|If you have a 401k or IRA, you’ve already lost the game of money and you don’t even know it yet! Your advisor doesn’t even know it yet…. There is 1 enormous flaw to your 401k and its called the 4% Rule… It The dirty secret that your 401k was not designed to produce good income… Like mathematically impossible. The 4% Rule works like this… However much money you have saved up when you arrive to retirement, you should only reasonably withdraw 4% of it annually to avoid the risk of running out of money too soon. What does that look like for you? $100k saves- $4000 of annual income $500,000- $20,000 The elusive $1,000,000 portfolio all these “gurus” talk about- $40,000 of taxable income. You are a millionaire living barely above poverty levels… It really doesn’t matter how good your 401k is… with the 4% Rule… it will always produce low retirement income… Do you know how much income MPI can produce? Up to 15%! Im Curtis Ray Always Be Compounding!|
It will always rebound! A common saying in the financial advising community to justify their bad investments! Just how bad in this mindset… It will cost you millions of dollars in your lifetime. Compound Interest is the most powerful force in the Universe but can only be achieved if you don’t lose. Why? Because when you lose money, you lose time. When you lose time, you lost the most important asset you can never get back! The Power of Time inside of Compounding!!! So how well has the stock market compounded over the last 90 years… Inflation adjusted, real value of your money, Around 65 years have been losing or rebounding from the bas investments and only around 25 years have been real growth. Think about that… You were sold the stock market would produce you wealth but instead, it was all just a Counterfeit… MPI never loses in down markets, and why it out Compounds all other financial plans. Im Curtis Ray, Always Be Compounding.
Cash Emergency Fund- DROP DOWN + VID
A common suggestion by the financial world is to have an emergency fund up to 6 months of your salary saved up in cash or a liquid savings account. Is it a good idea to have emergency fund? Of course. In a savings account? There is a much better way! Its called a Compound Account with Liquidity.
As an example, your hard-earned money in a savings account loses around 3% value each year due to Inflation! So if you had $15,000 in your emergency savings account, the buying power of your money would drop to $14,550 after 1 year and after 20 years, as low as $8,000. Inflation would erode almost half of your money’s value sitting in a savings account.
However, having your $15,000 in an MPI Compound Account, that has liquidity similar to a savings account to act as your Emergency Fund, and continue to Compound simultaneously, after the same 20 years of inflation, would still have real value of up to $70,000.
Know the Rules of Compounding!
I had 5 rentals in 2014… It was the lion’s share of my retirement plan for my future. Seemed like a really good idea at the time with so many people pushing it. Holding Real Estate long-term has 3 main advantages: Appreciation, Cash Flow, and Leverage. There is just 1 problem. This method is very difficult to achieve wealth and carries a lot of risk. Yes, some people can, in the right market, manually build a great empire inside of Real Estate. But for everyone else, a lot of bark and very little bite. Let me explain: Appreciation of Real Estate: With a national long-term average of 4.2%, that’s barely above inflation. Most your growth is maintaining, not increasing your wealth. Cash Flow: Literally opposite of Compound Interest. Spend you earnings, that’s a near guaranteed way to never achieve the financial freedom you desire. Leverage: Now this is really cool but inside of Real Estate, lies a lot of risk. Market plummets, evictions, baseboards, carpet, just the crap of being a landlord. Tune in for part 2 where I break down the #’s compared to a Good Compound Account!
Part 2- In 2014 I had 5 rentals. Let’s break the math down if it is a good long-term retirement plan. The average rental purchase price was $200,000. I put 20% down, totaling $200,000 out of pocket. Appreciation Value: Started at $200,000, at 4.2% Average Appreciation, in 30 years, each House would be worth around $650,000. Equity unfortunately means nothing unless you sell and most of that growth would be inflation only. Cash Flow- In these houses I was making, after expense around $200/mo, increasing 3% per year, also just inflation. No real wealth building. In 30 years, all 5 houses would have been paid off, giving me retirement income of roughly $7,500 a month in today’s buying power. Decades of work and risk, a retirement around of only $90,000 annually. Pretty Good! However, If you would of put the $200,000 down payment into a good Compound Account such as MPI, and did nothing but wait and Compound, your retirement income could be around $180,000 of real buying power! Double the Income, Little effort on your part… Im Curtis Ray, Always Be Compounding. (mortgage, taxes, insurance and maintenance)