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Should you borrow from your 401k to fund your business? · Earn Your Leisure

• 0:00
  Speaker 1: An illegal alien from Guatemala charged with raping a child
• 0:03
  Speaker 1: in Massachusetts. An MS thirteen gang member from Al Salvador
• 0:07
  Speaker 1: accused of murdering a Texas man of Venezuelan charged with
• 0:11
  Speaker 1: filming and selling child pornography in Michigan. These are just
• 0:15
  Speaker 1: some of the heinous migrant criminals caught because of President
• 0:19
  Speaker 1: Donald J. Trump's leadership. I'm Christy nom the United States
• 0:23
  Speaker 1: Secretary of Homeland Security. Under President Trump, attempted illegal border
• 0:28
  Speaker 1: crossings are at the lowest levels ever recorded, and over
• 0:31
  Speaker 1: one hundred thousand illegal aliens have been arrested. If you
• 0:35
  Speaker 1: are here illegally, your next you will be fined nearly
• 0:39
  Speaker 1: one thousand dollars a day, imprisoned, and deported. You will
• 0:43
  Speaker 1: never return. But if you register using our CBP home
• 0:46
  Speaker 1: app and leave now, you could be allowed to return legally.
• 0:50
  Speaker 1: Do what's right. Leave now. Under President Trump, America's laws,
• 0:55
  Speaker 1: border and families will.
• 0:57
  Speaker 2: Be protected sponsored by the United States Department of Homeland Security.
• 1:00
  Speaker 3: So remember way back when I think you know, first
• 1:02
  Speaker 3: two weeks we talked about Brittany and her jewelry company
• 1:05
  Speaker 3: ABC Jewels. Well, now you know she's gotten her net accounts,
• 1:09
  Speaker 3: she's starting to get some revolving accounts reporting to her
• 1:11
  Speaker 3: business credit reports. But she still needs a bit of money.
• 1:15
  Speaker 3: So she's went to her financial advisor and she wants
• 1:18
  Speaker 3: to have conversation with them about whether or not she
• 1:21
  Speaker 3: can borrow from her four to one K to help
• 1:23
  Speaker 3: continue to fund her business. Now, do you think this
• 1:26
  Speaker 3: is something that she can legally do? Yes?
• 1:28
  Speaker 4: Or no?
• 1:29
  Speaker 3: And why let's go ahead and like the chat up.
• 1:31
  Speaker 3: So she wants to borrow from her four one K
• 1:34
  Speaker 3: to help fund her business. This is something that she
• 1:36
  Speaker 3: can do as an entrepreneur. Okay, got a yes, so
• 1:43
  Speaker 3: far yep, yep. But she will be taxed yep, yep.
• 1:49
  Speaker 3: And we'll talk about that that tax part. Because there's
• 1:51
  Speaker 3: a difference between a taken out a loan from my
• 1:55
  Speaker 3: retirement and withdrawing from my retirement. All right, So the
• 1:59
  Speaker 3: thing that I think is going to be more important
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  Speaker 3: for us to think about a couple of things before
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  Speaker 3: we even think about going this route. First and foremost,
• 2:06
  Speaker 3: loan versus a withdrawal. So a loan you're borrowing against
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  Speaker 3: the money that you're investing in, right, So even though
• 2:12
  Speaker 3: you're taking that money out, it's basically like a secured loan. Right,
• 2:15
  Speaker 3: you're taking that loan out against your money that's already reporting.
• 2:19
  Speaker 3: And the good thing about borrowing taking out a loan
• 2:22
  Speaker 3: against your four one K is that you'll still be
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  Speaker 3: getting that interest even though you'll be paying it back, right.
• 2:27
  Speaker 3: But the difference between that and a withdrawal is once
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  Speaker 3: you withdraw something, and if you're under the age of sixty,
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  Speaker 3: you'll be hit with you know, tax penalties the ten
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  Speaker 3: percent federal and then depending on the state, they might
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  Speaker 3: also come hit you with some state tax as well.
