[00:00:00] Speaker A: You're listening to the Preferred Way, a retirement podcast brought to you by Preferred Trust Company, the preferred custodian for all alternative investments.
[00:00:10] Speaker B: Welcome back to the Preferred Way. We're here today to say just a simple word. Maybe if you skip the splurge and contribute, you too can become a millionaire when you're ready to retire. So let's talk about it and see how that hall shapes up.
I'm joined today with Chris Tremblay, the director of operations at Preferred Trust, and I'm going to ask her a few questions. She gets to see all the ins and outs of what goes on with contributions. Maybe why people make them, because she hears them talking on the phone or she hears her staff talking on the phone. So we're going to have a little bit of fun with this, kind of change it up a little bit. I think everybody's mindset is, okay, I know I can contribute X dollars every single year, but I'm just going to contribute to my 401k. Or maybe they don't know they can contribute to both.
But there's one thing that I know for a fact is if you don't consistently contribute to a retirement plan, and I don't even care what it is, 401k IRA, I don't know, maybe it's your Roth. Maybe you have a sub. Maybe you have a sub. I don't know. Whatever it happens to be. But if you're not constantly contributing to it, then you should not expect that when you retire that something more is going to be there for you.
[00:01:25] Speaker A: Yeah. Money's not just going to fall out of the sky when you're 65.
[00:01:28] Speaker B: Exactly. So.
And when is the right time? I don't know. We're going to run through a couple different segments here.
[00:01:36] Speaker A: Okay.
[00:01:37] Speaker B: And you know, we've done a blog in the past. I know you've done some social media stuff on this, but what is the lowest amount that a person can contribute to an ira?
[00:01:51] Speaker A: So you can, you can make any contribution amount you want as long as it doesn't go above the limit. So you. The limit is 7,000 for traditional and a Roth, if you're age 50 or above, you can do an extra thousand catch up contribution. So anything below that or up into that amount is fine. There's really no minimum, if you will, whatever your comfort zone is. Some companies won't allow you to make less than maybe $25 or something like that. You really have to talk to your, your financial institution that you're making your contribution to. But there's really. There's no minimum amount to make contribution. So any amount will do.
[00:02:33] Speaker B: But let's say I'm 20 years old, okay? Okay.
[00:02:38] Speaker A: Remember those years?
[00:02:39] Speaker B: I know.
Well, so long ago.
But at 20, I wasn't thinking about retiring.
[00:02:47] Speaker A: Oh, no.
[00:02:48] Speaker B: Right. And. And many 20 year olds aren't thinking about retirement.
[00:02:51] Speaker A: No.
[00:02:52] Speaker B: But what we are thinking about is driving through Starbucks or Dutch Brothers or. I don't know, there's so many others out there now. Maybe it's Dunkin Donuts. Whatever. Your flavor happens to be of coffee.
I see. I don't drink coffee, so I don't understand this whole thing.
The lines.
Sometimes it comes out into the road.
[00:03:16] Speaker A: Oh, yeah. Oh, yeah. Around the building, multiple times.
This is why they've opened so many new ones.
[00:03:22] Speaker B: Yeah. I'm always perplexed by this. I'm like, what is going on? And then I see, like, sorry to pick on you because I know you love Chick Fil a. Then I see these Chick Fil A lines and I'm like, why?
[00:03:35] Speaker A: Yeah, why?
[00:03:36] Speaker B: But the same people that are probably in the Starbucks line are probably in the Chick Fil A line. Chris.
[00:03:41] Speaker A: I've been known to double up myself. Yes.
[00:03:43] Speaker B: Okay.
So here's what I would say to the younger generation. Cause I happen to have a son that's in this age range.
And I always say things to him like, really, did you need that?
Like. Cause now he has a Roth ira and you know, he's contributing to it and all this stuff. And I say to him, son, if you could just go without one Starbucks and one Chick Fil a, you could make a. Just one day. Yeah, just one day. I don't know how much you guys spend at Starbucks and Chick Fil A, but one day.
[00:04:18] Speaker A: This morning it was $8.
[00:04:19] Speaker B: Okay, where did you go?
[00:04:22] Speaker A: The Coffee Bean this morning.
[00:04:24] Speaker B: Coffee beans.
[00:04:24] Speaker A: But I like them equally. You know, I kind of.
I like to go to all of them.
[00:04:29] Speaker B: And what you do for lunch for.
[00:04:30] Speaker A: Well, I haven't yet. I actually, I've been very good about this where I used to do more of the delivery and that type of thing. Now I. Maybe once a week, maybe. So. So today it's Lean Cuisine in. In the. In the freezer.
