I Wouldn’t Put Another Dollar In A 401(k) Until I Knew This

It's about optimizing income, questions on a 401 and how to maximize growth, minimize taxes, which is what we're all trying to do. I can withdraw my pension lump sum. I'm guessing is what it's supposed to mean and move it to an IRA. So when you get to your age, you can withdraw the pension and then you can move it to an IRA with no tax due. Is there a reason that this wouldn't make sense when I self-direct it and make more than I could by just sitting in the pension? Question number 2. I'm an LLC filing as a— filing as an escort— S corp. Hang on. I'm not reading that name. As an S corp in the past, uh, I've done mega Roth backdoors, solo 401k, Roth 401k to get in the future tax-free growth. This is before I signed up with WealthOS. Now that I'm with WealthOS, would it make even more financial sense or tax strategy sense to continue as an S corp owner to deposit into my 401k solo? Or my Roth 401 into a mega Roth, or better strategies to fully go Mark's way, the Wealth of the West way, and buy investments to generate income and save on taxes. I'm trying to see if I should even keep my solo 401 and Roth. Okay. So this is a pretty big question. And the question to me, it sounds like it's coming because there's a lack of clarity of where you're trying to go. So you haven't done like, you know, maybe you haven't gotten to, um, Maybe it's less than 3.9 or 3.10. Uh, you haven't gotten to the point where like, where are we trying to go? Where am I at? And then what are my route options and time to get there? Because if you were clear on that, then the answer to this would become much more clear for you because what you've proposed are any number of strategies that could all work on their— I mean, they're all decent strategies, but I don't know which of these will help you get to your goal in the desired time that you want to get there. At the Bitcoin conference, you know, thousands of people I talked to while I was there. So many people have like, oh man, Mark, I'm doing what you said. And you know, I've borrowed against the property and I'm thinking about borrowing against my Bitcoin and buying stretch. Is that the right thing to do? And I'm like, I— how do I know if that's the right thing to do? Is that a good thing to do? Maybe it could help you get closer to your goal, could help you get further from your goal. I don't know, because I don't know where you're trying to go. So to understand this, we kind of have to know where we want to go. So a couple things that I think about. Number one, I typically am not a big fan of 401s and things like that because those are tax deferral mechanisms. I don't typically like that. That's a personal thing for me. Your typical CPA or tax person loves those things because on paper it brings your taxable income down, but really what you're doing is just deferring those taxes. Now, I mean, maybe Donald Trump pulls out a Hail Mary and ends income tax before he leaves office, I wouldn't count on that. Uh, my guess is that in the future, whenever you want to pull that money out of your 401, taxes will probably be higher. Also, what your financial advisor tells you is that, yeah, but your income is going to be lower. So you'll be in a lower tax bracket. Why is that? Why, why do I want my wealth to be lower when I retire? I want my wealth to keep going up forever. Like what kind of, what kind of strategy is that? Yeah, I might just die too. I'll plan for that. Like, come on. Right. So typically I'm not a fan of those because of those reasons. One, I think taxes will be higher when I want to pull the money out. And two, I don't expect my, my assets and income to go down. Now, should you continue to do those? Or as you said, you know, now that you're in, in, in, in the WealthOS, you're starting to think about things differently. So I think it was, um, one of the first couple modules. I think maybe it was the Balance Sheet X-ray. We looked at our assets and we looked at them. We sort of mapped them in a matrix of control and value, like high value assets, little control, or low value assets, high control. And so that's like, is it a, is it a, is it a good performing asset? But then do I have control over it? So typically assets inside of like a 401k or some, something like that, I don't really have any control over. So for me, I don't typically like that either. Now, to the point that you're making here, Kathy, you said that it is, uh, uh, I think you said, uh, that you can control it. So it's self-directed, so you can invest into it, but you're still giving up control in other ways, like borrowing against it, for example. Right. So it just depends. Uh, this answer can't— I can't answer this question because a good, a good answer gets you closer to your goal in the timeframe that you want. And so if keeping it in there and deferring those taxes and losing the ability to leverage the equity inside of there can still help you get to your goal, then it's a good thing to do. Kathy, I think you're here. I don't know. Go ahead and ask a question on that.

Um, no, that helps. And yes, it was S corp, not escorts. Um, no, that, that helps. I just keep getting myself spun in circles around these different things where our money's been trapped in 401s and also this pension. So I know the pension's only earning 5 or 6% a year. So it seems like it makes sense to take it and put it into something else, but it has to go to an IRA to be tax-free.

Yeah. So to me, it sounds like on the surface, it's like a retirement plan question. But yeah, the way my brain works, when I read through it, when I go underneath it, what I really see is a control question.

Okay.

You're asking, should I keep using these tax-advantaged retirement wrappers, containers, or towards more of a WealthOS structure that gives me more control and more liquidity and better deployment? And I think that's the right question.

So that's helpful.

Yeah. I like the control aspect. Maybe I'm a control freak. I don't know, but like, I want to engineer my outcome. And so I want as much control over my assets that would allow me the ultimate, uh, you know, the flexibility to engineer the outcome that I want. And so typically when I'm inside of any kind of a wrapper, um, it takes that away. Now, um, you know, we, we did break down our assets into, um, you know, 4 layers of liquidity. We broke them into different types of assets. So for example, uh, we have productive assets that are cash flowing assets, right? Uh, we have collateral assets, assets we can borrow against. We have assets that are sort of like deadweight assets and they're deadweight, not because they're bad assets, they're deadweight because I can't really do much with them. So for example, investments in a private equity fund or a venture capital fund or land over in Bali, those are good assets potentially, but I don't have any control. I can't do anything with them. I can't get any collateral against them. They don't produce any revenue, no income. And so I could just say, well, my 401k sort of sits there. It's like, it's growing. It's a good asset, just like the private equity or venture capital is, but I can't do anything with it. And as long as it's okay to sit there and you can still achieve your goal with all the other things that you have, then it's perfect. It's great. I used a quote from Naval in my talk at Bitcoin Conference. And I said the— I cited his quote, but the only true sign of intelligence is if you, you get what you want. That's the only sign of intelligence, if you get what you want. But first you have to decide what you want. So if I know what I want, if I've gone through whatever it was, 3.9, 3.10, the lessons, the GPS, if I know exactly where I'm going and when I need to be there by, and I know what I have, the routes I can take in the time frame, and, and if that 401k or whatever can sit there and help me achieve that, then it's exactly where it needs to be. But I need to move it into something I can layer up a little bit more, or I can have more control over, then I have to do that.