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There is never a wrong time.
I don't care what this guy says.

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I don't care what his tax computation
says. There is never a wrong time

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to fund a Roth. Welcome to
another episode of The Chicks on the Right

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Show with our good friend and sponsor
of the show, Zach Abraham, who

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is chief investment officer at Bulwark Capital
Management. And we turn to Zach when

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we have questions and we just want
to vent about the state of the economy

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and finance and money in the United
States of America. That's when we count

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on our friend, Zach. Zach, thank you once again for joining us.

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Oh thanks for having me. I
love it. We have a couple

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of different issues that we want to
tackle with you today. The first which

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we were not expecting, But there
is a story that we saw a headline

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that kind of grabbed our attention that
said, is a ROTH four to one

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K really a good IDEA personal finance
guru claims he lost four hundred grand to

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a popular retirement scheme. That's how
they're referring to a ROTH four oh one

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K, and he warns others against
this costly mistake. Yeah, so,

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first of all, he didn't lose
four hundred thousand dollars. So what now?

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I didn't read through the whole thing, but I looked at the bullet

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points that what he's talking about is
he's talking about the lack of a write

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off. He's getting or right because
with the traditional IRA, when we put

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money into traditional IRA, we write
that amount off up to seven thousand dollars

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a year. Right, So when
you put money into a roth IRA,

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you don't get a rite off.
It's post tax money, right, but

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one hundred percent of the profits in
that account. So let's say you put

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one hundred thousand dollars into a ROTH
account and it grew to ten million.

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Okay, if you wait till retirement. Ame, how do we make that

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happen? First? Right? How
does that happen? It's the guarantee?

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Right? Trouble saying this? Right? What twenty percent annualized returns every year,

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no matter what? Right? In
all seriousness, if you think you

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found an investment like that, you
found a fraud. So don't you don't

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listen to me. I'm joking.
Okay, so but but yeah, none

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of that money. Funny funny story
about that, none of that money is

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taxable to the tune where Peter Teal, one of the co founders of PayPal,

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took his original right when they started
the company, took his stock and

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PayPal and put it into his roth. IRA. Well, that stock is

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now worth five billion dollars, completely
non taxable. Right, So there is

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never a wrong time. I don't
care what this guy says, I don't

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care what his tax computation says.
There is never a wrong time to fund

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a wroth. And for small business
owners, I've got a little secret for

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you out here, a little trick
that we use, and it's completely legal

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that I'm not going to be on
national or on your Guys show advocating somebody

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to do something untoward or questionable.
But if you are a business owner or

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a contract employee, right so technically
self employed or you know, a contractor,

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you can hire your children to do
work for you and you can determine

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maybe that's, you know, taking
out garbages at your house, maybe that's

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cleaning your office, whatever the case
may be, and you can pay them

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up to eleven thousand dollars a year
and that is not reportable income, right,

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so you can write it off,
but they don't have to pay taxes

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on it. But because it's earned
income, they can contribute to a ROTH

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ira with the money that you pay
them. This is fantastic. I love

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this so much. It is the
only way to get non taxed money into

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a ROTH account, and so I've
actually set those up for our kids in

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lieu of college savings accounts because something
else people don't know about a ROTH is

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you can use ROTH. You can
use the funds and profits inside of a

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ROTH account just like you would a
college satan's account. You can also use

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it for first home purchases. Right. So bottom line is this, if

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you start a kid contributing to a
ROTH at any age before twenty one and

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they stick to it, they're going
to end up with a giant pile at

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tax free money. So I think
that's just awesome. Yeah, that is

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awesome. What I hate about this
article is that people are looking at that

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and they're like, I'm just not
going to invest, and yeah, don't

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don't do that now. Now,
what he might be talking about is like

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a so in a lot of these
new four one K plans, they have

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like a ROTH sleeve. So you've
got the traditional four one K set up,

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which works exactly like in a traditional
RA and then you can also fund

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the roth side. Okay. Now, the one caveat I would say is

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do not fund the roth side until
you have maxed out your match on the

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traditional side, right, So number
one thing I tell people all the time,

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if your employer offers a match and
you're not maxing it out, you

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are burning money. Take the money, right and then any additional funding you're

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going to do outside of that funnel
that into the Roth side of things.

