Buying Real Estate, Crypto, or Cows in your ROTH IRA | Mark J Kohler LIVE |

Welcome everybody to this week's live broadcast on YouTube and Facebook. Mark J. Kohler and Entrepreneur magazine. Grateful to be here with you. We are gonna rock your world. We got info that's gonna blow your mind. That's a Jack Black blow your mind from school Rock. I got Matt Sorenson, the man in the house, the author of show him your book. He's legit.

I wrote a book so you know you're good.

That's all you have to say.

Just want to let you know I'm kind of a big deal.

Matt uses that as a pickup line.

I wrote a book and that's anchorman quote, by the way. That's one point for me. Zero points for Mark on movie.

I thought I just quoted Jack Black. School of rock. Okay, we're tied. Okay, now let me just say this before you go anywhere. We're going to have fun. We're going to help you make more money and live that American dream you're trying to do. We're Talking about Roth IRAs, ESAs, that's an education savings account, health savings accounts, 401ks. What do we own in ours? Okay, let's do it. I own the cutest little meth lab. It's adorable. I got a sweet low income housing rental. What do you got?

I own a pretty cool three bedroom single family, pretty much plain of the mill, suburbia. Rental property.

Not on a golf course.

That is an awesome investment. Okay, it's on the municipal golf course. Okay. Okay, so it's not the country club

and we call it the Muni. Yeah, it's kind of like the res.

Yeah, you could own this stuff. And that's, that's in my.

Yeah, I own five cows. Check that. 10 cows because they just five babies, which are called calves. FYI, I own 10 cows in my health savings account. What do you got? Okay, you can beat that.

I own Bitcoin and Ethereum in my Roth ira.

Okay, but for you.

Do you own a mutual fund? Are you feeling a little out of the party? Do you want a crappy mutual fund?

Any of you like. I'm not a mutual fund. Okay, so today's topic, we're going to talk about all the things you can put in your retirement account. Maybe get bigger returns, maybe not. We're not making any financial representations or promises on a rate of return or telling you what to buy. We just want to tell you what you can buy. Oh, I had one more. I own my own cryptocurrency rig. Oh, yeah, I'm mining in my cryptocurrency. No, I'm mining in my Roth IRA for cryptocurrency. I've got bitcoin now. So, everybody, we are here. Anything else we could throw. You can buy all sorts of stuff. That's what we're talking about today. What else? We have clients that own private company,

like pre IPO stock stock that do hard money lending with it, that are just like. They're playing the bank, loaning their money out.

Restaurants.

Yeah.

Restaurant ownership racehorses.

I've had a client own a gentleman's club. Just saying, partial minority owner in it, you know?

Yeah. You know, I didn't expect that one. That's hard to.

I just.

I gotta get back.

Yeah.

I gotta get my mind back. Okay.

I know. I don't want you to get. There's the jokes that could come off of that one or.

Yeah, we're just. That alone.

Let's keep it.

I have clients that buy and trade vehicles. Like, not collectors, collector vehicles, but they'll buy like a F150. Fix it up, flip it.

Yeah.

Okay, guys, Wall street does not want you to know this. Someone should write a book titled what Wall street doesn't want you to know. Oh, yeah, I did grab it. I'm going to grab it right off the wall here.

Okay?

Right here. Financial freedom, baby. What Wall street isn't telling you. And one of them is that you can invest your Roth account in crypto. Robinhood doesn't even let you have a crypto. Sorry, A crypto Roth. They won't let you have a Roth IRA inside your Robinhood. Now, you can buy. Doyce calling. That's cool. But when you make a million bucks, you're going to pay tax on it.

Yeah.

So.

So let's talk about. Why are we talking about this with retirement accounts? Like, well, Matt, I can own a cow right now, today, with the money in my bank account. Or I could own. I can go buy crypto on Robinhood right now.

Yeah, I.

Obviously, I can own a rental property. What's so cool about doing in an ira? Well, in a retirement account, when you just think of how you use it now, you buy Facebook stock at 100 bucks a share. It goes up to 150 bucks a share. You sell it for 150 bucks a share. Do you send the government any money? Do you pay any taxes? No, it's in your retirement account. The deal is, when you make profits in your retirement account, you don't pay tax. It keeps building up. And in a Roth account, it comes out all tax free in A traditional you're going to pay taxes, you're pulling the money out over time, but you're not paying tax as you go. It's a huge perk of retirement accounts, but it's not the only deal for stocks and mutual funds. You can do it with crypto. Can you imagine if you would have done this when I shot my videos on you, how you could do this in 2017?

Yes, you did.

2017. It's showing you. You know, I can't believe in the prices I was referencing in the video. You can see them on YouTube. But any asset rental cows, that's all building up in your retirement account. You don't pay tax. It's really the best tax. Yep.

Now for some of you, okay, that was a lot, right? We're just throwing it at you. We are here to answer your questions for the next hour on anything self directed. That's the topic. For some of you that have never heard that term self directing. It means I just don't have this small little menu of Wall street products. For your retirement account, you're able to invest in what you know best. Gold, silver. We didn't bring that up. Currencies. It's precious metals. But we want to help you invest in what you know best. And so we're going to slow down. We're just excited to be together. We're normally not together. Plus, I'm on probably my second. This is my one and a half rock star for today.

Do you get one and a half?

Well, it's been a long day. Oh, I normally only get one.

Okay.

But I saw he came to the studio, we're here. Matt's never here. He's always in the Phoenix office. So. Is that cold?

Yeah, it's cold. I appreciate it. I'm gonna do a little opening here.

Oh, it's pretty pure goodness. Yeah. Yeah.

I mean, if anybody needs a opener for anybody, that's pretty good open.

You may think we're sponsored by Rockstar soon because we are rock star tax lawyers. How many rock store tax, rock star tax lawyers do you know? That's a tongue twister.

That is a tongue twister.

Okay.

And no one's trying for that. Yeah. Okay.

We're going to play around and have fun. But let's get into a couple facts. You're young. Some of you out there, like, I don't want to do this in my frickin roth or my IRA or 401k. I want to spend the money. Here's what you do. You do both. You buy A rental property in your own name. You buy crypto in your own name. You invest in a small business in your own name, but at the same time, you invest in your account. We want you building both of these structures, so in the long run, you're twice ahead. You're ahead of millions of other Americans that turn 50, 60 years old and have no retirement at all to speak up. Yeah.

So it's kind of like for any of you golfers out there, you got to work on your short game and your long game. So, dude, the retirement accounts, the long game.

I gotta tell you, Matt, that's the second one Matt's come up with today that you've never said before. Yeah, that's new material. I got a lot of new material. Some of you may think I'm sick of Matt's material. I am, but that's new. The other one, he said, have your retirement account your way.

Get it?

Burger King.

Yeah, Burger King.

That was yours. I don't want to take.

Yeah, have it your way. Yep.

Your way.

Okay. All right.

I love this. All these great questions. And you know what? From the bottom of my heart, I want to say thank you to so many of you that follow us. Come onto the Live every week. We've got great blog articles every week, YouTube videos. We got a lot to talk about today, and I just want to say thank you. Okay, so let's do some basics. Ashlyn, we need the whiteboard. It's time for the whiteboard. And I want to hit a couple basics from my perspective. Matt, I can write, draw for you because you're. Sometimes you're drawing as much to be. Do you. You don't want mad on your Pictionary team.

I'll just say that I'm good at guessing.

Yeah.

I'm just not the good. I'm not the good.

