All Forum Posts by: Joel Johnson

I WOULD NEVER PULL MONEY OUT OF MY HOME AND PUT IT INTO WHOLE LIFE INSURANCE! Please, please, please sit down with an independent financial advisor before you do this. 6.5% on your money is not accurate. 

Start with the end goal in mind. Do you want a paid-for house? If so, then don't do the refi. Do you want to take money out on your house to put into good investments and potentially earn a higher return? It's completely dependant on your goal whether or not I would do this. Personally, I'm already on a 30 year, don't plan on paying it off early, and am investing the rest in stocks, real estate, etc.

I love my 401k! I do agree with a lot of the points that they make when they call it a "scam," but I am a traditional investor first and foremost. I love the stock market and think it's just a different option to the same solution. Also, this isn't a zero sum game! Couldn't agree more, why not do both.

In my situation, I am planning on getting enough properties, and teaching my SO how to run them, so that we can self insure. I would maintain life insurance until the point that I am comfortable that my family would be okay without me. Until then, I will carry insurance. Though, if my investments can produce enough income, my need for protection disappears.

Find 5 CASH FLOWING properties at $40k down each and get a solid real estate portfolio going.

Like Covey says, "Begin with the end in mind." If your goal is to become a real estate investor and you're willing to put in the work that requires, then you should decrease those contributions. The only way this hurts you long term is if you decide down the road you don't like real estate as an investment vehicle. You cannot retroactively contribute to retirement plans so you would lose the ability to shelter money in that way.

An alternative might be to continue to max out an IRA with the intent of eventually rolling it to a self-directed IRA to invest in real estate.

I haven't done this but as a financial planner, I would try to find another way to get into real estate, especially if you're just getting started. Turning a dollar into $.70 will be VERY tough to make up for with returns depending on what you're doing in real estate. If I were you, I would get involved in real estate with other dollars FIRST, then once you know what your returns are in your chosen niche, decide on the 401(k). This is not a decision you should take likely especially if you have a lot of money in there.

As a side note, time is just one of the factors that impact your wealth. The main one you should focus on is where you're getting the highest return. If real estate outside the 401(k) only earns you 7% and the 401(k) earns 10%, you've lost. Hope this helps and good luck in your journey!

Find a different lender? Can't imagine having to pay a fee to become a member of a credit union, and that rate is competitive but doesn't seem special. I would definitely do some shopping on the rate rather than pay to become a member. If for some reason you can't go get the mortgage through someone else, you break even in 15 months, so as long as you stay in the home that long I would do it. Again though, best idea, find a different mortgage lender.

The only thing you would be giving up here really is the tax advantages that you receive from 401(k) accounts. I think an interesting strategy would be contributing to a Roth or Traditional IRA, outside your employer, with the idea of investing it in real estate down the road by converting it to a self-directed IRA. This gives you the best of both worlds if Real Estate is your goal, but it would be a longer road than just investing in real estate directly. I'm only 27, but I will tell you, your goals and objectives should drive how and where you invest, AND IT WILL CHANGE!

Personal finance is personal...100% of the time. The potential reason for his suggestion of focusing on the 401(k) investing is the tax benefits that come along with it, especially being in CA. Real estate investing is a strange animal that many planners don't study well and it doesn't often fit their framework. If real estate is your goal, your 401(k) could actually be a way of getting there. If you feel like you can trust the guy I would stick with him and just dig into the reason for his suggestion.

Today's podcast really focused on the processes that you put around real estate investing. As a numbers/analytical guy, I love that. I am trying to put processes around my investment process even though I am starting small and come from the equities world. One of the great takeaways from today's podcast was checklists. So here's the long way to the question, does anyone have any good checklists they are willing to share? Check-in/check-out, leasing, etc? I have bought the legal forms, but these seem to be a big benefit if someone has some good ones!