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Investments are supposed to be a somewhat safe and conservative way to grow your money. Not only is that not true, but there are several reasons you’re actually losing money if your cash is parked away in a retirement or investment account.

And some types of investments are worse than others. They come with fees that seem small, but actually gobble up a large chunk of your cash.

In this episode, I want to help you see through the confusion of investing and give you the secrets for making safer and more profitable investments.

Here Are The Show Highlights:

  • How inflation is robbing your investment and retirement accounts blind (1:42)
  • This is the worst type of investment to park your money into… (4:38)
  • How to see through shady marketing tactics that can steal $15k (or more) from you (4:48)
  • Hidden rules in your savings accounts that will gobble up all your money before you spend it (5:56)
  • Why getting into real estate can save you thousands of dollars on your taxes (8:03)
  • The deadly “C-word” you must avoid unless you want to wither away and die (11:39)

If you don't want your retirement account or your savings account dwindling away anymore and you want help or some guidance on what real estate to put it into, I'd highly suggest checking out the training we put together for you at http://socialmediablueprint.com/podcast.

Resources mentioned in the episode:

The problem with printing money

Value of $10,000 from 1921 to 2020


What Is the Average Interest Rate for Savings Accounts?

How a 1% Fee Could Cost Millennials $590,000 in Retirement Savings

Read Full Transcript

The big challenge is this: How are investors like us who are not backed by a billion hedge fund who are investing money from our own pockets? How do we buy, sell, and invest in the properties we believe in, yet still make a profit without risking all of our own money? That is the challenge. In this podcast, we'll give you the answers. My name is Nate Armstrong and welcome to the social media blueprint.

Welcome back. Today we're going to be covering one of my favorites. We're going to be covering why not doing anything for your retirement account is actually losing you money right now. That's right. It's losing you money by sitting still and being stagnant. Your retirement account and or your cash savings are going down. Okay? So here's how we recover and we're gonna be covering how printing money causes inflation. We're gonna talk about the fees on parking your money for it, standing still, and we're going to be talking about how standing still is actually going backwards.

(00:55): Okay? So first and foremost, this whole printing of money thing, you've probably seen it now. This is the second time it's happened in a short window of time. Well, relatively short. The last 12-13 years or so, back in 2008 to 2010 there was a ton of printing of money going on and now it's happening all over again or it just happened in this printing of money. What it typically does is it causes inflation. When you start circulating more money into the same economy, the goods that people are selling or the services that people are selling, they have to increase their prices. In fact, if you look back in history over time, like the last hundred years, inflation has gone up 2.73% that's just happened automatically every year. Now, some years have been worse than others, but it's still continues to happen every single year. Okay, so when we have this inflation going up, what really happens is that your savings or your retirement account is going down in value.

(01:52): Now, if we compare this inflation rate of 2.73% to the average amount that even just a savings account pays, an average savings account right now is paying less than 1% it's actually paying less than a 10th of a percent on average. Compare that 2.73% loss to maybe a 1% gain. You're losing money no matter what's done or said. Now, banks on the other hand, when they have your money, they're not sitting still. What they're doing is they're lending it out in banks. When they have one of your dollars, they can lend out $10 to other people. They can charge fees on that. They can charge interest on that. Like they're not sitting still. They're making a mint off of your money while it's this sitting there stagnant and stuck. So this whole concept, that idea of just parking cash or sitting still and stagnant, it's not a good one from the pure principle of inflation alone.

(02:43): We're going to be talking about the next topic on fees, which I hope will set a straight for you too, that you don't want to park your money and just let it sit still. If you're parking cash, it's dying right now. Okay. I did make the mistake of parking some cash at the end of last year. I parked some cash. I'm a real estate guy, so I wanted to diversify a little bit, so I put around 10,000 bucks into a retirement account into an IRA and I had my financial advisor put it in one of the most conservative mixes possible of mutual funds and all that kind of stuff because I just wanted to have some safety net and whatever. Well, guess what? That amount right now it's cut down by 25%. I'm down to $7,500 in value, maybe a little bit less than that.

