Episode 62: Self Directed Retirement Accounts are Changing with Damion Lupo

Ben Lakoff, CFA
February 7, 2022
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Today’s interview is with Damion Lupo.

Most of our listeners will know what a 401K and IRA are. If you’re interested in alternative investments, you’ve likely been frustrated that they’re hard to own in a retirement account. Maybe this led you to a self-directed IRA.  

Well, Congress has proposed changes to the laws governing IRAs as part of their $3.5 trillion reconciliation package. In its current form, their proposal would prohibit IRAs from investing in most alternative assets. All accounts holding these assets would need to liquidate them by the end of 2023.  These changes, if enacted into law, would have a direct negative impact on your ability to self-direct your IRA!  

Damion goes over what’s changing and some potential moves you can make to keep investing in alternative investments in your retirement account.  

Damion Lupo on Retirement accounts, Enjoy!

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Show Notes

0:00:00 Welcome and context

0:03:07 What is your background?

0:05:36 Not being afraid of failure

0:09:25 How are you helping people to open up their eyes?

0:14:30 What is a self-directed IRA?

0:16:41 Where is this reconciliation package going?

0:20:04 What can people do to block this bill?

0:22:30 What should you do with your non publicly traded assets?

0:27:25 What are the concerns for people that look to do this?

0:30:00 How were people using the mega back door?

0:32:10 Have you thought of other potential honeypots?

0:40:01 Where can people find out more about you?

Show Links

Reinvented Life

The QRP Book

Damion’s website

Follow Damion on Twitter

Episode Transcript

[00:00:00] Ben: Welcome to the alt asset allocation podcast, exploring alternative investment opportunities available to the everyday investor. Here’s your host Ben Lakoff.

Hello and welcome to the Alta asset allocation podcast. Today’s interview is with Damian Lupo. Most of our listeners know what a 401k and an IRA.

If you’re interested in alternative investments, you’ve likely been frustrated that they’re hard to own in a retirement account like 401k or an IRA. Maybe this has led you to look down the path of self-directed IRAs. Congress has proposed changes to laws, governing IRAs as part of their $3.5 trillion reconciliation package.

In its current form, which likely will pass their proposal would prohibit IRAs from investing in most alternative assets, all accounts owning these assets would need to liquidate by the end of 2023. Massive changes. These changes if enacted into law. And again, it’s looking like this will be the way this would have a direct negative impact on your ability to self-direct your.

I normally try not to be too topical and stick to longer-term themes with this podcast. This is still there. This is part of the bigger macro theme of getting more taxes in the government’s coffers. Eliminating your choices with self-directed IRAs. This is no different. Damien goes into what’s changing and some potential moves you can make to keep investing in alternative investments in these retirement accounts.

A reminder that nothing in this podcast is financial advice and is meant to get you started scratching your head about some other options and not to be the sole source of truth with your decision-making progress. Do your own research before you listen, please don’t forget to like us subscribe to the podcast or even better leave a review.

If you’re watching this on YouTube, please like the video and or subscribe to the channel. This stuff really, really helps. Okay. Damion, Lupo on retirement accounts. Enjoy!

Damian. Welcome to the show. Excited to have you on

[00:02:16] Damion: today. Yeah, Ben. Good to be here, man.

[00:02:20] Ben: Likewise hopefully everything down at Birmingham drags out.

We’re just saying there’s a once in 200 year storm that just happened. You’ve got rivers all over the place, riding your rowboat to the grocery and things like that.

[00:02:33] Damion: They’re everybody’s growing gills out here. We had one of the guys. Did you get a picture of his truck? And it was literally like five feet sideways in off of his driveway.

So it’s just kind of interesting when you wake up and you realize sometimes how little power you have, and you have to assess what you have control of. I think that this was a good reminder of that. There’s a lot of things that we complain about that we can’t control. And then there are things that we can control and it requires us taking action.

Like you can’t stop. But you can prepare for the rain. And that probably has a little bit to do with what’s coming just in the economy and finance and investing, being really prepared for it so that you’re not freaking out when the rain comes, that’s a bad time to start.

[00:03:09] Ben: Yeah, it’s very true. It’s a very stoic way of thinking about things, right?

Like all of these externalities, you can’t really control, but you can control your preparation and reaction to them. Definitely agree with those. Excited to talk about a number of very interesting things for my audience, but before we get started, wanted to hear a little bit more about you and your background, where you’re coming from.

[00:03:31] Damion: So it’s sort of a crazy, like somebody asked me where you’re from and I said, I’m from everywhere. It’s like a military background. I grew up in Alaska. But I’ve, I’ve lived all over the place with projects and businesses started more than 50 companies and, and done a lot of, I used to there I’ve been out there in the real world.

It’s not an academic experience where I’m teaching from a book teaching from scar tissue and baldness. And my background is basically just going out there and doing and trying. And so I did the opposite of what they teach in school. I just, I said, okay, well, I’m going to go do this. And then I learned that I’m going to be wrong most of the time.

And, and instead of saying, well, I need to be right, 70 or 80% of the time to pass through this thing. I just went out there and I stopped caring whether I was going to be wrong because I knew I was going to be wrong. And in business ended besting, that’s been a really beneficial thing. The only problem is if you don’t have any sense of anything, because you’re too young and too dumb or just too.

