How America Keeps You Poor [Rich vs Poor]

hey everyone meet Kevin here on this video we're going to talk about how America keeps you poor and we're going to start with point zero which is obviously that America doesn't teach you about this that's because even though I ran for it when I ran for governor in California and ran for the idea that we should have Financial education in schools we don't so Point number one is don't feel bad as to why America keeps you poor it's the way the game has been raked it's been designed to keep you uninformed for ways to either build your wealth or to maximize the money that you have left over so let's talk about in this video at least five principles that you should be really incorporating into your life I would almost recommend all of these I have to be careful when I say the word recommend because even though I'm a licensed financial advisor this video is obviously not personalized Financial advice for you but these are principles that I think everybody should value incorporating into their lives so number one has to do with taxes let me give you a trick and then I'll show you one that's applicable to pretty much everyone but I invested about 4 000 bucks into many years ago into this thing called an HSA a health savings account and that let me prevent paying income taxes on any of that gain it's kind of like a retirement account right that account grew to about ninety thousand dollars with that ninety thousand dollars we're now able to pay for a surrogate who's carrying two of our children now what's amazing is while I took a tax deduction going into that account usually you have to pay taxes when you take money out of a retirement account right now with the health savings account the health savings account I'm able to withdraw that ninety thousand dollars almost all of it being gains and not pay taxes again that's a really Niche example of how to play the game you could learn more about hsas you have to have a high deductible Health Plan by going to bed kevin.com HSA but it's just an example that's a paid sponsorship by the way that's just an example now here's one that's much more practical that pretty much everybody can take advantage of many of us will spend money on Christmas gifts for ourselves or holiday trips or tools that'll make our lives more productive some of those tools could be things like Apple headphones these are quite expensive they're about 4.99 plus taxes but let's go with the idea that these are 499 dollars and just ignore sales taxes for a moment just to keep math simple we'll call it 500 bucks well if you generally pay an average of 30 percent in income taxes in order for you to afford these 500 headphones you would have to earn about 713 dollars to have 500 left to buy those headphones however if you're an entrepreneur even if you're also employed somewhere and you have a reasonable expectation to make money in your business your side hustle then you could buy these for five hundred dollars and it only costs you five hundred dollars that's because you are able to write off this product as potentially a business expense as long as it seemed necessary and ordinary that makes you more productive at your job as long as that job you're writing it off for is not a hobby and has a reasonable expectation of profits in the future you can now write off things that maybe otherwise you wouldn't have been able to write off which could be a computer that you use for work but maybe you game on at night maybe it's headphones to keep you more productive maybe it's a new laptop or an iPad so that way when you're on the go and you want to watch movies or Netflix that you've downloaded or whatever on a plane you can do that but you also use it for work hey if your primary purpose is work a lot of people say great necessary and ordinary business expense the trick it's not even really a trick it's just knowing about it it's totally legitimate is making sure that you have some kind of business that you could write off expenses against generally the IRS wants to see that you're actually able to earn money from this business so what do a lot of people do well a lot of people they might have their full-time job and they become a real estate agent and even if they just sell one property every couple years could be to their friends their family or whatever they're able to to write off potentially tens of thousands of dollars in additional expenses they wouldn't have otherwise been able to write off what's another example of a relatively simple license that you could get study hardcore that you can get would be a registered investment advisor license hey maybe you provide Financial advisory services to some friends or family you collect some revenue and even if you're losing money you're able to write off business expenses as long as you have an expectation of profit from that business the big differentiation is is that a hobby or are you doing it for work the cool thing now is you could be an employee and let's say you're an employee at Apple making 200 000 a year you want to go buy a five thousand dollar gaming laptop you're not able to write that off now if that laptop happens to primarily be used for your side Hustle real estate agent business and you happen to game on it later in the day there's a potential argument to be made that that laptop was necessary and ordinary for your business and you on the side happen to also use it for playing games but now that laptop maybe cost you 30 to 40 percent less because now when you pay that five thousand dollars you're actually basically paying 30 to 40 percent less in taxes which could be around fifteen hundred to two thousand dollars less obviously every time we talk about taxes it's important to consult your CPA now you can go extreme with these sort of tax write-offs if you happen to be a real estate agent who's deemed to be a real estate professional you can actually do something known as costs segregate your properties you could buy a three million dollar building and take a one million dollar potentially write-off in the first year of your ownership as a real estate professional now those are specific and more Niche tax deductions but the point is they're all around you why do you think some folks like to get larger Sprinter vans or a heavier electric vehicles like the EV Hummer or larger Tesla electric vehicles Like the Model X well a lot of these have bonus depreciation that allow you to accelerate your depreciation basically take more write-offs after you purchase them the big purpose of saying all of this is the more you open your eyes to huh okay as an employee maybe I'm not going to get all the tax benefits I'm as I could or that I could but if I had a side hustle even if