, and there are a lot of tax advantages I can utilize as an owner operator but not a company driver. Per diem will get me about $20,000 deduction this year. But anything that's a deduction, has to be for the business. A reasonable business expense. Although there's one lady I've read about who got audited for a million dollar yacht and won the case because she used it to show properties in the bay area. Wild.😂
Abbot and Costello got in trouble with the IRS. One of the issues that they were charged with was deducting their clothing as a business expense. If the clothing can be worn in everyday life, it is not deductible. If it had a big Abbot and Costello logo, for example, it MIGHT have been deductible. Everyday suits, no.
That story should drive home the point that whatever shenanigans you come up with to dodge paying taxes, the IRS has probably seen it before.
Math: you have 100 rent houses. A hurricane washes 100 of them away, how do you pay your debt now?
Government bailout
As someone who just went through a hurricane here in Florida, I feel this. My place is fine BTW.
Insurance?
Better scenario... you own 100 rent houses. 12 are empty due to turnover renovation, 5 are waiting to be rented, 3 have squatters who have filed lawsuits against you, 18 are behind on rent, 7 need some work done but you can't find good subcontractors, and you're working a day job to cover the missing mortgage payments.
"But its passive income!"
My idiot brother jumped into the real estate market in 2007. “Hey, market is hot! How can I lose!” Had sold his house and taken all the equity and bought three townhomes. Lost all three.🤦♂️
Bro is about to be shocked when he finds out about insurance
I only opened a Heloc to cover my existing debt and it was only like 1/16th of the value of my home at current values. Credit card rates are so bad in 2024, that it made more sense at 11.5% apr. But, I would only suggest doing something like this if you are disciplined and understand that you will not allow yourself to accrue more debt.
haven't checked in awhile, but it's nice to see that Boe is still excited
Hey money guy team, great content as always. You say that there's very few people for who permanent insurance makes sense. Could you shed some light on a case where it does make sense? Which billionare bobby would you recommend permanent insurance for?
I used leveraged debt to make some money .. when the interest rate spike came, the rent couldn't go up as fast as the mortgage payments (in Canada 🇨🇦 we don't have 15 ~ 30 year fixed mortgages) .. what I'd suggest to anyone doing this is to limit their leverage to max 50% .. Canadian regulations won't allow banks to loan greater than 80% anyways .. besides the interest rates the key risks that liability insurance won't cover are failure to pay rent (legit - life happens), major repairs, management expenses, and time commitment (if you have 40 of these and each Tennant calls you with a problem once every 6 months, kiss your weekends goodbye)
"convert equity to cash" is IMHO a really misleading way to think about what's happening with a HELOC.
It is just borrowing money at whatever interest rate.
Your equity is merely what gives the bank the confidence to lend you that money at that rate. You might get a lower rate than other loans that way, but any cash you're taking out is new cash you're BORROWING, not cash that you're "converting".
Yes! I abhor hearing people talk and/or advertising about HELOCs.
On a several occasions, I have gotten a cash-back refi (not a HELOC) on an investment property. It is like a tax free cash infusion to invest elsewhere.
Are UA-cam influencers able to write off travel if they are posting it on a channel and making revenue?
Not a CPA or tax professional, but have some accounting experience. I believe it would only be deductible up to the percent that you are there on business. E.g. if you travel to film a review on a hotel that might be deductible. Although if you take your family on vacation and film one video reviewing the food and then that’s it, then no.
Again not a tax professional.
@@jeremycox7505you need to be prepared to fight for it. Dont think youre going to disneyland to try the ice cream. But maybe you can go to maui to " review the hotel". But youll need some actual work product, whipping out for phone for a 15 sec tic tok isnt going to be convincing.
Great content! This taught me a lot
This was *SO* good guys, thanks!
My financial planner says insurance products, and annuities are not there necessarily make you wealthy, but keep you from becoming poor
Great stuff especially the insurance stuff. Thank you
Great stuff!
Great video.
My favorite lies are fraud
The way we bought our foreclosed condo in a downtown metropolitan city with a fabulous view for under 50 K was because there was a downturn and the entire USA mortgage market was underwater🤣🤣 there were literally high rise condos that had just been finished brand new with no one moving into them. There were fenced off pits for high-rise buildings that stayed fenced off for the next decade until the market recovered. I still remember those tattered fence wraps advertising those spectacular high-rise apartments with their beautiful images, all faded from year after year of sun damage while nothing happened. This is the type of crap that tricks young people who have never seen housing downturns last more than five years. homes across America are going underwater as we speak.
