Contribute the minimum to get matched and invest the rest in a Rich Man's Roth. In this episode,
I'm going to address the question, "How much should I contribute to my 401K?"
I wish I had a nickel for every time I've been asked that question.
And I wish I could just say, "Nothing." People go, "What?" Okay. Well, maybe up to your match but no
more because I'm going to show you a far superior vehicle than a 401K
to put your hard-earned serious cash into so you will not outlive your money.
Many people when they work for their employer, the employer may offer a company 401K. Now,
that means oft times, that you can put in pre-tax dollars into that account. And you can choose a
percent of your income up to a certain percent or dollar amount. But no more. Because a 401K,
like an IRA is a qualified plan. They also would include 457s, 403Bs, tax-sheltered annuities.
So, they're qualified with who? The government, okay? Uncle Sam is your partner. Now, let me
use this scenario because I've never been a fan of 401Ks. In fact, in 2017, the Wall
Street Journal had an article... I think it was the first or second day of January that said,
"The Original Champions Of The 401K Lament The Day They Ever Came Up With That Idea."
Why? Because they got out of hand. People started putting too much money it became the
popular retirement plan. And if your money is in a 401K in the market,
Wall Street was never built to create predictable income. Wall Street was built to build money
if you invest and you're okay and you're lucky. But not to create predictable income.
If you ask an asset manager to show you a predictable income stream, they can't do it. Or if
they do, it's only 4% because the average retiree is only earning 3.5%. That is a true statistic.
So, they don't want you to pull out any more than 4% because they don't want to be sued for you out
living your money. So, I've never owned a 401K. I've never owned an IRA. I've never owned a Roth,
never will. Because my favorite vehicle, you're going to learn here is what I call the Laser Fund
which is far superior for many reasons. But when we talk about a 401K, a lot of employers will have
matching. So, that means that if you put in a dollar, they'll match 50 cents on that.
So, a lot of companies may match a 50% up to the first 6%. So, if you contribute
six percent of your income, they'll match 3% on top of that. So, you have 9%. And people think,
"Whoa! I'm getting a 50% return." No, you're not. You started out with 50% more. You're
getting whatever rate of return you're going to get and oftentimes it's pretty pathetic.
Sometimes less than 1%. But let's do the math. If you put in a dollar and you get a 50 cent match,
not bad. You got a buck 50. If you were immediately vested, meaning you could pull it out,
you pull out $1.50 and you have to pay 50 cents a third of that in tax. So, an employer match is
okay. They're covering your future tax liability because you're going to be taxed on that money
when you retire. I would say no more contributions than what you're being matched on. You wouldn't
believe how many people put in far more than the company match. I go, "Why are you doing that?"
They go, "Well, where else should I put it?" Hence this episode is about how much should I contribute
to my 401K?" Well, no more than you're being matched at the max. Anything over and above that,
you want to put into a private retirement account. What's that? This is your own account? I would
prefer the Laser Fund because it accumulates your money tax-free. It has the 2 benefits of a Roth,
it accumulates tax-free, you can take it out tax-free. And for additional benefits that Roths
will never have. And I'm going to invite you at the end of this episode to claim a free copy
of my most recent best-selling book, The Laser Fund, it's a 300-page book. In fact,
if what I've said so far is resonating with you and you know somebody who is also wondering
"How much should I contribute to my 401K? Should I even contribute to a 401K?" Share this video,
okay? And search on this YouTube channel because I have a lot of various educational videos
that hit this topic head on. But let's talk about the 4 additional benefits of a Laser Fund,
my favorite vehicle. See, where I put my serious cash, I can put in as much as I want. I can design
it to accommodate 30,000; 50,000; 100,000 a year. 300,000. You can't do that with a Roth.
So, if you make too much money, you can't own a Roth. This is why many savvy
CPAs and tax attorneys call my Laser Fund the Rich Man's Roth. I snicker
because you don't have to be rich to have a Laser Fund. I set up Laser Funds when my kids were born
for 25 bucks a month. You can set up a laser fund for $500 a month. But you can put in 100,000 if
you want. You can put in $300,000 if you have a banner year. Let's say you could put in 300,000
but you don't. You only put in 30,000. You have 270,000 of room that you didn't use.
If you have a Roth, if you don't use the little bit of room you have every year, you lose that.
With the Laser Fund, I can put in that 270,000 anytime I want in the future. I don't
lose the room. The next advantage. With the Laser Fund, I have full liquidity. Let's say I put in
$300,000. And 30 days later, I need 250,000 for a business opportunity, an emergency, I got laid
off. Whatever it is. I can access that money with an electronic funds transfer or a phone call.