They’re like my, my story. When I started out, I spent about five, six years building up, going from zero to a $20 million portfolio. And I thought I am Superman, man. I am 10 feet tall, Bulletproof and everything is good. And the 2008 showed me that I was mortal, went from 20 million to negative five and 12 months.

It gives you a lot of perspective when everything is taken away and you go wait a second. And then one of the funniest parts was, was saying, okay, well, this is my dumb partner’s fault. This was Obama’s fault. It was bushes fault. It was, you know, the federal reserve, everybody else’s fault. Th the biggest shift there was, was shifting to a place of responsibility and saying, no, this is a hundred percent my fault.

And here’s how I can shift me and do much better next time. And so that, that was, I mean, the story goes really from victim to Victor through responsibility. And I think that that’s the big takeaway from that whole thing. It took $25 million passing through my fingers to understand that responsibility is how.

[00:05:19] Ben: Yeah. Well, hopefully some of the listeners can learn a little bit from these, and I know that that that’s part of your mission is spreading that knowledge. Other people don’t have to experience the loss of a significant sum of money like that. I’m curious, this learned by doing, not being afraid to fail, like swinging big.

What do you have you thought deeply about like, why. You ended up like this, something in childhood that influenced you, parents influence what does it, do you suppose that made you think like this?

[00:05:50] Damion: I think part of it was, and so it’s interesting growing up cause I have siblings and none of us are the same.

Like I’m very much the outlier. And so we all had the same type of growing up or we were told no. Be safe. Stay inside. Don’t go out. I mean, in an Alaska, you go outside, you can be eaten. Like I remember walking home and there were bears that were out there. My dad was out there with a shotgun and I didn’t know, I just walked through so I could be eaten on the way home.

Literally not a thing. Most people have to worry about being eaten by something, but I did. And, and so part of the being told no, and our system tells us know a lot, don’t do this. Don’t do. And it’s, it’s generally trying to contain us to keep us organized for a system. And I just got, I pushed out of that.

A lot of people stay caged in, they get broken. When you break a horse, he break the horse and part of the spirit dies. And I think a lot of people unfortunately have their spirit broke and then they just become a cog. And for whatever reason, I got so mad at being told no that it, it pushed me. It made me lurch and go out with this ferocious need to win.

And part of winning was proving that they were wrong. Like they, the system, my parents. And so I it’s interesting because I don’t know if you, if it’s better to tell a child that yes, you can do anything or to tell him no, you’re terrible. And then you make them push through. For me, I pushed through it and it was, it was really proving after dropping out of college.

It was, it was proving something because I felt like people were judging me. Why aren’t you going? Why aren’t you staying in college? You’re you’re basically a loser. You’re not, you don’t have a job. And, and so part of this was, was the significance. It’s one of those basic human needs that Tony Robbins talked about.

That’s where I heard about it first years ago. And it was the need for significance. Like I need to show people that I’m significant. And then now it’s about the contribution and, and so I’ve shifted from the ego of significance to the giving of contribution. Yeah. There’s a deeper fulfillment with a contribution.

Then there a significant significance is never enough. It’s like you get one for our, you need five to showcase that you have a newer one, a faster one, a greener one, or brighter, one same thing with everything else in your life. So I, there there is a shift and part of it takes everything being lost. And I don’t know that I would necessarily say that people should lose everything.

But we shouldn’t be afraid of losing because when we think of everything, we tend to get wound up in the stuff. Instead of understanding that when we still have relationships, assuming you haven’t blown those up, which I’m familiar with doing that to the relationships and your health. And, and the stuff that people go, that’s very, very easy to talk about, but I need to figure out how to feed myself.

And I’m like, yeah, in America we get way too wound up in the stuff and the money. And, and we go, why is it not fulfilling? I’ve got all this success. And the problem is they’re very different. And we tend to spend so much time on success that we miss the whole point of life, which is the fulfillment of being alone.

[00:08:38] Ben: Yeah, a hundred percent. Hedonistic treadmill of a more bigger, faster, and then it kind of reverting to the new norm. It’s interesting. I’ve spent the majority of the last decade outside the U S by more entrepreneurial minded people. And it’s funny to come back. I’m in LA the narcissistic capital of the world, but like the amount of.

Yeah. People just sleepwalking through life and just accepting their role as a cog in the wheel. And not thinking that there’s another path or another way of like living this a blank canvas that is life and going towards something a little bit more fulfilling. That really resonates a lot.

What you’re doing now, I mean, why, how are you kind of helping people kind of open up their eyes to these other possibilities? Or where do you point them? Like, what’s your process for kind of chaperoning people to this new possibility and opening up their eyes a bit?

[00:09:35] Damion: Well, I mean, part of it, it starts with this a little bit of a shake, you know, like shaking people loose and, and to your point, I used to many times I’ll call myself the, the hedonistic cricky would have.

To have met 15 years ago. I wouldn’t want to have met me 15 years ago. It took this whole process of re-inventing, which I wrote a book called reinvented life, which was basically a manual to me not to do the same dumb crap I did for 10 years. And, and so after that, after that process of losing and starting over.