[00:04:44] Speaker B: What?
[00:04:45] Speaker A: I know, I know, but.
[00:04:46] Speaker B: Okay, but normally you would have. Who deliver it? You wouldn't even go get the Chick Fil A?
[00:04:50] Speaker A: No, no.
[00:04:51] Speaker B: Oh, and that's. How much is delivery?
[00:04:54] Speaker A: Well, it depends on the. The app that you use. Chick Fil a does their own delivery, so maybe it's $2.99 or something like that. So theirs is, is cheaper than. But yes, if you're using one of the other many providers, I mean it can be.
Yes. Serious.
[00:05:12] Speaker B: I didn't realize I was going to get to pick on Chris, but it sounds like she is a 20 year old.
[00:05:16] Speaker A: It's funny because I was talking to my husband last week and he mentioned to me, he said I was lazy. He said I didn't want to leave the house after I got home from work. He said and I really felt like sushi. So a place that we frequent at work, at lunch, where, you know, he said I ordered it for delivery. And at the end, of course he went ahead and pushed yes for innocence, but it was $80 once he was done. $80 for just him. It's not like I don't like sushi. So I wasn't including myself. So it was $80 to have whatever sushi he got delivered. That's insane.
[00:05:53] Speaker B: That's crazy.
[00:05:54] Speaker A: Absolutely insane.
[00:05:55] Speaker B: But these. Yeah, this is our normal course.
[00:05:57] Speaker A: That is what. Yeah, I mean it got to be kind of that way with the pandemic, right. Where you couldn go out, you had to have everything delivered. So people recognized all of a sudden that ease and convenience of having now everything delivered. Not just, you know, not, not just your. What you're a fast food or a restaurant. But you can have anything delivered. You know, if you ran out of milk, you know, you can have Albertsons delivered, you can have 711 delivered. Like whatever you can for that ease and convenience. Yes.
[00:06:25] Speaker B: All right, so let's go back to this.
[00:06:27] Speaker A: We're in the wrong industry.
[00:06:29] Speaker B: You said $7,000 a year.
[00:06:31] Speaker A: Right.
[00:06:31] Speaker B: Is what I can contribute. I'm 20 years old. Just being hypothetical here. I' years old. I'm assuming the 20 year old has a job. Right. Because in order to contribute, you have.
[00:06:38] Speaker A: To have earned income. Yep.
[00:06:40] Speaker B: You've now just spent $25. $20. I don't. Let's do simple math. $20. Let's say you spent $20 today on your desires.
[00:06:52] Speaker A: Whatever's being delivered, whatever, whatever's happening in your life.
[00:06:55] Speaker B: So $20, we're just going to take, you know, I'm going to give the 20 year olds the weekend. Saturday, Sunday, do whatever you want.
But Monday, Tuesday, Wednesday, Thursday, Friday, those would be normal work days.
Maybe not in Vegas, but normal work days for most folks.
[00:07:11] Speaker A: Right.
[00:07:12] Speaker B: So you've got a hundred dollars a week.
There's 52 weeks in a year.
We're just gonna do simple math here. So we're at $5200.
[00:07:22] Speaker A: Yep.
[00:07:23] Speaker B: Okay.
Imagine making a $5200 contribution, which nobody can fathom. Making a $5200 contribution because at one.
[00:07:33] Speaker A: Chunk it seems like a lot. Right?
[00:07:35] Speaker B: Yeah. Like super overwhelming. Especially if I'm 20 years old.
[00:07:39] Speaker A: Right.
[00:07:39] Speaker B: But when you think about it the way I just broke it down.
[00:07:42] Speaker A: Yes. Of $100 a week, two drive throughs.
[00:07:45] Speaker B: A day, maybe an Uber, maybe a. What do you guys call, doordash. Maybe I'm really aging myself here.
[00:07:50] Speaker A: I don't know.
I'm the same way.
[00:07:53] Speaker B: All these different things. Right. So it goes generational. It is generational. But that was $5,200.
[00:07:59] Speaker A: Yeah.
[00:08:00] Speaker B: So imagine that $5,200 contribution. What? That could be over time.
[00:08:07] Speaker A: Sure. Especially because once you invest it, you should be earning income off of it. There should be some interest off of it. So you're not just letting the 50$200 go out the door on a coffee and you're not drinking away that money. You're actually earning something on it. Yeah. So that 50$200 is going to actually become more. Right. It's not just the 5200.
[00:08:28] Speaker B: And that's the craziest part about it because when you think about the average return being somewhere between 8 and 10%.
