3X Your HSA: The Secret To Supercharging Your Wealth

Today I am going to teach you a secret about the health savings account, the power of being able to invest your HSA and what you know best. I've actually invested my HSA in cows, a crypto mine, a rental property and tripled the value of my health savings account with this little known secret called self directing. Did you know that you could invest your health savings account when you're not using it for medical expenses? Did you know you could self direct your HSA and buy cows or rental property or cryptocurrency? Well, you're going to learn how today. Now I'm a registered CPA attorney, best selling author and own several businesses in the tax and legal industry. And over the last 15 years I've been teaching this strategy to thousands of clients, saving thousands of dollars in taxes by better deducting their medical expenses. I've even been using the HSA myself. And you know what's even fun? I own cows and a crypto mine inside my hsa making money tax free to pay for my medical expenses. Now let's get into it. I want to first explain what an HSA is, the benefits of an HSA and then how you can invest your HSA to make tax free money and pay for your medical. That's where the cows come in. All right, so now what is an hsa? It's a savings account. Think of it like a retirement account for your medical. But you don't have to wait till you're 69 and a half to use it. You can use it tomorrow. So it's an account that you can take with you anywhere you go, get a tax deduction to put money in it, invest it in whatever you want, let it grow and then pull it out tax free for medical expenses. Yeah. Did you catch all that? Incredible. But in this account goes with you anywhere you want. You don't have to be an entrepreneur to have one. You don't have to have an employer that provides one. You can set one up easily if you have the right type of insurance policy. That's it. That's it. There's very, very few drawbacks and I'm going to go through the list of the good and the bad here in a moment. But first of all, just know it's an account, you can manage it, grow it, build it and pull money out tax free for medical expenses. Now some of you are like, well Mark, I have a lot of medical expenses or I've got to put money in this first and then I can write off my medical expenses. No, no, no, no, it's even easier than that. Let's say you had some medical expenses just a few months ago. If you have a health savings account, you can put the money in on day one and on day two, pull the money right back out and reimburse yourself for your medical expenses. You just manufactured a tax write off. See, you can get write offs for medical expenses you wouldn't otherwise be able to. Another point, a lot of people think, well, Mark, I get to write off my medical expenses anyway. Oh, really? Who told you that? For us that are a little older and have been turning in our medical expenses over the years to our accountant, and I'm the accountant breaking them the bad news. But if you've been turning in those medical expenses and your accountant goes, yeah, you make too much money. You can only write off your itemized medical expenses after a certain level and it's based on your adjusted gross income. Here's the short end of it. You don't get a write off. The number you may have heard is this. This 7.5% that you can write off any medical expense over 7.5% of your adjusted gross income. So if you make 100 grand on your tax return, you can't write off any medical expenses, no write off at all, until you're 7500 and next dollar. So I can write off $1 if I have 7501 dollar in medical expenses. That's how it works. It's terrible. And so the average taxpayer getting into bigger medical expenses soon realizes I can't write off any medical. Now, if their day job has an HRA or a flexible spending account, that's the use it or lose it plan. Those are fine, they're okay. But the creme de la creme, the silver bullet, the holy grail of writing off all of your medical expenses is the health savings account. Now let me try and say this one other way. Then we're going to go through the pros and the cons. You own a small business, you don't. You have a day job, you don't. But if you have the right type of medical plan, you can open a health savings account this year. Put into it 4150 if you're single or 8300 if you're married. Filing joint, get a tax deduction and then invest that money and pull it out whenever you want for future medical. Or you can have that account opened alive and well. And when you do have a medical expense, pay for it with your debit card or out of Pocket, whatever and then turn around, put it in your savings account and pull it right back out and reimburse yourself. You just manufactured a write off, so in effect you are now getting 100% write off for all of your medical expenses. It's ingenious. It's beautiful. It's amazing. Insurance companies don't really want you to know about the Health Savings Account because they want you to pay for expensive insurance where they cover everything. Very. If it's still a little hazy, hang with me, keep listening. I'm going to explain the pros and the cons and at one point