it was just a side hustle I was making a few thousand bucks I'm now able to unlock writing off all the other things I might want to buy that I could use in my business and otherwise as well that's great that unlocks massive opportunity for you to minimize your tax burden and this is something we don't learn about in school hey do you want more perspective from me take a look at this I now offer licensed Financial advice with my team you can go to stackhack.com to get stacked with stack hack personal wealth plan and stock fundamental analysis at stackhack.com that's licensed a personal financial advice so you'll sign an advisory agreement with us my real estate startup at househack.com and of course our favorite courses on investing zero to millionaire real estate investing stocks and psychology of money making more money with how to get sh9t done that's llc's Insurance business expansion uh being an employee and making more money Property Management we can manage your rentals and renovate them better save money here you had lifetime access to these courses and live streams if you want some more limited Financial advice but actual Financial advice go to stackhack.com otherwise you get that lifetime access over here at meet kevin.com to all of the lectures on building your wealth this personalized this really for everyone and of course our real estate startup at househack.com while this isn't meant to be a comprehensive guide I'd really encourage you start looking into business expense deductions and keep in mind you don't even have to over complicate this people hear this and they think oh but then I have to create an LLC and I have to create trademarks no you actually don't have to do any of that on your regular tax return is a section for self-employment income you don't need an LLC you don't need a partnership generally what I recommend is get insurance for your business call it a day so for example if you're a real estate agent call up or go to hiscox.com not sponsor go to his Cox get like a three or four hundred dollar insurance policy there you go don't need an LLC don't need anything obviously talk to an attorney and CPA about some of the benefits of that but really the key here is what can you do to keep more money in your pocket and if you're going to be buying 500 headphones anyway would you rather spend 500 or spend seven hundred dollars that's the way to look at it and that's really important and there are two ways to look at that one is you have to earn 700 to have 500 left to spend 500 that's the employee direction if you're self-employed most self-employed people do the math a little different they say oh that's 500 cool well after my tax benefit it's only like 350 dollars five basically the same thing just done in a different way so what are again some things that you can do real estate agent aside investment advisor on the side lender on the side heck you could do a coding startup AI is all the rage obviously right now uh it'll now start segmenting all of those expenses your travel your Ubers potentially 50 of your meals and entertainment your tools Electronics computers uh some portion of your utility bills it was a fantastic opportunity there now number two a big thing that keeps a lot of folks poor in America in my opinion is the news cycle the news cycle especially if we just watch CNN or fox or the mainstream media is generally designed to sell us fear and that's unfortunate and I know that as a YouTuber as well I know that fearful titles get way more views than not fearful titles well what I always try to do in my content is look at realism what's the most realistic trajectory of the American economy do you want to bet against the American economy and most people are just always obsessed with where the next recession is where the next big crash is where the next big failure is where the next Scandal is and most of the time we should be focused on what can we do to increase our top funnel and how what can we do to increase how much money we have coming in what can we do to maximize how much of that we have left and then how many assets can we control that's going to be our stocks our bonds and our real estate stocks also being a pseudonym for business ownership the more businesses you own the more stocks you own the more real estate you own generally the better off you will be in building your wealth in the long run just consider that the average net worth of a homeowner somewhere at 180 000 whereas the average net worth of a tenant somewhere around five thousand five hundred dollars this is why I encourage everyone around me soon as practically possible leverage your W-2 your salary by real estate that's actually the beautiful thing about being employed this is not a video about oh you should always be self-employed because they're definitely big failure points of being self-employed that's why I think one of the best things to do is be employed and have a side hustle a self-employment gig so you get the benefits without necessarily all that downside risk so that negative news cycle I think is one other way that America keeps you poor it keeps you from investing in that new business idea in that real estate or in those stocks those are things that historically have always led to Building Wealth over the long run milk on wood that it stays that way the third thing and Third Way America keeps you poor is what I call the savings trap so we're generally taught that you should save money but Harvard did a fantastic study on this and money that is sitting in a savings account is statistically 100 likely to be spent whereas money that you have transferred out of your savings account and into a stock brokerage account even if it's not spent on stocks it's just in the brokerage account or in the retirement account and just sitting there as cash even if it's just transferred over is nearly 100 not likely to be spent in other words the more money we have in our bank account the richery feel now this is why psychologically it's really important to when you look at your bank account feel poor in fact one of the things that I like to do and I have a lot of different bank accounts it's a lot of money juggling I like to take any excess Capital that I have and move it into businesses or brokerage accounts as soon as possible I would rather see my personal account go negative and have Lauren my wife text me going like hey why is the personal account negative 50 bucks or whatever I'd be like oh let me transfer somebody over I'd rather that than have this big cushy feeling of of excess cash there because the more you have excess cash sitting the more you're likely to spend it on things that you don't actually need whereas surprise surprise when Lauren's like oh