[00:08:37] Speaker A: Right.
[00:08:38] Speaker B: If you. I've spreadsheeted this a few times. I try to teach as many people as I can, especially younger generation.
[00:08:45] Speaker A: Right. And I think that's important too. We were just like you. One of our other employees has a. Has a daughter who just graduated from high school and she has no clue. And her mom's worked really hard to kind of teach her. You know, this is what we're going to do. We're going to start saving now.
[00:08:59] Speaker B: Yeah.
[00:08:59] Speaker A: You know, for 60 years from now, you know. Yeah.
[00:09:04] Speaker B: Talking about generational from contribution standpoint, you know, well, up until. What was it? I don't know what year exactly, but they started not requiring highly recommending and suggesting that employers allow a Roth option inside their 401k.
[00:09:21] Speaker A: Yeah.
[00:09:22] Speaker B: But we know that Roths have been around for quite some time. Some time.
[00:09:26] Speaker A: Right.
[00:09:26] Speaker B: But 1994 isn't really that long ago when you really think about it.
So we're kind of in this awkward situation where we have a more mature population, as I like to refer to ourselves.
Yes. I am referring to us as a mature population. And then we have a younger population and this gap between the traditional IRA and the Roth ira. And I talk to my son a lot about the Roth IRA and making his contributions there Granted, it doesn't help him on taxes now, but later, imagine when he's 65.
[00:10:03] Speaker A: Right. Because what he's going to earn is going to be compounded over all of these years.
[00:10:06] Speaker B: Yes. Yes.
[00:10:08] Speaker A: Yeah.
[00:10:08] Speaker B: And just for, because I, we have run through our spreadsheets. If you were to take an 18 year old, 20 year old, I don't care what it is, 20 year old, and you were to put $10,000 over a two year period into a Roth IRA for them and that's it. Nothing you do for your child. Let's see, let's say you do not have the means to help your child through a college. Right. Okay.
I'm gonna promise you this is a better gift.
[00:10:41] Speaker A: Oh, 100%.
[00:10:42] Speaker B: They will find their way. Right. Not all of us are in that situation where we can, we can, you know, afford to put our children through college. Maybe they have to take student loans or whatever the case may be. But give them this one gift.
Trust me, you can save over an 18 year period to give your child this gift.
[00:11:00] Speaker A: Right.
[00:11:01] Speaker B: And that is to make sure you get $10,000 into a Roth IRA for them.
Because if that is invested in an 8 to 10% annual yield for from 20 to 65, they will have over a million dollars. Never make another contribution.
[00:11:18] Speaker A: That's right.
[00:11:19] Speaker B: That person would. That your child, your whomever yourself would never have to make another contribution. Not one time.
And you can take $10,000 and turn it into $1,000,000 of tax free income.
[00:11:34] Speaker A: Yep.
[00:11:35] Speaker B: Okay. So yeah, assuming that most of us are living a realistic life without coffee every day and Uber eats and doordash and the drive thru and all of these things and we pull back just a little bit. We pull back. If that $10,000 can be a million, imagine what 20 can be.
[00:11:55] Speaker A: Yep.
[00:11:55] Speaker B: Imagine what 30 can be. Imagine what $40,000 could be.
So for anybody to say that they can't.
[00:12:03] Speaker A: Yeah. You just have to make some life adjustments.
[00:12:05] Speaker B: Yes. Right.
[00:12:06] Speaker A: Just. Yeah, just a little. Even if it's just once a week, you know, twice a week when you lead up to.
[00:12:12] Speaker B: Oh, come on, I'm asking for Monday through Friday.
You can have the weekends. You can do anything you want on the weekends. But really, just think about that for just a second.
Contributions. And making contributions to your retirement account does not have to be hard.
[00:12:26] Speaker A: No. And you know, it's not talked about a lot either. I, you know, think back to, you know, retirement accounts I had when I was younger and they just kind of sat in the big box companies. But it wasn't Like I ever got prompted either or reminded to do anything. And I think that's the important thing too is that, you know, that's what we were talking about with the employee. It's not like you learn about this stuff when you're in high school or college. Nobody teaches you the real life things that, that you're going to need. Right. But everybody knows how to go through a Starbucks drive thru. So it's interesting the things, the life lessons that you know. And she said if, if I wasn't in this industry, I wouldn't know to do this.
And so I think that's a really big part of what we try to do is educate because the bigger box companies aren't doing that. We're not hearing much about contributions and why it's so important.
