TGCI 37: Do you have an active 401K with your employer? How you can use CARES ACT to unlock upto $200K without any penalties or taxes?


Episode 37 – Do you have an active 401K with your employer? How can you use CARES Act to unlock upto $200K Without any Penalties or Taxes?



In today’s show, Pancham interviews Damion Lupo, Founder and CEO, eQRP. Damion shares some little-known details about the newly announced CARES Act that are guaranteed to help out W-2 investors.

Especially, you will learn how you can unlock your 401K funds (without paying penalties), take out additional loans, get leeway on interest payments and carry back losses to get tax refunds.

We hope you enjoy this show!

Pancham Gupta
TGCI 12 - Damion Lupo Episode 12 – Why an eQRP is the Best Option for Investing Your Retirement Money
Damion Lupo

Timestamped Shownotes:

  • 01:31 – Pancham welcomes Damion to the show
  • 02:34 – Damion shares his background information
  • 04:00 – How to unlock funds in your 401K fund courtesy the recently announced CARES Act
  • 05:32 – Will you have to pay taxes on your unlocked 401K funds? What about penalties? And are there any restrictions on where you can invest these unlocked funds?
  • 08:08 – How the CARES Act allows you to take out an additional loan against your 401K; do you get any leeway on interest payments?
  • 10:07 – Damion shares how you are now allowed to carry back your net operating loss
  • 11:47 – What are the benefits of an eQRP?
  • 13:25 – Do you need a financial planning team to avail these new benefits?
  • 14:18 – How to plan your investments in the wake of COVID-19
  • 17:36 – Taking the Lead Round
  • 17:52 – The Gold Collar Investor Recommends: Damion shares his favorite book

3 Key Points:

  1. How to unlock 401K funds (without paying any extra penalties)
  2. How to take out additional loans against your 401K and get leeway on interest payments
  3. Carrying back net operating losses from your real estate business and getting tax refunds

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        The Gold Collar Investor Show 12

        QRP book by Damion Lupo


Welcome to The Gold Collar Investor Podcast with your host Pancham Gupta. This podcast is dedicated to helping the high paid professionals to break out of the Wall Street investments and create multiple income streams.


Here’s your host Pancham Gupta. Hi, this is Joe Fairless. If you want to diversify out of Wall Street investments then listen to The Gold Collar Investor Podcast.


Pancham: Welcome to The Gold Collar Investor Podcast. This is your host, Pancham. Really appreciate you for tuning in today. Let’s get into the show. US government has created $2 trillion in the cares act to help stimulate US economy. There is a lot of talk about it in the media. Many businesses and individuals have used the benefits. However, people who have high paying jobs and are still employed by their employers feel that there is nothing in the act for them. If you have an active 401k from your current employer or an old 401k you do have something magical in the care sack that you can use. It’s so good that you can unlock up to $200,000 from your active 401k to discuss the benefits. I have invited back Damion Lupo to the podcast. Damion was a guest on the podcast episode number 12, where he discussed how you can convert your old 401k or IRA into an eQRP plan. If you are interested in learning more about it, you can go to 12. Now let’s get into the show. Damion. Welcome to the show. Good to be back. No, I’m glad to have you back. You’re officially my first repeat guest on the show. So really, really excited about it. Are you ready to fire up my listeners break out of Wall Street investments again?


Damion: Let’s break them free, man. Let’s do it.


Pancham: All right, let’s do it. So, you know, for people have not listened to your previous podcast, which is the show number 12. They can go and listen to that So for them, you know, can you give us a quick background? Your background?


Damion: Absolutely. I’m a professional investor. I’ve been investing for more than two decades in real estate, primarily also precious metals, gold and silver. And I’ve had 50 plus companies. I’ve written a dozen books, and I’ve done a lot of stuff, which seems kind of impressive. If you just realized how much of that I’d screwed up. I think you really understand who I am. I have a guy that makes mistakes faster than most people on earth. And I just lived to tell about it because mistakes don’t necessarily kill us. They do make us stronger and they build the confidence so Now I take those mistakes and I do what I can to teach people and give people options to so that they don’t have to necessarily make the same mistakes. We’ve all got plenty of things we could screw up, I don’t think you have to screw up the same stuff. So I teach those things and continue to invest. And I spend most of my time working on getting people’s retirement money freed from the shackles of Wall Street, and it’s pretty fun. I like to its not very fun for the Wall Street advisors, but it’s really fun for our clients.


Pancham: That’s great. That’s great. So cool. I want to dive right in and, you know, talk about the subject of today, which is because of COVID-19 Congress passed this CARES ACT, who has help these small businesses and individuals, it has some provisions for both the active investors and the passive investors you know, that was not talked about in the mainstream media that much and all that so can you share with us what those are? And how can these people who are you know, either have W-2  jobs or do not have W-2 jobs? You know, how can they average IQ?