Okay. All right, so let's give you a little. We got to create a little space here for whiteboard. Okay, There we go. Now, I'm going to just hit a couple basics. Everybody remember the trifecta. If you watch any of Minor Math's videos, meet with any of our attorneys or CPAs, we teach the trifecta. That is, you've got your trust, which for privacy, might use a unique name to hide your family name. And this is your 1040. So your trust and your 1040 right here. Then we're going to divide your life into two sides. We want to put your ops over here. Operations. This may be going to make sure pretty. Here we got your W2. You might have a side hustle. One in three Americans now have a side hustle. Or you may have an LLC or something taxed as an S corp. Or you might just have a little LLC thing going on kind of full time small business.

Alright?

Some clients have all three, but this is your operations side. Over here is your asset side. Now we're going to build on this diagram the rest of the hour. So please take this seriously. So over here, I like to divide your life into two sides as well. This is your tax free side. And this is where we're going to put Roth IRAs. Maybe a solo 401k, maybe you have a 401k at work. You're not going to have as many choices with that. You may have a health savings account, An ESA is a college savings account for you or your kids. But this is your tax free area and you can invest with that. Then over here is your personal investments. And this could be a rental property as well. It could be money in the bank, stocks, mutual funds, Bitcoin, or any crypto. I'll put B for any crypto, but you can do all that over here. So what we want you to do is building up all of these buckets of wealth. And over here you're generating income to feed these buckets. And we want them to grow. So what I'm getting at here is we talk about investments, we want to talk about what can you put over here that may grow completely tax free. So Matt, that's the basic outline. Mm, take it to the next level, baby.

Well, when you think of the retirement accounts, those are just vehicles that create tax efficient ways to build wealth, right? Remember, you don't pay tax when you're making money. If I own the rental property I own in my 401k, right? When I make money in that, when I sell it for profit, I don't pay tax, okay? It's a totally tax, there's no taxes. I'm growing the account. And if you think of the long time haul of investing money, if you're paying the government 1/3 of what you make on an investment, every time, that's less money you get to put into the next deal and the next deal and the next deal. And from investing over 20 years, that really crushes your returns. So by using the retirement account, it's a more efficient way to build wealth. But you've got to put things in the vehicle. Okay? If you just open up a retirement account and put cash in it, that vehicle is not going to get you very far.

No no, you're not going to run out of gas, people. So some of the things you can put in here, as we've already said, is be. We'll call that cryptocurrency. Bitcoin being the most prevalent. Prevalent could be rental property. It could be cash notes, loans that you make to people, other small businesses, BS businesses. So we want to teach you how to do this. We've got a workshop tomorrow for two days. We do it twice a year. You might be available for that as well. So, you know, I think. I think we should do some Q and A. Let's go straight to some questions. I'll pick one out here from Instagram. We got our Instagram followers watching as well.

Oof.

Boy, these are some tough ones. I'm gonna just grab one. How should you think? What do you think about a solo 401k versus a Roth bucket versus a backdoor Roth? Oh, okay, everybody, one thing that you want to know. This car could be a 401k that's broken into two parts. It could be part Roth or part traditional. You could also have a Roth IRA on the side, and you could also have a traditional regular ira. My answer to Christian, is you can do it all. A lot of people think, if I have a 401k at work, I can't do an IRA, or if I have a regular IRA, I can't do a Roth over I make too much money, I can't do a Roth at all. Christian, that's a big question. And I just say it depends on your income, your age, how much money you have set aside, how much you can set aside, and what you want to try to accomplish. So those are all great ideas. And Christian, the answer to your question, should I do a 401k Roth or backdoor? The answer is yes, you could do it all, and the world is your oyster. But your stockbrokers and your financial advisors that are hamstrung under SEC rules may not tell you that.

So, and I would say, don't think of everything you can do. Think of what you should do first. I think of when people think of any everything they should do, they get confused and it sounds complicated. Think of what you should do first. Okay, if I were you, Christian, I would do a solo K first. You can put $19,500 of Roth money into that and start investing that. And if you're self employed with no other employees, solopreneur, a solo K is the best option.

Okay, I'm going to disagree. All right.

Okay.

I'm Going to disagree.

Okay.

Because you're assuming Christian here has the bank to throw down 19 5.

Well, that's what I say. You start first.

Well, I bet I. But maybe he doesn't have 19 five.

Okay. All right.

So I'm. Okay. Daniela, we got a. Daniela Camacho says, what if I don't know how to manage the money? Can you still have a savvy custodian? And there's a lot of people out there that are just getting started, like Daniela, that say, I may not have $19,000, I may not know what to invest in. So I'm teasing my partner here. That Christian. No, sorry about that. Was that inappropriate touching?

No, that was that.

Okay, okay. I don't. I said partner and touched him at the same time. We're law partners. Business partners. I don't want to.

Yeah, yeah, Just keep the touching off screen.

Okay. I apologize about that. Okay.

Get confused.

So what I'm saying is some of you, like Christian, may have 20 grand to set aside right away and know what you're doing. Daniella. And many of you out there start with just a basic Roth ira. You could start at Acorns. I love the Acorns app. Put away $50 a week, put away $500 a month, and just get the habit of savings going. I may be sounding a little bit like Dave Ramsey, but I love that we need to start saving no matter what you can save. And for Christian, Matt's right. The first thing for you might be a solo 401k. For someone else, it might be just $100 a month in a Roth IRA. So everybody's a little different. There's a little something for everybody.

So let's start back up. What I would do, and I just put this in order, is Roth IRA first, unless you want to get it more than six. If you're like, now I have like 20 grand I want to throw in this year.

Okay.

Solo K if you're self employed. So worry about what you should do first.

Jason Brown's question here is classic. Okay, but I want to answer Daniela's too. She goes, I want to self direct, but I don't know what to do. What if I have a savvy custodian? Daniela, your custodian is not going to tell you what to invest in. That's the point of self directing. So do this. Just start with a TD Ameritrade or a Scott Trade Roth and just buy some ETFs. They're called exchange traded funds. Warren Buffett is a huge fan of just buy some Fortune 1000 ETFs.

Yeah. Even you know Warren Buffett basically has challenged hedge fund managers and he'll donate like a million bucks to the charity of their choice if they can just beat the S&P 500 after taking an account for their fees. So everyone could go buy The S&P 500 fund spy. That's an ETF basically. It's so. But and even what's his name? Tony Robbins, the you know, book, you know, that's his point is it's like everybody's trying to beat the market. Just go buy the S&P 500. If you don't know but you want to get in a habit of saving and you don't want to get.001% at the bank then invest in something just like an ETF or index fund and get that habit of saving. But if you really want to build have a successful retirement account, you want to be actively involved in finding opportunities whether it's in whatever you're good at.

Well, look at Peter Thiel. Peter thiel that started PayPal, one of the founders used his Roth IRA. Now estimated to be worth more than a hundred million dollars a billion. Is it billionaire? Oh my gosh. Now but here's the thing. You just get started and start educating yourself, Daniella. And start saving. That's the first thing. If you're saying well I don't know what to invest in, I'll say how much you got? Nothing. Well start saving first. Then we'll get to what to invest in. And so there's lots and lots of options. And self directing is a part of the path to wealth because you're going to invest in what you know best. Now Jason Brown's question. I want to buy 4 black face Angus cows. Pretty cool.

I'm with you.

If they each have a calf. And now I have eight total cows and I eat one. Do I pay tax on what we eat? Okay, now Jason, here's the problem.

Yes. Okay. That would be a distribution.