[00:13:15] Speaker B: And old habits are hard to break. So if your habit is to go get coffee every day, breaking that habit is hard.
But once you break the habit, as easy as making the habit. So if you can break from that habit just for one year.
[00:13:32] Speaker A: Yeah, I just needed one one year once. Yeah.
[00:13:35] Speaker B: You know, and put those funds away, you can create a new habit.
[00:13:40] Speaker A: Yeah.
[00:13:40] Speaker B: So that's 20.
But then it starts to get harder because life starts happening.
[00:13:46] Speaker A: Yep.
[00:13:46] Speaker B: So now I'm 30 now I'm married now maybe I have now your kids.
[00:13:52] Speaker A: Yes. Your expenses have changed a lot.
[00:13:54] Speaker B: Three dogs and a white picket fence.
[00:13:55] Speaker A: Yep.
[00:13:56] Speaker B: How do you, how do you keep going? Like, what would you say to somebody that now is in a place where, you know, it's not about the drive through and the ubereats and the doordash. It's about life, it's about really struggling. You know, you're in that, that phase of struggling. What would you say to somebody at that point?
[00:14:16] Speaker A: I think like for us it's, we try and make it as easy as we can for people. We, we look for an institution that allows you to set up recurring payments so you can set it up to withdraw from your bank account once a month, twice a month, whatever you want it to be.
And then it's, you don't even almost, you don't even feel it. You know, we talk to our employees about this, about the fact that, you know, you can take out directly from your paycheck for a 401k and that type of thing and you actually aren't going to feel it in, you know, when it's coming directly out and you don't have a chance to go out there and spend it. So we encourage not only our employees, but you know, everybody out there to get with a company who allow you to get on a recurring payment because it's almost like set it and forget it, you know, and it just automatically is happening for you. And that habit, you don't. You don't have to worry about anything, you know, it's. It's done for you. Right, exactly.
[00:15:08] Speaker B: You adapt to it.
[00:15:09] Speaker A: Yes, exactly.
[00:15:10] Speaker B: And the other thing I would say, you know, I think some of our habits just change.
[00:15:13] Speaker A: Oh, yeah.
[00:15:14] Speaker B: So our habits may change from, you know, Starbucks.
[00:15:17] Speaker A: Yeah. You may not drink coffee by the.
[00:15:18] Speaker B: Time you're to subscriptions.
[00:15:21] Speaker A: Oh, yeah, right. Let's.
[00:15:22] Speaker B: Let's just talk about it for just a second. Like, it changes now. Now you're a homebody, Right. Because now you're kind of honed in on family life and just life. And so now you have Netflix, Discovery plus Hulu, YouTube TV. Right. Now we have all these other.
[00:15:40] Speaker A: All the things, noises, but they all add up. Oh, yeah.
[00:15:45] Speaker B: And so really think about, like, could you do away with one of those?
I always try to get into the minds of people and they're like, well, I probably could. It's like, if you say you probably.
[00:15:54] Speaker A: Could, you can, you can.
[00:15:56] Speaker B: You just have to.
[00:15:57] Speaker A: It might just be a little uncomfortable. You know, it's going to be a little uncomfortable for a little while. But, hey, go over to your best friend's house and watch it over there.
[00:16:04] Speaker B: Yeah. Get somebody's password.
[00:16:05] Speaker A: Don't say, don't know. Don't.
[00:16:07] Speaker B: Pretty sure Netflix is. Cut that out. You can't do that anymore. But still, there. There are other ways. You just have to dig a little bit deeper to figure out, like, what can you do without so that you can make sure that when you retire, you don't have to.
[00:16:21] Speaker A: Right. And I think that's super important because you can't say, like, you hear a lot of people say, well, that's. That's years and years and years from now. I'm not going to worry about that till I get a little older. Okay. Well, when you're a little older, it's going to be a little bit too late.
[00:16:34] Speaker B: Yeah.
[00:16:34] Speaker A: You know. Yeah, it does. You can't. You can't say, I'm going to take care of that later, because by the time you know it, you're almost 50 and you're going, well, wait a minute. What's it. Wait a minute. What did I do? I. I know how many coffees I drank, but, you know, like, I didn't save anything, so. Yeah.
[00:16:48] Speaker B: Well, now you just brought us into the phase of life that we're entering. Right. So now we have the more mature audience that's 50 years old. It hasn't started yet.
[00:16:58] Speaker A: Yeah, yeah, right, yeah.
[00:17:00] Speaker B: And we all kind of like, oh, you haven't started yet. But really, if you think about it, if we were able to take $10,000 over a 40 year period and turn it into a million, now you just have to hunker down even a little bit more that you take 40 because. Right. We're cutting it down.