Damion: Well, it’s an amazing thing that happened. What we know is that for most people that are working at a company, and there’s a 401k, it feels very trapped. It’s like in jail. And basically, we can’t really do anything with it. Until most cases, we can’t do anything until somebody leaves their job. What Congress did is they said, okay, a lot of people are going to be hurt. And then we need to figure out how to get money into the system. So they changed a couple of the rules, at least for this year. And maybe that’s it. So we have this timeframe where two things can happen. One, we can get money out of most 401k’’s including thrift savings plans. If you work for the government, many big company employees or big companies that have 401k’s, you’re able to pull up to $100,000 out right now as a disbursement without the 10% penalty that’s normally you’re hit with if you take the money out. Now, once you do that, assuming that your plan allows it and that’s really up to every employer, you can take that hundred thousand and to do one of two things. You could either keep it and never put it back and then you pay two Taxes over the next three years, or what’s even cooler is you could take that hundred thousand dollars out and move it into an eQRP, which gives you self direction. And what that means is that you can take your money out of Wall Street and you put it into an eQRP, which is a self directed retirement account. That’s what we set up. And you’re able to use that for things like investing in real estate or gold or almost anything you want. No taxes, no penalties, nothing. So it’s a really powerful way to get money out of that. That was just the first one. There’s actually a couple of different things they did.


Pancham: Let me jump in right here. Right so couple of things you mentioned there like if I have a W-2 job right now, right and assuming my employer allows me to take out that hundred thousand dollars, since I you know, keep it in my bank account. I do have to pay taxes on it over the next three year period with my current income bracket, tax bracket, but I do not have to pay a penalty, right, no penalties and you literally can keep it in your bank account. If you wanted to. You could just put it all into a retirement account in three years. So you can technically use it for investing yourself if you wanted to right now. And then in three years, you just have to make sure that that money gets into a retirement account of some sort. It’s basically a three year rollover. So you can roll it back, or you can roll it into something else. It gives you a lot of flexibility and a lot of access, though.


Damion: So if I put it back within the three year time period, I don’t have to pay taxes in that case, right? No taxes, no penalties, no payments. Okay, so the when you said that over the three year period, you have to pay taxes. What does that mean? So does that mean that I have to pay every year does that mean I have to pay towards the end of third year.


So if you’re if you’re not going to put it into a retirement plan within three years, then you you’re saying, okay, I’m going to keep the money. And so you’ll pay taxes over those three years, it’s really up to you to decide if you’re going to put the money back or if you’re going to keep it and if you keep it you do start paying taxes, you break it up into thirds. So a third of the money you pull out is going to be added to your income in 2020 and a third 21 and 22 is the final third.


Pancham: That’s awesome. This is pretty cool, right? So now let’s talk about the second part, which we’re talking about, which, if I have to take that money out now and put it into some other retirement vehicle, let’s say an IRA or eQRP, like you said, or any anything like that, then I don’t even have to pay taxes. And penalty was not the case, even in the first one. So, so yeah, so basically, I can use that money and invest it anywhere. I want.


Damion: Absolutely. It’s totally up to you totally flexible. The rule is you have to have some type of impact from the Corona virus for COVID-19. So you got the virus or somebody like your family member got it, or you’ve had an economic hardship, which I mean, it’s hard to find somebody that has not had some type of consequence from COVID. It’s very broad. And all you have to say is I’ve had an impact, and that’s enough, there’s not some big process. It’s kind of like the PPP loan that happened. It was a pretty, pretty basic process to get money for small businesses. This is not meant to be challenging, it’s to get money out into the system. So very, very easy to do. So that applies to any retirement account, whether it’s a 401k, eQRP, IRA…anything. The other one, the other thing that they did that’s pretty big is the loan. So this is only for 401K’s and eQRP’s. It’s not for IRA’s, and this is a loan where you can borrow normally you can borrow $50,000, or up to 50% of your money, whichever is less than you pay back over five years, that was changed. So between now and September 27 of 2020, you can borrow up to $100,000 or 100%, of what’s in there, whichever is less, and then no payments for 2020. And you can pay it back over five years starting in 2021. This is in addition to the disbursement and if you already have a loan out no more payments in 2020. So technically, right now, not even tech, just reality is if you have over $200,000 in your account, pretty high likelihood you could take up to $200,000 out very, very soon.


Pancham: So when you say $200,000 out very, very soon. So hundred thousand with the provision one $100,000 with the provision to, that’s it. So in the provision to, if I already had, let’s say, $50,000, out, for whatever reason, pre-COVID. So I can take out only 50, then in that case…correct another 50, you wouldn’t have to make payments on any of that for the rest of 2020. And the new 50, you could start making payments a year from the date you took it out in 2020. And depending on whether it’s a company plan, or it’s your own eQRP. If it’s an eQRP. You get to choose the interest rate. So it’s an amazing place to tap into money right now. I mean, that’s just part of what happened. But this is really powerful retirement accounts, being able to get money out of a company plan and put it into your hands to control it really has not happened before in our lifetime, right? No, this is pretty powerful. So any other changes on top of these two?