Yes. So this is good. Okay, let's do this. I'm not kidding. Some of you are like mark, you're full of crap. I'm going to show you a valid. This is legit. This is a picture of my cows. Now I don't think we can. I don't know if we'd be able to see. Look at there. There's me with my cowboy hat in the sunset. I know some of you think that looks like John Dutton from Yellowstone. Some say I look like Kevin Costner at Times. But no, it was me. And those are my cows in my health savings account. So. But Jason. Let's do this, everybody. This is legit. This is serious. Let's say this is Jason and this is Mark. Me. And Jason goes out and buys eight cows. Well, he bought four mother cows, and they had four calves, so he now has eight cows. All right, well, when he sells a cow or goes out to eat it or whatever, you know, and barbecue, whatever, this is personal. So if he sells the cow and makes money, he's going to pay taxes and he can butcher a cow whenever he wants, or he can continue to build the herd. Me, I can't do that because I took my money and I didn't buy eight cows. I funded my health savings account. My HSA opened an llc, and my LLC went and bought five mother cows who have now had their calves. We're going to go on location tomorrow at the summit. I'm going to show them to you. And now I have 10 cows. I can't butcher a cow and eat it because it's not mine. It's my HSAs. This is called a prohibited transaction. And Matt teaches this a whole chapter in his book on what you can and cannot do. So Jason's probably joking around, but Jason is right. I would have to sell the cow. I could sell it to Matt.

Yeah.

Matt could buy the cow.

Yeah.

Butcher it, have a barbecue.

Yeah.

So he has a barbecue, but the money he paid goes to the llc. The LLC puts it back in my hsa, and I can go pay for my health care tax free. And I didn't pay any tax on that transaction. So Jason's question is actually maybe a play on words. It's funny and all that, but it's a really good example that you can't benefit from what's in your HSA or ira. Yeah, I've got to sell it first anyway. Sorry.

Yeah. Another one would be. Let's talk about the rental property. You know, let's say you own a rental property personally or even, maybe it's an Airbnb. Okay, well, you could stay in it if you want, you know, if you own it personally.

But if I do it with what type of account?

But if I do it with a, let's say just a traditional ira.

Okay, fair enough. There it is. There's my ira. Okay.

But if you do it with your ira, you can't stay at that property.

The IRA opens an llc.

Right.

And then I do a vrbo. Airbnb.

Yep.

All right, keep going.

Could be a Regular single family, whatever it is. But it's the rental property, okay? You can't use that property. Just like you can't eat the cow. All right? This is not you. You don't own this. Your retirement account does. And there's a set of rules that make you stay kind of at arm's length between it. So it's just a good investment. You're not buying this property to have use of it or benefit of it. You're buying it because it's a good investment, because you want the rental income to grow up and build up your retirement account so you have a bigger retirement account in the day. So in the property, appreciate you have a bigger retirement account the end of day as the gains go back in it.

Okay, we're going to answer some questions quickly. We got Christian on Facebook says, how many retirement accounts can you have? If I have a solo 401k with a traditional and Roth at TD Ameritrade, can I also do a backdoor Roth with another ira? Yes, you can have all of them.

Yep, those three work.

Yep. Next on Instagram, I like Yanni's question.

Hey, guys, can I buy a property from my capital gains from cryptocurrency, like a 1031 exchange to save on taxes? Now, Yanni, this is the important distinction here.

When we're.

Where are you Go back to the personal and retirement.

Okay,

back here. Okay. When we're over here pointing here. Oh, there we go.

Oh, yeah.

Okay.

That's right.

If you bought these, the have the crypto over here personally. You're on the asset side over here. When you sell it, you're going to pay tax. Even if you reinvest it and buy real estate, there's no way to do a 1031 exchange. 1031 exchanges only work real estate for real estate. So you can't go crypto to real estate. But if you were over here and you had crypto in your retirement account, sell the crypto, no tax, go buy real estate.

Yanni, I got an idea for you though. This is what tax lawyers do. You call us. We want to save and make you 10 times whatever you pay us. Here's an idea, Yanni, Sell the crypto, have a capital gain, go buy an opportunity zone piece of real estate. You can do that to defer the capital gain and even minimize the amount of capital gain. So you would sell the crypto and turn around and buy real estate in an opportunity zone. I've got an article on that, some YouTube videos on that.

We did a whole Podcast on.

We did a whole podcast. But again, the money, Yanni, is not in your retirement account. You're working in this world and not using a 1031. But opportunity zone.

Yeah. Opportunity zones are where you can take capital gains from stock, stock, or even crypto and reinvest them in certain real estate in location.

Okay, I want to get to Sasha's question, but first over to Instagram. Our journey asked two questions. They go together. He said, hey, I bought a rental property and for three months I lived in the rental property and fixed it up so I could Airbnb it. Can I log eight hours a day to be to earn the status as a real estate investor. Now, what he really means is a real estate professional under IRS designation. And the answer is yes. Working on the rental, helping find tenants, making it pretty, getting it ready to go, being a Realtor, showing properties, all those activities give you real estate professional status. Now some of you are like, do I want that status? Do I not go to YouTube, type in real estate professional. Kohler. I got some great videos on that. It's also a chapter in my book. But the tax and legal playbook. But our journey, the answer is yes, it would qualify. What activities qualify again? Showing property, working on property, investing, the process of finding and purchasing, repairing, managing. All that is included.

Yeah. And remember on that, real estate professional status, that's got to be your primary business. You can't have a W2 job doing something else else. So make sure that your primary occupation is doing real estate.

Okay, now I did mention YouTube a little bit because I got a lot of YouTube videos over there. Matt, do you happen to have one of the babies?

I do not, but I know a guy who does.

You know a guy? Yeah, I know a guy. I want to say thanks to all you. I'm so excited. I got my silver play button this week in the mail. This is big. It took me 14 years to earn this. And I want to say thanks to my team, especially Corey, my son Dylan, that helped make this happen. We shot so many videos and these are 100,000 subscribers to a tax guy. I didn't have any cat videos, no cupcakes, no, you know, someone falling off a bridge to their death. This was legit content.

So you've got that silver play button the old fashioned way.

I did. I earned it.

You earned it by shooting tax videos

and with the help of you. Okay, now, Sasha asked a great question. I like this one. Can you go back up to Sasha first? She says, hi, Mark, you look great. I want to Say, hey, thanks, I appreciate that.

That's the best way to get your questions answered.

Yeah, yeah. Just compliment me or tell Maddie looks like crap.

Those comments get read. They definitely do.

They do. No, she. Okay. Stasher says, what is the most tax efficient way to convert traditional IRA to Roth? 1 word chunking, which is a favorite word of ours because we think of chunk in Goonies 1980s classic. Sasha, what you want to do is you have a traditional IRA and you're going to start slowly chunking it to a Roth ira. Pieces and parts. Oh, can't see my producers on me. Okay, so here's Sasha down here, and Sasha has a regular ira, and she goes, I want a Roth. I want to play in the Roth party. I want to be a. I want all this Ira to be a Roth. But let's say she has 100 grand in there. As she converts it to Roth, she's got to pay tax on each chunk. If she did it all at once or in pieces.

Yeah, because remember, when you put money in that traditional ira,

he's like, look at this.

You got a tax deduction. Okay. That saved you tax when you put the money in. So the IRS is like, when you want to come over here on the tax free, on the way out, you got to pay the toll to get back out. Because we already gave you a tax break to get in.

And time and time again, it's been proven from other experts around the country, in the long run, the Roth will always win. And we want to retire with more money than we have now, and we don't want to pay tax when we pull it. So the Roth is a good move, Sasha. And what I meant by chunking is do it in pieces. Maybe you do 20 grand a year for five years, and all of a sudden this is gone, and now you're all Roth. But you didn't pay at a higher tax rate by chunking it all at once. So you might want to convert it in pieces. And now you have two IRAs. You can invest this one a different way. You can have two or three Roths. You can do all sorts of goodies.

And we've done 45 minutes on Roth conversion strategies, by the way. So if you want to go on a deep dive on that, we have that on our directed IRA podcast.

