There's a lot of people using your name. You know who they are. And I asked, I said, as a friend, are you willing to be able to speak about it publicly on the show for the very first time? Here we go. Here we go. Please help me understand what this guy's talking about. And I think this will create maybe a laugh or two, but, you know. Go to the bank, get you a Roth. Roth, brother RA. Put three grand a year in there, right? Don't touch it until it matures. And it matures every day, all right? I guarantee you 3.7 million. You guarantee it? 3.7 what's your name kevin johnson kevin johnson now listen when i get that 3.7 million i'm looking for you tell you something best advice i can give you start looking at an investor i'm gonna show you one quick investment you would never imagine all you got to do is go to morgan stanley morgan i got me morgan stanley account okay go to morgan stanley ask him for mutual fund and energy right take 20 grand uh-huh you get three grand every 90 days for forever forever one one time one time payment one time one time investment so me i'm 23 i plan to live with 107 so three grand For 107 years, for 90 days. Yep. Every 90 days. Here it is. It's $12,000 a year. All right. What in the world are they talking about? I don't know if I understand that Morgan Stanley played all that well. I might have to let you speak on that one. But when it comes to the Roth IRA, I mean, you can contribute up to, I believe, almost $7,000 into a Roth IRA. The issue is that many people that I work with are phased out. being able to contribute to a Roth IRA because they make too much money. So what we end up doing is we have to funnel some of it into a non-deductible traditional IRA and then backdoor it into a Roth IRA, aka the backdoor Roth IRA strategy. And that's how we're able to get some money in the Roth IRA account. But from what this guy is stating is that, one, put $3,000 in there and you'll have $3.7 million by the time you're, did he say 20 years old? Yeah, he didn't put an age. I guess he can't be wrong there because you can always. But But my deal is like, yeah, you're totally right. The Roth is a great strategy. And if you make too much money, you can still get creative about putting your money in a Roth. My issue is like, I didn't understand it. As you put 20 grand in your every quarter, you're able to take three grand out. Like I would love to see underlying investment because the math just doesn't, you can't take out half your money every year and then have that work. So I didn't, I just, I think it's the art of. I just was, you know, I don't know why the media team put this on our radar, but they wanted, and I called them. I was like, hey, like, what does this video mean? And they're like, exactly. We'd love to get Carlton's point on it. I was like, all right. I want to find this guy and have him take me to Morgan Stanley. I want to set up whatever deal he's got going. I deposit, you mean I deposit $20,000. I get paid $3,000 every 90 days. Sign me up. Let's put some more money in there. $250,000. How much I get every 90 days? Morgan Ponzi. That's what it's called. All right, we got another guy, and he's got, this is the five ways to pay less in taxes, and let me, he, I think you've probably seen some of his stuff. Let me pull him up. If I were in my 20s or 30s, here is exactly how I would avoid paying taxes on about 42% of my income, legally. I'm Tyler. I'm a former financial advisor and portfolio manager. Now I make financial content for free so that you don't have to pay for it. Number one, let's assume I make $90,000 a year. Number two. I'd put $23,000 into a 401k and try to get the employer match. No-brainer. And anyone who tells you not to is selling you insurance. Number three, put $7,000 in a Roth IRA and invest it aggressively. There is an income cap to contribute to these. So do it while you can and do it while you're young and in a super low tax bracket. Number four, I would max out my health savings account with $4,300 if I had a high deductible health plan. Invest it in low-cost index funds. And trust me, your future sick self will say thank you. Number five, then I'd turn around and take the $15,000 single-filer deduction. Tell the government I only made $47,700, went from the 22% to the 12% tax bracket, and at this rate will most likely become a millionaire in just over 15 years. Number six, in the words of Ferris Bueller, life moves pretty fast. If you don't stop to look around once in a while, thoughts? So first off, these strategies are considered basic strategies. If your CPA is coming to you and charging you to tell you to put money into a 401k or an HSA, please run. Chat GPT will probably come up with some better strategies for you. I just wanted to say that. So those aren't strategies. Those are basically deductions that you can take on your tax returns. And someone who's making $900,000 a year is not going to save a lot of money by maxing out $23,000 into our 401k. But that being said, one of the things that we have to look at here is retirement counts are deferring tax. What you're essentially saying is that I'm not going to pay the tax now. I'll pay the tax later. And hopefully when I pay the tax later, I'm hoping that I don't pay as much as I would pay today. So you're kicking the can down the road. There's