[00:17:17] Speaker A: Yeah.
[00:17:18] Speaker B: You know, you know, you're somewhere between 10 to 20 years. You know, if that's, if that's where you're at, maybe 30 years, that's a huge chunk of time.
[00:17:27] Speaker A: Yeah. It's never too late. I think that's, you know, kind of what you're saying there is that. I think people always, you know, kind of bring that up and we like to encourage them and say it's never too late to get started. You know, don't look at the negative that you didn't do. Let's look at the positive. What can you do? Let's get you there. Let's help you. And so, yeah, you have to focus on, on that because yes, you do have a good period of time left.
[00:17:48] Speaker B: To start that 100%. We're living longer now.
[00:17:51] Speaker A: Absolutely.
[00:17:52] Speaker B: Right.
[00:17:52] Speaker A: We've got, we're working longer.
[00:17:54] Speaker B: Yeah. We've got Botox to help us out along the way.
We have.
[00:17:58] Speaker A: Oh, yeah.
[00:17:58] Speaker B: Oh, yeah, yeah. So the things that do we really need. So when you get to that range again, you're just looking at.
[00:18:05] Speaker A: It's just a different set.
[00:18:06] Speaker B: It's a different set of criteria.
[00:18:07] Speaker A: Expenditures.
[00:18:08] Speaker B: Yes. Where you have to really think, oh, look at you think. I know, I'm hitting all the hot topics.
[00:18:13] Speaker A: You are not. So.
[00:18:14] Speaker B: Yeah, I mean, it just becomes more and more and more apparent as we're having this conversation that it's really just doing without something. You don't really need to make sure that that need is there for you later.
So you had mentioned when I turned 50, my contribution limits go up.
[00:18:33] Speaker A: Yeah, by $1,000. Well, they call them catch up contributions. So I think, you know, the government knows that maybe you haven't been as much as you should have been. It's put it in place for a reason. They're giving you that opportunity to catch up, you know, from maybe years previous that you didn't save anything. So they're giving you that thousand dollars and you should take advantage of it. Absolutely. Take advantage of it. Because also, you know, the irs, they don't always raise the contribution limits. It's, it's not standard and it's not a huge amount when they do. So you want to take advantage of the catch up. If you're at that age and you can do it, make the, make the highest of the contribution that you can.
[00:19:12] Speaker B: Yeah, yeah, let's talk about that.
[00:19:14] Speaker A: $8,000 a year.
[00:19:17] Speaker B: Yeah, well, that's, that's not going to go very far.
[00:19:19] Speaker A: No.
[00:19:21] Speaker B: You know, and you had mentioned, you know, you've got to start contributing now so that you can start investing.
So it's not only important to contribute, it's important to make that money work.
[00:19:32] Speaker A: Right. You can't just sit it. Yeah. And then let's set it and forget it. Yeah. You have to actually engage and consider investments that will help you earn off of that, that initial contribution that you're making.
[00:19:45] Speaker B: So can I make an investment with as little as $8,000 is probably the next question. Or $7,000 or four or three or two or one.
[00:19:52] Speaker A: Yeah.
[00:19:53] Speaker B: What are you seeing as far as maybe a change in trend when it comes to these investment amounts? Because it used to be. Well, it doesn't. What's $7,000 going to be? I'm going to have to contribute for five years before, before I can invest in something. Things have changed.
[00:20:09] Speaker A: Well, I think today people are looking at the alternative space a lot greater than they ever were before. And in the alternative space you have a lot of opportunity, a lot of different types of investments. So this is anything that's not publicly traded. Right.
So you're privately held companies. You know, you're looking at precious metals and real estate, things that you're probably a little bit more familiar with as well.
Digital currency.
So you can. The barrier to entry for some of these investments are as low as $5,000. You just have to find them and seek them, do some research.
And you mentioned earlier, you know, the average return anywhere from 8 to 10%. I mean, on some of these alternative investments they can be even higher. Oh yeah, right. And a lot of the alternative investments today are backed by, you know, hard assets like real estate. So you also have, you know, it's not like a paper stock where if something goes down and you lose it, that's it. Right. You have something to back it. So yes, there are opportunities out there to absolutely get in at that. You know, a lot of people have said that, well, what am I going to do with that little of money? There's plenty to be done.
[00:21:12] Speaker B: There are things you can do.
[00:21:13] Speaker A: There are absolutely things you can do.