Oh, boy. Okay, we've got all sorts of questions here. By the way, we've got Darren Charington, one of our tax attorneys, on the chat, live in, answering questions quickly. You doing okay? His hands are on fire over there. He's working it. Cory, we doing okay. Instagram questions. You have any that you wanted to pose? Okay, Instagram. Rob Life says, can my wife and

I Both have separate IRAs and use

them to partner in rental properties. Ooh, okay, Matt, I almost draw. Let me repeat the question. Matt's gonna answer. He's the expert. Rob says, on Instagram, can my wife and I both have an IRA partner together to go invest in a property or something? Is that prohibited? Mr. Sorensen, may I draw? Yeah.

No, it is not. As long as you do it the right way. Okay, so there's something called prohibited transactions that he's referencing there where your IRA can't buy or sell stuff between you or my IRA can't buy something from my spouse. Right. Those are called prohibited transactions. The IRS doesn't trust your retirement account to transact with yourself or, or with certain family members, but they can co invest into something at the same time. So if you have a Roth IRA and let's say your spouse has a traditional IRA and let's say you've got 100 grand in your Roth and your spouse's IRA has 200 grand and you're going to go buy a property for 300.

Now do you just go buy the property?

No, do not do that. Okay. What we're going to do in the middle is you're going to set up an llc. See how it appears? It just appears. I just, like I just, you know, I just say it and point and it just happens.

Just happens. You know, it's magic.

Now, this is called a multi member IRA llc. It is a chapter in my book and we set them up in our law firm all the time. And it's a great strategy. It's a great strategy and structure. If you have multiple accounts that you want to combine to pull off a specific investment, like the rental, that 300 that you couldn't buy with your Roth with 100 and your wife couldn't buy with her traditional with 200. So we combine them together. Now we can go buy the $300,000 property. Now, when the money comes into the LLC, it's going to go down to each. I mean, you can leave it in the LLC and let it accumulate, but when you start taking money out, it's going to go to your Roth IRA, which owns 1/3 of the LLC, and to your wife's traditional IRA, which owns 66%. So this ownership is always broken up based on the dollars that went in.

Now I want to take it to the next level and blow your mind. So let's say husband and wife. And this could be mom and dad. I mean, mom with daughter or dad with son. It could be grandpa and grandma. Any family members can do this. Let's say we go buy this rental and it starts cash flowing pretty well. Let's say it's making two grand a month. Well, do you just leave it in the LLC or put it back to the Roths? Well, I don't know. What do you want to do in your llc? The two grand could now go open a wallet and start buying crypto. It could go buy gold. It could go loan someone money. It could go invest in another business. So this cash flow can be redeployed at the LLC level without ever going down to the IRAs until some date in the future. So, okay.

All right.

Should we go to Andy? Andy, Tom says, how do I comply with 401k real estate investment requirements when I am a W2 employee? Okay, Andy, by the way, your picture looks great. And he's on YouTube watching Andy. It brings up, I think this is what Andy's asking. So I'm going to try to give this a nice little drive. So let's say we've got our trifecta. Andy's got a day job with the W2, which he says, and they've got a group 401K. All right, that's cool. Let's say also one out of three Americans now have a side hustle. So let's say that Tom also has a little side hustle and he set up a little LLC to do this. So in this side hustle, I do not. I'm going to put side gig. I'm all jacked up. Okay, so we have side gig. So I can spell side hustle. At the moment, my brain's fried. Okay, so I've got this side gig and Tom sets up a little llc. So think of it again. Day job for Tom. Side gig with an LLC. Tom, you might set up your own solo 401k funded by your side gig. Can you have two 401ks? Yes. So this one may be the one you use to go invest in real estate. When you're saying, how do I comply with real estate? Self directing in a group 401k as a day job, they're probably not going to let you do that. They're going to say, you can buy this ETF or you can buy this stock, but they're not going to let you self direct. So do it in your own 401k. I don't. I Think that's what he's saying?

Yeah, yeah. Most of you, if you have a 401k with an employer, you're locked down until you leave. Now, if this was an old employer 401k, you could just roll it to an IRA and just do a self directed IRA. Or if you work at that W2 job still and you've got all your money tied up in that company's 401k, if you're at retirement plan age 59 and a half, you can roll the money out to an IRA even if you still work there. And that could get you into being able to just self direct and buy real estate.

And Matt and I have done podcasts and videos on could I roll some of this money over to the solo? Depends on if it's vested or not. You might be able to take an old 401k and roll it into the new one. You might have an old IRA that you could roll in. So this is what an attorney. Okay, so some people are already asking, how do I get a consult for just me personally? Let me throw this out. Everybody's a little different. As you can see, we're going to be here every week doing our podcasts and videos, trying to help get you information free. We're just trying to give you info. When you're ready and you're like, okay, I'm ready to pull the trigger, get a consult with a tax lawyer. We've got nine tax lawyers at our office that are just freaking awesome and we want to save you 10 times whatever you pay us. I know some of you may have never worked with a lawyer or never realized you were tax lawyer quality people. You are. You're Main Street America. We love you. Our whole firm is designed around you, not some multi millionaire Bobby Axelrode billionaire. We want to help you, the small business owner. That's billions.

Billions. Yeah.

If you haven't seen the show Bobby Axelrod. Yeah, he's legit. So. So if you want to check out our law firm, this is not an infomercial, but we're getting questions. Let me just say, go to kkoslawyers.com our phone number is 888-801-0010. So if you want to get a consult on what your options are, also, if you're ready to start setting up your retirement account, a Roth, or move my money over, set up a crypto Roth. Any of those accounts go to directed ira.com and you in the middle of the night, you can set up an account and Oftentimes within a week. Be up and investing, depending on how quickly you can get the money over. But together, the law firm will work with directed IRA to help get your structure designed the way you need it. So there you go. Okay, Matt, you choose a question.

Okay, let's go to Scott's question. Says, my daughter is turning 18 in two years. Is it wise to buy a house now when there's a 50% chance, the market drops and 50% goes up with inflation?

Well, Scott's got a dismal look on the future.

Yeah, Scott's like, well, it's either going to shit or it's going to the moon. Like, it's either real estate's either gonna be awesome or it's gonna suck. Here's. I mean, here's the thing. I have no idea. I mean, that's not our role as whether it's going to go up or down. But think of it this way. I'll just give you some insight. You decide whether it's helpful when you're buying real estate, let's say for your daughter here, and this is a house. So you would not do this in your ira, okay. Because your daughter's going to live in it. And whether she's going to own it or you're going to own it, it can't happen in your retirement account. Okay. Because remember, those have to be investments that you don't have personal use of. So, so let's say you're going to do it on this side of the equation here, on your personal side. Remember, we got there. You're going to own the real estate person. You're probably going to get a mortgage, right? You're going to put 10% down, maybe 20% down. If you believe we're going to have massive inflation, what's the one thing you want that puts you in a positive position? Debt. Because if the value of money goes up or, sorry, if we have rapid inflation, you have debt. Your position. Well, real estate's going to go up. I think it's a, it's actually a good thing to have, is to, is to have debt because you're going to be locked at a really low interest rate where we're at right now. And the cost of housing is going to be going up as we're having inflation, which will be rental costs and everything up. So I actually am a little counterintuitive on. But I don't counter too. But I, I would disagree with your premise. And I don't know that real estate.

Okay.

Who knows?

Yeah. And I'll give you a different take. Matt and I don't agree on everything. I wear glasses because I'm a little smarter and that's just the way I roll. So I'm gonna throw a different perspective.

Yeah, yeah.

