When I first started getting into financial independence, the first things you find are index funds. And so I just haven’t really looked at it since, and in my opinion, it’s not a significant dollar amount in terms of if the market dropped 50%. Yeah. I’d lose 10 grand or 15 grand. It’s not like I’m sitting there with hundreds of thousands that I would lose a ton of money.
Yeah. Let’s keep it on red mentality. Just let it ride significance. Not make sense. And also with my logical and with my mindset too, could I ever run my bank zero, like really low to invest in a deal. And so I’m always going to keep some cash available and this is being a little bit more aggressive and the cash is a little bit more conservative and all this stuff for you.
Like I’m getting really nitpicky. You’re not working with too much, but this is the foundation for when you get over half a million, then you won’t really care about all this stuff. If you were to take this and maybe think about taking the Roth out, because you’ve already paid your contributions into it and just taking it out cash to invest it.
We talk about this a lot. Why do you not want retirement accounts? Number one? You’re going to be retired well before you’re 50 on the way to your sending to get it. Number two, your tax bracket is probably a lot lower today. So you want to pay your taxes on it today, then in the future, number three, where this country is going, taxes are going to be going way up.
But what a lot of people don’t realize is number four, when you invest in a retirement account, you don’t get the passive losses from your investments. So that is you need the passive losses, especially from the syndication. To get out the simple, passive cashflow gravy train, which is all about lowering your W2 activity, come and paying little to no taxes.
You don’t get that opportunity to do that. Yeah. You got to get real estate professional status at 750 hours. You don’t get to do that until you get those passive losses. So that’s the fourth reason why you don’t do retirement accounts, but something to think about, like Richard, like just maybe take out the Roth because you already paid a tax on it.
So it’s not really that big of a deal. And at least take out the contributions. You not the gains because you take out the contributions. You don’t need to pay the penalty. 10% penalty. So drain that out. But at the same time you want that magic number. I don’t know what that is in your head, like 20 to 30 grand of emergency savings.
But if you have to increase it, we’ll then put money into your 401k via the match. .