[00:21:14] Speaker B: Those days are. Those days are gone. They were there, though. I mean, I remember 10 years ago, it. It really was that. Yeah, a lot of the barrier to entry was 50,000.
[00:21:24] Speaker A: $50,000. Right.
[00:21:25] Speaker B: And it just was not palatable at that point.
[00:21:27] Speaker A: You can find a lot of crowdfunding today. You know, I mean, we've seen it as low as $500. I mean, you know, there, there are those opportunities out there, and if you just start little by, you know, you know, like dipping your toes in the, the various options that are out there.
Yeah. You've got a good amount of time to get it going.
[00:21:48] Speaker B: Yeah.
[00:21:48] Speaker A: Yeah.
[00:21:49] Speaker B: Wow. Looking over this list, all this stuff they wanted us to cover, look at all this, huh?
Start small, build momentum.
How does compounding interest reward early contributors?
Well, I can assure you, I know one thing, I don't plan on leaving my son millions of dollars, but I at least know he's gonna have that. You know, that will grow up to the million dollars. And he didn't put it in alternatives, which is kind of interesting. I know, but. And I think really, you know, the whole, A lot of the point of this podcast is to just do something, do something.
[00:22:27] Speaker A: Right.
[00:22:27] Speaker B: You know, because there's going to be different stages of your life.
[00:22:31] Speaker A: That's right. And maybe at that young age, too, you're not quite sure about alternatives yet. You haven't had that opportunity, you haven't had that experience yet. So as you get older, those are more things you'll learn about. So, you know, going with something traditional in the stock market. Stocks, bonds, mutual funds, something like that, just to get you started and get your interest piqued and into savings. Then when you've, you know, you've made some money off of those contributions, then you can think about diversifying a little bit more. And then, you know, you can have more than one ira. I think, you know, as you said in the beginning, you know, you can have a 401k in an IRA, so you can split your IRAs up, you can have some in, in the stock market, and then you can move one and have some in alternatives so that you can really diversify.
And then it provides some equilibrium, too, into your, into your retirement savings. So, yeah, I think as you get older, you get to expand your knowledge base a little bit more. You may even in your personal life, just out of like purchasing your own home. If you've purchased your own home, then you are a real estate investor. You know how that works. Consider that someday down the line in your retire retirement account Absolutely, Yeah. I think the whole point is just to say to people, do something. Start saving. Do not wait till the last minute. Right.
[00:23:48] Speaker B: Break a bad habit.
[00:23:49] Speaker A: Right.
[00:23:50] Speaker B: Make a new habit.
[00:23:51] Speaker A: And that's Right. Buy a coffee maker and make your coffee. I don't. Which, by the way, I did do, because there I used to, I used to go for a coffee every day.
Yes, every day. And in my way into work and now I just, just, I bought these cute little disposable cups that you can get for like 3 bucks or for a package of 12. Fantastic. Makes it seem like you went through a drive through, but you really didn't. You just make it at home and bring it in. So now, mindset. Yes. Now I only really go like Wednesdays, like once a week. Like, I'll go. So I've done very well with that.
[00:24:27] Speaker B: Freed up a lot of extra dough.
[00:24:29] Speaker A: It certainly does.
[00:24:30] Speaker B: You can make contributions that way.
[00:24:32] Speaker A: Yes.
[00:24:33] Speaker B: Long, long term goals here.
[00:24:35] Speaker A: Term, Absolutely.
[00:24:36] Speaker B: What's the smallest amount that preferred trust allows for a contribution?
[00:24:42] Speaker A: It's $25.
[00:24:43] Speaker B: A month?
[00:24:44] Speaker A: Yes, a month. Monthly. Yep. And you can, you can sign up anytime recurring. We can, you know, take it out of your checking account, out of your savings account.
Of course, you can send the contributions into us. But you know, when you sign up to even open an account, there's a portion of which I think gets missed a lot of times and overlooked. But you know, even if you're, you're transferring money from an old 401k or you have an IRA at one of the big boxes and you're getting into alternatives and you're transferring your money, you can still set up a contribution. You know, you can still have a monthly contribution because imagine, you know, your, your power in investing if you take power buying. Yes, exactly. So, yeah, you can set, you can sign up at any time. So 25 is our minimum.
And. Yeah, and there's no fee for that. We don't charge a fee to set you up. And, and then you don't even know it. Every month we just, we just withdraw.
[00:25:40] Speaker B: So let's say I'm 20.
[00:25:43] Speaker A: I know, and it was just yesterday.
