Mega Backdoor Roths, HSAs, QRPs and More with Chris Tanner

Full Transcript

Taylor   0:02  

What's going on guys? Welcome to the passive wealth strategies podcast. I'm your host Tabor load. Today, our guest is Chris Tanner from new direction Trust Company. Today we're going to talk about a variety of strategies that you can use with tax advantaged accounts that just don't get covered. In other cases, We're going to talk about the HSA. We're going to talk about mega backdoor Roth conversions, which is something that I hadn't heard of before we get into a number of other topics that people just aren't really touching on these days. And we haven't touched on this podcast and this show in previous episodes. So I'm thrilled to bring that to you today. For those of you who don't know, I'm your host Taylor load. I am a busy professional just like you. I am a real estate syndicator. I buy multifamily real estate with passive investors, but I love talking about real estate investing. I have been investing since I had two nickels to rub together. And I love teaching others what I've learned. Once again today our guest is Chris Tanner from the new direction Trust Company. Without any further ado, here is the interview.

Chris, thanks for joining us today.

Chris Tanner  1:11  

Yeah, it's great. I appreciate you having me on the podcast. Looking forward to it. And yeah, just kind of jump in and let me know where you want to get rolling.

Taylor   1:21  

Cool. Before we get to, you know the topic. Can you tell us about your company? What do you guys do?

Chris Tanner  1:28  

Yeah, of course. So my name's Chris Tanner, you probably do a little bit of an introduction, but I work at a new direction Trust Company. We're a self directed retirement plan custodian. We're out of Lewisville, Colorado. And so, you know, we're probably similar to some of the other custodians that are out there. But pretty much anything that can be self directed, we can help folks with and so in addition to you know, I don't not only work with them, but I've self directed since today. thousand and six. So I personally use solo 401k and a self directed Roth IRA. So I have actual real world experience. And so hopefully I can bring something to your listeners today.

Taylor   2:11  

Great. Absolutely. And like you said, I'll do some at the front. But I always like to let guests introduce themselves, because everybody likes talking about themselves, me included. So that's why

Chris Tanner  2:21  

I yeah, I appreciate that. Thank you. You're welcome.

Taylor   2:25  

So it's great to hear that you're using these accounts for yourself. And today, you know, I, you mentioned in our little pre interview discussion that we could talk about h essays, and I'd like to just touch on that before we you know, keep going on before I forget, you know, let's talk about h essays. And can we self direct them and because this isn't talked about, and, you know, lay it on us?

Chris Tanner  2:50  

Yeah, for sure. And this is one that I think is a growing area simply because the health insurance providers want to put the high deductible plans in front of us, so I think more and more people are getting high deductible health plans. So what that means is, if you have one of those plans, you can have an HSA and and I think you'd mentioned you, you have an HSA yourself, I have one as well. The bottom line is that those can be self directed. And I guess the biggest thing I would say with the HSA is, is there's kind of two groups of people. There's one group who they're open to, their intention is, let's use up the money for the qualified medical expenses. But then there's another group, and this might fit in for some of your folks who I have an HSA. But maybe I'm at a point in life where I can afford to just cover those medical costs for right now. And I'm looking at this HSA account as a nice little cool mistake. And what I mean by that is we have clients who have these HSA accounts that they self direct, and the coolest thing about this account is it's tax free going in, and it's tax free coming out, which is you don't think of it that way. But as long as it's for qualified medical expenses, it can be done that way. But the intent is, is you gotta leave that money alone, that so that you could invest it. And what a lot of our people are doing, you know, HSA accounts, we're not talking about 10s of thousands, usually or hundreds of thousands, you know, someone might have $8,000 in there. And so what they're doing is they're partnering, their HSA with maybe another of their self directed accounts, or even with themselves, because that partnership can happen with an HSA just like it does with an IRA. So maybe there's, you know, a piece of real estate out there. It's 100,000. And they partner they use 8000 from the HSA and then tag that on with one of their IRA plans to buy it, so to speak.

