401k vs Real Estate Part 2 — Video

What is it that Boomers and their kids are learning that has been changing their thinking about retirement dramatically?


Transcript:   Hi this is Jeff Brown the “BawldGuy”. I’ve talked a lot about 401k’s and what I don’t like about them, which is most things. There’s one exception, we’ll talk about that later, but I want to compare 401k’s and their end result, the end game, which is a magnificently abundant retirement. It won’t happen using them, but we’re going to pretend that they do, but we’re going to compare them to real estate to show the difference. So you’ve been putting money every month year after year into your 401k and what you have is a whole bunch of money and you’ve saved a whole bunch of taxes during those years and here’s what you have. If you’re one of the 1 percent you have over $300,000. If you’re really lucky you’ve got $1 million. Today $1 million, if you more than double what the ten year treasury yield is, it’s 4 percent, $40,000 a year before taxes. Really? That’s what you slave for for thirty, thirty-five years, $40,000 – before taxes, which is just – what… $10,000 more than your social security, and yeah, I know, I said social security out loud, forgive me. Here’s the main thing, if real estate goes through another bubble or let’s just say the people that were getting ready to retire in 2006, they free and cleared everything and the bubble hit. They had a bunch of properties, they had a bunch of income, they had their retirement cake bought. They’re ready, the invitations are out. It’s time and their $4 million portfolio overnight was $2.5 million. Their income on that might have been – what – eight percent let’s say. They’re making 8 percent on $4 million. That’s a lot of money. What if that was cut by a third? What if it was cut by 40 percent? Oh, no. They’re making six figures a year in retirement, much of it tax sheltered. Tell me again how that $1 million in your 401k is going to be your savior. Tell me how you worked for thirty or forty years to make another $10,000 more than your social security and this is all before tax, really? You did that on purpose to yourself? Think again. This is Jeff Brown, the BawldGuy. Don’t say you weren’t warned. Thanks again. See you next time. Bye-bye.

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