1733: ROI on Health Savings Accounts - TAX FREE

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Take care. Welcome to the Creating wealth show with Jason Hartman. You're about to learn a new slant on investing, some exciting techniques and fresh new approaches to the world's most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine, self made multimillionaire who's actually been there and done it. He's a successful investor, lender, developer and entrepreneur who's owned properties in 11 states, had hundreds of tenants, and been involved in thousands of real estate transactions. This program will help you follow in Jason's footsteps on the road to your Financial Independence Day. You really can do it. And now, here's your host, Jason Hartman with the complete solution for real estate investors.

Welcome to episode 1733. 1733. So first American is out with a report and their housing index may become my second favorite housing index, displacing potentially. Which one? Do you know what I'm gonna say? Which one would they displace? NAR's housing affordability index. This one might take second place. I'm not sure yet. I've been thinking about it for quite a while now as I've been really digging into their index a bit. But they do, and we've talked about it before, the RHPI Real House Price Index. And they say that today's house prices are over 40% more. Yes, I said more affordable than the housing boom peak, meaning before the Great Recession, the global financial crisis. So again, measuring in only one thing, dollars. You can be deceived very easily. And as a second part to that, measuring only in the price of the house, not the payment on the house, you can also be very deceived. So don't do that. Don't do it. Don't do it. You want to follow the Hartman Comparison Index so that you have an accurate view of the prices. And you know, here's the thing. There are many more factors out there in the economy, in the housing market, in society in general than anything we discuss in the hci, the Hartman Comparison Index. However.

You may not need to think about all of these other factors. You got to think about them a little bit, but you don't need to agonize about them too terribly much. Why? Why is that? Well, I'll tell you why.

The reason is that all of those things, all of those commodities and services in the Hartman comparison inde contain a massive amount of data. In fact, they contain so much data, literally billions. Yes, that's right. Billions of people and companies have contributed to the data of the items in the Hartman comparison index. How is that, you might ask. Well, I'll tell you how. Okay. And we will of course discuss this in much greater detail at Empowered Investor Live, which is coming up fast and I gotta tell you, I'm so excited. We might add one more speaker. We're trying to see if the schedule will work, but I just got off the phone with a speaker that has a phenomenal set of resources for investors, especially investors who are interested in taking greater control of their properties, self managing or doing the plan. I recommend that we recommend the hybrid self management plan. The hybrid is the best plan. That's the best one. Okay, so we, we might be able to add him and we're working on it. But more to come, more to come. We're working on the schedule again today to see if we can fit one more speaker to just make it a powerhouse of information. So yeah, that's coming. All right. Data. Yes, data. The billions of people and zillions. Because there probably aren't billions of company, but the billions of people and companies altogether. There's billions that contribute to the data in the HCI in the Hartman comparison index is absolutely staggering. Just understand that the price of anything, of any item in the marketplace, any good or service, any commodity and other indexes like the Forbes Cost of Living Very well Index. Yes, I've talked to you about that one before. That's their own version of the CPI for the ultra wealthy. Right. All of these items contain a massive amount of data. And where is that data hidden?

It's hidden in the price.

There are billions of people and companies, these companies that are managing their own treasury, all of the trading firms, the Wall street firms, the bond traders, Pimco, Goldman Sucks, Merrill Lynch, Ameriprise, Warren Buffett, Berkshire Hathaway, you know, every, everything. It's all in there. It's all there. Folks. We wouldn't want to leave anything out for you.