a situation in which this does make sense for some taxpayers. But for most taxpayers, what you're essentially doing is you're stuffing money into a retirement account without a guarantee on what your tax rate is going to be later in retirement when you go pull those dollars. And that uncertainty around what your tax rate is going to be creates a lot of. missed opportunity that can't properly be factored over time. And for me, I understand the need to save money sometimes in the short term. But in the long run, if I have a retirement account with all of these taxable retirement dollars in there, then that may not serve me that well. So I love the idea of a Roth 401k biting the bullet when you're making income that qualifies you to contribute to a Roth 401k or a Roth IRA and maxing that puppy out. All right, we got Uncle G here. I know that you're friends with him. He had this clip on 401Ks. The team wanted us to react to it, and it would be interesting to hear your thoughts on this. Yeah, I have a lot of money in my 401K. Okay, I'm sorry for you. Why do you feel sorry for him? It's a way to put money in without paying taxes on it. It's a way for you to be trapped for 30 years. Well, you can pull it out when you're 63. How old are you right now? 50. 13 years from now, will taxes be higher or lower? Higher. You will wish you would have sold them when you were 50. Because you'd pay a lot of taxes, dude. You don't pay any taxes when you pull out money out of your 401k if you wait until you're 63. When you start using that money, you're going to pay taxes, bro. You weren't charged taxes while it sat there. What's wrong with you? You're not. IRS laws, penalty-free withdrawals from retirement accounts after the age of 59 and a half. Penalty-free, not tax-free. Penalty-free, not tax-free. So they're going to charge you a penalty. They're going to put handcuffs on you to sell it before then. But, dude, when you're 63 years old, when you start withdrawing, you're going to start paying taxes at that point. 401k withdrawals are taxes, ain't they? Exactly. I feel like I jumped into GC's body when he was talking to this guy because exactly how he responded is exactly how I would respond. If you're bragging to me in an interview about how much money you have in your 401k taxable account, I'm sitting here looking at you like, what's up with you, bro? Good for you, man. You are going to and I would do exactly what he did. Let's put you in a situation here. What do you think taxes are going to be in 10 years? Do you think they're going to be higher or lower than where they are right now? You know? You don't have Trump as your president anymore in 10 years. Do you think they're going to be higher or lower than where they are right now? 99% of the people I talk to with a brain on their, with light bulbs upstairs is going to say, Carlton, the tax bills, the tax rate's going to be a lot higher in 10 years. Why then would you lock up so much money into a qualified retirement plan that you're going to have taxable to you when you withdraw those funds? Make that make sense to me in an argument today in 2025, knowing you're not going to pull that money 10 years later. Yeah. I think it all comes down into your ability to invest and grow that money. And I'm talking to half the population who have zero skills when it comes to growth. The fact that they can put their money in a target date fund and have that money locked up and actually get penalized for touching that is actually a good thing. That's crazy for me to say out loud, but they are literally them controlling money is a disaster, and they'll go spend it. And so that's hence the person that. discovered the 401k, Ted Benna. That's what he'll say is one of the best things in the 401k. And then that's exactly why I'll just speak for myself, is why I'm not in love with the 401k. It's like you're telling me I have to, I'm not just, I defer to an unknown date at an unknown time. And if I get that, if I want to get access to that money early, not only do I have to pay taxes, but I have to pay a 10% penalty fee. And so it's like, okay, I can see both worlds. But for entrepreneurs and investors like Grant, you really think Grant is like, oh, the best use of my dollars is to lock them up into Wall Street's funds. I think he was pretty animated there. And then I always love the misinformation. I'm like this person thinking it's a total tax-free thing. But how many people, Carlton, literally think that 401k is tax-free? I hear that all the time, and that just tells you the lack of education, period. What if the interview ended right there and you didn't even get to hear Grant correct him? So many people jump on Instagram and YouTube and they hear one little thing and then run off with it. Yeah. Right. Grant had to correct him. That's dangerous information right there. Hold on, buddy. Your 401k is taxed. You don't have to pay a penalty once you're 63 and a half. Your 401k is still taxed, though. Yeah. So absolutely the details matter and the devil's in the details. I love it, dude. All right. We got one more reaction and I got your permission to talk about this before because I love you, dude. You're on top. You're the punching bag. People are essentially There are people behind the scenes that want to increase their status. And