You always listen the guy that has glasses because they kind of smarter. So anyway, so here's the thing, Scott. Where's your daughter going to go to college? Who knows? When my daughter was 16 years old, one week to the next week, I had no clue if she was even going to go to college. I have three daughters and I love each one of them, but it's hard to predict the weekend coming up, let alone two years from now. Also, we're on a run with real estate on a 10 to 12 year high. There's a lot of piled up foreclosures out there. A lot of people in forbearance due to Covid, a lot of, of evictions that still need to happen. I think it's a little unpredictable. So sit back and save, sit back and invest in maybe some more traditional investments and wait and see what happens to the real estate market. See where your daughter may end up going to college, then make an acquisition, involve her in the process. Don't put it in a retirement account because you're going to probably want her living there and working on it with you. And I've done the same thing with my kids where a lot of them have gone to college. They've all bought their own property before or after they got married. And I think, Scott, you're on the right track, but take your time.

Yes. Let's look at some other questions there if you don't mind. Okay, let's hit some other ones there. I've been seeing the same one sitting there.

Can you trade Forex and Webster, can you trade Forex and day trade in an ira? Yes. How does it work when you need money out of it? Webster in Kentucky. Okay, if you do a Roth IRA, Webster, what's cool is you can put 10 grand in a Roth, start trading whenever you need your contribution. You can take it out tax free, penalty free, anytime, any age. It's just the earnings that you can't touch for the future. Oh, we got Vic, Matt, go ahead.

All right, let's see if I can answer this question. Oh, wow. I just, I just heard that if you wear glasses it makes you smart. So you know, I.

Those look good on you.

They're on the specs.

Yeah, this is, this is a new look for Mr. Sorensen. Yeah, I was. Man, this Is like double the brain power up here. Oh, yes.

How do I turn off the X ray vision on these?

X ray vision on these.

All right, all right. How do you buy a rental under your Roth? If you buy a rental under your Roth, how can you write off deductions, depreciation, etc. Okay, this is a great question because some people actually say, oh, don't buy real estate with a retirement account because you don't get the deductions and depreciation. Okay, what, what world would you rather live in? Let's think about this. A world where you don't pay taxes or a world where you do pay taxes but you can have depreciation?

Sometimes I'd like to live both. Can I live in both?

You could live in both, but I think one of them is a better world. Live in the world where there's just no taxes, period. Depreciation only helps you when you do pay taxes and it helps offset taxes or taxable income you may have. If there's no taxes in a retirement account, there's depreciation. Doesn't help you because you don't pay tax. So it's kind of like being like, well, do you want a fire extinguisher when there's a fire or would you just rather be no fire? I just rather be no fire.

Okay, here's what I would say. Look it, I've cleaned up our diagram. So I've got my tax free investments and my after tax. Look at, it's a double edged sword here. You get depreciation and losses. I love that. I want my clients to work towards being a real estate professional. I want to buy rentals and get tax losses and depreciation. Tax free growth and appreciation. I love that. But look over here. No tax on gains. See where you, you get here, you get your cake here, you get to eat it. You want both? You want my cake and eat it too. So build up rentals. When we tell clients to maybe buy one rental a year, buy one rental a year in your own name and buy one rental a year in your retirement account. So I'll just call this self directed IRA, whether it's a Roth or a 401k. So my answer would be why not do both? So Susan, can you buy livestock in a traditional IRA? Yes, you can buy them in a 401k. Can you do transactions with a child that has a different last name?

Ellie?

I like that trick, but no. Once they're a child, they're always a child.

So if they're a Stepchild that you have not adopted. They're not a disqualified person, technically stepchild. So. Yeah.

Do you, J.P. do you have one? I don't want to cut you off.

Yeah, you can see. See, J.P. yeah.

Okay, J.P. says I'll ask Matt. On the tax free side, do you distinguish what kind of investments you make in pre tax versus post tax, like Roth? Okay.

Yeah, you could. Pre tax and post tax are confusing words. I always used to like to use traditional and Roth because in the IRA world, that's what you have. Pre tax basically means I got a deduction. It's traditional. Okay. Post taxes. I paid tax on it already. That's the Roth.

I agree.

And so just think of pre taxes, traditional dollars, and post taxes, Roth dollars. Now, in your 401k, maybe you have a 401k at work and they. They may categorize this as pre tax and post tax, but yeah, you could have multiple. And you just have a different traditional IRA and a Roth. Those are different accounts with pre and post tax dollars.

See, and here's the thing. Some people say, well, do I want an IRA or do I want a Roth when I'm in this world? Well, again, you might want both. Sometimes clients need the write off. They're in a high bracket that year. They want a deductible 401k contribution. And then other years, they're like, oh, my gosh, I'm in a low bracket like Covid last year and say, I'm going to do a Roth this year. See, no tax here, tax here, deduction here, no deduction there. So again, it's strokes for different folks. Strokes for different folks.

What's that from?

Well, I thought it was different strokes. You know, like the song.

Oh, okay, maybe not. I. I was lost on that. Okay, Sometimes. Sometimes my jokes, sometimes they hit great.

Yeah, sometimes they crash and burn. You know, we went to a photo shoot because Matt was in town. We said, we need some photos together. It was a little hurtful. One of the photographers we got there and she goes, well, I guess I can work with this. She said that, did she not? And I was.

Let me. Let's clarify. She said that to Mark.

True, true.

Okay.

All right. I mean, yeah, I gotta take it. Can you buy a traditional. A rental with a traditional ira? Yes, Spencer, you can buy a Roth. You can use a Roth to buy rentals. 401k, traditional HSA. I own a rental in my health savings account. I'm not kidding. Yeah.

Let me answer Philip's question. Hey, guys, If Gemini offered a Personal loan option like BlockFi. Four and a half percent interest in a yielding, in an interest yielding crypto wallet. 6 to 7% interest. How could you utilize that in your self directed ira? Limits on use. Okay, so love it. You can do it. We have a crypto Iraq directed IRA that we set up a Gemini trading account for our clients. Like that's what mine. When I talk about my Roth ira, that's a directed ira. I have a Gemini account and a wallet there. And I'm on the Gemini exchange. So I can buy and say trade crypto whenever I want. You can all do the same thing. I don't just get it because I'm, you know, the CEO there. I that's, I'm just a regular customer. Like when I'm doing this, I'm kind of like the. What's the bosley hair for men. He's like, I'm not just the CEO, I'm a customer.

Oh yeah, that's good. That's good. He sells.

Yeah. So you can do it the same way. Now Gemini has an EARN product called Gemini Earn, which it is possible for you to basically enroll your IRA in and lend out your crypto that's owned by your IRA. Now BlockFi is. And there's other places out there where you can loan your crypto to. That's all fine too. What you can't do though is you can't be on the other end receiving that loan personally. Okay? So think of your IRA and what's permissible for it to do is to lend money out or crypto out and it can get interest back paid in crypto. And that's totally cool. That's absolutely fine. But what you cannot do is remember, you can't be the one getting the loan back. Perfect.

That would be prohibited. Okay. And I want to add to that, Philip. You can trade crypto in a Roth, you can loan your crypto in a Roth and you can mine in a Roth. You can do all three. So there's no limit on what you can invest now. So I love it. And then every time you pass go every January, if you're under age 50, you can put in six grand. If you're 50 year old, you can put in seven. So you're going around the monopoly board every year putting more money in. But if you land on Boardwalk and make a grundle on a particular coin. Great. Now if you're going to mine, I have a whole video separately on the mining and using a C corp in the mix. I don't think we'll go there today. We've got other videos and podcasts on that topic, but if you're going to mine inside your retirement account, you've got to add an additional structure to be safe. Corey, do you want us to. Oh, do you have an Instagram question, Ashlyn? I have a couple for you.

Okay. All right. Maria wants to know how much she can put per year in her child's self directed ira.

Do you want to answer that? Yeah.

