Financial "Convertable" Vehicles

ABOUT THIS EPISODE

On today's episode, Financial expert and Amazon best-selling author John Browning talks about "convertable" instruments and how to use these in your portfolio. Learn more when you Connect with John by texting "LIFE" to 21000 or GuardianRockWealth.com.

Welcome to the build your life podcast with John Browning. Build your life as a relaxed and unedited conversation with financial expert and number one Amazon bestselling author, John Browning Jones, the founder of Guardian Rock Wealth and serves clients across the United States. John's the author of the book build a life, not a portfolio, a guide to your financial future based on your personal values, which you can purchase on Amazon, or stay around to the end of today's show and I'll tell you how to get a free copy mailed right to your door. I'm Michael The lawn, your host for the next few minutes as we chat with financial expert and business owner John Browning. Well, John Browning, how are you doing this fine day, sir? I'm doing a well. How about yourself? Fantastic. You know, we are recording this in early May and Spring Has Sprung and Little Rock R I am and over the weekend I took the pool cover off of my pool and going to go get chemicals...

...tomorrow. Got The solar cover on it, so I'll be swimming, Lord Willing, in a couple of weeks. So it's a bad time to tell you that. Dad. Yeah, we've been swimming, like basically he's for the last two months. Yeah, this is all right. That was a great podcast, John. Yeah, you know, I need to send that tomorrow. I'm in telling her we need a heater. You need to buy heater for our pool. So I can you know. And you go, you really like five grand or something like that. Right. Yeah, well, what do the whole podcast around like, because I found a cheaper way to do it with an RV heater on demand. So usn't we go there? We could talk about that all time long. But Anyway, I was driving with my daughter yesterday. She's thirteen. She does hip hop dance because she's adopted, she's Africanamerican. She's got rhythm, and so we take her to hit. Huh, I don't have I got no rhythm, dude, I got not. She laughs at me. I said, Cann it kind...

...go in and dance with he should daddy? Please? Yeah, please, no, Daddy, stay in the car. So we have this on going to but on the way to hip hop last night she was telling me about her dream cars and she's like, I want a convertible. I think that'd be really Colosif really, why do you want to converrol. A Shit, we tops down wind in your hair. A convertible would be really cool and I was okay, well, work on that. And when I was thinking about talking to you today, I was saying about some of those investment instruments that are out there that a lot of people have their retirement money in. Some of those are convertibles, or they could be. Right. So let's talk about the the convertibles in a retirement portfolio. I'd think that's a good analogy. Actually, I like it because I like convertibles, so they're kind of fun and my Harley is the ultimate current convertible, as you know. So yes, love the Harley when in your hair, right, and what?...

You know what I have? Yeah, really exactly, but that's true. It's yeah, we're actually hearing a little bit more about that now, as the market has the market has decline right in two thousand and twenty two. It has been a tough year in the equity markets. MMM, and you know, we could, we could be upset about it, but if you've done your proper portfolio management for your situation, you're still in good shape. And we can talk about that in a different episode about how to do that. But this actually is a is a potentially a really good time to do what they call a Rath conversion. Okay, what that is is if you have a regular IRA, a so individual retirement account, or you have a fore k that's maybe at an employer that you're no longer at, or you retire and you want to roll that over into a Roth urth rath retirement...

...plan, it can be really advantageous. And the reason that it might be more advantageous now versus at another time is that the market is declined, because when you do that, when you roll that over, you have to pay taxes on that amount at what your tax rate is in that year. Okay. So folks, when they hear that they're like wow, my, my f one case, like really big, that's a audit, that's a big tax bill, right, yeah, so let's let's think about this for a minute. Why? Number one, because the markets down, you're going to be paying less taxes maybe than you would have at the beginning of two thousand and twenty two or, it's true, even into two thousand and twenty one. So if you're going to do it, this might be a really good time to think about it, to pay less taxes, okay. And the the other thing, if you really think about this. So would you rather...

...pay taxes on? We're just going to I'm just going to pick a number. Sure, think a number of Fiftyzero. Okay, make the Nice round number easy. So fiftyzero. You pay taxes on that now. Okay, it's painful, right, it hurts a little bit. Now, if you were to keep that fiftyzero dollars in and we'll just use say, a five year period, because that's generally what I tell people, if you're not planing on using this money for daily cost the living needs for the next five years, it might be a good idea to convert it to a roth because over the next five years it is likely, not guaranteed, but it is likely that that fiftyzero would grow quite a bit and rather than paying money on that, then higher amount, that taxes on that, then higher amount, it might be better to pay taxes on Fiftyzero. Yeah, and when you look at history, it history is any guide. It right? We don't know,...

...but if history is any guide, over a five year period you are likely to have a much higher if it's invested properly, and all that your money. You're much more likely to have a bigger number that you'd be paying taxes on. Yeah, yeah, and and the other aspect of which I think we're going to do a whole episode on, is and and did I'm not a financial dude, right. And this. We're not giving financial advice, but that's right, we're not. This is just talking between friends and between folks and just giving some don't tell your audience this is how I get free counsel. Right, Dr John, he's not giving me advice, we're just friends. No, the your money should grow over time. It should if you're invested properly, but also so you would be paying more, more tax because you've gained that money. So now you go from Fiftyzero let's say seventy five. Just numbers, right. But the other thing that could probably possibly change is the tax. Great. So what if the text rate went...