There something popped out and that was this mission to help people break their shackles. Because I look at money today as modern day slavery, when I’ve been outside of the U S that longest I went was about seven weeks. And I remember coming back and that, there’s something interesting. I think after about a month, you start to break your like vacation mindset and you start to be, it becomes normalized.

And then you go back to the United States. You’re like, oh my God, it’s just consumer mania. And there’s just this totally different focus on what’s about. So on the other side of this, this meltdown, I mean, I spent some time traveling a bit, went to Fiji and things. And, and what I did is I studied and went deeply inside and I found that there was a need for me to teach and help people break out of their, their bondage.

And I watched my parents, both of them play by the rules and the school system in the military and retire broke. And then basically my dad. Run running out of money. And, and so I just watched this whole process and I said, there’s gotta be something that is better. That’s that’s truer. Like this seems dishonest.

And so what I’ve found is that most people are playing by the rules. They’re building up this idea of a retirement playing by the wall street rules and, and they’re getting screwed and they just don’t even realize what’s happening. Because the system just feeds on us. It’s like the matrix or Facebook, whatever you want to, you know, you want to look at it.

We are the product and wall street is, is the, the eater. They, they eat on us. So I, I started looking at everything that’s out there. What are people doing? How are they prepping? How are they building a foundation? Is it quick sand? Or is it sand? Or is it rock or you’re like, what is it? And what I found is most people are, are building assets based on paper, smoke and mirrors, and that’s that’s wall street, that’s mutual funds.

What, I’ve, what I realized. Th that there’s no real financial freedom. I’ll give you an example. I had some people come to me about seven years ago and they said, we heard that you’re great with money. And I said, I don’t really know what that means. They said, we want you to help us. And I said, okay, what do you want me to do?

And they said, well, we don’t know what to do. We have $2 million. We’re 50, 50, 2, 53 years old. We have no idea. We just don’t want. And they knew they didn’t have time to get, to spend another 30 years building it up. They really kind of accidentally ended up with it, which is what most people have with 401ks.

They just accidentally have a million or 2 million because they were contributing, but they never had to learn. And they never built a muscle. They just looked at the gym. They never went inside. So I realized that people need, like, when we talk about alternative assets, you have to start understanding some stuff like you can’t just buy real estate.

Generally, you’ve got to figure a little bit out. Like you’ve got to understand what you’re buying. If you’re going to buy gold and silver, you got to understand a little bit. If you’re gonna buy crypto, which everybody should be buying crypto. And I very rarely say you should do anything, but our entire financial system is changing.

The entire monetary system is going to be changing this decade, guaranteed. That’s where we’re going. It’s exponentially shifts. And, and so you have to start being engaging. Otherwise you’re always going to be afraid. You’re all. I don’t care if you have a million or two or five or 10, you’re always going to be afraid of losing it, just like my parents were and these people were so the, the shift.

That I made was to give people power and control over their retirement money. It was, it was to say there is an alternative where you can actually control it. You can take your 401k is your IRAs can take that money without paying taxes. Without paying penalties. You can start investing in real estate. In gold in Bitcoin, in private placements.

And there’s a better way. And just what you’re told is the only way. And that’s, that’s really been the shift for the last decade is giving people control and true possibility so that their life is not by default. It’s actually by design. That’s what. Yeah.

[00:13:34] Ben: So the default way is go get a job at a big corporation, have a 401k, have the matching, do my traditional or Roth IRA put 6,000 bucks in a month on the side.

And then it, which is invested through a brokerage. I have access to publicly traded equities and do this until you’re 60 years old. And then look how much you have inside and hope to God. It, it lasts you until you pass away. Is that kind of, is that pretty accurate?

[00:14:02] Damion: Yeah. Literally, the people have hope as their strategy.

That’s exactly what people have been doing is

[00:14:06] Ben: definitely not a strategy. Well, it is for a lot of people, but it should not be a strategy, I guess, or it’s not a viable strategy, I suppose. Okay. The idea of self-directed IRAs, I think I’ve talked about this on my podcast before, but just for my listeners to go over what that is, give me an overview of what a self-directed IRA.

Is what it can hold and what it cannot pull currently based on the current laws. And we’ll get into the potential changes.

[00:14:34] Damion: So, but so basically they’re just, so we’re really clear that there’s two main things. There’s qualified plans like 401ks and four 50 sevens and things. And then, and then there are IRAs.

These are the two main things that people use as their tax shelters. Our tax code is built for people to incentivize people and stoke, most people start with a 401k or a company plan or a thrift savings plan with the federal government or something. And then when they leave, they’ll move that money typically into an IRA.

Sometimes it’s self-directed IRA, but they’ll put it into an IRA. You can also set up an IRA and you can just put your 6,000 bucks a year into it or seven, if you’re over 50. So basically we have one of these two things and people have been using this self directed IRA, basically because they were told by the marketing machine of IRA, custodians that, Hey, this is how you can invest in alternative assets.

You can control, you can buy your own stocks. You can choose, you could even do some real estate or some crypto. And so people have been going down that path and that was the best information they had because it was either that, or they just went back to wall street and had mutual funds with their old 401k.