it's going to click and you're going to go, oh my gosh, this is crazy because I've taught this so many times. I know that it can seem a little complex, but then all of a sudden it's going to come together and you're going to see the power of the Health Savings Account. Who is this perfect for? It is perfect for the person that's generally healthy. They don't even use their health insurance. That's a lot of Americans. It might be you. Your employer provides you insurance, you buy your own healthcare. Healthcare.gov insurance, fine. But you really don't use it. You're generally healthy. You're a perfect candidate for the Health Savings Account. Now, if some of you have a lot of medical expenses, you need great insurance. There's a certain network that you, you've been in for years that you may want to hold off on doing an HSA because you need this health insurance plan that really pays for a lot of medical for you. You're on a tight budget and you need great health insurance because you're maybe a little unhealthy. I've been there. I get the, it's overwhelming. The number one cause of bankruptcy in America now is medical expenses. So I get the strain on your family. When you have high medical expenses, go out, get the best insurance you can. But for the rest of you, you might be in that phase of life right now where you're generally healthy. You're not even using your health insurance. Oh my gosh, this is the golden opportunity. So what you're going to do is get a high deductible plan. And with this high deductible plan, you're telling the government, hey, I'll self insure myself. If I got to go to the doctor, I'll come out of pocket for my deductible, which you're going to get a write off for. But you say I'm okay, I'm going to just get a policy where if something really bad happens, I get in an accident, I need some surgery, I go to the emergency room, I get cancer, whatever. You have health insurance, but you're going to have a higher deductible. Now, in the meantime, that allows you to open the health savings account, start putting money in there, get a tax write off, grow it tax free. It's like a Roth account on steroids. Because if you're building a roth or an IRA or 401k, I need you doing that. That's awesome. You're building retirement, but it's the same type of account that you're building for your future medical expenses, tax free. So in summary, when you're healthy, you want to be funding this account and getting a killer write off. And then when the time comes, you pull it out for medical. That's where it's used most efficiently. Now let me try and close a loop on this. And then we're going to go through these 10 incredible benefits and I'm going to summarize them for you. But that money you're Putting away, the 4150 if you're single, 8300 if you're married. Filing joint, you're putting that away every year you're getting a tax deduction to do it. Then you're investing it. You get to choose how you invest it. Yeah, you can do ETFs, exchange traded funds, mutual funds, stocks, bonds and all that stuff. Or you can invest in creative things and really grow it. Then when you pass, go again, think of Monopoly. You're going to pass go. Next January, you can put another 4150 or 8300, adjusted for inflation. It always goes up. So every, every year you're putting more gas in the tank, this 4150. And then whatever you invested in it could double or triple. You could buy Bitcoin, you could buy Solana and it triples it. And now it's worth $15,000 next year and you put your next 4,150 in. Now you got 20,000. So that the growth in that is tax free. You're never taxed on it. And every year you get to put another round of gas in the tank. Now maybe next year you see some medical expenses coming down the pipe and you're like, oh, I really need some better insurance this year. That pays for more of it. I'm going to stick it to the insurance company. Fine. Get on an HMO with a better plan. Guess what? You get to Keep the hsa. The HSA is still growing. You don't get to put your 4150 in next year because you didn't get a high deductible plan. You went for maybe a PPO or HMO plan where you needed more support. And then the year after that you're like, hey, I'm doing pretty well. I'm going to get back on an HSA plan. You get to bounce back and forth. You're going to take advantage of the insurance company when you need them to pay for your medical. When you can best guess that I'm going to be healthy, you back off, you self insure yourself so you are in control of your medical savings account that's growing and growing tax free. Oh, and by the way, if you don't use it for medical, you can pull it out for retirement at age 59 and a half, just like an IRA. So you're going to get to use it tax free for medical up until a certain age where you're like, man, I'm the George Burns of medical. I'm never going to use this account. And, and then just pull it out like an ira. It's always your money. It's portal. It goes with you with any employer, it goes with you with any business. And it's asset protected. In any type of lawsuit, no one can take it away from you, only the government. If you don't pay your taxes or an ex wife or an ex husband in a