I said, dude, there's a lot of people using your name. You know who they are. And I asked, I said, as a, as a friend, are you willing to be able to speak about it publicly on the show for the very first time? And, um, and so thank you. I'll let you take this where you may, but let me tee up a video that has gone crazy viral. And I just want to give you your flowers before we tee this up. Um, I bought my first watch. Thanks to you. thanks to some encouragement so i'm not i'm not as uh i don't have the nicest watch collection yet but uh i'm on my way and uh and uh but with all that let me uh let me pull this thing up Oh, here we go. Here we go. I can't write off a Rolex, but if I start a YouTube channel where I talk about watch trading and I start buying Rolexes and watches and hold them as inventory, the Rolexes that I spent my money on are inventory for my business, which now makes my watches ordinary, necessary, and reasonable in the pursuit of income underneath code section 162A. Ladies and gentlemen, what do we have dead wrong at the YouTube channel distractor 162A? ordinary, necessary, reasonable, no matter how many times he says 162A, that doesn't make it the only code section for inventory. It is code section 471. And under code section 471, inventory is typically capitalized, which quite literally means it is not deducted. But let's say you qualify for one of the exceptions and deduct it. It doesn't really matter because when you resell the inventory, it's going to then be taxed and you won't even get the benefit of that deduction. If you're genuinely in the business of actually reselling it, you wouldn't typically have that long of a sales cycle. And for more accurate tax advice from a tax attorney, subscribe. Yeah. All right, dude. First time publicly sharing this. Oh, yeah, bro. First off, you know, kudos to Jasmine DeLuca for, you know, jumping on top of my videos and, you know, putting her expertise over it. I think that in this space, there is a lot of misinformation 24-7 that goes out. And all she's doing is trying to protect people. I've seen it happen where people have taken my videos out of context and have rushed off to go do things incorrectly. And I understand what my superpower is. My superpower is that of a marketer. I am probably one of the best marketers in the tax and accounting space. But that doesn't also mean that I am going to sit and explain something for 20 minutes over a 60-second video. Because I have the skill set as a marketer to know exactly what to say to get people curious, I lean in on that skill set. And then you have people like Jasmine who are tax attorneys that want to come in and be politically correct. Actually, 471F is inventory. And if you held it for inventory, the chances of you actually holding it for longer than a year or two years is highly unlikely. Yeah, Jasmine, you're talking about a certain situation for a certain type of person. But I will say this. Code section 162A, still one of the most powerful tax codes in the United States tax code. That tax code is the reason why many entrepreneurs are able to take deductions. And I want to see more tax experts, including Jasmine, teaching entrepreneurs how to use code section 162A, how to use inventory to their advantage and capitalizing it over time and teaching people the ways and how they can leverage the tax code instead of just saying, nope, you can't do that. Nope, you can't do that. No, you can show us what you can do then. What is possible? Because your channel and what you're doing is really just coming off of somebody else's videos and saying, hey. In tax court, it would hold up like this. In tax court, it would hold up like that. Very valid, very respected, and grateful for that content. But I want to see us kind of coming around to some content around where you're showing people how to actually leverage the tax credit. Listen, Jasmine, if you're watching this and you want to hop on, I would be honored to host an exchange where there can be back-and-forth conversations. That's an open invite. Here's what I'll say is and I have this on a micro-scale on the insurance side because We're doing things differently. We're going to events and people are feeling very threatened. They're feeling threatened that this young kid's out there talking about things differently. And so I've heard things behind the scenes of people's what they say about me. And I'm like, yikes, like if they only knew like, like, man, that's tough. That's tough. But I'm not nowhere nearly as big as you and you're doing way more marketing. How do you handle that? Because I'm sure there are so many people that aren't even on YouTube that are like throwing your name under the in the mud. Because, you know, a lot of different reasons. Number one, how do you deal with that? And then how do you deal with like, you see a lot of your content being taken. It's got to be in a world. It's got to be an honor to be like, hey, like people are talking about me. Like they're literally using me to grow their business. Like that's pretty neat. But then you also have to have some thick skin from a standpoint because people will take shots. Literally because taking shots at you increase their status, which is, you know, with the. the use of the internet and leverage is kind of an