That is not the best information anymore. It’s it’s what people have done. And I did it, I mean, 15 years ago. That’s what, that’s what I had a self-directed IRA because I didn’t know any better. And I didn’t know any better because I was following mainstream information. The narratives out of. Big institutions that want to keep your money in their systems so they can charge you fees.

So if you follow the money, you can learn a lot about finance and pharma and medicine and everything else. Just look where the money is flowing and you realize, oh, that’s what’s going on. That’s the agenda. So that’s, that’s what people have been doing over the years is, is defaulting into a self-directed IRA where you can start choosing some of the stuff, at least kind of choosing with a custodian, a babysitter.


[00:16:09] Ben: Well, I think over the last, I don’t know, a couple of years or whatever Peter teal has been getting a lot of heat because he had $2,000 in his Roth IRA, which is post-tax income grows, tax free. And. 59 and a half. He had a value of $2,000 of it in his Roth IRA and 1999. And now he has over $5 billion in this IRA that he will pull out when he’s 60 years old and gonna pay any taxes on it because it was post tax income on that $2,000 long ago.

There has been this reconciliation package that’s going through. That’s talking about kind of going after these. Self-directed kind of alternative. Retirement accounts. Can you talk briefly on what’s going on and where this might be going?

[00:16:59] Damion: Yeah, I can tell you definitely where it’s going.

This is there’s an attack on wealth it’s we don’t have Democrats and Republicans. We have haves and have nots. And when we have people that have, that are trying to pretend that they’re protecting the have nots, and what they’re doing is they’re actually ending up protecting the wealthy. So imperier Teal’s case.

It’s really interesting because he’s got the Roth IRA with five. Part of this reconciliation bill, which gives Congress the ability to pass all their budgetary stuff on a, on a straight majority vote, which you need to do with the us Senate being 50 50, they can’t do anything that requires 60 votes with the filibuster.

So they use this process to be able to pass. Initiatives like the Trump tax cuts and different things were used. They were passed using reconciliation. Whether they’re saying some part of their rules that they’re proposing, that we believe will be passed. They came out of house ways. It means one of them was if you have over $20 million in a.

You’ve got to take or, or any type of defined contribution, like a 401k. If you’ve got 20 million and you make over $400,000, that’s a Biden thing. If you make less than 400, you’re not being touched. If you make over 400,000 and you have over 20 million, you’ve got to distribute or disperse everything over 20 million.

The following year. So theoretically, this would be the Peter teal would have to take 4 billion, $980 million out of his retirement account before age 59 and a half pay, 10% penalties end cap and gains. Like it would be a mess. And I laughed because the way this is written, Ben it’s, it literally won’t even impact him because all he’s going to do is say, okay, I’m not going to make $400,000 in adjusted, gross income.

So Congress does these crazy things and people like P people like Peter have incredibly smart and. He’s already pretty damn smart, but wealthy people have advisors. They’re like, okay, well, how do we need to shift? Like I was working with Tom. I had a, an event a couple of weeks ago, and he said, this is going to pass.

And it was, he almost kind of like was laughing about it going, this is going to pass and it’s not going to impact anybody they’re trying to impact, but it is going to impact people that went out and did self directed, IRA investing. And they invested in real estate and syndications and all those checkbook IRAs that have LLCs.

All of those are being banned. Not only are they being banned, but they’re, if you keep it and you have an investment, they will disqualify your entire IRA. So that’s the terrible news because people are saying, well, shoot, what do I do? I’ve got a deal. That’s locked up for three or four years. What am I supposed to do?

So there’s ways that we can move out of that. I mean, that’s what we do with , but for a lot of people there, they don’t even realize this is happening. They’re just sitting there going, oh, okay. You know, it’s Congress for yelling at each other. But the reality is this is the biggest overhaul with the retirement system in probably two generations, since it is even.

[00:19:39] Ben: These single member LLCs are the way that people own Bitcoin or own real estate though. There’s like far reaching. I guess before we jump into some of the other options, what can my listeners do now to try to block this is their call your Senator or anything, or does this even

[00:20:00] Damion: matter at this point, it doesn’t make any difference to it’s such a small.

The way the Congress looks at things they’re looking for honeypots where are they going to get easy money? And the, the national association of planet advisors, Napa has fully endorsed this bill. They said, this is good for everybody. And because they are basically run by wall street, they’re saying this is a great thing.

It doesn’t really matter if, if you know, Joe and Susie America called their senators and say, we don’t like this because this is a massive amount of money for infrastructure. And they’re not going to try to protect Peterson. Even a computer dealer isn’t even going to be hit, but they’re not going to change the bill and lose tens of billions of dollars in rent.

So that somebody can make more money in their IRA. They figure that 10 or $20 million is, is plenty. And they also don’t. Here’s one of the problems. One of the reasons that they’re pulling this away, it’s to push money to wall street, and there’s been a lot of scams. So people are investing their money.

They have this chocolate, these checkbook, IRAs, and they’re getting sucked in and losing. I’ve seen a lot of people that have put, been pulled into scams. So I think. That’s the one, the same of protecting

[00:21:05] Ben: investors, right?

[00:21:06] Damion: Foster protection. Thank God. Yeah. I mean, great. That’s like the sec and Gensler saying, oh, we need to protect everybody.