divorce, you're going to have to split it. That's it. Other than that, it's your money. It's incredible. Now I've been bouncing around trying to help you catch the vision of this and I want to explain a couple other items. Then we're going to go through that summary of the top 10 benefits of an HSA. And I'll mention, I think three or four, you know, drawbacks, things you got to be aware of. All right, what is this high deductible plan? Well, this year in 2024, when you go to shop for that health insurance, it needs to be at least a $1,600 deductible if you're single and $3,200 if you're married or head of household. So you're going to have this higher deductible plan. Now practically speaking, you're like, mark, that sounds complicated. You're right. So if you're going out to shop for insurance on healthcare.gov on the network, you're going to just look for the little star that says HSA qualified. Done. So you're going to look for an HSA qualifying plan. Again, if you're feeling that you're healthy and this is the plan for you, that's your decision. Now, if you're going to your employer, and many of you may have your health insurance provided for you at your day job, when it's enrollment time, you're going to go, hey, can I get the HSA plan? And your employer go, yeah, check that box. Done. So if you have a day job, go ask your HR department, hey, when's enrollment again for my health insurance? Because most of the time you don't care about it. You just take whatever they give you because you're healthy, right? You're healthy. You don't care. You don't ask your employer. But now you are, and you're going to say to your employer, hey, when's open enrollment? They're going to go, oh, it's in November. Okay, when I enroll, can I choose the HSA qualifying plan? Because all employers have them now. And they'll say, okay, they done. Paid for, done. Your employer's covering you if you have that type of benefit at your day job. So again, if you're healthy and you're choosing your own plan, you want to look for that little icon that says it's HSA qualifying. Or if you have a day job, you want to go to your employer and go, hey, at open enrollment, I want the hsa. It's going to have a higher deductible, and then you are going to get that tax deduction on the front page of your tax return. No phase out, no income limitations. You could make a million dollars a year and still put this money in. Then you're going to invest it in what? You know, maybe it's cows, maybe it's crypto. Maybe it's stock bonds and mutual funds. Maybe it's a rental property. Oh, wait till they tell you what's in my hsa. Then it grows, and next year you can do the same thing. Then it grows, and then next year you can do the same thing. It starts to snowball and grow. I have clients that are like, I have so much money in my hsa, I don't even need it. Okay, back off. Go stick it to the insurance company. And when you retire, you can pull it out like an IRA if you need to, or you can pull it out for medical anytime you want. Now, last thing I want to mention before I go into my list of 10 things. What medical expenses qualify, believe it or not it's a book of a whole bunch of medical expenses that you may not realize qualify. You go to IRS Publication 502. It's right here on my laptop. You can go to Google and just put in IRS Pub 502. It's a publication with an index in the back of all the medical expenses you can write off. And this is going to include eyes, dental, co pays, acupuncture, chiropractic, massage therapy. There is more and more medical expenses that are preventative in nature that or that you can use as a tax deductible withdrawal from your hsa. Please look into it, at the very least the publication 502 so you can see what type of medical expenses you might incur that would be completely deductible inside your HSA. All right, now let me go through the 10 benefits and maybe a few drawbacks and I'll show you how to set them up and how to invest them. By the way, I'm going to repeat some of the things I've already said, but these are distinct and clear and right there on your screen to look at. Number one, you're going to get a tax deduction on the front page of your tax return for any money you put in the HSA to either quickly reimburse yourself or use it for future medical. Number two, you are not going to lose write offs on medical expenses ever again. You're not going to itemize on schedule A. You're going to fund your HSA or every year and then use that ongoing growth and balance to pay for your medical. Third, most HSA providers that have an account that will be managed for you if you go that route will give you a debit card and it's like a Visa card for your medical expenses. And I used to have one. I'm investing my HSA right now. I'm not pulling it out for ongoing medical this year, but I had it many years. I had a Visa type card that was up in the corner said hsa. And so when I'd go to Costco or I'd go to Safeway and the grocery store or I go to the pharmacy, I'd put all of the pharmaceutical or whatever that was write off and in the part of my grocery cart and then I'd have my food over here and so when I go through the checkout line and go oh, put that all