Okay. All right, Maria. Now, in order for a child to contribute to an ira, and we typically want to do a Roth ira, right? Because, you know, your kid's not paying taxes. So let's do a Roth ira, they have to have earned income. Now, the max you can put into an IRA per year is 6. Now, right now, because you can still make 2020 contributions. If you had income in 2020 and you had 2021 income, you could make a $12,000 contribution. 6,000 for 2020, 6,000 for 2021. The rules were expanded for this year till May 17th for 2020 contributions. Usually it's April 15th, you know, for the prior year's contributions. All right. But to do six, she would have had to made income of six. Maybe you have a small business your kid works in that you paid them six to the year. Maybe they made a thousand bucks during the year, then they could contribute a thousand into the Roth ira.

Now, on that note, that was the missing link. If any of you want to build a retirement account for your kids, Matt and I have done that with our children, and they don't have millions. We're just average Joe's too, trying to help our kids get through school and learn about saving. But mom or dad cannot just give them money to put into a Roth. This is the missing link. You've got to have a small business. And so it could be an online business, janitorial business, landscaping business, just anything. And then you're going to hire your child to work in the business. You might just have a little LLC sole prop, and we've got all sorts of, again, podcasts and videos to help you with that. Go to YouTube, type paying your kids Kohler and Sorensen.

Yeah, and you could have a teenager, too, that has a job or a summer job that blows their paycheck on everything, but they actually have earned income. And you're like, I want to help them out. And they made, you know, 5,000 bucks this year. Okay, you could help them out and get that 5,000 bucks in their Roth IRA because they had earned income. Even if it wasn't from your family business.

Okay. Now we're going to do a quick news alert break to keep you guys interested here. I. I picked up a copy of the paper.

The news?

Yeah, the news. You got the news? Okay, I got us. Now I have star somewhere in here. And now this is from so I Married an Axe murderer. The paper. This is the paper. But Brad and Angelina, they have still not settled their divorce, and I'm really sad about that. Britney has still not got her dad out of there. Oh, here's. I wasn't kidding. Here's the star. So. Oh, I don't know. You know, Megan has burned all her bridges in Europe. It's just. It's crazy out there. So just a little news alert. Just wanted to throw that out.

Thanks for the update.

Okay. All right. Okay. Another question.

You leave the glasses on for that?

I can't read the questions without the glasses, so. Okay, Susan, super excited you guys are here, too. I'm paying off debt with crypto and saving for taxes. Then I'm going to transition. Transition crypto holdings into retirement accounts.

Susan sounds pretty smart.

Yeah. Now, but Susan on Facebook, she said something that can be a little deceptive. She said, I'm transitioning crypto holdings into retirement accounts. Now, that's an important point because if you've got crypto over here that you own personally, you can't put that in a Roth or an ira. You've got to sell it, convert it to what's called fiat currency or dollars or yen or euros, whatever you got. And. But you got to put it in dollars, pay your tax, then you contribute it to the retirement accounts. There's. We had. I had a question on that this week, believe this or not. This is crazy. A client of ours called. She said, I have 2.5 million in Ethereum and Litecoin. How can I get in my Roth? I was like, you're not getting it in your Roth, girl. You got to sell it, pay the tax. Then we can start funding these other accounts. So it's really hard to. Once you're down the path, I can't bring you back.

Yeah.

Yeah. So, okay. Another question, Matt, you choose.

Okay. Shane asked about are they going to bring more exchanges in the Esther account in addition to Gemini for crypto? It's possible. You know, we've got a relationship with Gemini for us, and we like them because they're a actual licensed financial institution, unlike some of these other cryptos that I'm terrified of being, having my money on it. But one thing you can do. If you're like, I want to buy crypto that's not on Gemini, maybe you want to buy XRP or DOT or something else that's like. Or dogecoin or whatever. And Gemini doesn't have that crypto. You could do an IRA llc. Have your IRA own an llc and you'll set up a wallet with that llc. Now, the problem with the IRA llc, and this is why we've moved to the crypto IRA product, it's going to take you a few months until you can do that.

Well, now I have to give an update. I applied for a crypto exchange account at Coinbase. So I took my Roth, formed an LLC and went and applied for a Coinbase wallet in the name of the llc, not me. So you can't just go on the app and set up an account in the name of your ein and LLC name. You have to do it with an application through their main website. I'm out three weeks right now, and it looks like I might have it by tomorrow.

I've heard that. A couple days. Yeah, it looks like I'm gonna have it by tomorrow.

You know, I'm trying, Matt. Okay.

I'm just saying, I did it. This judge in 2018 is when I set up my Coinbase wallet that my LLC owns. Back then, they were doing them pretty fast. Now all the crypto exchanges are overloaded, so LLCs are like, the last thing they get to. Unless you're like a huge hedge fund that's like, yeah, we're sending over 100 million. So if you're just LLC with 10 grand in it or something, or 100 grand or maybe even a million, they're just taking their time, unfortunately.

Now, I want to give, but you

could get there at the end if you want.

I want to say thank you to a couple comments of people saying, quit drinking, rock stars. It's bad for you. Now, my mind you, there's no aspartame, no sugar, no carbonation, just electrolytes, taurine, B vitamins, electrolytes. There are more chemicals that haven't even been identified in a cup of coffee than there is in this. I'll go toe to toe. You start listing the chemicals in this compared to a cup of coffee. This even has lower caffeine than a medium coffee at Starbucks.

So they're comparing it to water. Oh, yeah.

Okay. So, yeah, water is a little cleaner,

I guess, but you just. You just pick, like, something else that I know.

But this tastes better than water, you know? Okay. Oh, Christian, you're Asking a lot of questions. You know, you just. There's other people. You're Christian. I love your questions. You got to set up a consult with one of our lawyers. Darren, right here. Darren, get Christian. Make a comment to Christian on how we can get an hour with you. Yanni says thanks for answering my question. And Drew from your company has responded via email. Yesterday I was setting up a consultation. You both are awesome.

I like Byron's question up there too.

Thanks, Jani.

Starting an online advertising business, marketing digital products as well and looking for real estate investments to rehab. Should those be done in separate entities? And is it best to start Roth IRAs under both businesses? Okay, we got to go back to the trifecta.

Yeah, we got to go to the trifecta. What do you want World peace too? And by the way, I want to do ava's question on YouTube. So we'll come to that one. Okay. Brandon, was it?

Brandon?

Byron. Byron. Okay, can I try a little bit on this? Okay. Byron says starting an online advertising business, marketing digital products.

Let's stop there. What do you think in that business is that's an operational business.

There we go.

Is not an asset. Right. Operational business.

That's right.

You're going to get income for providing products or services.

And the big debate, well, should he start with an LLC or go straight to an S Corp? Now I've got a video on YouTube with thousands of views that's very legit and easy to understand. So, Bryron, you want to please, if I may ask you to go to YouTube and search. Sorry, LLC versus S Corp. Go to YouTube and search, LLC versus S Corp. Kohler. And I've got two or three videos that will really explain that. But when you're going to do digital marketing or advertising, I'll do digital ads. You're going to run that business nine times out of 10 through an S corporation. And especially if you're making more than 40 or $50,000 a year, which I'm sure you'll want to do. Then he says, I want to do real estate investments, such as a rehab. Now, rehab could go a flip or it could go into a long term hold. Let's assume hold. Matt, would you do a hold over

here if it's going to be a rehab? Well, think of what your strategy is. Now, I myself actually had a rehab that I meant to flip that turned into a rental.

He also went to rehab.

Yeah.

So. Oh, did I say that outline?

That was attorney client privileged information, tmi. Yeah.

Yeah.

So if you're doing a Rehab, if it's gonna.

There's nothing wrong with rehab. I mean, wrong with that. Yeah, there's nothing. Yeah, it'd be good for you.