A ton of data is in the prices of all of these things. And that's one component that I am really going to make sure we explore in greater detail at Empowered Investor Live. Because it's so Important to understand all those inputs into this data that make it so important. Okay, so Mark Fleming, chief economist for First American says quote, the underlying fundamentals driving the housing market signal that booming house prices are poised to gradually moderate rather than bust. Now you could argue that they've been moderating a bit. Now remember, the data has a lag time of about three months. So out in the news today. I was just reading this morning because every morning I'm just reading tons of stuff for you. Well, I'm also doing it for me. I'm not being totally altruistic, I just like this stuff and it's interesting to me. But hey, I share it with you too. Of course. This report showed that housing prices were up. I believe the number was 16, 16.8% year over year in the trailing 12 months of the last reported month, which is always lagging. But they are moderating a little bit. There is just a little bit of a, well, to use the word we used on our last couple of live streams, tapering. Yes, a slight, slight, ever so slight tapering and that is occurring. But folks, according to really all the people that get it like yours truly and Mark Fleming and the HCI and the RHPI and even NARS Housing Affordability Index, which by the way, it's pretty good, but it has a few flaws that I've explained previously. They don't see it. They don't see this big crash people are talking about. Now there are other factors of course, but remember those factors are considered in the prices of the items in the comparison index because few things in life contain more real world data than the price of something. The price is quite literally the information itself. That's the information. Alright, so don't look for any big crash anytime soon. Now granted the Fed is tapering and you know, they buy a lot of mortgage securities and there's this, that and the other thing and there's the fact that our country is completely leaderless. We have no leader. If, if the aliens visited Earth today and said take me to your leader.

What would we do? I don't know. It certainly wouldn't be Joe because he's not there. You know, the lights are on but nobody's home. So we have no leader. So there are definitely issues, no question about that. But hey, it is what it is and all you can do is sit back and watch it like a sitcom because it's so completely absurd. Yes, it is. It's completely absurd. All right, so empowered investor.com, get your last minute tickets because we got A great event coming up, folks. I am just so excited about this and I'm so excited to see everybody because, hey, it's been a while. Yes, it has. It's been a while. By the time we do this event, it will literally have been, gosh, since I did a live event, well, I've done other people's live events, but my own live events, it will have been one year and 10 months. Yes, one year. No, one year and nine months. I think one year and nine months. A long time. So I'm really looking forward to seeing all of you and many of you have purchased tickets already, but I know there's a few that haven't and that's why I say go to empowered investor.com right now, right this minute. Empowered investor.com get your last minute tickets and the hotel information will be revealed to you right away. You'll have our discount link and wow, this property is just so gorgeous. I was watching an orientation video for meeting planners of this property. We've, you know, we've already held events here before, but I mean, wow, it's, I just love, love this venue. So we're really looking forward to seeing you. All right, today we've got my friend Darlene Root back on the show. She's been on before, but it was a long time ago. She was at one of our prior conferences and some of you met her there. She will be at Empowered Investor Live, by the way. Darlene will be there. She is just a wealth of information with some really creative ideas in terms of retirement plans and how to use the financial instruments available to you in a better way with your income properties. So let's go to Darlene and that will be the topic for today's episode. Here we go.

It's my pleasure to welcome back my friend Darlene Root. She has been on the show before and she has also spoken at at least one of our live conferences before. And today we are going to talk about how you can use. Well, the unofficial title of this presentation, I should say is called Tax friggin Free. Okay? But we're going to talk about how you can use the hsa, the health Savings account, as an investment vehicle and you can buy real estate with it. You can do other investments with it. And I think you're really going to like this. So Darlene, I believe you are sharing your screen now, right?

I do believe I am sharing.

Fantastic. So we have some people who will be watching this online and they'll get to see the visuals and some that won't so let's explain the visuals to them if they're just listening to audio only. And let's go ahead and dive in. I love your quote to start with. Tell us about it.

Yeah, thanks. Good to be with you again. It's been a while since I've seen you and been on your show, so looking forward to seeing you in September. I'm going to come out.

Good stuff. We are, too. Yes. At Empowered Investor Live.

Yeah. So, yeah, this first slide was shared with me the other day in a conversation. And boy, isn't it true there are two tax systems, one for the informed and one for the uninformed. And that was from a judge back in the early 1900s. So nothing has changed. Nothing new under the sun.