I’m like, you know, what, how about people take responsibility? That’d be awesome. But they don’t think that way. They think everybody is basically incompetent little children. So don’t even get

[00:21:20] Ben: me started on the accreditation for rural.

[00:21:22] Damion: Right. So yeah, that, that blows, I mean, so they’re, they thought this was a good idea.

What can you do? You can, you can prepare for this to come become law. It, even if it didn’t become law, because by some weird reason they pulled it out, it’s in the cross hairs, it’s going to be changed. And so what do you do? Do you wait and just try to hope you get out before now. You just, you shift and that’s, there’s a transfer that you can do between an IRA and a qualified plan.

Like the ERP, you can move your assets. And so that roll over is a non tax non penalized. That takes all of this problem way. And people don’t even realize that they’re just, they’re like, oh, I need to change the law. You don’t need to change the law, just change your asset. And can you walk

[00:22:04] Ben: me through and all the disclaimers, hashtag not time to financial advice, do not tax advice, like talk to your own advisor for or legal.

But high-level what somebody, so for the, for the standard. American person who has money in their 401k or IRA you know, this doesn’t impact them. They’re held in publicly traded markets, but if you have a self-directed IRA or like, what, what are my next moves to help protect this? Or what should I be thinking about right now?

[00:22:36] Damion: So right now it’s, it’s really important and timely to get educated on this there. And so this is you taking initiative. It’s not waiting to see what happens. It’s it’s starting to ballroom. If you’ve got a self-directed IRA and you’re investing in anything other than stocks, this applies to you. And what needs to happen is you just ultimately need to convert.

It’s a, it’s a rollover of an IRA into a qualified plan. So IRAs are built under one part of the tax code called 4 0 8. And all of the, basically the other stuff is under 4 0 1. And so if you move from the 4 0 8 to the 4 0 1, it’s a moving from an IRA to a qualified plan. Specifically, what we do is we build an ERP.

It’s an enhanced qualified. And somebody can move assets. And so, again, like you just said, get your advisors involved. And if you are your advisor with you and Google, you need to hire somebody because this is not something you want to have Google being your, your Yoda. Like, that’s a terrible idea because that’s a dumb Yoda.

That’s like, it’ll tell you whatever you want to hear. It’s like a yes, ma’am you don’t, you don’t want that. You want people to tell you that. So logistically what happens is a qualified, we set up a plan and then we move the asset from the IRA, whether it’s Bitcoin, whether it’s gold, whether it’s a private placement in real estate, that asset gets moved from the IRA into.

The qualified plan. If you have an LLC, you can move the LLC into the plan that LLC is going to be blown up by this tax code change. So you can, it’s a rollover. There is no tax taxable event when you do any of this stuff. And it’s just, it’s a question of timing because there’s going to be some time to do things, but the problem is a lot of times people say, well, there’s no urgency because nothing’s going to happen this week.

And then all of a sudden. When they realized about a time, they don’t have enough time to get it done. So right now is the time to start converting things. There are some things that end in two months, and there are some things at the end of this year, like the mega backdoor Roth is being shut down in 10 weeks.

And then there are certain things where you have a grace period of a couple of years. So it’s important. Like, what we do is we spend our time educating people. We, we spend our time strategizing and talking about options. That’s what people need to be doing, figuring out the options and then thinking through and making decisions and taking action now, not waiting until they get a notice from the IRS.

[00:24:49] Ben: Yeah. Now the the Titanic floated until it didn’t right. And it’s gradually, and then suddenly, so I’m thinking like, I mean, I had an old 401k from an employer that I rolled over, so I essentially switched from 4 0 1. To 4 0 8 when I did that. So this is just rolling it back from 4 0 8, which is the IRA equivalent into 4 0 1.

And then it’s shielded. It’s still, there’s no tax impact. It’s just a paper movement, I guess, but I mean, would you be dissolving the LLC? And then those assets would be transferred over to this new qualifying account or how would that work?

[00:25:30] Damion: So here there’s two options. Basically. You’ve got an IRA that has assets from the custodians investing.

We can move. The assets directly from the IRA into the ERP. If you have a checkbook LLC, IRA where, you know, your, your IRA bought in an LLC and then your LLC is the investor, we D we simply move the LLC over. So your assets are still going to be in the LLC. It’s actually a fairly straightforward move. We just moved the whole LLC over.

And, and this works pretty you’re by yourself. A dozen or 50 employees. It’s, that’s the unique thing. The QRP is set up to be dynamic. So a lot of people get stuck and like, well, you know, I’ve got, I’ve got a couple of employees or something. This actually works. And it’s the only one of its kind in America that works like that.

So really important. You don’t, it’s not necessarily brain damage, unless I’ll tell you what’s brain damage. Then when you get a tax bill for a hundred thousand bucks, you weren’t expecting, and I’ve seen that happen over and over. Cause people. Well, my advisor and I’m like, your advisor doesn’t know this because they don’t specialize in this.

You need a team of people that specialize in generalized. You need people that see everything and people that see this one narrow thing really deeply. And unfortunately, most people have one or the other, or none. All they have is Google, which I just constantly go. Google is not your friend. It’ll tell you what you want to hear.

