Should I Even Keep Contributing To My Roth IRA??

[Account Closed]

Hello All,

About two years ago I opened a Roth IRA after taking a college class for Personal Money Management since my teacher encouraged diversification and the tax benefits and all that jazz. Well since then, I have learned a lot about investing, taxes and what financial direction I want to pursue in life. REI to be specific. So I have been wondering lately whether it is even advantageous to keep my Roth IRA since I know that I want real estate to be my sole source of passive income and financial freedom. Also, I have learned that real estate is one of the best tax havens so I feel that it makes no sense to use property assets and paper assets as a tax strategy when I should just focus on using one type in order to maximize benefits and results. Thanks in advance!

[Michael Swan]

I will go against the herd here. I say stop contributing to IRA and start to build up a solid 3 to 6 months emergency fund and everything else start stocking away into your RE investing account. Hoard a lot of cash and start putting down 20-25% down on rental properties and get enough passive tax deferred cash flow to surpass your W2 after tax earnings. Then double your W2 earnings with more tax deferred cash flow. THEN DOUBLE THAT!! THEN BY 35 YEARS OLD GET MARRIED, QUIT YOUR W2 EARNINGS JOB AND PLAY WITH YOUR KIDS, ENJOY FINANCIAL FREEDOM!!

I did not learn this till I was 46 years old. I cashed in my IRA, paid the stupid penalty, refinanced my house and took that money, one rental at a time and became financially free. 2011 first little 1br 1ba condo. Two years later 10 rental condos, two years later 1031 exchange condos for apartment complexes and now 89 front doors, $120,000 tax deferred cash flow per year, 5.5 million in Real Estate, 2 million to 2.5 million in equity after almost 6 years of investing. All you need is 20-25% down on front doors that cash flow $400.00 or more per month, appreciation by buying low and refi or 1031 exchange. Why make other people money, like financial planners, mutual fund managers, expense ratios, 401b fees, plan administrators. When I increase the NOI 1$ on an apartment complex I own, the bank tells me it is worth 10$ more than I paid.

Sooooooo, in a 16 month period, one of my apartment complexes I have increased the NOI by $8,000.00. That means the value of this 15 unit has already risen $80,000. In another 18 months, I expect our NOI to have increased by $15,000. Then, the complex will be worth $150,000 more than I paid. We only put $150,000down. What next? Refi and take entire investment out and keep the 15 unit or 1031 exchange for a 1.2 million property with that $300,000 ($150,000 increased value plus $150,000 down payment). Don't forget the $100,000 in cash flow taken out in those 4 years of holding the property.

That's why I don't have a dime in the stock market anymore. I have control. The stock market is at the peak!!! How much further up can it go. You have NO influence on the price of a stock you invest in. I have a great influence in increasing the NOI of my 6 apartment complexes. I only took out of my IRA the down payment ant about 30% more to pay for the stupid tax for investing in the IRA anyway and the regular taxes too, which we will pay no matter if we sell now or some imaginary date in the future.

Last, let's say you were to achieve success and have 1 million in you retirement IRA when you retire, financial experts say, you can take 3.5% out each year and not out live you money by 88 yrs old. Soooooooo, you can take out $35,000 a year and not outlive your money. Remember, you have to pay taxes on that money too. Unless you paid along the way with a Roth. Still $35,000 doesn't make me excited. Does it make you excited? The financial planners say, you will be in a lower tax bracket when you withdraw and at will be good.

I say hogwash!!  They are saying our goal is to be poor.  What?  You see what I mean?  

If you change the way you look at things, the things you look at change right before your eyes!!

Swanny