Damion: Well, anybody that has a required minimum distribution at RMD is not required to make those in 2020 because the markets dropped and a lot of people were pulling money out and their basis was dropped down. They said okay, you don’t have to take RMD. These are the big ones. One of the powerful things that happened in there that can kind of be used with this is the read aloud net operating loss carry-backs. So you can, let’s say you, you lose money in 2020, you could take that loss and apply it to 2015 tax return. So if you made money in 2015, and you lost money in 2020, you could actually get a refund for taxes you paid in 2015. So if you’re thinking, Well, I’m not losing money in 2020. Well, here’s a way to do it. If you were to take some money out of your retirement account, put it in your hands and go buy some real estate, you could potentially have losses because of bonus depreciation from that real estate or real estate syndication you invested in and then now you take your losses and apply it backwards. This is where you get a great tax strategist and have that person to work with you. But you can use these two pieces together and potentially pull money out of Wall Street jail and use it towards real estate or something and get your taxes that you paid five years ago, back pretty big deal


Pancham: Yeah, no that is pretty awesome. I probably will get someone a CPA on the show to kind of talk about that part because that kind of goes back to five years preserve which is very, very big if you really think about it right? Yeah, so no that’s great. So we discussed this in our previous show which was showed was and people who want to go and learn a lot about eQRP we covered pretty much a lot over there. But can you give us a brief overview of what that is? And you know, if a person is interested after listening to this, and they say, oh, you know what, I want to take that hundred thousand out and put in some other retirement vehicle where I have full control over those hundred thousand and one of that plan is eQRP. What does that person have to do?


Damion: Well, just in case you’re either you’ve heard of it or you’re not quite sure, or just a real quick snapshot eQRP is a unique retirement plan. It’s the enhanced qualified retirement plan, and it allows you to have checkbook control. It’s not like an IRA. It’s not like a solo 401k. It’s truly its own animal. And what it allows you to do is invest in things like real estate, whether you’re by yourself or whether you have employees, all of these things work. And it’s different in that, if you were to say, Okay, well, I’ve heard of an IRA or self directed IRA, and you’re maybe investing in real estate, which I think a lot of people are interested in. If you were to do that, you’re potentially going to get hit with you but, taxes, big, big landmine that’s out there. That applies to IRAs it that invested real estate that has any type of debt. With an eQRP, you’re exempt from that. Meaning, if you’re retiring money goes to make an investment. And let’s say you double your money over five or six years with an IRA. I mean, you could pay 10s of thousands of dollars in this tax, whereas with an EQRP zero, it’s exempt. That’s a big, big difference. The other big difference and power is that you have control you’re the trustee. So you write the checks and you control the assets. If you buy physical gold. You can actually hold it can’t do that with an IRA. The IRS does not allow an IRA holder to physically take possession of gold. But with EQRP, it’s absolutely allowed. Pretty cool.


Pancham: So yeah, no, I guess it’s a pretty powerful tool if you really want to control the money the way you want. And it’s also like the number of requirements to maintain it is it’s not right.


Damion: That’s right. It’s very, very simple and straightforward. And one of the values of important things about investing in business is to have a team. And so you’re going to have a team, which includes us to keep the plan in compliance. Basically, you do the investing, we do the compliance, very, very simple. I think the system the Wall Street system has conned us into believing that things are too complicated. And so we should just give them our money, and they’ll take care of everything. And I just fundamentally don’t believe that that’s the case. I think it’s our responsibility to not abdicate the responsibility for our money in our investing. And so this gives you the power and control you have a checkbook and it’s very simple, you invest, do good investing, and anybody can do that. It’s not overly complicated.


Pancham: Cool, so you know, I want to move on to the next section of the show, but I do have one question which I’ve been asking everyone now like in the situation that we are in, like, what are you seeing in the market? Because of like in your portfolio or things that you have invested in? And in general, like, what’s your take or feeling right now?


