The Rich Get Richer But It Is Not A Secret With A CPA

@build.my.mil

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Promoted product

Trump Accounts

Why it worked

The video leverages the 'secrets of the rich' trope to provide actionable, high-value financial advice, positioning the creator as an expert while demystifying complex tax strategies.

Summary

A CPA explains how wealthy individuals use a combination of 529 plans, custodial accounts, and Roth conversions to build tax-advantaged wealth for their children. She argues that these strategies are not secret, but rather accessible tools that anyone can use to improve their financial future.

Structure

1Introduction to the concept of wealth-building strategies
2Explanation of 529 and custodial accounts
3Detailing the Roth conversion process
4Summarizing the combined benefits for children
5Call to action to take advantage of these strategies

Product placement

The video discusses 'Trump Accounts' (likely referring to a specific type of custodial or trust account) as a tool for wealth management.

Call to action

It's up to you to take advantage of it.

On-screen text

The Rich Get Richer But It Is Not A Secret With A CPA THE TRUMP ACCOUNTS WAY FOR THE RICH TO GET RICHER. I'M SAYING IT RIGHT NOW AS A CPA. I CAN SEE THE WRITING ON THE WALL. THE PEOPLE WHO ARE GOING TO TAKE ADVANTAGE OF THEM TO THE FULLEST ARE ALREADY PUTTING MONEY IN A 529 FOR THEIR KIDS. THEY'RE ALREADY PUTTING MONEY IN A UTMA AND A UGMA BROKERAGE ACCOUNT FOR THEIR KIDS. THIS IS GOING TO BE AN EXTRA TAX SHELTER FOR THESE PEOPLE. TAKE THAT $5,000 CONTRIBUTION AND THEY'RE GOING TO MAX IT OUT EVERY YEAR FROM WHEN THEIR CHILD IS BORN TO WHEN THEY TURN 18. THEN WHEN THEIR KID TURNS 18, THAT ACCOUNT IS GOING TO TURN INTO A TRADITIONAL IRA. THE BASIS OF THAT ACCOUNT, WHICH IS THE MONEY THAT YOU CONTRIBUTED, HAS ALREADY BEEN TAXED. AND THEN THERE'S GOING TO BE THE GAIN THAT HAS NOT BEEN TAXED. WELL, WHAT THEY'RE GOING TO DO IS WHEN THEIR CHILD IS BETWEEN, LET'S SAY, 22 TO 24, WHEN THEY'RE IN THEIR LOWEST TAX BRACKET AND NO LONGER A DEPENDENT OF YOURS, THEY'RE GOING TO TAKE CHUNKS OF THAT GAIN AND THEY'RE GOING TO ROLL IT OVER INTO A ROTH IRA. SO THAT MEANS ALL OF THAT MONEY IS BEING MOVED INTO A TAX FREE ACCOUNT GOING FORWARD. AND IT'S GOING TO BE DONE AT THE LOWEST POSSIBLE TAX RATE THAT THEY CAN DO IT AT. SO THIS PORTION IS CALLED A ROTH CONVERSION. AND ROTH CONVERSIONS ARE NOT NEW THINGS. IT'S SOMETHING THAT YOU AND I CAN DO EVERYDAY. WHAT'S IMPORTANT TO KNOW ABOUT ROTH CONVERSIONS IS ONCE THAT MONEY IS IN YOUR ROTH IRA FOR FIVE YEARS, YOU CAN TAKE IT OUT FOR WHATEVER YOU WANT. YOU CAN TAKE IT OUT TO BUILD A HOUSE. YOU CAN TAKE IT OUT TO BUY A CAR. YOU CAN TAKE IT OUT FOR WHATEVER YOU WANT. THE GAINS OF THAT ROTH IRA ARE GOING TO CONTINUE TO GROW TAX FREE AND YOU CAN PULL THEM OUT WHEN YOU'RE 59 1/2 OR WHENEVER YOU RETIRE TO LIVE OFF OF. SO NOW WHAT THESE RICH PEOPLE HAVE DONE IS THEY HAVE USED A 529 TO PAY FOR THEIR CHILD'S EDUCATION. THEY HAVE USED AN INVESTING FOR MINORS ACCOUNT FOR WHATEVER EXPENSES THEY WANT TO GIFT THEIR CHILD WHEN THEY TURN 18 OR 21. AND THEY HAVE GIVEN THEM A ROTH IRA THAT HAS BEEN GROWING SINCE THE DAY THEY WERE BORN. THEY CAN PULL OUT THE CONTRIBUTIONS AND DO WHATEVER THEY WANT WITH AND THEN ALSO SUPERCHARGE THEIR RETIREMENT ACCOUNTS. THEY'RE MAKING IT SO THEIR KID DOESN'T HAVE TO WORRY ABOUT ANYTHING ELSE THE REST OF THEIR LIFE. IT'S NOT PURELY BECAUSE THEY OPENED A TRUMP ACCOUNT, BUT THE TRUMP ACCOUNT IS GOING TO MAKE IT SO THAT THEIR LIFE IS EVEN EASIER THAN IT WOULD HAVE BEEN IF THEY DIDN'T HAVE THE ACCOUNT. YOU DON'T HAVE TO OPEN THIS ACCOUNT, BUT I CAN SEE THE WRITING ON THE WALL THAT THIS IS JUST GOING TO BE ANOTHER PILLAR FOR THE RICH TO GET RICHER AND THEN YOU'RE GONNA COME AND SAY, OH WELL, THESE ARE ALL THE SECRETS THAT THE RICH PEOPLE DON'T TELL US. IT'S RIGHT IN FRONT OF YOUR EYES RIGHT NOW, AND IT'S UP TO YOU TO TAKE ADVANTAGE OF IT.