But I think the idea here is,

that money is set aside to just grow. You would want to be in a position where you can cover your medical expenses, but at the same time track those medical expenses because the IRS doesn't care when you pull that money back out. It could be five years from now, it could be 10 years from now. But you're keeping track of those medical expenses. So at some point down the line, you can pull that money. There's no tax on it, when you pull it for qualified medical expenses.

Taylor   5:25  

Okay, so I think this is one of the stumbling blocks I've had with this HSA account business myself and I've known you can self directed and everything, but really just determining a strategy because be a little selfish here and talk about my own position here, but I'm a young guy, I don't have any kids and I'm married anything like that, and I'm in good health. So I have a pretty long time horizon, but I also don't have an enormous balance of my HSA. But kind of I think knowing what we can do with the HSA can help us maybe formulate a plan a little bit better if we're self directing. I mean, can we invest in it? I mean, if we can partner with our US, Ira, we can invest in real estate, I mean, our stocks, bonds notes, are those options out there too. And then, parenthetically, or follow up question to that is, what happens if it's invested? And we have some kind of health event where Okay, now I need to spend this money and I didn't expect it.

Chris Tanner  6:24  

Yeah, great questions. And so the first part of that question is, well, what can we invest in, and whatever you can invest in an IRA in a self directed IRA, this the same rules, everything applies to that HSA. So you can really think of it as a mini IRA plan, it just happens to be a health savings account. So all the rules that are in place as far as self dealing, and you know, you know, you can't buy a property and live in it. That still applies with the HSA account, but otherwise, everything's the same and so You really you're open, you can all those things you just listed you can invest in. So excellent question that you just brought up, you know, what happens if there is a big medical expense? And I think what we see is there's a couple of different scenarios. One is we see people who have two accounts. One, they may have an HSA account that's just sitting at a bank, whose purpose is okay, if I have something hit that's big that money is for medical expenses. And then I have this account over here that's intended for investing. And so you have two buckets of money. That's one way to look at this or approach this is this money is for that medical expense. This money over here is really just strictly for investing. The other is that, you know, hopefully you're peeling off some rental income or some other things that you can pull from but it's it's a risky Take if your money's tied up and you're investing in something you got to think about. Maybe you don't tie it all up. Maybe you hold some back.

Taylor   8:08  

Interesting. Okay, so that is a very real risk. If we're investing our HSA in less liquid investments, if we say we do need the money, then you know, maybe we're getting some return back or, you know, rental income, like you said, but if we get into a situation where we need that, just to keep going with the $8,000, we need the full $8,000 then we but I don't know, we might have made a bad decision earlier. It's hard to say.

Chris Tanner  8:38  

Yeah, that's exactly right. And so it's tough, you know, we don't have a crystal ball. We don't know when that ER visit or, you know, one of those surgeries or big medical expenses might happen. And so if you're in a position to be able to hold back whatever is deductible. You know, usually there's kind of a, that threshold that you gotta hit. So if there's any way possible Maybe a hold that back. And anything that's extra you can throw towards investing and let that build and accumulate.

Taylor   9:06  

Okay, that sounds like a smart move. So if we want to if we feel like we've covered HSA is pretty well here, if we want to move on to any other accounts, or you know, I know you have some, some aces up your sleeve in terms of things that you've learned along the way in this self direction game. So, you know, I'd like to get into that. What, what can you teach us?

