Is Meet Kevin Wrong? React: “3 Reasons I Won’t Use the Roth IRA”

I want to respond to some of the statements Meet Kevin made in his video ‘3 Reason I Won’t Use the Roth IRA’.  First off, I want to make it clear I am a big fan of Kevin, and I usually have mad love for his content.  That being said, I cannot let my appreciation for him cloud my judgment.  There is something about this video that just rubbed me wrong, and I need to set the record straight. 

I’m sure I will piss off some fanboys, thinking I am just hating on him, but making money requires attention to detail, and no sugar-coating will change the facts. 

Of course, we are all just dudes on the internet sharing our opinion, and with that in mind no one is right or wrong . . . . well, except for me, because I am always right.

This is so true about schools not teaching students about finances.  Heck, I remember back in elementary school, going to “Enterprise Village,” a program designed to teach students to be good little consumers.  Without going into a long-winded story, I will summarize it quickly, and then we can get back to Kevin. 

The concept is each student is given a job with one of a dozen or so businesses; for me, I worked as a bank teller at Barnett Bank.  Each student is given a paycheck & checkbook (I guess now debit-cards).  Throughout the day, you leave your job and interact with other students working at other businesses and purchase products or services.  Any items you purchase with your virtual money, you get to take home and keep.  In my case, none of the items for sale were of any use to me, so I decided to save my money.

The stupid thing was, this was against the rules.  All students must spend their money by the end of the day; for this reason, I was given a low grade for the assignment for not spending my money in the economy.  

This is hardly a good way to teach students to be financially responsible, it only teaches you to spend all your money, and when you run out of money, charge it on a credit card instead of saving and investing your money.

Ok, enough of me complaining, now back to Kevin.

[after main vid]

Ok, here is where I have an issue with Kevin.  He is presuming the status-quo will continue, and I think it is more reasonable to conclude the opposite is more likely, and here is why.

Historically, the Top Federal Tax Rates have been on a decline since their highs in the 1960s, with a few blips up and down, they have averaged about the same now for 30 years. 

After the great depression, we saw an almost 40% uptick in the Top Federal Tax Rates from 24% in 1929 to 63% during the Great Depression, and this steadily increased, reaching 94% in 1944.

In 2020, due to the [illness that will remain nameless, so YouTube algorithm doesn’t screw with my video], we see historically high unemployment and the most substantial financial impact on small, medium, and large businesses since the great depression. 

As we all know, this has spurred the US Congress, the US Department of the Treasury, and the Trump Administration to pass unprecedented stimulus and financial rescue packages to help the people and businesses weather this storm.  Overall, I agree with this and feel it was necessary; however, the downside is an ever-expanding national debt.

The debt, in and of itself, is not the primary concern I have here.  The more significant concern I see is the growing sentiment for the Democratic Socialist platform, encouraging both political parties to pass ever-increasing spending bills.  I am not here to argue the nuances of the pros and cons; this video is strictly about facts and finances.  Once you turn on the faucet of free, easy money, it is tough to turn it off. 

This is not a right vs. left issue, in-fact if you want to read about how both political parties have lied, cheated, and stole from the people, check out my book America Hijacked.

Ok, now, back to my reason for disagreement with Kevin.

With all of this in mind, I feel there is a strong likelihood over the coming decade or two; Congress will be forced to raise taxes to cover the costs of ever-expanding social programs.

With Kevin’s idea of 1031 Exchanges for real estate, yes, currently, this works excellent for legal tax mitigation.  However, there is no guarantee this will remain the same for decades to come.

I can very quickly see a political talking point from someone like Representative Omar (D-Minnesota) claiming that “evil landlords are getting rich off the backs of the people,” and the “1031-loophole” needs to be removed.

In the short term I see a lowering of payroll taxes coming out in President Trump’s second term, yes, I am pretty sure he will be reelected. 

However, in the long term, 15-20 or more years, we can reasonably deduce that payroll and income taxes will either stay the same as they are today or get higher, not lower and you quickly lose the benefits Kevin outlines.

Congress can easily change the rules by saying, “after today new real estate purchased cannot use a 1031 exchange, or new IRA accounts cannot be tax-free, or new investments in Opportunity Zones no longer qualify”.

Yes, those would all suck, but from a legal perspective, and of course, remember, I’m just a dude on the internet, not a lawyer.

Whereas, with a ROTH IRA, it would be almost impossible for a law to get passed that, retroactively changes tax law to force you now to pay taxes on the money in your ROTH IRA. 

It would be easier to say no NEW transactions can take place tax-free.  

But it would be nearly impossible for Congress to go back and say “hey, senior citizens, remember the money you put in that Roth IRA that we told you for the past 40 years was tax-free, well j/k . . . now pay up”.

Such a deal would be contested legally in the courts and, just as importantly, would be political suicide for any party.

So, with all of this in mind, what am I doing to protect my finances?  Honestly, I am doing everything.  I am buying real estate, holding and renting these properties, investing in the stock market, and investing in tech startups.

While my general goal is not necessarily to sell any of my properties, a 1031 Exchange is the perfect option should I choose to divest some of my portfolio and transition to different properties.

I also max out my Roth IRA Contribution each year; this is currently set at $6,000 if you are under 50 years old.  I have a SIMPLE IRA with one of the businesses I own, and I participate in an HSA.  Then lastly, I have a few normal taxable brokerage accounts as well. 

I have a mixture of tax-free, tax-advantage, and normal tax investments.

This way, no matter how the laws change, I can take advantage of them.  If a bill comes out giving you a tax break on tax-advantaged accounts I can use it.  If there is a different law for normal tax investments, I can use that one as well.

No options are perfect, but spreading the risk across multiple tax strategies, I feel, is the best.

Thank you very much for watching, please make sure you like, subscribe, and comment on this video as it helps with the YouTube algorithm.  Also, please check out my book America Hijacked and last, checkout Webull with the link in the description below to use what you have learned about investments to open a brokerage account today.  If you deposit $100 into the account, Webull will give you two free stocks, with one of them valued up to $1,400.

Lastly, make sure you check out Meet Kevin if you haven’t already.  His channel is linked in the description.  Also, checkout his online video courses, from what I have heard they are pretty decent. I hope to make a fully review of his course work in a coming video.

Thanks again, and I’ll see you on the next one.

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