YOUR RETIREMENT The Scoreboard: Daily vs. The Long Game

The TV wants you to panic about the red dot on the left. The green numbers on the right are your real story. Stay in.

WORDS TO STEER BY The Daily Quote

"Investing is not a matter of how smart you are. It is a matter of how disciplined you are."

— Howard Marks

The Mailbag

"Hey Craig. My husband and I have $38,000 in credit card debt spread across a few different cards, plus about $12,000 left on a car loan. We bought our house five years ago and have seen the value shoot up, so we have a ton of equity sitting there. Our bank reached out and offered us a Home Equity Line of Credit (HELOC) to consolidate all of our consumer debt into one 'easy monthly payment.' It mathematically drops our interest rate from 24 percent down to about 7.5 percent, and it immediately frees up almost $900 a month in our budget. This seems like an absolute no-brainer to finally get breathing room. Should we sign the paperwork?" — Emily, USA

Here is the absolute raw truth, Emily. If you sign that paperwork, you are playing Russian roulette with your family’s largest asset. I need you to completely walk away from this deal right now.
The bank is selling you a financial illusion disguised as a life raft. They want you to think you are magically "paying off" your debt, but you are not paying off a single dime. You are just moving the shell around the table.
Let me break down the brutal reality of what a debt consolidation HELOC actually does.
First, you are taking $50,000 of unsecured consumer debt—debt that the credit card companies can only yell at you about if you stop paying—and you are actively chaining it to the roof over your head. You are turning unsecured debt into secured debt. If life happens, if one of you loses a job, and you default on a credit card, your credit score tanks. If you default on a HELOC, the bank legally forecloses on your house and your family is out on the street. You do not risk your home to pay off a Visa bill.
Second, this is the exact same trap as the 401(k) loan. You are trying to cure a behavioral disease with a math pill. You and your husband did not accidentally trip and fall into $50,000 of consumer debt. You spent more than you make. If you use your home equity to completely wipe the slate clean without feeling the absolute pain of paying it off, you have learned nothing. The statistical reality is that within two years, you will feel so "freed up" by that extra $900 a month that you will start swiping those credit cards again. Then you will have the HELOC payment and new credit card debt.
Here is your exact flight plan.
You leave your house equity completely alone. It is a fortress, not a piggy bank. You and your husband sit down tonight, get on a scorched-earth written budget, and cut up every single one of those credit cards. You take that Raw Truth Roadmap, you attack the smallest balance with absolute violence, and you work your way up.

Stop looking for the easy way out. Buy your cash flow back the hard way so you never put yourselves in this position again.

Send questions to [email protected]

YOUR MONEY The Household Dashboard

THE MILLIONAIRE MANUAL Roth IRA Basics - Paying the IRS Today Is The Ultimate Wealth Cheat Code

Here is the absolute raw truth. You have a silent business partner who is currently legally entitled to a massive chunk of your wealth, and his name is Uncle Sam. The financial industry loves to tell you to defer your taxes by putting your money into traditional, pre-tax retirement accounts. They tell you to take the tax break today because you will be in a "lower tax bracket" later. That is a completely toxic mindset for a wealth-builder. If you are executing the Raw Truth Roadmap, you are going to be wealthy in retirement—which means your taxes will absolutely be higher. Today, we are breaking down why the Roth IRA is the single greatest wealth-building weapon legally available to the American middle class, and why you need to lock the IRS out of your vault forever.

Let’s look at the brutal mathematical reality of what happens when you choose 100 percent Roth over traditional pre-tax accounts:
1. Paying on the Seed versus the Harvest: With a traditional account, you do not pay taxes on the money you put in, but you pay ordinary income tax on every single dime you pull out in retirement. With a Roth account, you do the exact opposite. You pay taxes on the small "seed" you plant today, and the massive multi-million dollar "harvest" you pull out in retirement is completely, 100 percent tax-free.
2. The Compound Interest Shield: Imagine you invest $100,000 over your career, and the market compounds that money into $1.5 million. In a traditional account, the government gets to tax that $1.4 million in pure growth. In a Roth account, the government gets absolutely nothing. You get to keep every single penny of the growth that the market generated for you.
3. The 100 Percent Rule: This is where people get confused. They try to hedge their bets and do a 50/50 split between traditional and Roth. No. You go 100 percent Roth. You max out the Roth IRA, and if your employer offers a Roth 401(k) option, you put 100 percent of your contributions in there, too. You take the absolute pain of paying the taxes out of your paycheck today so you never have to write the IRS another check when you are seventy years old.

The Move: Here is your exact flight plan to build your tax-free fortress.
If you do not have a Roth IRA, you open one today. You go to a massive, low-cost brokerage firm like Fidelity, Vanguard, or Charles Schwab. You link your checking account and you automate your monthly contributions to hit the absolute legal maximum for the year.
But you do not just leave it in cash. You take that money and aggressively buy broad-market index funds like an S&P 500 fund. You set it, you forget it, and you let the greatest wealth-creation engine in human history do its job without the government taking a cut.

Stop trying to save a few pennies on your taxes today only to hand over hundreds of thousands of dollars to the government tomorrow. Pay the toll now, build your 100 percent Roth fortress, and lock the vault.

RESPECT The Tribute

🇺🇸 To every refrigerated-freight driver running overnight hauls in January so grocery shelves stay full by sunrise — your frozen fingers and missed dinners feed families who will never know your name.

THE WATER COOLER The Big Three

#1: Inflation Hits Worst Level in Three Years

The government's most closely watched inflation measure jumped above 4% in May, the highest reading in three years, and it is now sparking serious talk about whether the Federal Reserve might actually raise interest rates again instead of cutting them.

#2: Apple Raises Prices on MacBooks and iPads

Apple is hiking the prices on its laptops and tablets, pointing to skyrocketing memory chip costs as the reason families and students will now pay more to get their hands on these devices.

#3: Medicare to Cover Weight-Loss Drugs for $50 a Month

Starting July 1, older Americans on Medicare who qualify will be able to get GLP-1 weight-loss medications — the same drugs that cost hundreds of dollars a month out of pocket — for just $50 a month through their coverage.

TRACKING YOUR S&P 500 INDEX FUND The Ownership 10

Your 401k S&P 500 index fund — whether you know it as VOO, FXAIX, or the Vanguard Institutional 500 Index Trust — owns all 500 of these companies. When they win, you win.

The Heavy Hitters — Working Hard for You Today:

The Benchwarmers — Having a Tough Day (But Still on Your Team):

Takeaway: Five companies are winning today. Five are hurting. Your index fund holds all 500. You never have to pick the right one. You just have to stay in. That is the whole game.

BACKPAGE The Wacky Corner

Back in 1996, a part-time notary and full-time dreamer named Larry Murante convinced almost the entire town of Williamsburg, Iowa to invest in his plan to bottle and sell the mineral spring water running under his property. Local TV in Cedar Rapids picked it up, the story went regional, and for about six weeks Larry was the most famous man in Benton County. Tourists drove in, investors called the house phone, and one Chicago paper ran the headline 'Iowa Man Sits on Liquid Gold.' Then a state geologist tested the water and reported it was, in every measurable way, completely ordinary groundwater. Larry quietly returned what money he could, the spring was capped, and Williamsburg went back to being known mostly for its Czech heritage festival.

Lesson: Lesson: Hype turns plain water into gold and then back into plain water — ownership of something real and boring always beats a headline.