People need it. So, okay, so if it's gonna be a rental long term, that's asset. We want it over on the asset side.

Point right here. Look at this. This is good.

We want to be on the asset side. You say after tax investments. So this is stuff you're going to pay tax on. Maybe a little confusing after tax.

Okay, personal. Yeah, personal. Okay, personal.

So yeah, so you got the LLC over here that's going to own the property. You could get depreciation and losses you could maybe use to offset some income over here, possibly a little bit.

Who knows?

Now if you're going to be like, nah, I'm going to flip this and I'm going to flip multiple properties. In fact, if you're just going to do one, you're just going to flip this one property this year. I may even throw it over there in an LLC anyways. But if you're like, now I'm a guy that flips houses, I'm going to, I'm going to flip a house every, every other month. We're going to run that through your S corp. We may set up a separate LLC that your S corp owns for asset protection that does all your flips, but the income funnels down into your S corp and then you're going to do your, your tax strategies out of the S corp.

This is our typical structure. Left side, right side, operations, assets, dentist, building, realtor, rental, digital marketing rental. Now when in Byron, if you called us up and you're on the phone with one of our attorneys, they're going to go, what's the plan with this rehab? Because it's on the fence. If you're going to flip it and you're going to do a lot of flips, we're going to bring it over here and run it through the S corp. It's going to turn into a rental. We're going to bring it over here. So when you, it's really important as you're strategizing to figure out what's the goal with this property.

Yeah. And the reason we're going one way or the other is for taxes. Flips are taxed more. You have to pay self employment tax on it just like you do when you're with your digital marketing income. When you have to pay that tax, we can minimize it in an S corp so you can pay less. But if you're like no, it's not a flip. Going to be a rental. Well, don't worry, you don't pay self employment tax on rentals. It's going to run through an llc. No reason to run it over here. We want it on the asset side.

Okay, now the last point of Byron's, which is really good, is it best to start a Roth IRA under both businesses? No, you can't. And Byron, don't be offended. Let me clarify this for everybody. Roth IRAs are an individual retirement account, not a Roth BSA business savings account. This is a Roth IRA for a person. So down here is Byron. And so Byron is going to open. Now Byron could open two Roths, but what's the rule? How much can he put away this year? And someone said, I had a dumb question. Brandon, how much is it a year? Brandon, that's not a dumb question. It's a great question. You can do six grand a year, all your Roths combined. So Byron, you could open two Roths and put three grand here, three grand here. But it's after the businesses. So you have two different businesses, maybe three, but you open the Roths down here.

And it may be confusing with the solo K because the solo KS and 401k accounts are retirement accounts created by the business for its employees. So a solo K, your digital marketing business here may create a solo K for the benefit of its employee, which happens to be you, you're such a great employee and then you're basically running the Solo 401K. So that can, that could be a little confusing.

I want to go deep now. This is for some of you that want some technical info. And I'm going to ask Matt here. Let's say Byron says I'm going to fund a Roth IRA with 6 grand. Can he also do a business 401k at the same time?

Yes.

Could he do 19. 5 in a Roth here and 6 grand in a Roth here? No, no. Backdoor Roth.

He could do a back door though. He could do 19, five here and do the backdoor Roth to get six more. Now the backdoor Roth is a unique strategy that for people high income that phase out and can't make regular Roth IRA contributions or someone that's maxed out the 19.5of money you can put as an employee in a 401k. But you can always do what's called the backdoor Roth, which you go through the back door into the Roth, the cool Roth party. It's just another way to get into the cool party. And you can still do the six.

See, now this makes a lot of people mad. And we get hate mail. I'm not kidding. Because we'll say, you could put 19 grand in a Roth. They're like, no, you can't. You can only put in six. No, you can do actually 19,500 in a solo 401k Roth. And then we go and you can do another Roth for six grand. They're like, no, you can't. Yes, you can. It's called the backdoor Roth. So Now I've got $25,500 in Roth money in one year. But they want more. They want more. So your age 50 can do seven down here and 24,500 up here. So now I've got another 6,000 on top of this. That's 31,500. Can I do more?

Yeah, if you have a spouse.

Oh, double that. So there's 62 for those of you in Utah.

This only counts for one spouse.

Yeah. So that's $63,000 now. Oh, but couldn't I do more with a non deductible in IRA? I'm sorry, non deductible, 401k contribution and convert it to Roth.

Yes, you could.

How much could I do there this year?

You can get up to like 57,000.

Is it 50 Cent? Let's go to the handy dandy Mark Kohler calendar.

58, 2021.

Yep. So in 2021 we can do. The maximum is 58,058 for 2021. Now that. Does that count with the 195 as part of that? Yes.

So you subtract out the 195 from the 58.

Okay. So we use our trusty dandy, 58,000 minus 19,500. This is what CPA, 38,500. So look at this. Let's forget the spouse for a minute.

That's a little CPA trick right there.

Yeah. So we can do 25,500, which is my 19 five plus my 6,000, and then, then we say, oh, I can do an additional 38,500 of non deductible. This is the trick. I told you we could after tax

in the 401k space. Yeah, in this.

So it's an after tax contribution to your 401k and then convert it to Roth on the next day. So that's 38,500 plus 195 plus 6. 38,500 plus 19,500 plus 6,000.

Isn't it going to be.

No, that's not. Siri, you let me down online.

Wait, it's basically the 58,000 plus 6,000, right?

Yep.

It is 64.

64,000. Look at that. You can put 64,000 in a Roth this year, Byron. Now that's if you got the money burn. You got a small business and no employees.

All right. Yeah.

Okay, let's do a couple other questions. Only two more questions. Okay, I might do some fast ones. I'm going to take, Suheer says what ages kids can be hired. Well, I usually don't put kids on payroll till they're about six. They can shred paper, clean the office, polish shell casings, and if they get their hands stuck in the shredder, it's good for them. It teaches them to be responsible.

With the new shredders now, though, that happens less. Yeah, they're a little more.

There's safety mechanisms for that, I think.

In reality, I personally, I did it when my kids were about 12 or 13, because that's actually when they started doing stuff. They'd come to the office and clean. They'd help with social media and stuff like that. So sometimes when they ask like, what's the age? You can do it. It's, well, when are they actually working? Is actually the question. If your 6 year old is actually doing something, then it's cool. But remember, if an IRS agent shows up and is like, okay, what did your six year old do? Do you gonna have a good answer for that? So I like, I like kind of like 10 plus. I mean, I don't know. I've had clients ask, well, you know, the dentist always asks this. I don't know about you dentists out there, but you guys hate paying taxes and I understand. I think they learned this in dental school.

Yeah, dental school. There's a class on tax. There's how to hate tax aggressiveness.

Yeah. And you do not get your dental degree unless you pass that class.

Yeah.

So. But they'll always be, well, you know, my daughter's on my brochure. She's two, she's adorable, she's smiling. I mean, I'm gonna pay her a modeling fee.

It's up to you. We could try to figure that out. Okay, now that was supposed to be a short answer. Oh, Mr. Sorensen.

Oh, I didn't make that promise. You did.

Oh, okay, fine. You could choose one more question. Then Ashlyn gets to choose one from Instagram.

Okay.

Okay.

Okay. Mike says, are there cons of buying an investment real estate rental in a sub directed ira? Yes. Depends on the rental. You could buy a Crappy rental that so just like it's. So the vehicle is just the retirement account.

Well, no, I would say, I think. Mike, Mike, you could have a crappy rental in your own name or in your ira. We get that. I think he's saying, is real estate as a type of investment, there a con to buy it in an ira?