You can't do that with a Roth. If you touch money in Roth in the first 5 years or before age 59 and
a half, there's a penalty. It's not liquid. You can't access the money. I can put money in, I can
access the money. There's no IRS penalties. When you read my book that I'm going to gift you here,
you're going to learn about a strategy called indexing. Now, indexing is a strategy where
you are able to maintain liquidity, safety, and unpredictable rates of return
and participate when the market the economy is going up without any risk because your money is
not invested in the market. Did you hear that? So, when the market goes down, you don't lose. I
have averaged between 7 to 10 percent tax-free returns for 40 years in my Laser Fund. Now,
what is it? It's a maximum funded tax advantage insurance contract. But before you go "What? I've
never seen an insurance contract do that." Well then you haven't seen one designed correctly.
This is where you take the least amount of insurance the IRS will let you get away with
under certain laws in the internal revenue code. And you put in the most money that the IRS allows
as fast as they allow and it turns into a tax-free cash cow. This is where savvy people will put
money. And you can put in 300,000, you can put in 500 bucks a month. You can design it however you
want. But there's none of these strings attached and it's called the Rich Man's Roth because
your money accumulates tax-free. You can access it tax-free. But I can put in big amounts. I can
withdraw money. I don't have to wait until I'm 59 and a half. But I can use indexing where the
market goes up, I benefit. When the market goes down, I do not lose one red cent. The last big
benefit of a Laser Fund, when I ultimately die, it blossoms. It increases in value and transfers
income tax-free. There's not a Roth around that will do this. If I died in an accident,
every million dollars I would have in my portfolio of laser funds (I have many, okay?) would blossom
right now to about 2 and a half million and transfer income tax-free to my wife or to my kids
or to my church or charity, the boy scouts or the red cross. I don't care. Whoever I want to leave
it to. There's not a Roth around that will do that. And people say, "How much does that cost?"
Well, nothing is free. But it doesn't cost me anything. It's being paid for automatically with a
minuscule portion of money that would otherwise go out the window in unnecessary tax on a traditional
IRA, 401k or a Roth. So, when people say, "How much should I contribute to uh my 401K?" I go,
"Well, do you want me to be honest or gentle?" And they go, "Honest." I said, "I wouldn't
contribute a dime." But that's me. But don't put in any more than you're being matched. Put your
money over here and something that's far superior into what CPAs call the Rich Man's Roth. And
you'll see how beneficial it is. I'm going to show you how you can read and learn more about why this
is the dream solution a godsend for people who are worried about outliving their money in retirement.
Because you will stay ahead of inflation. It eliminates the dangers of taxes because it's
tax-free. Inflation because inflation helps you instead of hinders you. Inflation you actually
link your returns to the things that inflate. You're able to participate with indexing in the
market but not lose when it goes down. And at the end of the day, when you pass away,
it blossoms and transfers to your heirs. So, it knocks the socks off of these other traditional
savings accounts. And do you know that many savvy business owners when they finally learn this,
they do away with the company's 401K. We have a company right now with over 100,000 employees
that are getting rid of the 401K in the company. And they're going to offer laser funds for all
of their employees. People go, "Whoa!" But if your employer does not know about this yet,
share this video but if they do not offer it because they're so concerned about
following the herd. "Well, how come everybody isn't doing this? How come we just don't have
a regular 401K?" Then most companies say, "Okay." But smart people, business owners,
they put a lot of their money in the Laser Fund for them. Not in the company's 401K.
So, if this is intriguing you, you know, I've written 11 books. They're back here on this
shelf. But my most recent best-selling book is titled the laser fund. And again,
LASER means liquid asset safely earning returns. In this book, I talk about the laser-ready test.
Any investment including 401Ks in the market, not in the market, banks, credit unions, municipal
bonds. I don't care what you're talking about. You can see how they score with liquidity safety
rate of return and tax benefits. My favorite that I call the laser fund is called that because
it passes those 4 tests with flying colors. So, this is actually 2 books in 1. And I want to gift
you a free copy. I'll show you how to claim your free copy. But this side, the white side is for
left brain thinkers. It's about 200 pages, 14 chapters with all kinds of charts and graphs
and explanations. But if you learn more by stories and examples, you flip it over and read this book.
This one is a hundred pages or so 12 chapters with 62 chicken soup for the financial soul
stories. And you'll see why the laser fund is the dream solution for goals not only like retirement
and why it knocks the socks off of a 401K or an IRA. But also for college funding, real estate
management, business working capital, emergency funds, lump sums. You name it. This is my go-to
place to have serious cash accumulate a great rate of return tax-free. It's like a financial
swiss army knife. It has all of these uses in one account. And you're going to see why I own
several. My wife does, our kids own several. And it is by far the most dynamic financial instrument
for your brighter future. So, go to laserfund.com. contribute a nominal amount towards the shipping
and handling and i'll cover the rest of that cost. And I'll by the book for you. And there's options
there to listen and learn watch and learn. Subscribe to this channel and look at some
of the other educational videos that are related to retirement and you will be blown away. The more
you watch, the more you listen and learn, the more you will feel empowered and have knowledge
so that you can become financially independent the smartest way and not outlive your money.