Our HELOC hit 10.25%, it’s come down to 9.25%
Taking out debt on your residence that isn’t necessary to purchase it is placing your home at risk to invest. Risky proposition.
Have I missed the fact that Bo has a beard now??
He's doing an Eric Trump cosplay event. Seriously, put the two of them in the same room and it's creepy. Bo is the handsome, intelligent one, obviousy.
Great video! I always enjoy seeing both of your takes on various financial myths. I would be interested in seeing the team's take on Variable Universal Life insurance. VUL insurance lets policyholders participate in the market fully. It would be more appropriate to compare VUL insurance (not IUL) to purchasing term and investing the difference. Obviously there will be fees but perhaps the tax advantages of the VUL could make permanent insurance make sense for more individuals.
It can make sense for a very small number of situations. In general, the fees and caveats make it a bad choice.
I agree, would love to hear their thoughts. I also don't necessarily agree with them comparing IUL as an equity alternative. Certainly more of a bond component.
Never understood permanent life insurance. If you plan on building wealth, you don’t need your insurance policy to pay you back when a “term” runs out (your death). Meanwhile, you are paying for that payout at a penalty by not being able to invest those extra premiums over the course of a lifetime.
I don't know if you guys take video suggestions. I would like to start putting $100 a month into the stock market. I've never bought a stock before. I really don't know how to do it. Can you make a video with step by step instructions?
Each broker will be slightly different, but mostly the same. First step: choose a broker : Fidelity, Schwab are the ones I use, I know there are a bunch of other good ones out there. Go to their website and choose the open an account and you will have to go through that process setting passwords and stuff. Then you will need to fund the account. To do this they will need your banking information and will often send a test transaction to your bank and you will then have to answer what the transaction amount was (it will be less than a dollar). This can take a day or two to go through. Its a safety precaution to make sure you are actually the owner of that bank account. Then you should be able to go into the broker website or app and transfer the money from your bank acct to the brokerage account. In that transfer button there will probably be an option to do a recurring transfer every week or month or whatever timeframe you want it to be.
Lastly you will go to the buying stocks section of the website or app. You will choose a stock or ETF to buy. There are a ton of good ones, VOO, VTI, SCHX, FSKAX whatever flavor of ETF you'd like; there are a ton of them out there. I believe most brokers allow you to set up automatic buying of stocks/ETFs as well.
Its good to note that this would come after the steps of paying off high interest debt, maxing out your 401k employer match and your roth IRA on the money guy order of operations. Probably a step 6 or 7? But if your situation is unique then maybe it would be different, not trying to give any advice on that. The steps for opening a roth IRA would be pretty similar to the above, you would just also note that its an IRA when you open the acct. But you would want to make sure that is what you want to do before you do it, ie that you qualify to open an IRA.
What about tying long term care expenses into your death benefits where you can pull it out for those while you are still alive?
Money guy may need Part N to flush out all the Financial Lies from TicTac!!
Good video
STOP pushing owning multiple properties as a path to wealth!
A residence and maybe commercial property that YOU operate your business from)
Yes, absolutely.
Own your residence and own your placd of business if at all possible.
The moment you start buying other properties for others to pay you for, you just made life worse for others for your profit.
There are some exceptions to this for a few reasons, but man.
I have a whole life policy and plan on taking out $50k a year in retirement tax free!
Can you deduct all your daycare? A college told me they deduct all 30k per child of daycare they spend.
Yes, unless you used a fsa.
@@thedude5040 so is there a reason to do the dependent care flexible spending account then?
Turbo tax says you can only claim up to 3k per child under then child and dependent care credit
@Chobiefi oh well then I'd believe turbo tax, I thought it was all of it.
Guys, terms expire a 30yr old getting a 30tr policy will need to renew in their 60s when they are no longer eligible for another term and now have to get a whole life at a much higher price.
The argument is often that a 60yo can set things up so that life insurance is no longer a necessity at that point
@_justuni2266 And a valid point it is. Unless you have not been a financially savy person your entire life and now you find yourself in need of a way to make sure your kids don't get hit with the $15,000 bill.
@VergeXT Just voicing the reasoning that's usually behind the advice. But I hear you, sometimes you just do the best you can with the situation you have!
@_justuni2266 That was usually the situation of people that would be looking for quotes.
I get it 100%, my dad doesn't need life insurance but I probably will lol.
Having luck be the driving force behind your wealth building is called gambling. Don't gamble with house money.
I commend you for acknowledging myth 1 can work but is risky. I myself have made a million dollar net worth by leveraging real estate. I have lots of equity in my properties and many people say pull out the equity and buy more, but I can’t stomach it. I have been 90% real estate and now at 52 I am selling some properties and locking in some of the gains by paying down my primary residence and getting back to contributing to my simple ira.