And if you don’t know the right question to ask, how are you going to get any information right.

[00:26:45] Ben: Yeah, well, and hopefully people are, are doing their own due diligence. Things like this will open their eyes to it. That’s for sure. But it’s certainly not enough to make a decision and it’s just kind of to get the ball rolling and start thinking, Hey, maybe this is something I should take initiative for and dig into a little bit more deeply.

You roll this thing over into a qualified. You QRP your company will do this. What are the ongoing costs or concerns or potential landmines that people should be familiar with or think about when doing something like this?

[00:27:21] Damion: So I’m going, costs are flat. It’s very different than most things that you don’t get nickeled and dimed, and you don’t pay a percentage of assets.

It’s 500 bucks a year. So it’s, and that’s fixed. Indefinitely. So that covers everything. It covers all your filings covers your fed filings, your state filings, your LLC filings. He covers all your compliance, which we do. It covers all the supports. What it’s actually funny because when people realize everything that’s going on, they go, that seems like a bargain.

I’m like, I think it’s a fair number. So that’s, that’s what happens landmines, as long as you don’t think, you know everything, because I can tell you from personal experience the day you think, you know, everything you’re about to get rolled on by a big Boulder or something’s going to smash you. So when you, when you are smart enough to ask questions and reach out to your team and you really don’t have landmines, it’s when people say I’ll just not tell anybody and I’ll invest with my parents.

With my retirement account, which is just disqualified. Like when, when people just think that they won’t get caught, that’s usually where people get into trouble. They go off and do things without bringing in the team and saying, Hey, here’s what I’m doing. Am I good? And we do that every day. We just, people call us and we say, here’s, here’s how you make sure it’s good.

So we keep people in compliance landmines. The only, the only other dumb one is where people say, well, I can just use this money for anything. I’m going to go buy a Ferrari. I mean, I’ve done the Ferrari thing and I didn’t do with a retirement account. If somebody that dumb to go use their retirement account to buy a Ferrari, you’re going to have an event.

Usually it’s ego that gets people into trouble in it’s like Ryan holiday’s book ego is the enemy like, hello, ego. It will get you into more trouble and it’s valuable, but it’s, that’s usually the landmine it’s people’s own ego and it’s their lack of humility. And in bringing on the correct people and people that will tell them that.

[00:28:59] Ben: Yeah, a hundred percent. And I think it’s mark Twain that gets credit for this, but I feel like I say, mark, mark Twain quotes all the time and I’m not sure it is, but it ain’t what you don’t know that gets you into trouble. It’s what, you know, for sure. That just ain’t so, and it’s so true. You kit so much in so much more trouble for those things that you’re.

Pretty sure about, you know and get blindsided that’s for sure. So I wanted to talk on the mega backdoor Roth briefly. So this thing is ending, but what was it and how were people

[00:29:30] Damion: using it? Yeah, there’s actually been some, some wealth strategists there out there that have built up some pretty significant practices where they’re basically saying, give me $20,000 and I will give you this amazing strategy.

Well, it was a goofy strategy that here’s what the strategy was. If you have a qualified plan you’re able to take and contribute up to $58,500. Normally you’d have to have about $180,000 in income and then mega backdoor, basically you structure the plan, the way that we build the plan, we structure it differently so that you’re able to make, earn like 60, $70,000 in income and put pretty much all of it into a Roth account.

And, and that was really interesting because. About 15 to $20,000 in payroll taxes. And it allowed wealthy people to put a ton of money into a Roth when they might’ve been precluded or excluded from doing that. If they made too much income, which is what happens with IRAs. So it’s, it’s a strategy again, you know, I love Congress, how they think it’s like the Patriot act it’s literally is the opposite of patriotic because of all the government growth.

But another story. They think that they’re going to hurt the rich and I’m like, you’re not hurting the rich, you’re just hurting people that are trying to create wealth. So they’re trying to box people in, and this, this was a tool that wealthy people used it, but also people that were trying to create wealth, you know, people that had had a million or two that are not wealthy.

I mean, a million dollars is not wealthy. It’s just a million dollars. Certainly not today. Oh, no, give me a break. It’s like middle-class, if

[00:30:58] Ben: that diamond, depending where you are, shit,

[00:31:00] Damion: it’s LA it’s probably the working homeless. I mean, just crazy. I

[00:31:06] Ben: mean, but I, I think, I think zooming out, like, yeah, I work diving deep into these changes specifically.

IRAs and retirement accounts, but this is part of a general overall theme of the haves and the have-nots and the wealth gap. And, you know, the dollars deflating and asset prices are inflating at beyond. Imagine manageable hides. And this is just furthering the wealth gap. So. W you said earlier that this was one of the honeypots and like kind of the low hanging fruit to go after.

Have you thought about other potential honeypots where this could be going? What people will be looking at next? Because for me, it seems like a lot of these have been used as a ways to grow your wealth over the past years, but like, The wealth has been generated at this point. And the rest of the world is starting to open up to these new things.

And as soon as you squash those, the hyper super wealthy will just find another way that, you know, costs a couple of hundred thousand dollars of legal fees and entity setups off shore for us to do what what are the next kind of honeypots where you see this going?