Chris Tanner  9:30  

Yeah, so we were talking a little bit about Roth conversions. And so I kind of throw this under the category of creating creative account strategies. And so I'm going to give you a couple of specific scenarios, one recently with a client that we have, and I just want to kind of throw this out there just as just getting the brain rolling. So what happened is this individual invested not in their retirement plan, but on the person Well side made an investment. Unfortunately, the investment went bad. And it turned out to be fraudulent. And so what this individual is in a weird situation, they're retired, so they don't have a ton of income. So they have this loss, this big loss that's going on. So the client called me and said, you know, Chris, I'm kind of thinking about a strategy here. And what he has is a solo 401k. And I'm guessing you and your listeners are familiar in a solo 401k. Most of them have a Roth 401k component. And so this gentleman has a solo 401k but it's all tax deferred money. And so the strategy was, is he's got this loss and not a lot of income. And he, he thought, Well, if I do a big conversion, that's roughly the amount of the loss. It's kind of like a wash because that's it. income to me. And he said, you know, if I have the option to go from a taxable situation, you know, when I pull that money out to move it to a Roth, where I'm not going to be taxed, he said, this is a no brainer. And what's interesting is he owned a piece of real estate. He literally owns a single family rental in the solo 401k. So what he's going to do is it's kind of like a paper conversion, he's going to retitle that piece of property from the regular 401k to the Roth 401k. And the value of the property has to come up with the fair market value for the property. That's the amount that's taxable. But keep in mind, he has this loss over here, unfortunately, that's offsetting that income. So he hit a point in life where he's creatively taking a negative and kind of turning it positive so he can absorb that loss, and now is he's pulling income off that property. It's all going to be in the Roth. So I just bring that up because there are some times in life where a Roth conversion might make sense. And that might be a time every now and then, you know, we nobody likes to admit their losses. But if you have, right, yeah. But if you do have a loss and you don't have anything to offset it immediately with that might be a time to think about a Roth conversion.

Unknown Speaker  12:28  

Interesting.

Chris Tanner  12:30  

And I'll give you another situation where a Roth conversion might make sense. We had a gentleman who said, similar situation, he just happens to have a 401k, a solo 401k. And he set the plan up and he was working full time and his wife was working full time, but their plan was to retire within a year. So what that basically meant was, is their income was going to go from you know, whatever it was to virtually nothing, and he didn't have a whole lot of passive income. I know that's The whole point of your podcast, and he was hoping to get there. But I talked to him and I said, you know, you're going from the six figure incomes to like, virtually nothing. I said, you know, there might, it might make sense to do some converting, because he had a pretty significant six figure account now, to start to convert some of that when you're in this really low tax bracket, and he was in his early 60s, so he didn't have to start taking money out. So his plan was, is that both he and his wife, were going to do a conversion up to keep them in a lower tax bracket, go ahead and take the tax hit when they're like 15% and convert it and then that piece that's now in the Roth 401k it's, it's done, they've paid their tax. And so that's kind of a creative, you know, strategy, a way to use that solo 401k but timing it so that you know, you're in a lower tax bracket. That's kind of the whole key here.

Taylor   13:58  

Interesting, okay. So it's, it's Knowing your own personal situation and then seeing that going forward and figuring that later on, you'll be in a higher tax bracket when you're actually taking distributions out of that account. Whereas when you're not taking distributions out of it, you're in a much lower tax bracket. I have it right.

Chris Tanner  14:19  

Yeah, I think that's fair to say, you know, some people are surprised if they've done a good job accumulating. And they've set themselves up during retirement. You know, at some point at age 70 and a half, you have to start taking distributions, and some people are a little surprised at how much income that actually generates. And so, you know, you may still be in a higher tax bracket if you've done a good job. And so it's, it's just kind of knowing that that options available and putting that to work. So a couple situations and I have one more if you want to go there, or if you want to move on. We can lay it on us. I got more questions

Taylor   14:57  

for you later, but let's go through this one.

Chris Tanner  15:02  

So this is another and and I would encourage you and your folks to look this up, and you can google this term. It's called a mega backdoor Roth conversion. So we've probably heard of a backdoor Roth conversion. And this is kind of like putting the cherry on top. And this is the mega backdoor Roth conversion. So I'm going to start with just a regular Roth conversion, but it's the backdoor conversion to kind of set up what we're doing here. And so what happens is, and I don't know you might be in this situation as well. But if you happen to be in a job where you make too much money, that you go above the income limitation to make a Roth IRA contribution. So either you individually or as a couple and if that's the case, you cannot contribute to a Roth IRA. Well, what people can do those, there are no income limitations to contribute to a traditional IRA. So the backdoor way to put money into a Roth IRAs, you contribute to a traditional, and then you just do a conversion. So you convert the traditional to the Roth. So even though you aren't technically able to do it right up front, you're still making that contribution. So we want to with that idea, that concept in mind, we want to take this a step further. And so this is for your solo 401k people and I don't know, do you happen to have a solo 401k

Taylor   16:36  

I don't at the time of recording, but when this goes live, I'm planning on having one it's something that I'm working on. Right now, as we speak. I'm in kind of the beginning phases, but actually the interview that went live today, the day of recording was on that topic, and that's what got me thinking like, oh, man, I should really have a solo 401k so I'm working on it.

