Podcast #19
Reed: Welcome back to episode 19 of the Tax Free Millionaires Podcast, where we cut through the financial industry's nonsense and give you the truth about building real wealth. I'm your host, Reed Scott, and today we're talking about something. That should have every American investor setting up and paying attention.
As I'm recording this right now, this week we're watching the richest man in the world, Elon Musk, go to war with the President of the United States over a massive spending bill. And folks, this isn't just political theater. This is your financial future. Hanging in the balance must just call Trump's signature tax bill a disgusting abomination.
And is urging lawmakers to kill the bill. He's warning that Trump's signature tariffs and tax bill would push the US into recession later this year and tesla the loss over $152 billion in market value in a single day because of this battle. But here's what most people are missing. Musk isn't just upset about politics.
He's sounding the alarm about something I've been warning you about for years. The massive debt bomb that's about to explode all over your retirement savings. What is the debt crisis reality? Well, let me give you some numbers that should terrify anyone who thinks they can just max out their 401k and cruise safely into retirement.
Trump's one big, beautiful bill will add 2.4 trillion to our national debt over the next decade, and that's according to the non-partisan congressional budget office. But here's the kicker. Some estimates say if Congress extends these temporary tax cuts like they always do, we're actually looking at 5.3 trillion in additional debt.
Now our national debt is already over 36 trillion, and we've reached 124% of GDP. That's prompted Moody's to downgrade our credit rating. Just last week, for the first time in American history, we're spending more on interest payments than our entire defense budget. And here's what your financial advisor isn't telling you.
The interest payments now account for one out of every $8 the government spends. Think about that. Every eighth dollar our government touches is just going to pay interest on money we've already borrowed and spent. This is exactly what I warned about in my book. Tax Free Millionaires we're living through the greatest debt explosion in American history.
And somehow the financial industry is still telling you to defer all your taxes until retirement when you'll supposedly be in a lower tax bracket. This, in my opinion, is the financial industry's most dangerous lie for decades. Your broker, your financial planner, and your 401k administrator have all been singing the same song.
Defer taxes, put everything in your 401k. You'll be in a lower tax bracket when you retire. Because your income will go down. Well, this advice may have made sense 30 years ago, but folks we're not living in the same America anymore. Our federal tax rates are actually the lowest they've been in 70 years.
We have a debt crisis that makes the 2008 financial meltdown look like a minor hiccup, and we have politicians from both parties who apparently think the only solution is to keep borrowing and spending like there's no tomorrow. 50 years ago. The 401k and deferred tax IRA is not the best place to put all your savings.
And in the Bill and Alex story, in my book, I give a perfect example of the problem, but most importantly, I show you how to fix it. Bill and Alex are two characters that illustrate the dilemma we face as Americans. They're both guys who make the same exact income. Have the exact same expenses, they're the same age and they start saving at the same time.
The only difference is Bill listens to his financial advisor, maxes out his tax deferred accounts, and doesn't have any tax free savings, but Alex doesn't follow the herd while Bill puts everything in his 401k and traditional IR thinking he's being smart by getting those tax deductions. Today, Alex diversifies his tax strategy.
He uses some tax deferred accounts, but he also funds a backdoor Roth and yes, he even uses Index universal life insurance for tax free growth and withdrawals. Now, fast forward retirement and Bill has a massive pile of money in his 401k and tax deferred Iowa, but guess what? Every single dollar he pulls out gets hammered by taxes.
And in the example, I didn't even increase bill's tax rates in retirement. I] kept them at the same historical low rates, but Bill still got hammered by taxes. Now, imagine what would've happened if I'd actually raised the rates as I expect them to go up. Now, compare this to Alex. Imagine how much worse off Bill would've been if I increased tax rates, but really Bill was just paying the penalty for having all of his money in tax deferred accounts.
I demonstrate in the book how even at today's historically low rates, it still doesn't make sense to put all of your eggs in a tax deferred basket. So imagine what happens if what I'm saying or Elon Musk is saying is true, and we have to raise taxes in the future, which . If history is any guide, we will now.
Alex meanwhile has created multiple streams of tax free income. And while Bill is getting destroyed by taxes on his social security, his 401k withdrawals and everything he owns, Alex is living comfortably on tax-free revenue streams. The result, Alex ends up with five times more spendable wealth than Bill in retirement, even though they had identical incomes and expenses.
And if you think there is no way this is possible that someone can have the same income and expenses and yet have five times more money in retirement than someone like Bill, who is a good little boy and did what his financial advisor told him and maxed out his 401k. Then that's why you should hang on.