• 2:43
  Speaker 3: So whenever you're thinking about your four to one K,
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  Speaker 3: go for loans over withdraws, make withdrawals kind of like
• 2:50
  Speaker 3: that last lash resort, Like this is the only funding
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  Speaker 3: source to have access to, and it's some money that
• 2:55
  Speaker 3: I have, and I'm okay with getting that ten percent
• 2:58
  Speaker 3: penalty against it if I'm below sixty. But you know,
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  Speaker 3: the kind of stipulation with loans that we often don't
• 3:04
  Speaker 3: think about is you can only borrow. You can only
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  Speaker 3: take out loans of those four one a K accounts
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  Speaker 3: for employers that you're actively with. So again like it
• 3:15
  Speaker 3: unless you are with that employee right now, nine times
• 3:19
  Speaker 3: out of ten, like that uh, four one K account
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  Speaker 3: won't let you borrow against it because you're no longer
• 3:25
  Speaker 3: working with them. They will give you the option to withdraw,
• 3:28
  Speaker 3: which you know, every you can do from every four
• 3:31
  Speaker 3: one four one K account that you have. But again,
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  Speaker 3: like I would try to, like if you could roll
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  Speaker 3: over all of those into that active method of employment
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  Speaker 3: that you have, because then that total amount will be
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  Speaker 3: rolled over into that one account and you'll be able
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  Speaker 3: to borrow from that as opposed to you know, only
• 3:48
  Speaker 3: having withdraw restrictions if it's sitting on their old accounts.
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  Speaker 3: So something definitely to think about in terms of, you know,
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  Speaker 3: overall consideration for your person as well as your business
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  Speaker 3: because when you're talking about yourefore when when you have
• 4:02
  Speaker 3: like multiple accounts, you kind of want to see whether
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  Speaker 3: or not you want to roll them over into one
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  Speaker 3: or you know, maybe roll them over into IRA, which
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  Speaker 3: is another place that you know can be a place
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  Speaker 3: so you can get some money and kind of think about.
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  Speaker 3: But in general, four one K is a great resource
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  Speaker 3: that I want us to keep in mind ifever we
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  Speaker 3: need to. But just understand the stipulations based on where
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  Speaker 3: you are in your personal like employment journey and how
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  Speaker 3: that might work out with taking this up as a source.
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  Speaker 3: All right, So some other kind of forms that you
• 4:35
  Speaker 3: know are out there and will be a bit dependent
• 4:38
  Speaker 3: on where we are in our journey, and I think
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  Speaker 3: will become much more sufficient as we kind of get
• 4:43
  Speaker 3: you know, more months and years under our belts in
• 4:46
  Speaker 3: terms of our over our business. So equipment financing I
• 4:48
  Speaker 3: think is a great place one because it provides an
• 4:51
  Speaker 3: opportunity to add installment type accounts, you know, largely because
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  Speaker 3: that's a lot of the equipment that you would be
• 4:58
  Speaker 3: leasing across Indus trees would be on like that, that
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  Speaker 3: installment kind of like method. So that would be a great,
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  Speaker 3: great space one because even though you are taking money
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  Speaker 3: out or borrowing money to get this, the kind of
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  Speaker 3: what you recoup in terms of actually needing that equipment
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  Speaker 3: to conduct your business, to maybe automate some processes or
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  Speaker 3: whatever that equipment means to you your particular business and
• 5:22
  Speaker 3: the niche that you operate in. Having that is something
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  Speaker 3: that could boost those profits. That will not only repay
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  Speaker 3: whatever monthly installment you have to pay against the equipment,
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  Speaker 3: but it also help you bring in profit as well. Right,
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  Speaker 3: So with equipment financing, think about not just the amount
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  Speaker 3: of money that you're going to have to put out,
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  Speaker 3: but how much more money will be will you be
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  Speaker 3: able to bring in simply because you have that equipment,
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  Speaker 3: or you know, an equipment doesn't have to be like physical.
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  Speaker 2: Right, Ernest, What's up?
• 5:50
  Speaker 5: You ever walk into a small business and everything just
• 5:52
  Speaker 5: works like the checkout is fast, the receipts are digital,
• 5:56
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• 5:59
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• 6:03
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• 6:06
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• 6:09
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• 6:11
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• 6:15
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• 6:19
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• 6:23
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• 6:26
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• 6:29
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• 6:35
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• 6:39
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• 6:44
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• 6:52
  Speaker 5: can keep pushing your vision forward. This episode is brought
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• 7:39
  Speaker 1: An illegal alien from Guatemala charged with raping a child
• 7:43
  Speaker 1: in Massachusetts. An MS thirteen gang member from El Salvador
• 7:47
  Speaker 1: accused of murdering a Texas. Man of Venezuelan charged with
• 7:51
  Speaker 1: filming and selling child pornography in Michigan. These are just
• 7:55
  Speaker 1: some of the heinous migrant criminals caught because of President
• 7:59
  Speaker 1: Donald J.
• 7:59
  Speaker 2: Trum leadership.
• 8:01
  Speaker 1: I'm Christy Noman, the United States Secretary of Homeland Security.