Chris Tanner  17:01  

So this one's interesting. And so we call this the mega backdoor Roth conversion basically. And so this is really for folks who, at whatever level Taylor's that they want they believe in the Roth, they believe that paying taxes now is better than what it might be in the future. So, you know, we don't have a crystal ball. But anyway, the person that kind of taught me about this was actually a physician, and this gentleman, high income physician, and his wife is also a physician, so they can't contribute to a Roth IRA. But what's interesting is that they do they run their medical practice through, you know, an entity so they're able to have the solo 401k. Well, they're there two ways to make do this, this conversion so to speak, but they can do a direct contribution to their Roth 401k with In the solo 401k they've set up. But there's another way that you can make a contribution. It's called profit sharing. There's a piece of the 401k plan, that's the employer contribution. And those contributions go in tax deferred. But what's interesting is if the solo 401k set up correctly, those contributions can be converted to Roth, as long as you're willing to pay the taxes on those. So there's two types of conversions that can happen from within that solo 401k. You can take employer contributions that were initially tax deferred and convert those. The other thing that we see happening is that somebody might have an old 401k plan from their work or an old traditional IRA plan, you know, that's tax deferred. Once you bring that in house and put that under that solo for a while K umbrella. The cool thing is, as long as the plan is set up correctly, you can do what's known as an in plan conversion, meaning money that's now in the plan that's tax deferred. Let's convert it. And now we convert it to a Roth. And so I don't know that most people are aware of that as a possibility. But you can do it and it's basically an unplanned conversion from within that 401k plan. And because the contribution limits are higher number one, and because that 401k plan can accept monies from other other retirement plans, it opens the door to be able to do that, and as long as you can afford the taxes, it's just a thought. It's something to think about.

Taylor   19:45  

Okay, so there's no there's no way to do this Roth conversion and not take that as a taxable event as a regular income or is there any way to to do that? And still defer their costs. I guess that's what we talked about at the front of the show is basically having a loss somewhere else, and then counting their income against that loss.

Chris Tanner  20:11  

Yep. So, yeah, you're gonna have to count that income, at least if you're doing it the right way with Uncle Sam. Now you can always

Taylor   20:20  

we're not saying anybody should do with the wrong way with Uncle Sam

Chris Tanner  20:23  

know for sure not, you know, you can hope you don't get audited, but I don't recommend that at all. But that's where you want to just be creative, I would say is the timing of it. So if you have a loss that you're offsetting, and that income is going to be offset with a loss somewhere. You know, that's, that's a possibility, or if your income happens to be lower, but just some creative ways to use those accounts.

Taylor   20:48  

Okay. And do any of these. I've heard people talk before about your speaking of audits, speaking, the effort to talk about the audit risk and some of these accounts. I don't know which ones can increase your audit risk or increase the odds that the IRS is going to say, let's take a little deeper look at this guy. And Can any of these do that? Like what's going on there?

