>I disagree with you on this point. Most 401ks have a matching component so the investor gets in most cases gets at least 50% instant profit.

In most cases that indeed would be a possible exception, though in my experience most do not enjoy that extra hit. Also, most of my clients have complained their 401’s haven’t even kept up with the S & P’s annual return.

That said, there are reasons you still would strongly consider using my way. (This would be besides the fact that it’s outproduced qualified plans since they were created in the early ’70’s.)

The gov’t requires the taxpayer to take out principal along with yield. This is silly if the account has enough to support the retiree without cannibalizing his life savings. Since my way will, over the long haul earn more of an annual return as demonstrated by history, the end sum accumulated will often be equal or more than even the matched 401.

Then there’s the most important fact: Using my way, the gross annual yield equals the after tax income because it’s totally tax free by definition.

Also, and you failed to mention this small fact, your qualified plan is part of their estate and will be taxed as such upon their death. Mine isn’t part of their estate and passes to their heirs absolutely tax free. It also has the option of borrowing from it without any penalty whatsoever for failing to pay it back. Also not true of 401’s.

Please tell me these factors don’t trump the use of a 401(k).

1. No penalty OR tax for cash withdrawals and no limit on how much you take out.

2. Not taxed upon death. Your heirs get the entire principal amount tax free.

3. All income is tax free for LIFE. No danger of running out of money because the gov’t required you to systematically take principal out.

4. Death benefit in the 7-8 figure amount if you so choose.

401’s just don’t measure up Spencer. It’s a sucker bet for most. The only exception I’ve seen is when the employer matches the employee’s contribution dollar for dollar, not 50%. I don’t see that happening.

The fact you like real estate sets you apart from 99% of your brethren. I have most of my clients grow their after tax income with real estate FIRST, then take some of their millions and buy some additional TAX FREE INCOME FOR LIFE.

When compared to what they would have had with their 401, it gives them chills just thinking about it.

Thanks again for your comment.

I have both a qualified plan and real estate( 22 units) ( self-employed I do not get a match) I would not want to go into retirement with just one. They compliment each other. I like the liquidity the qualified plan gives. I like the inflation protection the RE gives.

I recomend a balance portfolio to my clients. RE consiting of real property, timberland, REITs, TICs, and CMOs should be between 20-50% of their portfolio. Commodities 10%, Stocks and bonds splitting the rest according to risk.

Real estate is great, but it requires more hands on. I personally hate being a landlord. I like buying it,fixing it, and selling after a few years ( not flipping). Managing it is a pain in the ass and most people do not have the patience to do it and do not want to pay 10% for an outside manager.

Keep up your good work, you are just wrong on this one.

It’s only weekness is it’s strict avoidance of real estate. This is no doubt due to Andrews not being able to make money when his clients want to really grow.

With that one caveat, I too recommend this book.

Thanks Cher.