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Okay, interesting, it's good.
I hope a lot of people are listening

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to this because I know that that's
gonna shift some thinking about people's personal finances

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for sure. And I don't know
if you guys feel like this, but

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look, as long as we're as
long as we're operating inside the rules or

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we're not breaking any rules. Um, when you cannot pay the irs right,

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right, it just feels like Christmas, doesn't it? Like yea,

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even your money, it's your money
to begin with r right. But when

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we when my CPA showed me this
whole wrath thing, I just like I

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came home just rubbing my hands together, going baby, never, you'll never

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guess you know, it's fantastic.
Yeah, it makes me excited. I

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don't want to be Captain bringdown on
that note, because that was a very

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that's like a super positive. But
what's also in the news as of late

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is Biden and his Bidenomics. So
and the White House is so excited about

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this, like they are pushing it. They want everybody to believe that things

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are great thanks to them. Yeah. So what was your reaction when you

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first heard the term and its rollout? Um? Yeah, I give us

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your honest opinions act. You can
say all the things on our show.

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You can say, I mean,
the whole the whole idea is complete nonsense.

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The guy does not have a coherent
economic plan. I don't think anybody

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with any basic level of economic understanding
would argue against that. Um, it's

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been one, you know, one
nonsensical stream of nothing for since the guy's

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taken off. Did you think the
name Did you think the name was clever?

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I mean it was really clever,
Rightenomics? Well yeah, super clever.

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Yeah. I mean, but you
know, like when the entire mass

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media is effectively your campaign, arm
I mean, you've got a pretty big

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universe to pull from, right,
somebody's going to come up with something clever

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because they're all pulling in your direction
anyway. I mean it sounds like Reaganomics

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a little bit, right, right, except you know, like his whole

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I mean, his whole economic plan
is to run bigger deficits. So I

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mean that, you know, that's
it, Like, that's that's end of

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the ball game. And I think
that I think that a lot of people

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are really confused. If you look
at some of the nominal data coming out

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on the economy, it actually looks
okay. For instance, they revise Q

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one GDP higher, and so people
are talking, oh, bigonomics is working.

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That what we see happening To give
you guys a little piece of data,

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and why we're saying this is if
you look at if you track credit

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card and debit cards cards spending over
the course of the year. In the

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in the first quarter credit card and
debit cards spending, we're up ten percent,

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you're over a year, okay.
In the second quarter of this year

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it's negative two percent. Okay.
So it's like everything else you're and it

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really makes sense because when you injected
as much stimulus into the economy as we

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did, and and you funneled it
directly to consumers, right, well,

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what it does is it creates excess
savings, and consumers are very habitual creatures,

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right. It's it's we all have
more in common as consumers than we

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think we do. And what ends
up happening in a scenario like that is

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excess savings will fund increased consumer spending
for a while. Then inflation jumps up

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makes everything more expensive, right,
which we've all seen, and then excess

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savings begins to get tapped and you
see things returning, you know, back

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to the back to the previous arc, you know, so like before the

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stimulus started. And I think that
that is the biggest confusion right now.

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People are looking and saying, oh, it's economic strength, and you're sitting

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there going no, no to us. It's a wily coyote moment. Meaning

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you're looking at the apex effect of
all of that stimulus and it is wearing

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off and you can see it in
all the data and I'm talking restaurant data,

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and it's just amazing. We live
in a in a tunnel right now

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where you know, I call it
like the post truth world where everybody wants

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to talk about something called bigenomics and
talk about how everything's going great. You're

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just on the back end of a
sugar high is all it really is,

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Okay, and you come down from
it. I mean, there's no way,

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there's no way the economy can sustain
operating at the same fever pitch it

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did when people were getting five thousand
dollar checks in the mail. You know

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what I mean, Like you jack
up rates, people go back to work,

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and you take away the stimulus,
and they're expecting the market to continue

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operating, in the economy to continue
operating it, and the consumer to continue

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operating like they did in twenty twenty
one. And you're just looking at it,

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going, I ain't gonna happen,
guys. So when Joe Biden keeps

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saying this whole nonsense about how if
you make less than four hundred thousand dollars,

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you're not going to pay a penny
more in taxes, where everybody is

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paying more for everything. So if
it's not federal income tax, it's the

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cost of milk, you know what
I mean, Like that is effectively at

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tax. Yeah, oh, it
absolutely is. An economics, we refer

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to inflation as the silent tax,
right, the invisible tax, because it

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not only is it at tax,
but it's the most onerous And this is

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what drives you nuts if we really
am. And I could go off on

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hours on this, but then if
you start looking into energy policy, right,

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we want to strategically make petroleum types
of energy, right, oils and

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gas and things like that, we
want to make them more expensive to incentivize

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the turn to green. Well,
you look at them and go, okay,

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when the price of gas goes up
a buck fifty a gallon, it

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doesn't upset my lifestyle, it doesn't
upset yours. Who's does it upset?