Chris Tanner  21:16  

Yeah, that's a great question. And we actually get that question quite a bit as an IRA custodian. And so first of all, Taylor, I just want you to know that the IRS, they probably have a playbook. But I don't know if they've shared it with you. I certainly haven't shared it with us. So we're sort of, we're sort of guessing, to be very honest, but I will give you a little bit of insight. And I'll talk a little bit about the different kinds of plans. And what we found. Let's start with the solo for one case. And the reason I'm going to start there is I have a little bit of background and knowledge in this area that I guess would be unusual. I used to know and work with an accountant Who at one time was an auditor for the IRS and she actually audited the 5500. It's a tax return that businesses do that have 401k plans and solo 401k is a similar return. And what she told me was, as you can imagine, there's so many businesses in the United States that they kind of break businesses down by size. And in general, businesses that have 100 employees or more. Those were the businesses that tended to be audited. And the reason they're doing audits on bigger businesses is part of the reason for these audits is they want to protect the employees and make sure that there's nothing going on. That's, you know, creating risk or, you know, their employees aren't being treated fairly. So what she told me was that audits below that threshold were really, really unusual. And usually they would only come about as a result of fraud or something that was reported to them. But in terms of it didn't make sense to them because they're understaffed, quite frankly. And it didn't make a lot of sense to go after a little one person plan. And the idea being, you know, Taylor, if you set one of these up, you're a one person business. So from their mindset, you're not, you don't have any employees that could potentially be affected. You know, if you are, it's just you. So I'm not saying you couldn't get audited, but the audit risk seems to be a lot lower with those kinds of plans for those kinds of reasons. So yeah, so in the IRA world, there's not a lot of rhyme or reason to why an audit happens, but what we tend to find is that these audits, a lot of times, there's something else going on, that triggers the audit, and it might be something that happens on the personal side. So we've acted without being specific. We've had clients who they were audited on the personal side. And then when the auditor began to dig a little and said, Oh, now wait a minute, you got this self directed IRA. And it looks like you bought a house with it. This title looks kind of funny, and then all of a sudden they start digging. And then that's when those kinds of so it can be an expanded audit, where if they find something they want to dig further. The other thing that I would tell you is, and so I don't think there's a rhyme or reason to that. Some of it is just bad luck, like your number got pulled. And some of it is something else that triggered the audit. So some things that and this comes from an attorney that works in this arena, his name is john higher, and if you're not familiar with him, you may want to look him up and he might be someone that might be worth taking a look at for your podcast. Sounds like but he said, Yeah, he said, if there's a really enormous jump in the value of the IRA like you have a $20,000 IRA and 19 or 2019. And in 2020, it's worth 200,000. You know, there's a really, really big jump back that can cause them to go wonder what happened here. So that could be something that goes on. The other thing that happened, and we don't know if this is an increase in audit risk, but there is a product known as a checkbook IRA.

And on the form or the return, it's not a return, but there's something called a 5498 that as a custodian, we have to supply this to the IRS every year. Basically what it is, it's like, Hey, here's Taylor's IRA plan, here's what it's worth. But there's interestingly, there's a question on there that says, Does your IRA own an LLC? And so the fact and that just came about in 2015, I believe, the fact that it's there makes you wonder, you know, why did the IRS add that because prior to 2015, it wasn't on there. JOHN higher says that the IRS could have used those as low hanging fruit, that they think there's a higher likelihood from from their side of the fence that they could find something going on that's prohibited in one of those because there's no custodian looking over their shoulder. That doesn't mean the audits are more likely to happen. It's just something to be aware of that at least you know that that's anytime there's a checkbox that's a possible flagging system for the IRS.

Taylor   26:36  

Interesting. Okay, so how does that play with? So if I invest in a syndication with my self directed IRA, not a checkbook control IRA, but I invest in syndication, so I get membership units have an LLC, or my IRA gets membership units have an LLC, does that still trigger the check box?

Chris Tanner  26:59  

Yeah, that's a great question. And I hate to say this, but I almost have to get back to like, and I don't know if it distinguishes between this is an entity 100% owned like this looks like a checkbook IRA versus like to your point, you know, you're a limited partner in a syndication? I don't know if it distinguishes that level. Good question. Now, let me follow up with you and I'll get you an answer.

Taylor   27:23  

Yeah, I think that would be an interesting question because they need to, if it is maybe a little bit probing for potential audit, oddities audit, ease, whatever. People to audience audit. They're going to run into a lot of people like me who my IRA holds those LLC shares. And I'm not seeing a dime of that, obviously, because that's not what I'm supposed to. But I get what you're saying that that checkbox could be them looking for people that did a checkbook control IRA, and then haven't been judicious in not doing any prohibited transactions in that checkbook control IRA, because it's very easy to break the rules if you're flipping a house and a checkbook control IRA, for example, very easy.