Right, right. Well, I mean, the quote is, in America, there are two tax systems, one for the informed and one for the uninformed. And of course, we all know the rich, the elite, they get away with murder as far as taxes. I mean, you know, when we all heard a few years ago how Amazon.com had you multi billion dollar profits and paid zero tax, we were just disgusted. Warren Buffett, who complains about the tax system and the hypocrite that he is, takes advantage of everything. In fact, he sued the IRS over a tax issue. So it's just total hypocrisy. It's. It's really unfair. But look, the system is what it is. None of us are going to change it. We might as well use it to our advantage and do what the government wants us to do, what they're rewarding us to do. So let's do that. And that's just, you know, that's just being a good citizen.

Yeah. And that's, that's why this conversation is so timely, because most of us are uninformed. As an Americans, we don't realize that we can do a fair advantage without cheating the system. And those advantages are provided by the irs. Sure. First of all, I need to say who I am. And you and I have similar paths. We both got our real estate licenses when we were 19. Of course. Different years.

Funny.

And I started selling real estate just like you did. And then in 1983, I saw a guru who came through town teaching no money down techniques and bought the course and took off. But one of the things that I add to that, Jason, is I do it tax frickin free as much as I can. Yeah. And that's what we're going to talk about today. I do also specialize in entity structuring, putting things in Trust and LLCs. And you've got. You and I have had conversations and these are layered things. And I do the trust basically for anonymity.

And I think it's wise we should make the disclaimer. Neither of us are tax professionals and neither of us are attorneys, so please consult attorneys. Tax professionals. Get the advice you need. This stuff is very, very complex. Yes, we're giving. We're giving you the basic idea. We're sharing personal experiences. Darlene Will, at least I might throw in some of my own. But seek out professional advice for your particular situation. This is just for entertainment purposes only, as they say.

That's exactly it. And that's my next sl. I told you who I was. This is who I'm not. I am not any of those that have initials at the end of the name. I'm just somebody who's been doing it and I use legal counsel a lot because you can do things wrong in your IRA and have it blow up. And nobody wants to pay more taxes than they need to. So this slide is probably the one that puts nausea in my stomach when I look at this. And you can go to usdebtclock.org and don't do it now, but you can watch how our government is misappropriating our tax dollars. And at the time the slide was done, which was about three or four days ago, it was 28 trillion and change. I went there this morning just to update it, and it's getting closer to that 29 trillion and change. So it's not getting better, it's getting worse. And so we need to get a hedge against that.

And that is likely going to create even more inflationary pressure as we go through the years, because, you know, it's a good business plan for governments and central banks to inflate their debt away, as I teach with my inflation induced debt destruction philosophy. So let's take advantage of every tax saving opportunity we can.

Yeah, and you do a great job in your, in your podcasts about the two ways governments spend or pay for everything, and that's taxation and inflation. And inflation, as you know, is a hidden tax. And it's done, obviously, to dupe the minds of Americans. We think it's done by the consumer Price Index, and we know that that's not the case. And it's a hidden tax that destroys our purchasing power. And it is understated to keep Social Security entitlements artificially low as we race toward the baby boomer. I'm a baby boomer. You're not As I race toward that retirement age for the Social Security eligibility, that's going to be lower and lower as we press on. So, Jason, you already do a beautiful job of talking about the Chepwood Index and how that really is the real measure of what inflation is. We know that inflation is held artificially low. I couldn't find an updated Chepwood Index. I think the latest one, yeah, I.

Know it's not very published very well or I don't know where to look, look for it. But you know, the last one I saw, Darlene, it was probably the same one you saw that basically showed the real inflation rate in several, you know, I mean, I looked at Maybe the top 30 biggest cities in the country or metro areas and the inflation rate is essentially between. And this was a few years ago, so it's even worse now, but it was between 8 and 12% or 8 and maybe 13%, I can't remember exactly. And, and you know, the Chapwood Index is not manipulated like the Consumer Price Index. So it's a much more reliable measure, in my opinion.

Yeah, yeah. And if, if you haven't heard, I don't know what episode it is, but you talk about that in great detail and how it's measured. And so I will leave that right there. This is daunting. This is actually a 2020 slide and I updated it from previous presentations.