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It upsets the working people, right, the people making sixty to eighty thousand

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dollars a year. And when you
sit there and look at these, the

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fiscal ear responsibility. And it's not
just democrats, right. It's one of

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the funny things that really ticks me
off about the right too, is that

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there seems to be this habit of
we only care about debt and deficits when

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there's a Democrat in the White House. Right. So I'm not trying to

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get too partisan with it, but
you just look at it and go,

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you know, inflation is the number
one killer to the average consumer, right,

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It's worse than marginal tax rate.
Here there you know, they're not

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rich enough to be able to manipulate
the tax code, which is what a

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lot of rich people in this country
do. But no, it's it's all

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nonsense. And whatever benefit they's claimed
to be giving them, I mean you

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see it all over the place.
I mean, go go and read General

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Mills, Great, General Mills,
Cereal, you go look at them.

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People are consumers are being forced to
downgrade. Costco came out recently and said

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we're seeing consumers switch from beef to
canned chicken. Right. It's it's the

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little guy that's going to take this
the hardest and is taking it the hardest

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right now as always, and unfortunately
the media and the environment Wren tries to

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pitch these people as the patron saint
of the little working night and it's just

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it's it could not be further from
the truth. So then when you say

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we're on a sugar high, like
it's with every sugar high, there's a

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crash, like theyre going to be
like an even bigger crash, especially for

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those people that are eaten canned chicken. Yeah, so that's kind of the

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crazy thing where I'll just tell you
we've never seen a more bifurcated market outlook,

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where you've got the stock market telling
you one thing, and literally every

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piece of leading economic data we can
get our hands on. It's very consistent,

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and it really makes sense if you
track all the data. You're kind

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of clipping along at this normal run
leading into twenty twenty, right, and

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then all of a sudden, all
the stimulus hits, all that stuff hits,

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and you just see an explosion and
consumer spending, debt, issuance,

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credit issue, all these different things. Right, And so once that stimulus

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is pulled away and interest rates are
jacked up, I don't think it's crazy

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to assume that things will return to
the arc they were on previously before all

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that artificial stimulus was injected. Right, Well, what the market is saying,

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and what Wall Street is saying,
is no, we have a new

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normal, and this becomes the baseline
that we build from. And you're looking

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at it and going, you guys
are insane, Right, Yeah, you

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can't jack rates this high, remove
all that stimulus and expect the consumer to

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continue spending the same way. It's
just not possible. Yeah. So yeah,

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to us, I think that you're
seeing I think we're on the front

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edge the tip of the spear of
that quote unquote crash. Now, to

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be fair, it's not going to
be a situation like O eight to nine.

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I don't think, because you know, we've been telling our clients this.

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Yeah, I think we're in for
a rough ride. I think the

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investors are being way too optimistic regarding
earnings, outlooks and things like this stock

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valuations. That being said, I
don't think we're on the edge of a

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black hole because as soon as the
pain starts, ready yourself, the Federal

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Reserve will begin printing money again.
And if the Biden administration is in office,

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which we think they will be when
this starts, we think it's probably

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starting right now. Actually, um, they're gonna flood. You know,

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they're gonna throw money at it.
That's what we do now, which is

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the oh my god, yeah,
okay, well shoot, because I was

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here here, I was like,
I don't want to be captain bringdown because

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we were on such a high when
you were telling us about the four one

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K the Roth stuff, And I
have a I have a feeling that when

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people listen to this, they're going
to be like, how do I get

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ahold of that? Zach guy?
Because I want to know more. So

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tell them how they can get a
hold of you. Yeah, they what

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that ten million dollars? Yeah,
guarantee right, guarantee. Yeah, I'm

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sure regulators will love to hear that
I'm guaranteeing annualize the journey. M So,

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first of all, you can we
do our own show on podcasts and

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you can just google Know your Risk
Radio podcast asked or find us on Spotify

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or iTunes or anything like that.
You can google our board Capital Management dot

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com that takes you directly to our
site again, Know your Risk Radio.

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You can follow me on Twitter at
KYR Radio pretty easy to find. There's

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a lot of different interviews and things
we've done on YouTube and you can track

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us down pretty easily. Awesome.
Well, it's been great as always and

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we will look forward to talking to
you again in a few weeks. Hopefully

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there will be good news to discuss, but we never know what the Biden

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administration. Get hold my breath.
Thanks. We appreciate Investment advisory services offered

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through Trek Financial LLC, n SEC
registered investment advisor information presentatives for educational purposes

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only. It should not be considered
specific investment advice. Does not taken to

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consideration your specific situation, and does
not intend to make an offer or solicitation

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for the sail or purchase of any
securities or investment strategies. Investments involved risk

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and are not guaranteed, and past
performance is no guarantee of future results.

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For specific tax advice on strategy,
consoled with a qualified tax professional before implementing

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00:16:00,000 --> 00:16:00,240
any strategy discussed herein