no their personal account just got overdrafted we must be poor it's like exactly and guess what we tend to spend less money even though we secretly have that money it's out of sight out of mind and that's a beautiful psychological trick listen to Harvard you'll study on it you don't even have to listen to me but how does America keep you poor convinces you to keep money in a savings account or better yet are you savings account whatever you'd actually be better off moving money into a brokerage account that's offering you yields and keeping that money sitting at your bank you can consider a wealth front a Robin Hood none of these are sponsored you could go uh put your money into treasurydirect.gov and invest directly into T bills if you wanted to Shorter term treasury uh bonds anyway keep those things in mind and avoid the savings trap number four a lot of folks feel that a landlord is going to be your opportunity to have a concierge service in real estate oh I want to be a tenant because if something breaks the landlord will come fix it let me put it this way it's having a peak owned about 25 different rental properties and transitioning to a real estate startup where we're going to own hundreds of rental properties but personally peaking at 25 rental properties I have found that the amount of money that I have to spend on rental properties every year as a landlord is relatively low I usually think if I have to replace a stove once a year big deal cost me six or seven hundred bucks call it 800 bucks with some inflation and it's not that big of a deal we're looking at less than a hundred dollars per month in my usual budget for Arizona property it's around 200 per month now generally my properties were more upgraded than potentially other rental properties on the market but this idea that the landlord's going to come fix everything for you to the standard that you want and replace light bulbs I think it's a misnomer I think most tenants who've been tenants for a while realize that most landlords won't even go as far as I did in being a landlord I tried my best to be a great landlord and really take care of the customer which is the tenant but most landlords aren't your concierge they're doing everything possible to minimize their monthly expenditures so the idea that you're getting a concierge by being a tenant is nonsense you're much better off getting into owning real estate even if that means leveraging your job and putting down three to five percent don't need to save for 20 down people get worried about this mortgage insurance you can get rid of your mortgage insurance once you're at 20 Equity usually within three to five years for folks or you can refinance the property in the future now keep in mind you don't want to go in betting that you're always going to be able to refinance especially as rates are high now you know we're hoping that rates will be lower in the future but there are no guarantees but as long as you go in qualifying on a 30-year fixed rate mortgage that you can afford a property doesn't really matter how much you put down as long as you maintain your job what's more important is that you focus on getting into real estate because now you have the benefits of depreciation when especially when you turn the property into a rental property you have the tax benefit of living in the property for a homeowner for two uh to three years if you want and potentially selling it with no capital gains at all that's a rule it's called the homeowners exemption when you live in a property for two out of the last five years you pay no income taxes on the gains for the first two hundred fifty thousand dollars if you're single finer than okay if you're married a lot of people actually flip personal rental properties and never pay taxes with that strategy to buy a place build equity in it after renovating it live in it for a couple years sell it do it all over again without paying taxes on those gains there's some incredible ways to build wealth and real estate just make sure you're not over improving your real estate that's the biggest way that America keeps you poor when it comes to owning real estate people over improve they think well it's mine oh well I'm living it treat it like it's a rental imagine you're your own landlord are you really going to put in that wainscoting in that white picket fence maybe but you shouldn't it's a waste of money should really upgrade to the minimum that the entire Market Bears which would be about your average rental property grade of a renovation you're going to want to make it sound like minimum in the sense of oh you want to be a slum Lord you want to upgrade to the minimum of this is reasonable it's safe maybe it's a little bit even above minimum that's great but don't over improve that's a great way to waste money on real estate and that is the number one way people burn the invest spent money they have available say buy a home and then they spend all their money renovating it that is a bad way to build wealth with real estate so look at what the rentals in the area are doing and act like you're your own tenant best way to invest in property last one number five try to do whatever you can to minimize time wasters in your life everybody's looking for more free time yet we'll spend hours going to different grocery stores to get the best prices and use the best coupons I used to do that all the time I used to go to Ralph's but then grapes were on sale at Vons so I jump over there and the nuts were cheaper at Trader Joe's all of a sudden three hours of my day was gone now and I'm not sponsored by them but I think it's great you go to something like a Walmart Plus or whatever where you can get free delivery for your groceries buy what you need online at Walmart Plus have it delivered to you for free once you meet that minimum work quantity which isn't that high it's like 30 or 40 bucks and now sudden you're not being enticed by all of the other discretionary items that you could be tempted to buy if you actually went in the store you're just buying what you need have it delivered you minimize your time outlet and all of a sudden you could focus on your side hustle or otherwise being more productive so in my opinion these are five great ways to avoid falling into the Trap of how America keeps you poor if you like this consider sharing the video subscribe check out 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Channel: Meet Kevin

Views: 51,384

Keywords: investing, stocks, stock market, real estate, money, making money, passive income, wealth, starting to invest, meet kevin, house hack, househack, j bravo, graham stephan, reventure consulting

Id: Lh7mnJGtAeA

Length: 21min 50sec (1310 seconds)

Published: Mon Aug 14 2023