So let me, let me share what's on here for the people listening only. So basically 33% of Americans have no retirement savings whatsoever.

None.

Only at the other end of the spectrum only. And this is amazing, 13% have over $300,000. And by the way, if you think you're going to retire and have a middle class lifestyle with $300,000, you're out of your mind. So I doubt anybody listening believes that. But you know, I'm saying it generally speaking. But you know, back to the other end of the spectrum, which is really scary, 23% of the people have less than $10,000.

This is crazy.

I mean, this is unbelievable. So the vast majority of people are woefully unprepared. So what can they do? Darlene?

Yeah, so let's talk about that. I'm just going to go through this real quick because it goes the woefully unprepared. If you're, and that was an adult, was 18 and over, by the way. It was the average American adult. But Social Security is going down. The average check is $1,400 and change per month. And like you said, if you Think you're going to retire on that? You hit the nail on the head. A retired couple, and a retired couple is 65 years old can expect to pay $300,000 in retirement in health care alone. And that's not health care premiums, that is health care expenses. And when I say during retirement, retirement is 20 years. They're taking 65 years old to 85 years. And you're going to spend $300,000 just on medical expenses. That does not include long term health care. And Medicare only covers a limited amount of that long term health care. So that's a pretty scary thought when you said you're not going to retire in 300 grand. No kidding. That is just going to go for medical expenses in the long run. And here's some statistics. It's healthcare spending is expected on an average to rise more rapidly than the rest of the economy. No kidding. Baby boomers are all racing toward that finish line right now. And I believe you're a gen X, aren't you?

Yep. I'm in the middle.

You're in the middle.

I'm the generation everybody forgot about. The lost generation, the middle child of history.

Well, healthcare is going to be about 15% of the average retiree's annual expense.

That, that's, that's scary. Yeah. And unlike my parents generation, I won't have access to employer or union sponsored retiree benefits.

So yeah, this is good to share. Darlene. I, you know, our listeners are so well informed. I think they all understand the problem is terrible. Yeah. So let's kind of jump to some of the solutions and you know, because you've got some really creative ideas on this stuff and I absolutely love hearing from you when you've presented to our group before, just really creative, interesting stuff. So let's dive into that.

Yeah. This slide right here, Invest for your future. Tax free and debt free. I have a question mark on that because I don't believe in the debt free and I know I would get Dave Ramsey.

Dave Ramsey is in elementary school when.

It comes to this stuff. But there's a right way to do it and we don't mean debt free.

Refi till you die is your mantra and I'm in agreement to that. So let's talk about some of the tax advantaged, tax free and tax deferred methods and then I'm going to hone in on one if you'll allow me to do that. All of these are self directed and for our listening audience that can't see, I'm going to blow through these, the self directed IRA, that's just the traditional garden variety IRA, which is tax deferred. And then the 401k, another tax deferred. And then there's this really cool one called the 401K Roth. And it has all of the advantages of tax free with the advantages of getting debt without having to pay unrelated debt financing income. And that's a whole lesson in and of itself. We have the traditional ira, which isn't necessarily self directed. It might be with your employer. My fave, two of my favorites. One is the Roth IRA because that's tax brick and free. Then you have the simple, the sep, the solo, and the hsa. And HSA stands for Health Savings Account. And what I love about this over the ira, the Roth IRA is it's sort of the trifecta. You get a tax write off going in, your contribution is a tax write off and it is tax free. Investing while it's in your hsa. And then when you take it out, it's tax free. So it's the triune tax write off going in, investing tax free while it's in your hsa. And then when you take it out, it is tax free. Now there, there are some rules about that. We're going to go over that in a minute.

So this is, this is with the hsa, that doesn't apply to Roth IRA or traditional ira.

Correct.

They don't get all three of them. Those.

Some of them. Okay, well, we'd like to hear about that. But you know, the, the thing that strikes me about the HSA, and I'm sure you're going to cover this, is it seems like you wouldn't be able to make very large contributions to it.