(03:24): All from a year of parking my cash into what I thought was a super safe and conservative spot. Now I much prefer real estate because it's usually income producing and I'm going to stick to what I actually, I'm going to preach what I teach my next round. I'm going to do it myself, 100% not just 90% so boom. That's what happened to me and I don't want you or anyone else to make the same mistake. Next, let's talk about fees. There's an article published by NerdWallet. It's great. I'm going to actually link it to the show notes, but this article, the title is how a 1% fee could cost millennials $590,000 in retirement savings in the headline of the article really speaks to everything that's in the article. 1% fee on a sun mutual fund or some ETF or whatever. You stick your cash into that.

(04:13): You think that it's just sitting there growing for you. It actually takes a big haircut. It's like an extra tax that sucks from the principle amount every single year. Cakes, so be careful with these fees. Now let me put this in perspective. There is this article written by Investopedia. I'll also link it in the show notes and it talks about how the expense ratios, okay. On products that are like mutual funds, EMF or other things. Mutual funds are some of the most, I don't want to call it taxed, but it's almost like a giant tax. Mutual funds have some of the highest fees in the industry. They call it their expense ratio. They make it look small. On the investment side, on the brochure, the pamphlet, whatever marketing it, they say it's only a 2.5% expense ratio, 2.5% is huge. Let me give you an example.

(05:03): If you compare that with a a less aggressive expense ratio of half a percent, that's like I'm comfortable with half a percent, but 2.5 is huge. Okay? Let's just say that you put $10,000 into it and you're gonna park it for at least 10 years. Okay? Let's say that each year you make a $10,000 gain. What will that $10,000 at a 10,000 Oregon at a half a percent expense ratio, you could come out making 61 grant not bad, right? That's pretty sweet. Okay. With the same amount of money at a 2.5% expense ratio, which a lot of mutual funds are, I would only come out making 46 grand. I mean I'm losing, I'm losing with that grant for $15,000 because the expense ratio, even though it looks small at 2.5% it's actually huge. So just be careful with these fees. These fees are some of the biggest that are out there that can gobble up your accounts.

(05:57): Now, my wife and I and my wife is from South America, so we try to go to South America at least every year. And so we stuck at the end of last year. We stuck around five or 600 bucks into a Citibank account because Citibank has locations in TMS, in South America, and we figured we would access that money if we really needed it while we were out and about. And anyways, we never ended up using it. So I get a text message every day with my account balance from Citibank and that little savings account right there has gone from 600 bucks or almost 600 bucks down to $200 since December last year and I have not withdrawn a single dollar. Now, how is that like how does your savings account go from 600 to 200 and you withdrawal $0 million from it? Let's, because of fees, I'm getting eaten alive by these fees.

(06:42): They just keep gobbling up and gobbling up what I have there. The little bit. Pretty soon it's going to be a negative account. I'm just going to go close the thing as soon as I can, but literally like I've watched $600 disappear, a hundred percent of my money darn near all because of these things. Silly, silly little fees, so let's carry forward shall we. If you want help, if you don't want your retirement account or your savings account dwindling away anymore and you want help or some guidance on what real estate to put it into, I'd highly suggest checking out what we're doing right now. There's a training that I put together showing exactly what we're doing and exactly what our clients are doing to really, really accelerate the growth of their retirement accounts and their savings accounts. Okay. That's over at socialmediablueprint.com/podcast , socialmediablueprint.com/podcast and I want to tell you about John, one of our members, what he did.

(07:38): So John came to us and literally he makes pretty good money. He's got a good job, a successful guy, but it's a job. He wants to have something else on the side that starts building for him and he wants to have good retirement. So we got into this whole thing and we started showing them how to pick up properties. He loved it, but what he loved even more and not instead of losing money on the sidelines or losing money to fees and inflation, he's putting into real estate. What he loved. Even more than that is when we got together with a CPA, we were able to figure out that he could actually buy and renovate some properties and because of the way that he structures the renovations, if it's a refurbish, not a capital expenditure, meaning like a roof replacement. Instead it's that things that he can actually repair in year one, he can deduct that from his gross income, from his job, his regular job on his tax return.