on my HSA write off. And then over here I'd have my regular stuff from Costco or whatever. So you. There's many times if you're going to use your HSA in an ongoing manner. You're going to have a debit card to pay for your medical expenses. Next, you're typically going to have a lower insurance premium. Now I know some of you, when you go to shop for insurance, you're going to say, man, it's a more expensive premium for an hsa. Well, it depends on what type of insurance plan you're looking for. If you're looking for an insurance plan that's going to give you all the juice it up, love and cool co pays and all that stuff and different benefits, you might pay a higher premium and still have it HSA qualified. Now if you're like now I'm so freaking healthy, I just need a health care plan that if something bad happens, I'm covered. You're gonna have a typically a much lower premium. Now for those of you that are entrepreneurs, that's a big deal. You're still writing off the premium, but it's money out the door. So you want to get the lowest premium possible and still have HSA qualifying. If you have a day job, your employer's paying for it, who the hell cares? But again, for you entrepreneurs, you could oftentimes have a lower premium. Number five, you have insurance, you have medical insurance. If something catastrophic occurs with the flexible spending account, the use it or lose it plan, or some of you entrepreneurs that are flying solo with no health insurance, that could be scary. So you still have health insurance and you get this tax grow tax free account, the HSA working on the side. Number six, if you don't use the money for medical, you get to pull it out like an IRA for retirement at age 59 and a half. No penalty. You'll pay tax because you're pulling it out for retirement and not medical. But it still grows just like a traditional ira. Incredible. Number seven, the monies grow tax free if you pull it out for medical or tax deferred if you use it for retirement and they come out tax free for medical. So that tax free growth or tax deferred growth. Amazing. Number eight, you can invest your HSA in anything you want. That's called self directing. We're going to talk about that more in a moment. Number nine, they're easy to set up. You can go online and set up a HSA account@directed ira.com right now. There's a link down below if you want to set up an HSA and self direct the investment. There's also other banks and providers and just go Google it and you're going to see sponsored plans right out of the gate. Set up your HSA here. Get a debit card for your health savings account, whatever. Go out and shop around. It's easy to implement. And number 10, which is a lot of fun, you can fund your HSA up until April 15 for the prior year so you get the right insurance. You're going through the year, oh, I need to fund my hsa. You go put the money in in April, get a tax write off for last year and then pull the money out on day two for all your medical expenses for last year if you want. Or you can continue to invest it. 10 incredible benefits now, just a few drawbacks. Number one, you have to have a high deductible plan. Now conversely, that might get you a lower premium, but it's a high deductible. You're going to have to come out of pocket for some of those initial medical expenses and you'll get a write off for it. That's cool, but it's high deductible. Number two, you cannot put new money into an HSA once you turn age 65. So at that point you can get Medicaid. So the government says if you have an HSA you can keep investing it and keep growing it, but when you pass go in January, no more new contributions. And number three, if you do have high medical expenses and the HSA may not be for you, you could go add that feature one year when you're feeling great, back off on the HSA in a year where you know you're going to have some surgery that needs to get taken care of, stick it to the insurance company. Other than that, I don't see any other drawbacks to the hsa. I think they're an incredible opportunity to save taxes, build wealth tax free, pull money out tax free, use it for retirement if you need to and take control of of your medical expenses. I'm going to throw this out too because I've seen this very I'm not going to have it on the list of 10 I should have is that a lot of doctors in different services will give you discounts when you pay for your medical expenses with cash. Cash pay discounts. So when you're negotiating, maybe it's chiropractic or acupuncture or eyes or dental and maybe just regular doctors. I had a client once, they were getting ready to have a baby and the OB GYN said if you pay cash I'll do this for a lot cheaper. And they got like a 20, 30% discount on the birth of their child using their HSA account. Doctors, medical providers, here's a little secret, they hate insurance companies too. So when you self insure they want to work with you. Now I know some medical professionals that are listening out there saying Mark, you're wrong about this. Or some insurance professionals out there, no, you can do it this way. Hey, do your research, look into it. There's always different issues when you're shopping for medical