Yeah, good. So you saw my slides. Apparently you don't need to make large contributions to it.

Oh, well, so that, by the way, this is why I asked Arlene to be back on the show, because I reported maybe a month and a half ago or so about Peter Thiel, the most brilliant person in Silicon Valley, if you ask me. Read his book Zero to One. It's excellent. He has over 5 billion. That's with a B. 5 billion in a Roth IRA. It's the biggest Roth IRA in the country. And there are a few other bigwigs who have some pretty big Roth IRAs too. So you make money in the plan. But what he did is pretty unique, obviously, Darlene, because you know, he was one of the original investors in Fakebook. I hate that company. But we all use it and some other startups that just went parabolic. I mean, what are the chances, right? But if that's inside the Roth ira, that's how you get the trifecta, right? Because. Well, I can think of two things. Because you don't pay on the way out.

In the hsa.

So he did a Roth.

Yeah, I know, I know.

He could have done it in an hsa.

So the Roth, he got two of those three, right? He, he invested the money post tax, he paid tax on the money, then put it in his, his Roth ira. But once it's in there, it can, he can invest it tax free. So he's got one thing there. And then when he takes distributions later at 59 and a half or has to at 70, he gets those tax free under current law. But I worry they'll change the law. So how do you get all three in the hsa?

So I'm going to guess that he did not do this in a Roth. I'm going to. Of course it is in a Roth. But at the time he opened up the Roth, he did this in 1999. And I want to put some framework around it. You can really max out your IRA or your HSA in a very short period of time. Of course, Peter Thiel did it in a unique way, and some of those things are not available to most of us. But he did it with a $2,000 contribution in 1999. Now I'm going to guess that he did not make that contribution into his Roth because are income limits to having a roth. And in 1999 he was part of PayPal, if I'm not mistaken. Or he was joining in and his income probably would have been too high. I think at that time it was 140,000 or something. And so he would have had to do what is called a backdoor ira, a Roth IRA where he put it in a traditional, rolled it over into a Roth, and you're allowed to do that. So I just wanted to say that I'm wondering how he actually did that. He doesn't go into detail.

Bottom line is that you can do it with one contribution. He's never made another contribution to his plan and he has just used that as. And it's not his piggy bank yet. Unlike the HSA, he cannot take that money out until he's 59 and a half the HSA, you can do it right now. So the contribution limits for an HSA are small. $3,600 if you are single, 7,200 if you are a family and catch up is $1,000 if you're 55 years or older. And so for, I don't know how old you are, Jason.

Well, so how are we going to make any big money doing that?

Sure.

I mean, I'm thinking like a single person. What do you say, $3,600 a year plus if you're over 50, I think you said another thousand you could buy every year, 55. Okay. So you could put another thousand. So a 55 plus year old can put in $4,600 a year and a married couple can put in $8,200. I mean, like this is nothing, right? How are we going to buy real estate and do big deals here?

I'm going to show you. Okay, I did want to go back. Digress a minute. Now understand that the contributions are tax free. You can invest tax free and take it out tax free, but they have to be for qualified medical expenses. And here's really where I wanted to stick this. Well, what if I don't have $5 billion in medical expenses? You're not going to do everything in your hsa. And what you're going to do is you're going to do the contribution. You're going to invest those dollars and I'm going to show you some unique ways in doing that in a second. And you're not going to pay your medical expenses right now. So if you I have a high deductible because that is the qualifier. If I get sick and I have a surgery, I'm not going to use my HSA because I'm growing that hsa. I'm going to pay for it out of my personal funds. I'm going to keep really good records. And then down the road, say 10 years from now, I want to take out $50,000. If I have $50,000 in qualified medical expenses that I've accumulated, then I can go ahead and take that money out tax free and go on holiday. So you're going to, like I said, you're not going to have every one of your investments in here. At least build it up to where you have half a million dollars in there because we already saw that medical expenses are going to be at least 300,000 in your retirement. So these are just some tools in the tool shed. But you can, as any of our listeners, if you're 45, you open up an HSA today and you start doing some real estate investing and you build that out and you're paying your medical expenses for you or your family and you decide at the age of you know, 46, you want to take 50, 60 grand out. If you have 50 or 60 grand in there, you can as long as you had qualified medical expenses to offset that. Does that make sense?

