The Guru Gap: How America’s Financial Gurus Are Leading You Astray and How to Get Back on Track
Release Date: 01/29/2025
Trump: No Income Tax in 2026!
The Power Of Zero Show
This episode revolves around President Donald Trump’s claim that, due to the massive tsunami of tariff revenue that’s flowing into the U.S. coffers, Americans won’t have to pay income tax in 2026. David McKnight looks at the 2025 fiscal year: the Federal Government spent about $7 trillion and brought in about $5 and a quarter trillion in revenue. While breaking down the math related to the 2025 fiscal year, David points out that “Revenue from income taxes is the single largest source of Federal revenue”, while “Tariffs, by contrast, are one of the smallest.” Even Trump’s own...
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Congress Just Proposed a Major Change to Roth IRA’s—Here’s What It Means for You
The Power Of Zero Show
David McKnight addresses a brand new proposal that could transform the way Americans use Roth IRAs and Roth 401(k) – and that could have serious implications for your retirement flexibility, liquidity, and long-term tax strategy. With the current status quo, if a person has money in a 401(k) or even a Roth 401(k), they can usually roll it out into an IRA when they retire or leave their job. However, money can’t roll the other direction: you can’t take a Roth IRA and move it into a Roth 401(k)... A new bipartisan bill introduced by Republican Representative Darin LaHood and Democrat...
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What Are the Creditor Protection Rules for Roth IRAs and Roth 401(k)s?
The Power Of Zero Show
In today’s episode, David McKnight breaks down the creditor protection rules for Roth IRAs and Roth 401(k)s, as well as why more and more Americans are turning to tax-free accounts to insulate themselves from creditors… and the Government itself. In theory, under Federal Law, all IRAs traditional or Roths receive a certain level of bankruptcy protection under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. However, that protection is specifically tied to bankruptcy proceedings. If you’re sued in civil court, the Federal bankruptcy statute doesn’t automatically...
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Top Five Reasons to Pick a Roth 401(k) Over a Traditional 401(k)
The Power Of Zero Show
This episode features David McKnight sharing the top five reasons why a Roth 401(k) is far superior to a traditional 401(k). Something important to keep in mind: the decision you make today will determine how much of your retirement money your future self actually gets to keep. David touches upon the fact that choosing the wrong 401(k) could cost you hundreds of thousands of dollars in unnecessary taxes in retirement. Tax rate risk is the first big reason why you should consider investing in a Roth 401(k) over a traditional 401(k). David lists a series of key questions people who invest in a...
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Suze Orman Says Roth IRAs Are Great — But Here’s What She’s Missing
The Power Of Zero Show
This episode sees David McKnight look at Suze Orman, who, despite being one of the most widely recognized financial voices in America, shares what appears to be incomplete advice. David believes that Orman has done a lot of good for a lot of people thanks to her financial discipline-centered approach (in addition to being a big proponent of Roth IRAs). He agrees with Orman: “Roth IRAs are powerful, no doubt about it. You contribute after tax dollars, your money grows tax-free, and, provided you meet the requirements, you can withdraw those funds in retirement 100% tax-free”. The U.S....
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The 3 Questions You MUST Answer BEFORE Doing a Roth Conversion
The Power Of Zero Show
David McKnight addresses three key questions you must be able to answer before executing a single Roth conversion. Too many people go for Roth conversions without a game plan – this is something that can lead to overpaying taxes and running out of money sooner than anticipated. David points out that if you can’t answer the three key questions, you should stop and reevaluate because guessing here can cost you big. “What’s the total amount I should convert from my IRA or 401(k) to tax-free?” is the first and most critical of the three questions. Remember, the goal of a Roth conversion...
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Five Roth Conversion Myths Busted: What Most Americans Get Wrong
The Power Of Zero Show
David McKnight busts some of the most common Roth conversion myths that are costing retirees hundreds of thousands – if not millions – of dollars over the course of retirement. The “Don’t worry about Roth conversion, you’ll be in a lower tax bracket when you retire” myth is based on two flawed assumptions. The first one is that your lifestyle will drop significantly in retirement, while the second is the one related to future tax rates being the same or lower than they are today. David points out that, in retirement, people want to maintain their lifestyle. In some cases,...
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Two Experts Debate When You Should Take Social Security—But here’s the TRUTH!
The Power Of Zero Show
Today’s episode revolves around one of the biggest financial debates among pre-retirees and retirees: When should you take Social Security? Host David McKnight touches upon the recent debate of two of the smartest voices in the field – Dr. Laurence “Larry” Kotlikoff and Dr. Derek Tharp – on this exact question. Dr. Tharp, out of the University of Southern Maine, notes that economists commonly recommend delaying social security benefits until age 70. Boston University’s Dr. Kotlikoff agrees and explains that delaying can give you a 76% higher monthly benefit compared to taking...
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What REALLY Happened with Kyle Busch's $8 Million Lawsuit against Pacific Life
The Power Of Zero Show
David McKnight looks at what happened when NASCAR legend Kyle Busch reportedly lost $8+ million in what was supposed to be a tax-free retirement plan. The plan Busch relied on was built around an indexed universal life insurance policy. According to Kyle and Samantha Busch’s lawsuit, they paid more than $10.4M into several IUL policies issued by Pacific Life Insurance between 2018 and 2022. While these policies were pitched as a safe, self-funding, tax-free retirement plan, things didn’t go as promised… Poor design, unrealistic expectations, a delayed 1035 exchange, and poor...