[00:32:20] Damion: Well, one of the ones that’s becoming fairly popular is the real estate professional and, and B people being able to.

Limit their taxes. If they have a spouse that goes and buys real estate and it can offset, I think that that’s probably going to be a target at some point, as it gets bigger and bigger. It’s I don’t know what the number is, but it’s one of those things where they’re going to say. Yeah, we don’t know if this is a great thing.

What happens is Congress ends up really protecting the big, big institutions like the insurance companies and, and the reason 401ks are not being attacked in this, this bill for real estate investments. There’s hundreds of billions of dollars that comes from these plans that goes into commercial development, which is required if you want to have any type of real estate industry.

So they’re going to go after the things where they’re going to, they’re going to find the Peter TEALS and they’re gonna say. No, this is, this is what we’re going after. The problem is that our system is set up on fake money with a Fiat system based on central banks printing, which is very inflationary.

And it’s, if you look at every asset class and I was, I was watching and reading a thing from Ralph Paul at real vision, and he was talking about every asset class. It looks like it’s moving up. Like there’s a bubble and everything. So you look at real estate, you look at other than gold and silver, which is interesting.

It’s basically on sale, but very interesting. Yeah, but that’s been suppressed if you look at what happened to chase bank and JP Morgan or. They got fined a billion dollars in 2024, manipulating the silver market for 10 years in 2020, they made $1 billion on that trading desk. So they spent one 10th of their profits per year on their fine for manipulating that.

So that’s, what’s happening in the metals markets. They’re manipulated. So, okay. That’s the one asset class that has been, has not bubbled up. Everything else looks like it’s going up real estate, the stock market equities, all this stuff is. But if you actually compare it to the Fed’s balance sheet, what you realize is everything is absolutely flat the last 12 years.

So in terms of the balance sheet, you go everything except for one thing. And that’s called Bitcoin. Why? Because it’s technology and it’s exponential. Everything else is linear. Real estate is not going to ever go exponential. It’s matching the fed balance sheet because that’s the money that’s pushing the asset price based on the volume of cash that’s out there.

So what you have to start asking yourself is how am I going to survive a situation like this? Because you could have more, you could have more real estate, you could have more stocks, but if all your stuff costs more, you’re just net neutral. So there is a really important thing about thinking through where are we going?

We’re going through an exponential change that’s faster and more dynamic and decentralized than a central bank or a central government. They can’t catch it. It’s impossible. People say, well can’t, can it be stopped? Can Bitcoin be regulated? Like it’s decentralized. You can try to tax it, but the problem is unless you turn off the internet and if they did that, I mean, it’s Armageddon.

So the reality is we’re breaking, we’re breaking down. These, these institutions called government and central banks, all of the institutions are going to be decentralized, whether it’s insurance, whether it’s accounting, whether. Lending banking, all this stuff, even tokenization of assets, which are going to be other things you can go invest in.

All this stuff is shifting NFTs. People are all excited about it. NFTs. That’s just the beginning. Imagine when all the real estate is tokenized and everything’s on the blockchain and you don’t have to go and spend money on a title policy. It’s just what we’re doing is we’re taking all of this fat. And when you, one of the random things that I learned about the last couple of years as farming, it’s where you’re basically creating liquidity pools.

And if you lose me, if you know, you’re listening, you’re watching what the hell we’ve

[00:35:44] Ben: done. Tons of tons of talks on, on defy. Okay,

[00:35:48] Damion: good. Well, it’s what my thinking in seeing this stuff is this is so like I’ve been making 50, 60% per year on farming and this has been happening for the last year. So I’m like, okay.

You know, I don’t think it’s, it’s not a one week thing it’s been happening all year. And I look at that. And then I say, well, how is that possible? This is what the banking system has been making off of us and been paying us one or 2% or 3% or whatever, the number of this crappy number. That’s why they have giant buildings everywhere.

That’s why they have bonuses into the hundreds of millions of dollars. Why? Because they’re scooping up and sifting all of the cream. And so when you shift all of that profit and the potential, it goes to the people and you start realizing, wow, that’s actually just what the banking system has been taking for the last a hundred.

[00:36:31] Ben: Oh, yeah, no, it’s I actually had somebody from the maker team on Mariano a couple of weeks ago. And like I tell people all the time, this was before compound and Navi, like we’re super user-friendly, but it’s like go to. Put up some money in a city, they were called CDPs back then. But put it in a vault, take out a loan you’re generating dye and you’ve just created money collateralized by another asset with a few clicks and a couple hundred bucks in gas.

And there’s nobody running that that’s lines of code. That’s all done automatically. If you don’t pay it back, you don’t have to pay it back. And if the price goes down, you keep your. Automatically. I mean, it’s just, just mind blowing for these things. And that’s for

[00:37:18] Damion: sure. I, that based part about this that I like makes me happy.

I mean, it’s why I’m so supportive of it. And it’s why I really think that either you’re, you’re supporting a current at the current system, which is tyrannical or you’re supporting freedom. If you start shifting assets, if you have dollars, you’re supporting tyranny and that’s pretty hardcore. And the reason I say that is because.