Yeah, it's just hopefully nobody will really have those medical expenses that are significant at all. So, you know, it just sort of begs the question, you know, how are you going to really use this then?

Sure.

I mean, it's still medical expenses even after 59 and a half. Right. Like with a traditional IRA or self directed IRA. Right. You can start taking distributions that are taxable if it's not a roth. Right. After 59 and a half. So with this plan, when you're 59, does. Is 59 and a half still an age that means anything with an HSA?

No, it's now, it's today. If you open it up when you're 20 and you start investing and you're really building it up using some of your techniques, some of mine, and you stockpile that, say for instance, in a couple of years you have 100 grand in there, let's just say that. And you've paid your medical expenses out of your own pocket. So you have $50,000 in medical expenses. You at any age can take that money out, you can reimburse yourself.

But it's only for medical, so.

Only for medical.

Right, but what happens if you want money out and it's not for medical?

You can't. So it has to be for qualified medical. But you've already paid those medical expenses, say over the years and I did this before I was 59.

So in other words, you can go back and all your old expenses. Got it.

Any of the expenses. Yeah. During the time you had your hsa.

Oh, no, no. But so only when you had your hsa.

So yeah, sorry. Yeah, yeah.

So you can't go. You can't use an HSA today and then pay your medical for the last 20 years.

No. Wish you could, but can't.

But I mean is this money is not locked up completely. Right. You can liquidate the plan, I'm assuming with a penalty you can just like.

Any of the other, self directed. The other self directed.

So you would have to pay the tax and I believe the penalty is like 10%, right?

Correct.

So tax plus 10%. By the way, don't quote us on any of this stuff, folks. Check with your advisors. But that's how it works. Right.

And one of the reasons I like this tool is you do get the tax write off going in. So every year you're just going to get a tax write off and you're going to invest this, but it's again you're not doing just your HSA investing here are a zillion different things you are going to invest with. But I couple my HSA along with my Roth IRA and then I partner with other people so you can get what I call fat stacks in a short period of time. If you're partnering and for those who are not able to see the slides, you can do basically any type of investment in an HSA that you can do in a self directed IRA or any of the other.

And pretty much what Darlene's saying there is arm's length type investments where you don't take possession of a painting that's going to hang on your wall, that's not going to qualify. No gold coins that are going to be in your house. Okay. But you know, rental properties, real estate partnerships, flipping houses, mobile homes, raw land, vacation homes, not for personal use though. So vacation rentals we should say, you know, assisted living, precious metals. But you must have a custodian. Not you, you can't take possession. Private equity deals, private LLCs, private placements, cryptocurrency. I'm not a huge fan of cryptocurrency, but this does seem like this kind of vehicle, whether it's a self directed IRA or an HSA would sort of lend itself to that because of the craziness of the huge potential upside of course that you could have a huge potential downside too. Some of these go to zero. There's a graveyard of coins that never made it out there.

Like over a thousand of them I believe now. So be careful. Crypto is very risky and I would not call it an investment but a speculation. But so was founders stock in Facebook for Peter Thiel, right?

Absolutely.

And so if you have something that has that big potential capital gain, this is pretty great for that. I think it is.

And like I said, I spread the love amongst my self directed. Some of the stuff I do in my HSA because I'm still building that up and some of the stuff I'm doing in my Roth IRA and some of the stuff I partner with my own personal self and you can do that as long as it's done correctly. There's also discounted mortgage notes, performing and non performing and buying partial notes. And that's a real quick way to at least get your money deployed out there. But in the rental. Well you can't buy a rental for $3,600. Close. I actually have. It's One of my slides on a high risk rental that I bought for 12 grand and I think you know of that one.

Where was that? Was that. Did you buy that on ebay?