interesting, interesting deal. Yeah. Listen, man, you throw paint on my name, you give me more fame. That's just how it goes, man. And I've always been the type of person that has been appreciative for the things that I've asked for. You know, when I stepped into this entrepreneurial journey, I asked for God, I was I want to blow up in the tax and accounting space. I want to do whatever I possibly can to make sure that I speak concisely and that I share my ideas with the world in the right way. And I'm willing to I'm willing to deal with whatever comes of that level of success. And what has what has happened is I've been able to network and connect with people of status and recognition that. Most people can't get into the rooms with, and I've also had haters utilize my videos to grow their own businesses and create entire products and business models over my videos. I am grateful for it all. I'm grateful for the Jasmines of the world and the Edwards of the world and also all of the grateful people that have followed and subscribed to my channel and have allowed for me to rise to this platform that I have here today. I do view myself as a pioneer in the tax and accounting space. And so as a pioneer, I can't get caught up with what's going on with the waves. I just have to stay focused on the course that I'm on. And I think if you're an entrepreneur and you're striving for success, look at someone who you look up to. That person that you look up to better have a big enough platform to where they have the attention, but they also have people that probably don't like them too. And that's just the truth. Jesus was not liked by everybody. But we read his book. every, every Sunday. And so I say that to say this, man, I'm doing everything I possibly can to change this tax and accounting space. And I will be the pioneer that I need to be. And if there's going to be people that come after me and attack me, so be it because my ideas that I'm sharing with the world is helping put more money back in people's pockets. And I think the, the underlying message, I, I, I, a lot of times people like will come up to me and they know that We're friends. And I literally had someone the other day who was like, dude. I started watching Carlton. He was 19 years old and was already crushing it in business. And he's like, Carlton was one of the people that I watched, and you gave him the belief to do what he's currently doing. So I think it's like in anything, it's like, yeah, I make mistakes all the time, and we have to be humble enough to be like, yeah, great point. Let's get better. But we can be so afraid to act, and it's like, what's the ripple effect of you only making our videos that have to be compliance approved? It's like. No, we got to create content that gets people to start thinking differently, and the internet will humble us in a second too. They'll keep us in check. So I just appreciate you sharing that because I know how you roll behind the scenes, and I just wanted to get your two cents on that. There's other videos of you talking about haircut and all. What would be your thoughts on I know that she I think Jasmine I saw a video that Jasmine was like, you can't deduct your haircuts and all. I can. I'm going to deduct my haircuts. I'm going to deduct my haircuts. Yeah. Not every business owner can deduct their haircuts. Not every business owner is making, you know, a quarter million from YouTube videos, you know, a year. Right. But my YouTube channel does. And I'm on YouTube twice, three times a week. So my barber is close to five hundred, seven hundred dollars a month. Most people aren't spending five hundred, seven hundred dollars a month on a haircut, let alone on camera 15 to 20 times a month. But I would argue that most actors and actresses. That are working in movie and film production are most likely getting their hair and makeup done on a day in or day out basis and are most likely spending more than the average folk to spend for their haircuts and makeup. So that's an ordinary and necessary expense for an actor and actress. I am not doing anything different than an actor and actress when I'm doing productions sitting here at the desk on a Monday, Tuesday, Wednesday, Thursday. So in my mind, if I were to be questioned by this. I have an approach that I would take if I were to be questioned by this. But if you're sitting here saying, oh, my gosh, somebody told me I can never do this. That's totally up to you. If you want to listen to their advice, I come from the advice. There's always something you can do, right? There's always a way in which you can figure it out. And my channel and what my voice is going to be known for is for curiosity. I challenge people to get curious about the tax code. Go do research. Go figure out how are other people doing it? How did Donald Trump pay $600 in federal income taxes and you paid $60,000 in federal income taxes? I want you to question things. There's plenty of tax experts that are going to tell you, no, no, no, you can't do that. There's tons of Jasmine DeLucas out there going to tell you, no, no, no, no, no. I'm Carlton Dennis. I'm telling you, yes, you can. And there's always a way in which we can figure it out and we can do so without Uncle Sam knocking on our door.
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