That first guy has the build of someone who eats tren sandwhiches but doesnt put in real effort at the gym or in the diet. Which lines up with his easy life shortcut videos.
Wealthy people use life ins as an investment to manage their wealth, not create it.
How about you just leverage the cash you have instead of taking it out of your home? That just seems crazy to me.
Mills are 50% deductible!😮 You can buy a mill for half off on your tax bill😮😮😮😂😂😂😂
interesting
If you are going to show a graphic in costs of Term Life Insurance, you 100% of the time should include the term length.
Stop saying borrow from yourself. People don't understand life insurance. You are borrowing from the insurance company. They are giving you an advancement of your policy. The person that showed you infinite banking didn't know what they were doing. You guys really need to understand how it works.
I have a friend who's goal is to be 2 million dollars in mortgage debt and it just kind of makes me sick that they somehow got convinced that being leveraged like that is a good idea.
"Well what do you invest in then?"
"Index funds? Bonds? Literally anything that doesn't require me to manage half a dozen properties."
And the properties are like in rural Oklohoma. None of that is appreciating.
IDK you hear about that big skyscraper going up in Oklahoma City?? you never know. (mostly kidding, I agree with what you said).
@@zackcinq-mars2129 I was at a conference where OK guys were joking about that claim.
❤❤❤
0:12 so exited skip
When it rains it pours with stocks, bonds, real estate, businesses, etc. Diversity matters. Being an informed professional matters! Whatever the investment is, it is for the long term. Using debt to purchase appreciating assets has created wealth for me. HELOC is NOT an option. Save the 20% down on top of 6 months of expense savings and continued mutual fund investing. Robbing Peter to pay Paul to leverage the equity on appreciating assets is a really bad idea.
Even part one is a deuce.
If you want to deduct every expense of your life, just be the NRA CEO Wayne LaPierre and have the NRA pay for your life
@@rudyardganuelas6254 😂😂😂
what is the number 468000
You have a Georgia Helmet and what appears to be a model tesla cyber truck sitting behind you..... How am I supposed to take anything you say seriously? PLEASE tell me what renovations you are doing (apparently wiht banked cash) that is raising the value of your home that you already put 50k down on (assuming thats supposed to be 20% please correct me if you using some silly money guy show math i dont know about) by 100k.
I don't like that you didn't explain what the actual benefit that permanent insurance provides for rich people. Returns on the cash value of your insurance policy grow tax-preferred to the returns in your non-registered investment account if you are in the highest bracket, meaning for those looking to pass wealth onto the next generation it can be profitable if the tax advantage outweighs the premium costs. I get that doesn't apply to the 99% but at least give the case instead of just bashing it.
Ask Dave Ramsey about leveraged debt to but real estate!!! I dare you!!!
As I recall he suggest a 15yr mortgage - that is leveraged debt.
What you are likely referring to is that he lost it all in the 80 because he had callable loans, and they called them. That is very different from mortgages used by investors for residential RE. Also different than Agency loans for multifamily.
Ramsey's rules are for the lowest common denominator offering the lowest risk. There are folks that are willing to take on some risk for higher returns. For a person that can handle a credit card, it is not the end of the world.
So people are listening to a guy, The Money Guy, who got caught in the real estate nonsense of 2008 that average smart people saw coming and easily avoided. Think abut that, he's no better than the ones he's criticizing.
Everything on the internet is NOT TRUE!?!?!? 🤯 say it isn’t so!!
Bring Stephanie Janis Stiefel on the show. She changed my life Financially I managed to grow a nest egg of around 120k to over a Million. I'm especially grateful to Stephanie Janis Stiefel, for her expertise and exposure to different areas of the market.
How can i reach her, if you don't mind me asking?
Well her name is 'STEPHANIE JANIS STIEFEL'. Just research the name. You'd find necessary details to work with a correspondence to set up an appointment.
Been debt free for two years thanks to Stephanie Janis Stiefel. So sad to see my friends in their 40s with car loans, mortgages and credit card debt.
The thing is people often doubt the prospects of financial advisors like Stephanie Janis Stiefel in business/markets today.
Well it gives me more time to get ahead while they stew in their own pity and doubts as they childishly complain about those spreading the word
Sounds interesting. How can she scam, I mean help me
Financial advisors are predators.
You don’t like rentals because you can’t charge a fee to manage them for your “clients”
How many rentals do you own?
I don’t like financial advisors charging %AUM or similar, but the hill you chose to stand on has plenty of fees and management costs, so, lol