You are correct, Roths are funded with post tax dollars. I hope I didn’t misspeak somewhere above when my fingers were flying on the keyboard.

Roths then grow tax free after that and its my understanding that withdrawals later in life are not taxed. I think there may be minimum ownership time requirement of 5 years before the account is eligible to be withdrawn tax free. But with the time horizon of many investors that shouldn’t too difficult a hurdle to jump.

@Scott – definitely agree with learning from those that have gone before. I would suggest all the things Adrian wrote in his post (trusts was the one I thought of but he named more) were some of the more detailed things we should all be so lucky to have to learn about, you quicker than the rest of us.

Hey Jeff – why couldn’t you buy a professional office building and rent it? Doesn’t have to be owned by one of the professionals. I think Scott was hitting it when he went back to our list of things we’re good at. I believe yours was leading and motivating others. Are there perhaps other things you left off – like physical fitness or being able to handle G-forces without throwing up (can I say that here)? Maybe that would be a good amusement park-like ride you could develop and sell? (Just get good liability insurance.) I throw that out as stimulus for thought, not nec. a serious suggestion.

Those are the multimillion dollar(or billion dollar) questions and those who look to that area the most and tackle it are the one’s who get to living their life’s purpose the fastest.

The more one does that, the less they even think about retirement accounts and safe fall-backs.

“What did the people that I want to be like do?

Did they get ‘rich’ on retirement accounts, or did they get rich buying and starting businesses, buying real estate and buying stocks in well-run, under-valued companies? What was their focus?”

I absolutely agree with trying to do that which others have done successfully.

I’m trying to tackle the REI and business stuff as well and am envious of your ready made solution of buying your own practice. Despite all the financial benefits that have come from being in the military, it’s left me a little perplexed about starting/buying a business.

I don’t see myself buying an aircraft carrier and air wing anytime soon.

I’m struggling with the what should I do/buy dilemma. What do I have to offer?…What do I want to do?…What can I realistically start?…etc.

Who knows what I’ll do retirement account-wise once I get more involved in building a business and deeper into REI. My perspective may change significantly.

I just keep stepping away from the whole picture to get another perspective and all I keep thinking about is;

What did the people that I want to be like do?

Did they get ‘rich’ on retirement accounts, or did they get rich buying and starting businesses, buying real estate and buying stocks in well-run, under-valued companies? What was their focus?

Then I come back to my senses then gear myself up to do what they did.

@ Adrian – I slipped up and you caught me! I’ll hang on to that commercial mortgage as long as I can!

@Adrian – Yes, I did comment on your dividends post. I guess I didn’t express myself clearly. My point was that investing in a stock for the sole sake of receiving a dividend is very similar to buying and renting a real estate property solely because of the tax benefits. In both cases, I think you need to analyze the underlying fundamentals first and base your decisions to buy on those fundamentals.

For stocks, it’s all the good Rule 1 stuff and a value based approach that we’ve discussed before.

For real estate, it’s a property that cash flow’s positively…on its own, not because you get to deduct expenses and depreciate the property.

If you find a stock or a property that measures up under that analysis…then a dividend (for a stock) or the tax benefits (for the real estate) are icing on the cake.

I don’t believe that either dividend or the tax benefits are the primary reason to decide to buy a stock or a piece of real estate.

From you posts, I thought you felt the same, but maybe I misread your articles.

Adrian, I agree with you on investments…pick the best first, look for tax advantages second, but I think you can do that with the tax-deferred vehicles that are available here in the US. Maybe I’m being a bit thick in this conversation, but aside from the businesses, I haven’t heard us discuss any investments that couldn’t be part of a self-directed IRA.

If you are an investor with a long time horizon, which I have been, which would you prefer to do?

1. Hold that investment in a personal account that was taxed (at 15% or more) each time you bought and sold it.

Or

2. Hold that same investment in a IRA/ROTH IRA/401K/403B etc, which will allow you to buy and sell as you like while deferring the taxes til a later date or in some cases never pay them at all (like a Roth IRA).

I’m sure my choice will not surprise anyone, I’ve been choosing the tax-advantaged approach (option number 2).

The only reasons I can come up with right now to not invest in these types of accounts first is either:

1. The amount you want to invest is greater than the annual contribution limits.

Or

2. You don’t like the age restrictions and early withdrawal penalties that go along with these accounts.

Those are both very valid concerns and certainly reasons to not use typical retirement accounts.

Whew…Scott, I’m sorry for hi-jacking your post. I’m enjoying this conversation greatly and look forward to continuing the dialogue.

Adrian, thanks again for setting up this crucible for us to forge our futures within.