...up another three percent from where it is today? Now you're not only paying on more money, but you're paying at a higher rate on that more money, whereas if you convert it into something else, you could potentially mitigate some of this. Is that I mean? It's conceptually. Those are the two enemies that I see. If I if I'm hearing you properly. Is that right? And there might be more. Know that that is exactly exactly the case. And if you look at it where our deficit spending is going great with with the US government at this point, you kind of ask yourself, do you think tax rates might go up or down in the future? I'll let the audience answer that question. Yeah, but at some point, you know, somebody has to pay for all of the government programs that are where we're put into place during the pandemic and and even up through two thousand and twenty one. Yeah, where's that money coming from? It's might come from...

...increased taxes. Maybe, maybe, maybe. It's interesing. You know, the picture that is in my mind is you, because we're talking about convertibles and and and being the and in forgive me, make sure I get the words of K or a traditional IRA right. Those are the the instruments that are convertible into what's currently would be called a Roth, right. Is that? Do I have that? Yes, you got that right. Yeah, so if you're in a traditional IRA or ae K, thank so. Your you have a convertible car that must stay, but you're driving around with the top up and that's okay. It works, but it's not the best design. So what John Saying is, if I can put this word picture, is it's it might be time to have the discussion, to say, is it time to put the top down and really enjoy yourself that Mustang and move some money into a different vehicle that is going to give you possibly some more...

...acceleration and some fun like that Mustang. Does that work? kind of, I mean kind of works. Right, it's not. It's a it's just that it's what the convertible was made for. That's good. That's what it was made for and that's what the Roth is. It's just it's much more enjoyable to me to pay less in taxes. Yeah, that's much more enjoyable. That's what the wrath was made for and I know like important point to talk to people about it. They're really just concerned about that tax builders. Two things. Number One, you can have the taxes withheld from the amount, so it's not like you have to write a shack out of your current fun St Fun that. And the other thing is you don't have to go all the way to half of it, the quarter of it. A couple thousand dollars of it roll that into a wrath. So if you wanted to minimize the pain of paying those taxes now, but if you're going to go...

...from a purely logical which I realize we don't write, to have a whole chapter in the book building a life out a folio, that's about the fact that, including me, we are and we don't make our decisions necessarily logically. So I get that. I respect that. But from purely logical standpoint, if you got five years and you're not in a very of like the highest tax bracket, there's there's really the math works out. It's really makes sense to convert it. And this wroth conversion idea may not be available. We don't know. There's there are bills winding their way through Congress and in DC that would eliminate the ability to do that and to do what they call a backdoor Roth. That one gets more complicated, but give me call there you go. Seriously well, and if you want to learn more about that.

But that's a really another, really interesting thing to do. If you are above the income limits where a wroth would normally be possible. Right, right, because there are limits, limits on all of that and that's the thing. And you said you had a great phraser. Give me a call yet reach out to John and and how you you got to have these discussions. And the thing about John and his whole thing at Guardian rock wealth as they have conversations with you, they build relationships. Understand where are you going? What is that destination? Is a convertible the right thing for you? Should you be should your top be up because you're in Seattle and it's raining all day? Okay, Great. Should you have to have the top down because YOU'RE IN PHOENIX? Those are discussions that you can have with John. John makes it really simple to reach out to you can take your phone, text and twenty Onezero is the number and you text the Word Life, lifee to twenty one thou and you'll get back from John. This this really cool thing that you can connect with them, get copies of his book, set a point and that's just it's really just a neat APP thing. I don't...

...know what to call it, but it's really cool. So Business Card, it's a digital business card. There you go. Text Twenty Onezero two, text the word life to twenty Onezero on your phone and get John's digital business card and then schedule a call with it and just talk about convertibles and Harley's and anything else you want to talk about. He's going to help you really build your life, build a portfolio that supports the life you want today and in the future, because it really is more than just building a portfolio. It is about building a life, having fun, having the right vehicles in your investment portfolio and having somebody like John Who's who's there to manage them, to help you, and it really allows you to well sleep better at night when the market goes a little wacky. And we'RE gonna be talking about both of those topics and upcoming episode. So hang around, but reach out to John at Guardian rockwealthcom or just text the word life to twenty one. Tho...

John Browning and it's always fun to talk with you. Thanks for another great episode. Thanks for being with me. Money really is a big part of our life and John Browning can help you and your family learn how to keep money in the proper perspective. It's important, but it's only a tool that can help you build the life that you want. If you like John Emili a free copy of his book build a life, not a portfolio. Go to John's website, Guardian Rock wealthcom, and click the contact US link and send your request. John Will Mell a copy of his book right to your door absolutely free. Thanks for listening to building your life podcast with John Browning. Be Sure to subscribe to this podcast so each new episode will be sent to you automagically when it's released. Have a terrific day. Nothing in this podcast should be construed as personal investment advice and past performance is no guarantee of...

...future results. Investing is not appropriate for everyone. There is a risk of loss associated with investing in the markets. No representation or implication is being made that using any methodology or system will generate profits or insure freedom from losses. Please remember that investing carries risk. Guardian Rock Wealth LLC and its affiliates are fiduciary investment advisors. Please consult with US or another experienced qualified investment advisor before making any investment decisions and or trying to implement any of the strategies and tactics we may discuss in any of our publications or podcasts.

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