• 8:05
  Speaker 1: Under President Trump, attempted illegal border crossings are at the
• 8:08
  Speaker 1: lowest levels ever recorded, and over one hundred thousand illegal
• 8:12
  Speaker 1: aliens have been arrested. If you are here illegally, your
• 8:16
  Speaker 1: next you will be fine nearly one thousand dollars a day,
• 8:20
  Speaker 1: imprisoned and deported, you will never return. But if you
• 8:24
  Speaker 1: register using our CBP home app and leave now, you
• 8:27
  Speaker 1: could be allowed to return legally. Do what's right. Leave now.
• 8:32
  Speaker 1: Under President Trump, America's laws, border and families will be protected.
• 8:37
  Speaker 2: Sponsored by the United States Department of Homeland Security.
• 8:39
  Speaker 3: It can also be technology. As we're moving into AI,
• 8:43
  Speaker 3: which I want to talk about a bit more in
• 8:45
  Speaker 3: a bit, But as we're becoming much more technological and
• 8:47
  Speaker 3: the idea of considering what is equipment continues to evolve,
• 8:52
  Speaker 3: don't not factor in technological equipment and how that can
• 8:56
  Speaker 3: also help automate processes and whatever else you need that
• 8:59
  Speaker 3: stuff or to kind of maximize profit to be able
• 9:02
  Speaker 3: to pay back these things on top of whatever else
• 9:04
  Speaker 3: you got coming in the pipe. Free operating calls merchant
• 9:08
  Speaker 3: advances are basically like credit lines against like your credit
• 9:12
  Speaker 3: card transactions, So like in some ways you're building a
• 9:15
  Speaker 3: relationship where like you don't have to pay those those
• 9:20
  Speaker 3: merchant fees out of pocket because of the line of
• 9:22
  Speaker 3: credit that you have installed with it. That's something that
• 9:26
  Speaker 3: I think is to you know, it's very niche dependent
• 9:28
  Speaker 3: and I think you know, it's something to consider only
• 9:31
  Speaker 3: if it would benefit you. Like, yes, building that relationship
• 9:34
  Speaker 3: is good, but in all the other areas that we've
• 9:36
  Speaker 3: been focusing on over the past couple of weeks, like
• 9:39
  Speaker 3: this isn't something that would be necessary, you know, only
• 9:41
  Speaker 3: if it will provide value and it's something that you
• 9:44
  Speaker 3: think will be beneficial in the long run. And lastly,
• 9:48
  Speaker 3: revenue based loans, So based on the revenue that you
• 9:50
  Speaker 3: bring in as a small business owner, you can actually
• 9:53
  Speaker 3: borrow against that in some ways. So this is a
• 9:57
  Speaker 3: good option for like folks who have steady income streams
• 10:00
  Speaker 3: revenue but don't qualify for those traditional loans. So this
• 10:02
  Speaker 3: could be another space for those of us who are
• 10:05
  Speaker 3: working on our personal reports and trying to get things
• 10:07
  Speaker 3: up to date or just you know, in that crazy
• 10:10
  Speaker 3: process of disputing which you know, the personal credit bureaus
• 10:13
  Speaker 3: are becoming much more aware and trying to you know,
• 10:17
  Speaker 3: keep us from what they know we legally should have
• 10:19
  Speaker 3: access to. But think of this as another one of
• 10:22
  Speaker 3: those options if you needed it, you know, in terms
• 10:25
  Speaker 3: of like I think for my folks who are working
• 10:28
  Speaker 3: on their person. So both the four one K element
• 10:31
  Speaker 3: as well as the revenue based a loan, which could
• 10:33
  Speaker 3: be something that you know, if you're already producing revenue,
• 10:35
  Speaker 3: not only is that good to show in terms of
• 10:37
  Speaker 3: your business plan when you're so listening this this this
• 10:40
  Speaker 3: money from those folks, but if they're utilizing your personal
• 10:43
  Speaker 3: report or looking at your DAT to limit ratio, or
• 10:47
  Speaker 3: looking at your history from your personal credit report and
• 10:49
  Speaker 3: saying that maybe they want to not do something right now,
• 10:53
  Speaker 3: having that revenue would allow them to be able to see, well,
• 10:56
  Speaker 3: even though they're working on themselves as a person, their
• 10:58
  Speaker 3: business is bringing in money way that I think that
• 11:01
  Speaker 3: regardless of where they are as a as a consumer,
• 11:05
  Speaker 3: that they could they could do this based on the
• 11:06
  Speaker 3: revenue that I'm seeing. So they'll will want you to
• 11:09
  Speaker 3: kind of like make that loan based on the revenue
• 11:12
  Speaker 3: that they're seeing and what they would consider you be
• 11:15
  Speaker 3: able to continue to bring.
