Ryan Daniel Moran shows how to borrow against tax-free investments at 6% returns to buy rental properties yielding 10%, then use mortgage interest and depreciation to write off $9,000 annually on a $100,000 house. He invested $40,000 and can borrow roughly 75% of its value tax-free.
Hey guys, Ryan Maran here. Welcome back to video three in this perfectly passive income training series. I just want to recap real quickly what we've gone through so far. We have gone through how to get free toys, how I paid for my Tesla almost free. I got an almost free. I had to put a down payment of 2,500 bucks down. But other than that, all of my payments are paid for through investments that I put my cash in. Where did that cash come from? It came from my business. So if I were to recommend to someone, how do you get rich and pay for toys and drive Teslas? First, you start a business, you invest it wisely into cash flow investments and you put the profits into your business into high yield, low risk investments like real estate and notes and some other cool places that we can talk about. Today we're going to talk about protecting your wealth. We're going to talk about how you can sleep at night knowing that your wealth is not going to go away and that people can't take it like the government. There are two things that I want to cover in this video. The first is an investment that I recently purchased for a couple reasons. One, because it grows tax free. And two, if it dies, it leaves Esther a lot of money. So my daughter is protected no matter what happens to me. So this is an investment that I put about $40,000 in.
Okay. And this is, this is a lower yield investment. It pays about 6% per year, which if you compare this to a stock or a dividend, this is pretty good. This is an okay yield. And this is fixed and it goes on forever. Now, the kicker here is that this growth is tax free.
So if as a result of this yield over the next 30 years, this becomes hundreds of thousands of dollars, all of that is tax free. And this is not an IRA, by the way. I don't believe in IRAs. I don't believe in 401ks. I tend to think that they're bad investments. This instead is fixed and it grows tax free without your involvement. The other thing that is cool about this type of investment is that I can borrow against it. So at any time I could take a loan out for about 90.
Just be safe, let's say about 75% of the value. So if this grows and I want to make another investment, if I want to make, if this grows to 100 grand and I want to borrow 70, 75,000, I literally can borrow from myself. This continues to grow tax free. And I borrow this money out tax free and can put it into an apartment building. My video guy Marty is going to kill me if I write off the board one more time. He's nodding his head yet. So if I put this into an apartment building or a house.
And these grow and return, let's just say 10% a year, then I get the 6% here, the 10% here. This is tax free. This is tax free. And these investments are giving me write offs that I can put against my taxes. This is how rich people shield taxes. This is how when you hear people like.
Certain politicians talking about the wealthy only paying 15% taxes or certain businesses not paying any tax, they're using strategies like this, similar to this. Not necessarily the exact same thing, but they're doing similar things. It's a combination of a few of things that are going on here. First of all, they're putting their money into things that grow tax free so it doesn't look like income. Second, they're able to borrow against.
Things that they then get tax free money here and put it into other investments that shield more taxes. So let's run through this a little bit deeper. If you. I'm going to keep that up there. If you buy a house for $100,000.
And you just pay cash for this investment and this has a renter at $1,000 a month.
Good for you. You're getting 1% on your money. Woohoo. Yay. You did something good.
Now this might also appreciate at 2% to 3% per year. And this is taxed at a lower rate. It's tax at capital gains, which is currently either 15 or 25% depending on who goes into the White House in 2016. Now this would be all you got.
If it weren't for some tax benefits that came with this. If you finance this and you're paying $500 a month in mortgage interest.
This becomes $6,000 a year in mortgage interest. This.
Is a tax write off.
That is supposed to say tax write off. It actually says.
Now second. There's a second tax advantage that you get from real estate. It's called depreciation, where every piece of real estate you own depreciates, goes down in value over, I think it's a 28 year cycle. So it ends up being like 3ish percent per year. So 3,000.
Additional dollars.
Of depreciation.
This also is a tax write off.
Now I'm just making up these numbers. So if you run them and they're different, don't shoot me. Okay.
So this is.
$9,000.
In tax that you no longer have to pay. You get to write that off at the end of the year on something that was putting money in your pocket, on something that was cash flowing. So when you combine all these strategies and you have an investment that you can borrow against that grows tax free. The money you borrow against gives you tax free money that you can put directly in your pocket and then you invest it into something that is going to grow tax free and give you a tax write off. All of a sudden you are starting to grow your wealth and shield it and pay less taxes. Plus, no matter what, the government can't come in and take any of this because they've incentivized it. They can't take away the growth that has been given to you. This is how you take one little success. You stack it on top of the next and stack it on top of the next and you use money to make more money and to keep more money. Your wealth grows a lot faster if you can keep the money rather than giving it all to the government, which is what most people do when they just keep it sitting somewhere so you can take your money and get it to make more money and pay less of it to the government. So in the last three videos we have covered the wealth triad strategy, how to leverage cash flow to pay for your toys and pay for your life and how to shield it and protect it against taxes and governments and it ever just going away one day. I know I've thrown a lot at you in the last three videos. So I'm doing a live training class August 9th where I'll take your questions and kind of massage this and help you get really clear on all this and we'll start to put some of the pieces together. Also answer any of your questions that you have in the comments on these videos. And again, I'm doing this because I'm thinking about doing a training class in 2016 for people who have businesses to make more money and invest it wisely. But I need to massage the message and make sure that what I'm talking about actually makes sense. So you can sign up for the live class over@perfectly passiveincome.com and that's on August 9th at 1pm That's a Sunday and that's 1pm Eastern time so you can go over there and register for the live training. I hope you enjoyed this video as much as I enjoyed making it for you. I'd be happy to answer any questions you've got on the live training. I hope to see you there. Thanks for watching.