Original caption

The secrets of the wealthy are oftentimes not secrets at all. Can you use this to your advantage this time? #PersonalFinance #toddlermom #LearnOnTikTok #investingforbeginners #investingforkids

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Transcript

The rich get richer but it is not a secret with a CPA. It is another way for the rich to get richer. I am saying it right now as a CPA, I can see the writing on the wall. The people who are going to take advantage of them to the fullest are already putting money in a 529 for their kids. They are already putting money in a UTMA and a UGMA brokerage account for their kids. This is going to be an extra tax shelter for these people. They are going to take that $5,000 contribution and they are going to max it out every year from when their child is born to when they turn 18. Then when their kid turns 18, that account is going to turn into a traditional IRA. The basis of that account, which is the money that you contributed, has already been taxed. And then there is going to be the gain that has not been taxed. Well, what they are going to do is when their child is between, let's say, 22 to 24, when they are in their lowest tax bracket and no longer a dependent of yours, they are going to take chunks of that gain and they are going to roll it over into a Roth IRA. So that means all of that money is being moved into a tax free account going forward. And it is going to be done at the lowest possible tax rate that they can do it at. So this portion is called a Roth conversion. And Roth conversions are not new things. It is something that you and I can do everyday. What is important to know about Roth conversions is once that money is in your Roth IRA for five years, you can take it out for whatever you want. You can take it out to build a house. You can take it out to buy a car. You can take it out for whatever you want. The gains of that Roth IRA are going to continue to grow tax free and you can pull them out when you are 59 and a half or whenever you retire to live off of. So now what these rich people have done is they have used a 529 to pay for their child's education. They have used an investing for minors account for whatever expenses they want to gift their child when they turn 18 or 21. And they have given them a Roth IRA that has been growing since the day they were born. They can pull out the contributions and do whatever they want with and then also supercharge their retirement accounts. They are making it so their kid doesn't have to worry about anything else the rest of their life. It is not purely because they opened a Trump account, but the Trump account is going to make it so that their life is even easier than it would have been if they didn't have the account. You don't have to open this account, but I can see the writing on the wall that this is just going to be another pillar for the rich to get richer and then you are going to come and say, oh well, these are all the secrets that the rich people don't tell us. It is right in front of your eyes right now and it is up to you to take advantage of it.