• 11:16
  Speaker 2: In based on that.
• 11:20
  Speaker 3: All right, so kind of moving into just like an
• 11:23
  Speaker 3: overview of class I wanted to remind us of like
• 11:25
  Speaker 3: those twenty compliance elements that we talked about, you know,
• 11:28
  Speaker 3: in the first week we talked about these first nine.
• 11:31
  Speaker 3: So thinking about just setting up our entity as a whole,
• 11:35
  Speaker 3: making sure that our ei in are dons, all of
• 11:38
  Speaker 3: our demographic information like address, phone number, email, website, all
• 11:43
  Speaker 3: that is up to date, and then after all of
• 11:46
  Speaker 3: that is done, you know, making sure that our credit
• 11:48
  Speaker 3: profiles are up with the four agencies, starting to build
• 11:51
  Speaker 3: those those credit histories and our business profiles, starting with
• 11:55
  Speaker 3: those net thirty accounts or those net accounts depending on
• 11:58
  Speaker 3: what the days are, then move into revolving accounts, which
• 12:01
  Speaker 3: will then help us be able to talk about those
• 12:04
  Speaker 3: last three that I just mentioned, so installment accounts, that
• 12:08
  Speaker 3: bank loan or equipment lease. So bank loan is different
• 12:11
  Speaker 3: from that secured loan that we talked about earlier. So
• 12:13
  Speaker 3: these are like those loans that are not you know
• 12:16
  Speaker 3: that that don't have to fall within like being defined
• 12:19
  Speaker 3: as something that's like you have the person guarantee or
• 12:21
  Speaker 3: secure something. And that's also going to be the space
• 12:24
  Speaker 3: where equipment leasing will also come into terms and in
• 12:27
  Speaker 3: total something that we didn't mention, but I think once
• 12:30
  Speaker 3: you kind of look at having seven at least seven
• 12:32
  Speaker 3: and once in on your net side and then at
• 12:35
  Speaker 3: least five and you're evolving side, trying to have at
• 12:37
  Speaker 3: least a total of fifteen like across all four of
• 12:40
  Speaker 3: your agencies is ideal. Excuse me, because that's going to
• 12:45
  Speaker 3: be what is supporting supportive in maximizing your opportunity to
• 12:49
  Speaker 3: get not just money itself, but larger amounts in terms
• 12:53
  Speaker 3: of the credit that they'll be able to give to you.
• 12:55
  Speaker 3: And of course I don't like I'm gonna I'm gonna
• 12:57
  Speaker 3: move that next time, but like making sure that you're
• 13:00
  Speaker 3: business place is up to date and compliant and showing
• 13:04
  Speaker 3: not just your your market analysis, which is going to
• 13:07
  Speaker 3: be an important space that most people will start at,
• 13:09
  Speaker 3: but like your revenue projections because they want to know, one,
• 13:12
  Speaker 3: do you know the industry that you're trying to penetrate into?
• 13:15
  Speaker 3: What profit do you see yourself being able to accumulate
• 13:18
  Speaker 3: based on your knowledge of being unique in a lot
• 13:22
  Speaker 3: of these markets that are like oversht What I shouldn't
• 13:25
  Speaker 3: say oversaturated but have a lot of competition.
• 13:27
  Speaker 1: An illegal alien from Guatemala charged with raping a child
• 13:31
  Speaker 1: in Massachusetts. An MS thirteen gang member from Al Salvador
• 13:35
  Speaker 1: accused of murdering a Texas man of Venezuelan charged with
• 13:39
  Speaker 1: filming and selling child pornography in Michigan. These are just
• 13:43
  Speaker 1: some of the heinous migrant criminals caught because of President
• 13:47
  Speaker 1: Donald J. Trump's leadership. I'm Christine Noman, the United States
• 13:50
  Speaker 1: Secretary of Homeland Security. Under President Trump, attempted illegal border
• 13:55
  Speaker 1: crossings are at the lowest levels ever recorded, and over
• 13:59
  Speaker 1: one hundred thousand and illegal aliens have been arrested. If
• 14:02
  Speaker 1: you are here illegally, your next you will be fine
• 14:06
  Speaker 1: nearly one thousand dollars a day, imprisoned and deported. You
• 14:10
  Speaker 1: will never return. But if you register using our CBP
• 14:13
  Speaker 1: home app and leave now, you could be allowed to
• 14:16
  Speaker 1: return legally. Do what's right, leave now. Under President Trump,
• 14:21
  Speaker 1: America's laws, border and families will be protected.
• 14:25
  Speaker 2: Sponsored by the United States Department of Homeland Security,