Chris Tanner  28:16  

Sure, yeah. And there's nobody looking over your shoulder because you're just doing whatever you're doing. And so you're kind of taking on that risk that you're going to follow the rules. And, you know, so if you were from the IRS perspective, not that this is the case, necessarily, but they think there's a higher likelihood that they could find something in that sitting or that situation, then with a custodial account, and that's just feedback from, again, an attorney who actually has sat in on these audits and defended people in Tax Court. And so it's his impressions that he's getting from the IRS aside and conversations he's had. So anyway,

Unknown Speaker  28:58  

yeah.

Taylor   29:00  

Alright, so another one I wanted to ask you about is the Safe Harbor 401k. What is that? And who's it for? You know, I? I've heard about it occasionally, and I don't know anything about it. So can you tell us?

Chris Tanner  29:14  

Yeah, yeah, that's a great question actually. And so the 401k is, I think, becoming more and more popular, and you're going to hear them called different things. You might hear it called a solo 401k. You could hear it called a self directed 401k. There are companies that marketed as just the words q Rp. Your P stands for qualified retirement plan. And so I've heard of companies just calling it a QR p or an E qR P. And so there's just different terms. They're all very similar, but a safe harbor is a little bit different in this sense. A solo 401k is intended for a business that does have full time employees. And so the way I think of it is it's an owner only business. So like Taylor, you're a good example. You probably own business entities. And you're the only owner. Yep. And so there are people out there. And so, like, for example, I've had a lot of folks there. They're like dental practice. And so the dentist might be a small practice, but he has full time employees. A solo 401k is not going to work for him because he has employees. So if anyone has full time employees, they're not eligible for a solo 401k. What a safe harbor 401k does is it allows you to self direct the 401k but with a business that actually has employees, and so it's kind of a hybrid between a full blown, corporate 401k plan that like Google might have and a solo 401k what makes a safe harbor 401k a little bit different is the reporting requirements. The word safe harbor means it's a very template, conservative 401k plan. And so there's not a lot of flexibility in terms of matching contributions and things like that. And so what it does is it kind of protects whoever has that safe harbor 401k from a ton of accounting costs for filing these 5500 forms that are mandatory whenever you have employees and your business. So it's a way to self direct and not have so much cost. And so it's a good fit for business owners that have full time employees, but they would like the option or the ability to self direct that 401k so that's the that's those folks.

Taylor   31:54  

Interesting, okay. I've heard that term kind of bounced around and that, you know, there's so many of these things. Like, I can't keep track of

Unknown Speaker  32:03  

just what it is

Chris Tanner  32:04  

sure. Yeah, yeah, absolutely. And it's still, ultimately it can be a self directed 401k. It all has to do with employees. And that's really what it boils down to. Okay,

Taylor   32:18  

yeah, that makes a lot of sense. So right now we're going to take a quick break for our sponsor. All right, Chris, I've got three questions. I asked every guest on the show. Are you ready?

Unknown Speaker  32:31  

Let's go.

Taylor   32:32  

All right, great. The first one, what is the best investment you've ever made?

Chris Tanner  32:39  

So this one was actually a pretty straightforward one, but I happen to invest in tax liens. And I am mostly investing for the interest. There's different ways you can invest. But the long story short is, I invested in a tax lien on a mobile home of all things and you would think, well, that's kind of crazy and whatever. But I invested literally a few hundred dollars like the taxes on this mobile home or a little over $100. And what happened is, is that there's a one year redemption in the in the state I live in, which happens to be Colorado the redemption period is only one year meaning if if they don't redeem, you actually can apply for ownership of the mobile home. So I literally, with all the fees and everything probably invested around $300 ended up owning a mobile home and I turned around and sold it in if I'm being honest, it was the best investment but also a good lesson for about 10,000 Well, the reason it was the best investment was the return on investment. You know, a few hundred dollars turned into about 10,000.