No, I actually bought that in a, in a nice little community, but it was a short sale. This is back in the short sale days. I paid 12 grand for this house and did absolutely nothing to it. And I rented it out to somebody who had a medical marijuana grow facility and they paid me $1,500 a month and I kept the house for five years. And so this is tax frickin free. Turned around and sold the property. I think we put ten grand into it to sell it. So I'll go through the math in that in a minute.

Interesting.

Here's how you can get fat stacks in your IRA a lot quicker than just, you know, 3,600 bucks in cryptocurrency. You can partner with your non IRA money. So you're going to bring two elements to the party. Your other retirement accounts, other people's retirement accounts. I call them financial friends or friends with benefits. It's a different connotation.

Now we get it.

Your spouse or, and there's a typo on here, or any other family member's ira, and a lot of people are going to cringe right now going, no, you can't do that. You can only invest with your brother or your sister. That's not true. You can't borrow money from your mother's ira, but you can partner with your mom. When you're doing these types of things, the paperwork and the timing of everything is crucial. So don't drive the Ferrari without reading the owner's manual. And then other investors, non ira. And I do that a lot with investors ira, non IRA money. People who just want to get a return on their investment. And so you want to make sure that you don't get into any SEC issues by pooling funds. And there are some ways to do that without getting your toes slammed in the door. So this one, I had $2,000 in my HSA. This is probably one of the first deals that I did. I had $2,000 in there and I had 20 grand in my personal account that I wanted to invest. And then I found a financial friend who had $114,000, just personal money. And we partnered on a loan in disproportionate interest. And you have to be careful what vehicle you use in order to do that. But the term of the loan was 12%, 2.5 points for 12 months. I never saw the House, it was in Las Vegas, did the paperwork and wound up putting a pretty healthy amount back in my hsa. So everybody has to have an agreement. There was a partnership agreement and it was also done in a trust, hence the disproportionate money coming back out. So that was one of the very first ones. It was fun because we only had two grand to play with in my hsa. When the money went back in, incidentally, the profit had to go proportionately to my HSA and my personal funds. I couldn't go, all right, I'm going to take six grand and put it in my HSA and two grand in my personal account. It doesn't work like that. So I just want to make sure your listeners are aware you can do it right and still do it tax broken free if you do it right. This was my high risk rental. This is the most favorite one that I, that I did. This is the second deal that I did with my hsa, but not my. I had done many deals with my Roth, but I wanted to start putting money in my HSA pretty quick. And so like I said, the purchase price was 12 grand. It was just beat up. But we knew it was going to be medical marijuana. They were certified by the state of Michigan. Now it's legal recreationally, but then it was only medicinal. The rent was $1,500 a month. Why? Because it could. Because nobody else was renting out their house. It was high risk. So we rented it out for five years. So that was like 90 grand in rental income, tax free. And then turned around and sold it for five years later. They decided not to have the grow facility any longer and sold it for 89. There were some closing costs and so forth in there, and we did have to put 10 grand in it to get rid of the mold and that type of thing. So, you know, roughly $150,000 went back into my Roth and HSA in direct proportion and how I partnered with it.

Okay, these numbers do get bigger. That's.

They do get bigger. And so.

And you know, that's a high risk rental because it's just an el cheapo property. And those are, those are just fraught with a whole different set of problems than we usually talk about on the show. So.

You can reach out to us if you want more on that.

Yeah, but now the big thing is medical or not medical, but marijuana facilities. And you can buy marijuana stock, interestingly enough. And startups and Peter Thiel invest in a startup with a company. Marijuana isn't going to Go away. Although federally still illegal air quotes, each state is having their own little idea of what that looks like.

We got 19 states are legal, I think now.

Yeah. And so I did put. This is an actual case, but not typical. And then some of the smaller things you can do, purchasing discounted notes, I do this in my Roth and my hsa and you can buy a discounted note if it forecloses, you can do the foreclosure and then get the property back and outright sell it. There's a lot of things that you can do. And all of our notes are serviced by a third party servicer, so we don't worry about collecting any of the payments. They just come in.