Well, you know what some people say is, well, I can't take depreciation expense. Okay? And that was the conversation of, but you don't pay tax when you sell it. You don't pay tax on the rental income. Why do you care about expenses?

And Mike, that's a fair question. I'll say this.

I have one con. Do you want me to give a con? Because I'm just being all rosy.

Yeah, okay, go ahead.

You can't use it and you know you're not going to get the value out of it until you hit retirement plan H. So if you're like, well, I want to make some real estate investments and use the money now that I make on the deal, use the cash flow now. What's your 59 and a half year? This is a long haul type.

And I'll give you another con. I'm going to finish with a pro. But if someone's like, quit making it so rosy, what are the cons to buying real estate in an ira? Matt says you can't work on it. You can't go stay there. And it's not yours, it's your IRAs. Fine. Number two, Matt said you got to wait till you're 59 and a half to really enjoy the spoils of the profits.

Yeah, the spoils of your plunders.

That's right. You know, I like spoiling. Plundering, yep. Those are good things. Three, I would say this, it takes a little bit more ingenuity. I mean, you've got to learn this topic. You got to learn the strategy. You're going to have to employ a custodian and lawyer to help you once a year, maybe address some things and just it takes a little bit more work intellectually to get it done. Yeah, here's the biggest pro. It's. Don't worry about, is it real estate, is it Bitcoin, is it whatever. Here's the thing. Get the best rate of return in your retirement account. If that's an ETF for you, then do it. If it's gold, fine. We're not going to tell you what to put in your Roth IRA or your 401K. We just want you to know what you can put into it. And don't listen to Wall street when they say you can't. It's they can't, but you can.

That's how you get a silver play button.

That's that silver play material.

That right there. That was good. I got chills.

That's good. You got chills. I like that.

Just want to show that we're going to cut that. We got to get a little cut of that.

I like that.

It's going to be my ringtone remark. Kohler calls now.

Yeah, ringtone. Ashlyn, the last. You better make this a good one, Ashlyn. This is the last question of the whole show.

I believe in you.

Speak loud. Speak loud.

Nice and easy one for you.

Vishal Visions on Instagram wants to know if she can split her investments between

an index fund and crypto.

And SDIRA can. What's the first name or the handle? Dashal. Dashal says B, B, B, B, V. Vishal. I know. Vishal. Vishal. Thanks for following. Okay.

All right.

I know who Vishal is.

Okay.

Vishal says, I've got an ira. Can I split it in a self directed IRA between index funds and crypto? Matt?

Yes. Let me tell you the easiest route, okay? If you have an IRA right now, you may have one at Fidelity or, you know, TD Ameritrade, wherever. Just leave the amount of money there you want to do ETFs with. Now they're not going to let you do crypto. Move that over to directed IRA where we have a crypto IRA where we can open the wall and get you trading in crypto, you know, in about a week once your rollover comes. That's the easiest. Now it takes two IRA accounts. Now we can buy. You can actually buy ETFs at Directed IRA, but you're gonna have to add a brokerage option. We don't have the cool login portal like to buy and trade stocks like TD Ameritrade does. So depends on what you want. I think TD Ameritrade beats us at a budget buying ETFs. It does, but we have lots of clients that buy ETFs in their IRA because they have a lot of cash sitting there. They got real estate. But I think for the crypto client,

I. Yeah, and I think Matt just described option one, having a regular IRA or whatever. It's a Roth or traditional. At your TD Ameritrades of the world, leave your index fund there and then open a crypto account and just do a partial transfer.

Just partial transfer of the Money that you want to do crypto with over to your Directed IRA crypto account.

Now going to throw out a little pitch for option two. If you open an ira, a directed ira, you can still, I think it. How much is the trading?

So it's 80 bucks to add the brokerage option. Now here's the thing, is our crypto IRAs, you can only buy crypto in it.

Yeah.

You can't add a brokerage option to it. It's linked to a Gemini trading account. So it's locked down to just do crypto. But you could have two accounts with.

That's right. And the reason why. Now I'm not trying to be self serving Vishal, but I would say try to get it all over to Directed Ira. Whether it's one or two accounts and how you structure it, you meet with one of the lawyers who talk to the team at Directed Ira. But what I like is it's all under one roof. It's there. And what's nice is the customer service at Directed Ira is freaking amazing. You actually talk to an individual. Heaven forbid. We're in this day of age of apps where we do it all on an app and if we try to call someone, it's like it's not happening. You can call directed IRA and go, you know what? I'm sick of the etf. Just push it over there to my crypto. Done.

Maybe even same day and.

But if you leave some of it over at the other brokerage and it's just a nightmare and I love it. We've got Aaron Hallerman, our chief operations officer here the house, and he's over there going, yes. It's so much freaking easier because he's got his team members trained to be like, easy button, beep. You know, like beep. Do we have an easy button? Aaron says we have an easy button. Okay. Yeah. So I'm just saying that because if you're sick of that Wall street rigmarole, you can just bring it over and make it happen. So talk to someone there. All right, well, we're done. Matt, because you're the guest of honor today.

Okay.

You get to say any final words of wisdom and take us out.

Okay. All right. This is my final words of wisdom.

I like.

This is a good prop.

Yeah, it is.

It's kind of like, all right, if these were my glasses, I think I'd.

You look good in the camera there too. Look at you.

All right. Okay. This is my final words.

Okay, okay.

This is my. This is my. I think this is a Good investment tip. Okay. I'm super serious. I'm being serious now. I'm joking around. All right. We've been talking about retirement accounts. I think a lot of people, particularly when you start throwing out crypto and things like that, that everybody starts thinking of hitting home runs, and I'm just gonna put $10,000 in, I'm gonna hit a home run and I don't have to, you know, I'm gonna be a millionaire with my crypto or, you know, I'm gonna make this big real estate deal and, you know, I'm gonna make a ton of money. That's not the successful things our clients are doing. They're doing these things, but it's not a home run. They're getting up to bat a lot. They're hitting a lot of singles and doubles. They're playing a lot of games. They're not just showing up once, buying crypto and hitting a home run and walking home. Okay. With the World Series, one in a million. Okay? So just save, get the. Get the money in there. Start investing, start learning, start hitting some singles, some doubles. As you learn, you get better, you find out what you're good at. Maybe you're good at real estate, maybe you're good at crypto. Start doing more of that, you're going to get bigger and higher returns. That's how you get a big retirement account at the end of the day, because that's the goal, is to really just have a big retirement account at the end of the day.

Yeah. And I said, you get final word. But all I'm going to do is say what Matt said in a different Slow and steady wins the race. We are not teaching get rich quick schemes. And I love what Matt just said. Our most successful wealthy clients just wake up every day, every week and just do a little bit. Just learn a little bit and do something new this week. Save a little bit. Take just baby steps as doctor doctor. What about. What about Bob? Doctor doctor. What was his name?

Dr. Leo Marvin.

Dr. Leo Marvin.

Yeah.

Baby steps.

Yeah. Dr. Leo Marvin.

Okay. All right. Well, thanks, everybody. We love you, Matt. Thanks for being here in Idaho, the great state of Idaho.

Yeah. The Granite State. What are you guys. What's the. What is Idaho?

Gem State.

The Gem State.

Gem State, Yeah. Where Aaron Paul, co star of Breaking Bad, moved to Idaho as well. Because he's like, Idaho kicks butt. He's freaking awesome. Yeah.

Huh? He didn't like Albuquerque, huh?

I don't think he ever lived in Albuquerque. No digs on Albuquerque. We just lost all of our Albuquerque fans, you know? Yeah, it's. It's a hard place to live. Yeah. All right, everybody. We'll see you next Thursday at 4 o'. Clock. Be here for open Q and A and another creative, interesting topic to help you build wealth. Thanks. Oh, that was in. In studio Clap.