And so I just wish I could have done that about 10 times over

Taylor   33:59  

but that's still Solid investment from a percentage standpoint. So good one on Yeah. On the other side of that, what is the worst investment you've ever made?

Unknown Speaker  34:10  

Yeah, so

Chris Tanner  34:15  

I've been investing, I would say since the mid, like around 2005 2006. And most everything I invest in is real estate. Well, I had an individual who had a business opportunity, we'll just put it at that. So this is a private business, they're looking to raise money. The reason I'm sharing this as my worst investment is, is it was almost a total loss. I put a significant amount of money into a business. And it was a startup. No, no track record, but had all kinds of promise, right. But essentially, I lost almost everything. I think I got like two distributions of in what's called My last like 95%. Okay, like this was brutal. But the reason I wanted to bring this one up, Taylor was because I had no clue. This was out of my specialty. This was out of my arena. I don't know about startup businesses, I didn't even know how to do my due diligence to check on the management like I was so clueless, that I was sold by an individual and the hype, which is called the hype and the excitement. But I didn't really understand what I was investing in. And so if I could lay out my lesson, and maybe that kind of follows up with the next question, it was that, you know, I shouldn't have done investment because I didn't know what the heck I was doing. I got into something I just wasn't. I was clueless on and I paid the price.

Taylor   35:51  

Ouch, ouch. So you lead me cued me up, right? For the last one. What is the most important lesson that you've learned?

Chris Tanner  36:01  

I'm going to actually say this is a two fold lesson. But let's follow up on my worst investment. And and that was, it's easy when you're investing, and to get tied up in the excitement or caught up in the excitement of the investment. And sometimes the excitement is who you know, because this, this was a person I knew personally, and let's say let's just call it a friend. And so that's part of what I think blurred my vision for the investment. And so I just say, Be careful, whether we want to think this is the case or not. A lot of us make decisions based on emotions. And whether we want to think that's the case or not, that's the truth. Yes. And it's, then we need to be able to step back and have an ability to separate our emotions from logic and be able to do that. And so that's one lesson would be you know, You're going to have times when an investment feels right and it feels good and the excitement's there. But don't be afraid to step back and go, okay. Let me really evaluate that. And the other lesson I got from that was, be patient. This happened to be the worst investment situation where there was a deadline. And you may have faced this in your investing career Taylor or other people have been great investments. But we got to have money in like a week, which means you don't have much time to investigate or do anything. And that was kind of the situation here. Like, don't be afraid to pass on something. Be patient, if you need to be and so that would be my advice. My lesson is don't be afraid to be patient. You know, don't let the deadline kill you because there's going to be another investment coming and try and you know, emotions are good. Sometimes to get you excited, but be able to pull yourself back from that.

Taylor   38:05  

Yeah, that's great advice. I think, you know, we can all be. It's that the term irrational exuberance exists for a reason, right? It's something that we're all capable of, you know, being a part of, or getting excited and making a bad decision, because maybe you don't have the time or we're not being objective enough or driven by the numbers enough, or whatever it might be. So it's a great, great lesson. Chris, thank you for joining us today and all the great lessons about retirement accounts and how we can reduce our tax bill. still making good money. If people want to learn more about you and your company, where can they get in touch?

Chris Tanner  38:45  

Yeah, so the name of our company's new direction Trust Company. So I would just encourage people to Google new direction Trust Company, the websites www and it's the initials of the company. So it's ndtco.com like a new direction. Trust Company. And that's honestly the best way to get ahold of us. They can shoot me an email, and my email. [email protected]. Either way works, and we'd be happy to answer any questions that folks have.

Taylor   39:26  

Cool. Well, once again, thank you for all the lessons today. And if anybody missed the links, they'll be in the show notes. But yeah, thanks for joining us and all awesome lessons to everybody out there. Thank you for tuning in. If you're enjoying the show, please leave us a rating and review on iTunes is a very big help. You know anyone that could use a little bit more passive wealth in their lives, please share the show with them and bring them into the fold. I hope you have a great rest of your day and a great week. We'll talk to you in the next episode. Bye