(08:26): Now I'm not a CPA. You got to get with your CPA to do that part and I'm happy to walk you through it with your CPA in mind because we want to make sure it fits your tax situation. But for John, this was revolutionary, like literally. So not only is he growing his retirement account right now and he's growing his savings account by putting it into real estate, he's also saving money on his regular job income right now by offsetting some of the taxes. So this is quite incredible real estate. It's one of the most powerful vehicles that are out there for that. And it's why most wealthy people hold some or a lot of real estate. The next topic that we're going to cover now is standing still is actually going backwards. Yup. Let that sink in and standing still was actually going backwards.

(09:07): If you probably heard this another way from Marcus Limonus, the star of the show in billionaire founder or CEO of camping world, he said that if you're not growing, you're dying, and to illustrate this point, what do the following companies have in common? Compac? Remember them. Compaq computers, MCI, WorldCom, remember MCI. How about Pan-Am member Pan-Am airlines, standard oil circuit city. That was like the number two competitor to best buy. Remember that? Circuit city, a Montgomery wards, Sears. What do all those companies have in common? Well, here's what they have in common. They're all iconic American companies. At one point they were iconic. That all went out of business or at least when bankrupt. I know that one or two that I mentioned have had some minor comebacks after bankruptcy, but all of them, they died. They stopped growing and the moment that they stopped growing, they died in the same thing happens to us as individuals.

(10:03): The same thing happens to our money. If we just park our money somewhere and don't grow it, it's dying. If we as individuals stop growing, our mind is the rest of society is going to keep moving past us. We are dying. Okay? If you're not actively growing your money, it's dying too. We had one of our newer members come to us, been with us for about six weeks or so, really nervous, was afraid because it didn't have a ton of capital himself and the little bit of capital that he had. He was nervous into what to put it into, and so we showed him what we're doing. This whole social media blueprint stuff mapped out the whole thing for him, and he nervously said, you know what? I'm going to go forward. Let's do it. And now six weeks in, the guy's got his second deal that he's wrapping up.

(10:46): Now, I'm not saying that everybody can do the same thing that he's doing, but he's applied to every single thing that we've taught them. He's been there, he's listened, he's taken advice and he's running right now. His first deal alone, he was able to make it more than the investment in our consulting help by a long shot, way more now for him. Again, I'm not saying that everybody can do that. I'm just saying for him, like someone that was brand new to the industry but really wanted to make it happen. I'm so shocked and I feel blessed that he was able to step over his nervousness curve. He was able to step in because he didn't want his money to shrink into die. He didn't want himself as an entrepreneur and as a leader in his family to shrink in his diet. He wanted to step forward and he's been able to do that and I love getting text messages from him.

(11:29): It's really cool. He is a English as a second language so it's not very perfectly clear. So sometimes he's like rather blunt to the point, but it's kind of fun getting text messages from now. I made the mistake once in my business career of getting too comfortable and then stop growing. And it happened to me. I, I got really comfortable because we were moving a lot of properties and then all of a sudden I got into a development project and the development went South. I stopped growing as an individual. I stopped growing as a business leader and when that development went South, it costs me a lot. It costs me almost everything to fix it. And I won't go into the long story right now, but it was all because I got too comfortable and I didn't grow. And when you're standing still, you're really going backwards.

(12:14): And I don't want that to happen to anybody that that's in my life at all. I want everyone to be growing and then continuing to keep momentum pushing forward. And same thing with your money. Same thing with your life. Same thing with your business. If you're not growing, you're dying. So you might as well keep growing this stuff. Okay? All right. So I hope that this has helped you on our next episode. This is really sweet. We're going to be talking about IDC. I always hear this, this statement in for folks, especially if they're in a very unique market, they'll say, well, Nate, my market is different. This won't work in my market, and we're going to be covering exactly that. I've had the blessing and privilege now of working in some of the most unique markets in the country, and there is a different formula to it. It totally is. And we're gonna be covering that formula on the next episode. So I hope you've enjoyed this one. I look forward to being with you on the next one. We'll talk again soon. Thanks.

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