Whatever your assets, your energy, your blood, your sweat, your tears are in is supporting that system. And the more the people shift into a decentralized system, the more we have the possibility for peace prosperity, where people are part of a global community. And when they’re communicating and they have assets and they have the ability to track.

They don’t go to war. And quite frankly, there’s not the ability to wage war. If you don’t have the assets or you don’t have fake money because you can’t, there’s no way to pay for it. So I, I think this is a possibility, this, this has the potential for us to shift into a place of peace globally. The more that people get on board with this.

And that’s one of the reasons I’m so in favor of people jumping in, and I say, you should be a part of this because this is where. Yeah.

[00:38:17] Ben: Potentially I think there’s a pretty disastrous dystopian world as well, where everything’s on a public blockchain, public transparent, permanent. You can like automatically push it.

There’s a, there’s a way that this technology can be used for evil. That keeps me up at night. And, and I mean, that’s where we’re going, right. There’ll be a CBD. CBDC. Yeah that they can push negative interest rates directly in our wallet. You see the, the, the value actually going down day after day and give you your stimulus check automatically.

It’s coming and it’s terrifying big fan of decentralized alternatives that’s

[00:38:57] Damion: for sure. Yep. No, you’re you’re right. There’s there there’s always two sides. Or if you listen to Robert Kiyosaki, there’s three sides to every. And there are some nefarious players and there’s the technology can it’s it’s like money, money can be good or bad.

It depends on what kind of fuel it’s for. Is it for a missile or is it for a car? Like, you know, like what, what’s the, what’s it doing? And people say, well, rich people are bad. I’m like no rich people just have more resources to do whatever they are naturally going to do. And so the same thing with technology it, and I just trust it.

I trust the code more. What I don’t trust is like the central bank, digital currencies, where it’s still centralized because that technology can be used to hurt people and steal from them and manipulate them. Whereas if it’s decentralized and it’s code and it’s transparent, I have a lot more trust in that and hope for the future.

[00:39:44] Ben: A hundred percent. Yeah. A dynamite can be used as a, a great tool for civil engineering and also a war. Whoever decides to do whatever the heck they do with it. Well Damien, I think this was super, super helpful. I I’m loving. All the EQR P people waking people up to their 401ks and their, their retirement accounts and what’s happening with them.

Where, what else do you want to leave my listeners with about this topic before we wrap things up? I think

[00:40:15] Damion: I always say that the best thing you can do is invest in yourself. And the thing that you can do to invest in yourself is take action and create momentum, because then it’s easier. It’s like when people that are in sales know that the best time to make a sale is right after you’ve made a sale, whether it’s with the same person or just using the energy.

And it’s because there’s momentum. And so along those line of thinking, taking momentum, getting some new information, I would encourage you guys to get a copy of the book. I mean, I’m happy to send it out. I mean, you can get [email protected]. Or ERP and just get a copy of it. It’ll give you a, a digital download of, of a summation.

So you don’t have to read the book, but get the summary and you’ll go to your phone and then you can share it and read it, take you 10 minutes, but getting that, it gives you some new ideas and then maybe one of those things, plants a seed. Maybe you say, I need this right now. It doesn’t really matter, but it’s, it’s taking, it’s getting practice in taking action.

That’s the whole point. It doesn’t take that much, but it takes something. It takes you choosing and then pushing some buttons. I that’s what I would encourage you guys to do. Just go to QRP, get a copy of the book and, and learn more. I mean, that’s, that’s the best thing that I can, I can suggest is, is taking control of your life.


[00:41:24] Ben: Awesome. Damian, where can people find out more about you? Where do you go?

[00:41:27] Damion: You guys can find me on LinkedIn and visit me there and happy to, I would like for people to reach out and are, are genuinely connecting. What I hate is when people send me some canned thing that they’ve had, you know, they’d sent it to everybody or their bot sends something to me, those are the types of things that I like to unfriend.

And I I’m happy about it. Like I just want to delete walk, but I absolutely love when people come out there, like. I, I want to learn something new. Here’s what I’m doing. I mean, I’ll spend time and invest in people. I’m not, I, you know, I’m not, it’s not to try to create a client or a revenue stream. It’s to make a dent in what I think is modern day slavery.

And so every shackle I can help break is part of the fulfilled mission of my purpose on this planet. So please do reach out, contact me, hang out with me on LinkedIn and see what I can do for you.

[00:42:12] Ben: Awesome. And I’ll link it up in the show notes. Really appreciate having you on today, Damian.

[00:42:17] Damion: Thanks, man. I appreciate being here.

[00:42:19] Ben: There you go. First off. Thank you very much for listening all the way through. I hope you got a lot of value out of that conversation. As always. You can find show notes, links, and [email protected]. Please share this with anyone you think might be interested and derive any value from this conversation.

And as always, you can reach out to me for any feedback or questions. Please give the video a like, or even better subscribe on YouTube or your podcast player of choice. This really helps others find the podcast or the video as well. Thanks a lot. Hope everybody has a fantastic day and stay safe out there and invest wisely.

Ben Lakoff is an entrepreneur and finance professional. He has developed strong global finance experience through 10 years of international assignments in the US, Brazil, Afghanistan, Southeast Asia, Czech Republic and through the award of his Chartered Financial Analyst (CFA) certification.