in different states. Everybody has different fact patterns and circumstances. But I'm just telling you, I've done 10,000 consultations. I've had my own HSA for 15 years. I've taught on the medical expense deduction for years as a certified cpa. Please trust me that this is one of the strategies that you do not want to overlook. They're incredible. All right. Now some of that may have sound very basic to you. You've already heard all this before, that's great Mark, but what's this investment in cow stuff? And really you're talking about taking this to the next level. We're going to put this on steroids, no pun intended. Okay, so you get your HSA account set up. You have two ways to really do this. You can set up an HSA account, let's say a bank, and you put the money in and they give you a debit card and you pull the money out. When you have a medical expense or reimburse yourself for a medical expense, they are only going to let you invest in their little choice of a few mutual funds. So you're going to get probably a 5% after all the fees and all the goodies, maybe a 5 or 6% rate of return inside your HSA account in fact. So the return is so low most people don't even know it's invested. They're just going to put the money in the hsa, pull it out with a debit card. They're not in it to build it, they're just putting the money in and taking it right back out. The second option is where you're like I can let this money ride. I can build it and grow it. I'm going to self direct it. That's the second option. Now in that case you're not going to go to the fidelities of the world to open your hsa. You're going to go to a self directed custodian or trust company. This is where I serve on the board of directors of directed ira.com. you go there right now and open up an HSA account. When you put the money in that type of HSA account, they call you up on the day two. Well, we send you an email and go, what do you want invested in? And you're like, oh, yeah, you're right. I don't want to pull this out for medical right now. I want to build it for the future. I want to invest that hsa. Okay, when that call comes, when that email comes, you're now opening up the world of self directing that HSA account and really getting 10, 15, 20% returns or more and building that HSA exponentially. So I want to go to the whiteboard and show you how that looks. All right, we're in option two. And you decided to create a self directed HSA that's a self directed health savings account. Okay. Several options at this point we have. And right there@directed ira.com you can open what's called a crypto HSA. And when you choose that option, this account is going to be created where a Gemini app and account is created for you to invest in. Any cryptocurrency on the Gemini platform, very common. And I have clients that will use Gemini to then invest in Solana, Bitcoin, Ethereum, all sorts of coins and tokens. So if you're a big investor in cryptocurrency and you're like, mark, man, I'm killing it. I'm making 20, 30% in crypto right now. I can buy and sell crypto anytime I want in my Gemini app. Yes. So you might put in 4,150 or 88,300, and then you roll the money over to your crypto hsa, you're off to the races, and usually two to three days. The cost to set up your HSA crypto HSA I think, is around three to four hundred dollars and you're off to the races. All you're going to do in the application is check a box. Yep, I have a high deductible plan. That's it. We don't ask for a copy of your health insurance. That's on you. You sign the application and go, yeah, I have an HSA plan. Great, knock yourself out. You set up the account, you drop your 41, you can pay for this fee separately. And so you've got your 4150 in here, buying crypto, Boom. Your Solana doubles in price, and all of a sudden you've got $8,000 in your account. And then next year comes along and you pop in another 4150. Do you see the Math starting to go crazy. So now you, your account is growing and growing and growing tax free because you understand crypto. Okay? That's option one. You could invest in crypto if you want. Now some of you are like, yeah, Mark, I'm not a big fan of crypto. I love real estate, okay? We set these types of structures up all the time. And what I did myself, maybe even I'll show you a picture of it here in a moment is I took my HSA, oh my gosh, it's been 10 years ago, and I opened an LLC and it's called, is it called Kohler holdings right now? It's an LLC in the state of Illinois. It's in South Chicago. And I went out and bought a low income housing rental property. I had about $5,000 in my HSA at the time. I transferred it up to this LLC and this LLC then went out and bought a rental property. Now let's talk practical steps. This is not a typical LLC that you're going to set up on LegalZoom. Our law firm, KQS Lawyers has setting up LLCs like this for over 18 years, affordably for any business owner that wants to self direct their ira, their Roth or their health savings account. The cost to set up this LLC with filing fees at the state is going to be around $1,500. Again, you can pay for this personally and make sure that all of your HSA money goes into the llc. The LLC