[00:25:46] Speaker B: I can make a $25 contribution, which, by the way, you just took me down from five days to one day. Okay, so only on Monday you can't have coffee and you're Chick Fil A. Yes, sorry, Starbucks and Chick Fil A. This is not nothing, nothing about you. They, I'm sure they will visit you on the weekends.
[00:26:02] Speaker A: No offense, but.
[00:26:04] Speaker B: So now that's only one day so one of five, seven days a week. Right. Because now I just had to add four more days in.
That's what it takes to make a contribution. But how much does it cost me to have an ira? Like, is it because I know if I sign up with my bank, it's free.
[00:26:24] Speaker A: Yeah. No, it's not free, but.
[00:26:26] Speaker B: And if I sign up with preferred Trust, what if I can't afford the fees?
[00:26:33] Speaker A: So what we like to do is for, for those clients who haven't started a retirement account, if they're just brand new and they want to start contributing, it's a very low annual fee. Because of that, we realize that you are trying to save, you are making that attempt.
And so we, you know, we're willing to waive an establishment fee to get you started. And then your administration fee for the year is very low comparatively, if you have a, you know, a big account that you're investing. Right. We know the point of you starting this account is to get savings so that you can be that active investor someday. So very low fees. Yeah, yeah.
[00:27:10] Speaker B: And do we see younger individuals hopping onto the contribution only accounts?
[00:27:15] Speaker A: Yeah, you know, it's interesting.
[00:27:17] Speaker B: Or parents may be opening them up for their kids.
[00:27:19] Speaker A: We have seen that. But it's interesting, you know, a lot of people, I think there was that timeframe too, you know, kind of in 0809 where a lot of employers that were previously offering 401ks or any kind of benefit programs to their employees stopped that because that was an expense they couldn't afford back then. And so a lot of people that were coming into the workforce during those couple of years weren't having the benefit of a 401k and so they needed somewhere to start. And an IRA and contributing to an IRA on their own gave them that opportunity. So we actually are seeing a little bit older, you know, maybe later, 20s, early 30s getting started there.
[00:27:59] Speaker B: Okay, yeah, well, that, that's helpful. Yeah, it's, it's good to know like whether your bank is selling you on the free concept.
[00:28:06] Speaker A: Right.
[00:28:07] Speaker B: Which we know is not free, but that's another conversation.
[00:28:10] Speaker A: Right.
[00:28:11] Speaker B: Or you open up, you know, one knowing that you want to go straight to alternatives.
[00:28:14] Speaker A: Right.
[00:28:15] Speaker B: And some people do.
[00:28:16] Speaker A: Yep, absolutely.
[00:28:17] Speaker B: And maybe you're very familiar with, you know, those alternatives.
I mean, gosh, if, if Bitcoin were to drop to X whatever, you know, I could buy a molluscule amount of it.
[00:28:30] Speaker A: Yeah.
[00:28:30] Speaker B: For $500. And who knows?
[00:28:32] Speaker A: And who knows what it would be?
[00:28:35] Speaker B: So. Yeah. I mean, it's just all those Little things.
[00:28:37] Speaker A: I mean, think about it. When bitcoin was first, when we first started investing and people started using their retirement accounts, I mean, it was down at like $3,000 or less, you know, for one unit of bitcoin, I think today it was, was 104 or something like that. So I mean, and obviously it's ebbed and flowed, you know, over the years, but. Yeah, I mean, but you don't have to buy one. You can buy a portion of one. We see that all the time, you know, so that's another great investment. Digital currencies are easy to get involved in.
They do have risk. Obviously everything has risk. But there's an opportunity to get involved in investing in something that doesn't have a barrier to entry. There's no minimum amount.
[00:29:11] Speaker B: Yeah. And I only bring that up because we were talking about keywords today in our marketing meeting.
[00:29:15] Speaker A: Yeah. And crypto for the younger generation.
[00:29:18] Speaker B: For the younger generation. Because it's something that they, you know, have kind of grown up in.
[00:29:21] Speaker A: Yeah.
[00:29:22] Speaker B: Because it's only, that's what some of.
[00:29:24] Speaker A: Them do for their business and their livelihood.
[00:29:26] Speaker B: Yeah. That's only been available.
[00:29:28] Speaker A: Yeah. Not that long for retirement accounts. Less than 10 years.
[00:29:31] Speaker B: Exactly.
[00:29:31] Speaker A: Less than 10 years.
[00:29:32] Speaker B: And so it's definitely top of mind.
[00:29:35] Speaker A: Yeah.
[00:29:35] Speaker B: And so if that's something you're interested in, know, you can do, you can do it with a self circuit ira and yeah.