Right.

But you can do this really with what you have, Jason, it's purchasing real estate. Find partners that are willing to lend the money, even if you have to do the lion's share of the work in the beginning, you're going to start building up your retirement account, your HSA account, getting ahead instead of being that one in three people who doesn't have a savings.

Got it? Got it.

When it's all said and done.

Okay, good stuff. So, Darlene, we've got to wrap it up obviously, and that's really great. So thank you so much for sharing that. One last question though. You are steeped in the world of the Roth style retirement plan or hsa, Right? I have never converted converted my plan to a Roth because I'm just worried they'll just change the rules. I mean, the government is obviously very desperate. They've mismanaged their money terribly, as we all know. I'm just afraid they'll look for the low hanging fruit and just change the rules and everybody that will have paid taxes will just basically get burned, you know, but hopefully I'm wrong about that.

Yeah, hopefully you are wrong about that. I'm not sure it's possible. Possible, not probable. I think one of the nice things about the Roth is I don't believe it would go away. The traditional might. They want the tax right now.

Right.

When you open up a traditional ira, you get a tax write off with that money going in and taxes deferred on the gain coming out. Our administrations, they're very shortsighted. They only think four years ahead of them.

Yeah, of course.

And they would rather have you pay the tax. They don't care if you're building it up tax free. And so I'm going to say that the Roth is still mine. Roth and hsa, tax free is better than taxable.

Right? Right. Good stuff, Darlene, where can people find out more about what you do?

So you can go to mutualinvestmentholdings.com Good stuff.

Mutualinvestmentholdings.com get advice from the appropriate tax or legal professional. I just want to say that again. And Darlene, thank you so much for joining us today. We really appreciate you sharing this stuff.

I had a blast. Thank you for being gracious with your time.

Hey, it's Jason Hartman and the largest wealth transfer in American history is underway right now. And I want to invite you to learn how you can defend yourself against this wealth transfer, be one of the recipients of this wealth transfer instead of one of the victims of it because the chips on the table are changing. Everything is moving around. And this is the time to be more educated and more aware than ever. So join us for Empowered Investor Live. This event has a totally new name, Empowered Investor Live. It's in Orlando and it's in the middle of September, September 10th, 11th and 12th. Beautiful resort property in Orlando. You can make a vacation out of this. Bring the family, Disney, Universal, Epcot center. Just tons of great things to do in Orlando. So join us for this event in the middle of September. Fantastic resort hotel. But look, that's not what it's about. It's about the education. It's about seeing the properties. It's about networking with fellow investors, learning how to create wealth in inflationary times, times and to explore the possibility of deflation in this market or a mix right where some things are inflating, others are deflating and you want to be on the right side of that trade. This wealth transfer is truly amazing. It has never happened before. There's not only the biggest wealth transfer in American history, but the biggest migration, at least in our our lifetimes, if not longer. So discover the markets that make sense, the markets that are a ripoff. We will have local market specialists there. Our teams will fly out from all over the country like they like they have at my past events. We've got great speakers lined up. We're going to talk about estate planning, asset defense, asset protection. A whole new angle on asset protection, by the way, that we have never talked about before. It's just going to be three great days. So Friday, Saturday and Sunday, September 10th, 11th and 12th, Orlando, Florida. Get your tickets now. Get the early bird price. Do not miss out on this event. By the way, if you're a member of the empowered investor inner circle, of course you did get a discount. Be sure to look in the inner circle for that promo code, that secret discount code for you. And if you're not a member, you can join below and get this event included in that package price. So take advantage of it. We'll look forward to seeing you in beautiful Orlando sunny Florida. And hey, I know a lot of you are thinking of moving here if you don't live here already. So it might be a good time to not only take a little vacation, but attend the conference, learn a ton of things and maybe explore some new areas, maybe some new places to live. So we'll look at forward to seeing you in Orlando middle of September. Get your tickets down below and we'll see you there.

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