Because in just a few minutes, I'm gonna tell you how you can get a free copy of my book and learn exactly how Alex did this for yourself. Now, the difference isn't magic. It's not some get rich quick scheme. It's just understanding one simple truth. Taxes destroy your retirement income even at today's rates.
And if public battles aren't an indication of things to come, I don't know what is. And I don't care if you're a Republican or Democrat or an independent, the reality is that taxes are going to go up in the future, so be prepared. Now, you might be thinking, but surely Elon Musk is just being dramatic, right?
Well, the Congressional Budget Office, as I said, projected that Trump's bill would add more than 2.4 trillion to the already staggering, government debt. But the committee for a responsible federal budget says the real cost would be 5.3 trillion. It if temporary provisions get extended, and here's the thing, temporary provisions always get extended.
Politicians love temporary tax cuts because they can claim they're being fiscally responsible. While knowing full well they'll extend them later. To avoid being accused of raising taxes, Musk sees what I've been telling you for years. We're on an unsustainable path. We're already at a a 124% debt to GDP and is growing.
There's no magical ferry that's going to make this debt disappear. It has to be paid, and that means higher taxes. The man who revolutionized electric cars, space travel and social media is telling us we're headed for debt slavery. Maybe just, maybe we should listen now. Maybe you don't wanna be a politician, but there is a solution.
What can you do? How do you protect yourself from the tax tsunami that's coming? You do what Alex did, diversify your tax strategy. First, yes, you can still use some tax deferred accounts like 4 0 1 Ks, especially if you get an employer match. That's free money, but don't put all your eggs in a tax deferred basket.
Second, you can maximize Roth contributions even if you're over the income limits. You can do a backdoor Roth. You're paying taxes now at historically low rates to avoid paying them later at much higher rates. Third, consider other tax-free streams like Universal life Insurance. I know, I know your traditional financial advisor probably hates life insurance as an investment, but that's because they can't charge you an ongoing annual maintenance fee on the money and that policy.
But a , especially designed index, universal life policy allows you to maximize tax-free savings and minimize life insurance. It allows tax growth and tax free withdrawals in retirement. It's like a Roth IRA without the contribution limits. And the goal isn't to avoid all taxes. However, that's impossible.
The goal is to have control over and when how much tax you pay, so you're not at the mercy of whatever desperate politicians decide to do in 10, 15, or 20 years. So what's the urgency? Here's why this matters right now, we're in a window of opportunity that's closing fast. Tax rates are still at historically low levels.
The debt crisis is building, but we haven't hit the wall yet. You still have time to position yourself correctly, but if you wait until everyone else sees what's coming, it'll be too late.
Remember, bill thought he was being smart, waiting to pay taxes later, but Alex understood that sometimes paying a little tax now. Saves you from paying a lot of tax. Later when Musk warns that Trump's policies could push us into recession andcaused the spending bill a disgusting abomination. He's not just talking about next year, he's talking about a fundamental breakdown in our fiscal sanity that we have consequences for decades to come.
Now look, I could talk about this for hours, but you need more than just a podcast episode. You need the complete blueprint. And that's why I wrote Tax Free Millionaires. In this book, I walked you through the exact process of how Alex built his tax free wealth step by step. I'm gonna show you the specific strategies, the exact calculations, in most importantly, how to implement this for yourself.
I compare Bill and Alex's situations year by year, dollar by dollar, so you can see exactly how the same income and expenses. Lead to completely different outcomes based on tax strategy alone. And right now, for the next week only, I'm giving away this book absolutely free. Just pay the shipping and that's it.
Now I have to charge something for shipping because I'm paying for all the expenses to get this, just go to tax free millionaires.com/tfm-book-sales and you will be able to get a free copy of the book that's Tax Free Millionaire.
And that's, by the way, it's tax dash free millionaires.com/tfm. Book dash sales and you'll be able to get, get a free copy of the book. So again, that's tax dash free millionaires.com/tfm-book-sales. And grab a copy of your book today. Now this isn't some 30 page PDF. This is complete wealth polling system that shows you how to protect yourself from the tax increases that are absolutely positively coming.
The Trump Musk battle is a wake up call, and the richest man is warning about our debt trajectory. The president is pushing through a spending bill that adds trillions to our debt, and financial markets are already starting to react with higher interest rates. The writing is on the wall. The question is, are you going to position yourself like Bill, hoping things will work out, or you're gonna be an Alex preparing for the reality of higher taxes?
Learn the exact strategies that will protect you from the coming tax storm because when the debt bomb finally explodes, you wanna be holding tax free assets, not a massive pile of tax deferred money that the government will be desperate to get their hands on. Remember being Alex, not a bill. Your future will thank you.
I'll see you next time on Tax Free Millionaires, where we always follow the money and protect what's ours. Thanks. Have a great week.