Damion: Well, I mean, what we’re seeing is we’re seeing a lot of uncertainty. We don’t know what things are going to look like down the road, like next week or next month. What we’re fairly confident of is two things. There’s a lot of people with a lot of money that are going to chase assets. And so we believe that there’s going to be a correction because there’s, I mean, there’s 30 plus million people in America alone, that or have become unemployed. So things are going to be different things that we thought were certain like student housing, maybe not so certain the University of California system said no classes in the fall, maybe some exceptions for medical students, perhaps, but things like that, where we thought there were certain D housing apartments that are rented where the government says, nope, you can’t collect rent or you can’t evict somebody for four months. The rules are changing. So what we’re seeing is we’re seeing people being very cautious. I see people that are rushing because they think that that we’ve hit a bottom and maybe the stock market. I think that’s crazy. We have not hit a bottom, there’s going to be a shake up. You can’t have all these restaurants and commercial businesses and real estate, all shutting down and collapsing, and not have negative consequences. So what I see is I see people rushing, and I think people should be patient. And I think there’s going to be opportunities, epic opportunities, if you could see beyond that the chaos. And I think that that’s likely to happen in the coming years. I don’t think it’s going to happen necessarily in large part this year, because we’re printing so much money and we’re subsidizing I think there’s a lot of manipulation. So it’s hard to plan if you’ve got the Government Printing trillions and trillions of dollars because nothing’s rational. And so I think we need to be careful and be patient.


Pancham: Yeah, everything is kind of skewed because of that.


Damion: Super skewed.


Pancham: Yeah, yeah. No, that’s great. Well, thank you for that. We’ll be back after this message. If you’re an accredited investor. And have been thinking about putting your money to work for you. Then I have good news for you. I have created an investor club which I call The Gold Collar Investor Podcast club, I will be putting together investing opportunities exclusively for the group. These are the opportunities where I have done the due diligence for you and will be investing my own money alongside you. If you are interested, please sign up on I repeat. Thegoldcollarinvestor I will reach out to schedule a 30 minute phone conversation to discuss your investing goals. Once you sign up, this can be a good opportunity to diversify and take some chips off the hands of Wall Street to produce some passive income. And in case you were wondering, what is an accredited investor? An accredited investor is someone who has earned more than 200 thousand dollars as filing single or more than $300,000 filing jointly for last two years. Another way to qualify as an accredited investor is if your total net worth is more than $1 million, excluding your personal home. It includes your stocks, 401K’s, IRA’s, cars, etc. Just not the equity in your personal home. If this is you, I would highly encourage you to sign up. Alright, so Damion, I ask these four questions to everyone on my show, and I call this Taking The Leap Round.


You were on the show before we can skip all of that. I do have one question for you, though.


Like what’s your favorite book or a book that you’ve been reading recently and kind of taken something from it and apply it to your daily life? 


Damion: The book that I refer back and read reference constantly is mastery. And I do that because it’s a book that our fellow martial artists And I apply that to not only martial arts because you can study martial arts and do the same thing for years. And it doesn’t seem like anything’s happening. And it’s called a plateau. And then we pop out of the plateau. And all of a sudden, there’s a new level that we’re living at, or practicing at. in business and investing. It’s the same thing. You can literally look at dozens and dozens and dozens, hundreds of deals. And you feel like I’m not making any progress. And then one day, it just becomes part of your DNA. And so I think there’s a huge value in us being willing to practice and be engaged and not wait for something to happen. But be patient enough as we’re going through it to know that that is a plateau process. So I love that book. I think it’s a great book for anybody in anything that they’re doing business investing, martial arts, or even life with your family. Sometimes you plateau with your kids for years. And then finally, one day they say, you know, I got it. And then you’re like, wow, you actually did get it. You heard it. I thought for the last 10 years, you weren’t listening. So it happens all over the place.


Pancham: Okay


Damion: The name is mastery is by George Leonard.


Pancham: Okay. We’ll put that in the show notes as well. Great. Thank you, Damion. And how can listeners reach you?


Damion: The best way to reach me and connect with me is is to get a copy of the book and you can do that on the site I think it’s is out yet. Right? That’s That was the link where you can get a copy of your free book.


Yeah, the once you get that you’ll be able to reach out ask us questions. We can help with any of your retirement stuff that you want to talk about. If we can provide strategy, just get a copy of the book, go to the website, get a copy it will FedEx it out to you.


Pancham: Great, well, thank you, Damion for being on the show. And, you know, connecting with me again and talking about the changes that are, you know, relevant to pretty much everyone was 401 K and how can they leverage it? Thanks.


Damion: Happy to be here. And thanks again for having me.


Do you think that those are great incentives to unlock some money out of your active 401k? I think so many people have moved to cash in their 401k because of market uncertainties, you can put that money to work or have the ability to put it to work later if you were to leverage the benefits from the cares act. Of course, you will have to check with your employer if you’re eligible or your plan is eligible to do that. But if they are allowing it, I feel that this is a great way to unlock that money and have the ability to do investments that your active 401k not allowed. Cool. So that’s it for today. If you have questions, email me at I repeat I really appreciate you this is Pancham signing off. Until next time, take care.


Thank you for listening to the gold color investor podcast. If you love what you’ve heard and you want more of Pancham Gupta visit us at and follow us on Facebook at The Gold Collar Investor Podcast. The information on this podcast are opinions as always, please consult your own financial team before investing.


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