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The Financial Guru Hall of Shame--Who's Leading You Off a Cliff?
The Power Of Zero Show
David McKnight focuses on three of the biggest names in personal finance – Dave Ramsey, Suze Orman, and Ken Fisher – and why you should be careful with following their advice. David emphasizes that anyone trying to wring the most efficiency out of their retirement savings should focus on advice that’s backed by math… not soundbites. While David Ramsey is the right person for people who are making less than they are spending, the same can’t be said for his retirement planning advice. For instance, he claims that 100% of cash value life insurance sucks 100% of the time. For...
info_outlineToday’s episode is a podcast guest interview David McKnight did for Josh Jalinski’s The Financial Quarterback Podcast.
David gives Josh’s audience a quick bio that spans from his early days in the financial services space in 1997 all the way to his latest book The Guru Gap.
The premise of The Guru Gap is the difference between the 1990s when people had very few options to vet out financial planning advice and today, where they have plenty of ways to vet out.
Nowadays, whenever David makes a financial recommendation, 90% of his clients take to the internet to vet that recommendation.
In The Guru Gap, David focuses on financial gurus Dave Ramsey, Suze Orman, Ken Fisher, Clark Howard, and Ramit Sethi – and their advice.
Since financial gurus aim at taking important and complex financial principles and distilling them down into 10-second sound bites, they tend to give short shrift to a lot of details David’s clients would need to protect and grow their retirement savings.
The #1 goal most Americans have is to have their money last as long as they do.
Financial gurus have had an adversarial stance toward financial planners like David and Josh Jalinski.
Some of David’s clients who seem to put more stock into what these gurus have to say tend to forget that their advice typically isn’t undergirded by math and actuarial science…
Josh Jalinski shares a couple of stories that really tick him off when it comes to financial gurus and the consequences of their advice.
David believes that America is better off with people like Dave Ramseys and the like in it than without them.
“If you’re making $50,000 and spending $60,000 Dave Ramsey is precisely the person you should be talking to,” says David McKnight.
David sees people like Dave Ramsey be “good for bad investors, and bad for good investors”.
Wade Pfau thinks that following Ramsey’s advice of taking 8% withdrawal rates on your assets in retirement and putting 100% of your allocation in stocks, you’ll run out of money in advance of life expectancy 63% of the time.
David touches upon the so-called Dave Ramsey circle of poverty: he gets you out of debt on the road to financial success, and then he promptly bankrupts you by taking an 8% withdrawal rate.
Josh shares his thoughts on Dave Ramsey and explains that some people never save.
Citing former Comptroller General David Walker and Penn Wharton David talks about what could be waiting for the U.S. in the near future.
David gives out a couple of reasons why you should think about doing a Roth conversion.
David and Josh talk about saving future taxes when someone passes away.
A key question to ask yourself: Why not pay the tax today at 22% or 24%, so that your kids can inherit that money tax-free regardless of when they liquidate it?
David reveals that, because of The Guru Gap, he has received a cease and desist from one of the financial gurus mentioned in the book.
Josh and David dissect “the Ken Fisher approach” – including its key flaws and shortcomings.
In Josh’s opinion, one of the negative traits of financial gurus is their lack of availability for debate.
For David, the least expensive way to purge the longevity risk from your portfolio is an annuity.
Josh and David bring up financial advisors dispensing advice on TikTok into the conversation.
The overwhelming amount of tips shared by gurus leads to people making bad decisions or not making a decision at all.
Of the five financial gurus mentioned in The Guru Gap, Suze Orman (the only CFP of that group) is the one David McKnight likes the most, also because her advice is most in line with the mainstream financial planning consensus.
Ramit Sethi is the financial guru that seems to have the most adversarial approach toward financial planners.
David used to be a fan of Clark Howard who now has a strong opinion about cash-value life insurance and fixed-income annuities.
David lists steps people should be taking with their money from a tax and retirement perspective.
According to David, if ever there were a time in the history of our country to be undertaking a Roth conversion, it’s over the course of the next nine years.
Josh and David discuss a balanced financial plan that includes annuities to counter longevity risks, insurance to protect one’s family, money as a volatility buffer, equities to beat inflation, some Bitcoin, a little gold, and cash for emergencies.
Mentioned in this episode:
David’s national bestselling book: The Guru Gap: How America’s Financial Gurus Are Leading You Astray, and How to Get Back on Track
PowerOfZero.com (free video series)
@mcknightandco on Twitter
@davidcmcknight on Instagram
David McKnight on YouTube
Get David's Tax-free Tool Kit at taxfreetoolkit.com
Josh Jalinski, The Financial Quarterback
How to Get Rich (Ramit’s Netflix special)
I Will Teach You to Be Rich: No Guilt. No Excuses. Just a 6-Week Program That Works by Ramit Sethi
How to Spot a False Prophet in the World of Finance (episode of The Financial Quarterback)
DOGE – Department of Government Efficiency
American Equity Investment Life Insurance (AEL)
Ernst & Young’s study on life insurance and annuities