[00:29:42] Speaker A: We have a lot of people.
[00:29:43] Speaker B: Yeah.
[00:29:44] Speaker A: Have actually become millionaires by investing in digital assets.
[00:29:47] Speaker B: Yeah.
[00:29:48] Speaker A: It's incredible.
[00:29:49] Speaker B: It is. It's totally wild.
[00:29:50] Speaker A: Yeah.
[00:29:51] Speaker B: Well, here's what I think we've proven.
Whether you're 20, 30, 40, 50, 60.
[00:29:56] Speaker A: You can make the change.
[00:29:57] Speaker B: You can make contributions throughout that.
[00:29:59] Speaker A: Yeah.
[00:30:00] Speaker B: Wait, there's one thing we didn't talk about.
[00:30:01] Speaker A: Yeah.
[00:30:02] Speaker B: This is before the cameraman gets up because he thinks we're about to end is can I make contributions on behalf of somebody else?
[00:30:13] Speaker A: You can make it on behalf of your spouse. You can make it on behalf of your spouse. You obviously have to have earned income and, and make sure you understand the definition of earned income.
And. But yes, you can make it on behalf of your spouse. You can. Absolutely. Into their retirement account. Yes.
[00:30:32] Speaker B: Could I make it on behalf of my child?
[00:30:36] Speaker A: You can, yeah. They also have to have earned income. So, you know, we're talking about earned wages. So.
[00:30:43] Speaker B: But if he had $7,000 in earned income, could I make a $7,000 contribution on his behalf?
[00:30:50] Speaker A: You have to be careful with that. We want to strongly suggest that people will last. Yes. Well, that is true. And what we do is we suggest you talk to a CPA or tax specialist. Right. There are some new things coming out with some of these bills in Congress. This is something that we actually talked about on a call. Y.
You know, these new accounts, these new types of savings accounts that they're coming out with to encourage parents to save for their children.
And it's a big thing. You know, there are some limitations to. You can't touch it until you're 18 years old. You know, that type of thing. Any type of distribution has to be qualified anyway. It's part of this new big, beautiful bill that everybody's been talking about, no matter what side you're on.
But this is a provision in the bill is to help encourage people to save for their children's retirement. So I think that's a big thing, too, is that, you know, before they reach their. Their twenties, you know, before they're. They're of, you know, they. They could have the opportunity. You could have the opportunity to help them start saving way before then.
[00:31:48] Speaker B: Yeah.
[00:31:48] Speaker A: Yeah.
[00:31:48] Speaker B: We've had these 529 plans drilled into our head as parents.
[00:31:52] Speaker A: Yes.
[00:31:52] Speaker B: And, you know, that's kind of evolving a little bit because, you know, a lot of kids aren't going to school anymore.
[00:31:58] Speaker A: Right. Yeah. Trades are very. That's. That's. Yeah, that's a very popular thing today is trade schools. Not so much as the standard colleges or universities. Yep.
[00:32:07] Speaker B: Which kind of messes with that whole 529 plan.
[00:32:10] Speaker A: It does.
[00:32:11] Speaker B: And I think that's why we're starting to see more of that saving aspect coming into. Into legislative measures encouraging people to help.
[00:32:19] Speaker A: For their kids, for themselves.
Incentives in there. Absolutely. Huh? Yeah.
[00:32:24] Speaker B: Okay. All right. Now I'm done. I just had to get that little bit in there because, you know, if I had an opportunity to contribute for somebody else, could I. Yeah.
Is likely a question I didn't see on the list here, but, hey, you know what?
[00:32:37] Speaker A: Yeah, absolutely.
[00:32:38] Speaker B: It happens.
[00:32:39] Speaker A: So it gives them an opportunity to save as well.
[00:32:41] Speaker B: Yeah. Well, you heard it first. If you slightly.
Whether it's one day or five days, I prefer five days. Kris is willing to take one day because she's allowing $25,000. 25,000.
Well, 25amonth minimum for contributions. That's nothing in comparison to what we're spending on average day. Just stuff. Just life in general.
So all we want to do is encourage you. Encourage you to contribute, whether you're here working with us at Preferred Trust. And you think, eh, you know, it's just a contribution. Every contribution amount you make matters.
And it may not feel like it right now, but when you retire, you will thank us for having this conversation with you and listening to what we have to say about this because it's so important.
So we will see you next time on the PREFERRED Way.
[00:33:40] Speaker A: Thanks for joining us for another episode where retirement savers meet alternative investments. Can't wait for the next episode. To learn more, visit our
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