will have a bank account. You get to be the manager of that bank account and you're off to the races. When you meet with the lawyer to set up this llc, we're going to walk you through it, we're going to teach you how to do this, we're going to give you a comfort letter, we're going to set up the LLC in the state where you're going to buy a rental property. And now that rental property is owned by your HSA people. I have literally had a low income housing little Property in my HSA for 10 years or more and all the rent goes into my LLC and back out to my hsa. And I paid for my daughter Molly's braces with my hsa. I had a rental property paying rent tax free that paid for my daughter's braces. Pen drop. Yeah, that's how incredible it is. That was one of my investments. I still have it there today. Anyway, that is my rental property owned by my hsa. Scout's honor. And by the way, I was an eagle Scout. Okay, that's option Two, you want to buy real estate with your hsa? That's how you do it. Call the law firm, set up your self directed HSA account. I highly recommend you listen to my podcast on itunes and Spotify called the Directed IRA Podcast. The first 10 to 15 episodes walk you through all the steps on learning how to self direct. You got to learn something here. This doesn't happen overnight. But if you know real estate, this would be the way to invest in real estate with your hsa. Or oh, and by the way, your brother's HSA can be a partner. Your Roth IRA could be a partner. Your 401k could be a partner. People, this is all. I just got chills when I said that the power of the self directed LLC with your HSA is off the chart. Incredible. Now, if you don't like real estate, but you like crypto, use option one. I don't care. It's your money. Invest it in what you know. Now option three, you. You have the same hsa. You're like, mark, I don't like real estate. I don't like crypto. But man, I know ranching. I love Yellowstone. I love Kevin Costner open range. I want to buy cows in my hsa. All right, so what I did. Oh, boy. Was this. Three years ago, I wanted to prove it was that easy to do. I went out and set up an llc. And for you Yellowstone fans, you could go look at it in the Secretary of State of Idaho website. I have what's called Kohler Dutton Livestock llc. Yep. And I called up one of my friends. It's a rancher in eastern Idaho. He does Wagyu beef and Snake river farms. Oh, my gosh, so good. And I was like, hey, I want to buy some cows in my little hsa. He's like, all right, now if you've ever bought cows, they're called pears. So I buy a pregnant cow. I bought five cows with my hsa. Now let's back up. So what I did is I took my HSA and I funded Kohler Dutton Livestock. I think I did it with about $10,000. And I went out and bought five cows. These pairs cost me about $1,800 each. So I was out about 7,000, $8,000 on my cows. And then I put them out to pasture for the summer. And the rancher was like, yeah, I'll throw them in my herd and I'm going to charge you $50 a month per pair, because a pregnant cow is called a pair. And then my cows gave birth And I had five calves, they were all male, which is fairly rare. And I got five bulls until I turned them into steers. That's a whole other story. Birds and the bees. And then I sold in the fall my five now pregnant moms again, because a bull was left in the herd during the summer. I had my calves and I sold all 10 cows in the fall and made about a 17% profit. And so my calves and my five moms, I sold all the calves in the fall because I didn't want to pay for wintering the cows. Then I'd have to buy hay and all those goodies. So 17%, not too bad. Oh, and then it was January again and I put another $8,000 in my HSA, took the profit and put it down in my HSA and went and did another deal. Now, if you want to go invest in a stock, bond and mutual Fund and make 4% if you're lucky, knock yourselves out. But I wanted to build my HSA. I've now got close to $100,000 sitting in my HSA after investing it and using it for Molly's braces over the last 10 to 15 years. It's that easy. You get to control your health savings account and how it's invested. Now, I did mention this earlier, so I want to close the loop. One thing I did after my Kohler and livestock is I have another LLC over here and I added some Roth money with my kids over here and I've got some HSA money in it. And we're doing crypto mining. I've got a crypto CPU with seven video cards for those that crypto mine. I'm using the Nicehash platform and this LLC is doing crypto mining. That's fun. I make it about a 22% return in that. So invest in what you know. That's the beauty of this. You're going to use the law firm to create your llc. You can partner with others retirement accounts if you want. You're going to listen to the podcast@directra.com and you're going to set up a HSA account if you have a qualifying medical insurance plan and start to take control, save taxes, the 10 benefits. Thank you for listening. Today my mission is to help you and others better live the American dream. And the HSA is one of those strategies that can help you get there. Please check on the links below and see my next video on your path to building wealth.