Holy Smokes I may have found a way to potentially never pay taxes even though I will be trading stocks. So that way when stocks run, I could sell the rip and potentially pay no taxes. and when stocks fall I could use that money to buy the dip in other stocks and you could do this by exchanging the stocks. kind of like a real estate exchange. Now this is not tax advice and I'm certainly not a CPA And if you want tax advice, you should consult a CPA about the tax benefits of ETFs. But let me just give you a spoiler alert here in this video. I am launching an ETF and I'm doing that because of the tax benefits and another massive reason. all of which I'll explain in this video with the two big reasons for investing in an ETF this might be in the the future the only style of investing I do with stocks ever. Let's get into the video. hey everyone Me: Kevin Here today is a really big day. I am announcing the launch of my very own ETF That's an exchange traded fund that's going to be actively managed kind of like other innovation-based ETFs whose name we won't mention except I have a little bit of a different strategy that I'm very excited to share with you. You can start trading today on most brokerages, though it might take a few extra days for some retail brokerages like Robinhood M1 Finance or Weeble to show it. but I hope my ETF will be there soon. Now the ETF that I'm launching is called the Meet Kevin Pricing Power ETF It's an ETF that focuses on allocating money to stocks with the strongest Brands and Innovation allowing those companies to price their products and services competitively and profitably ideally with growing margin and valuations that are at reasonable levels. So that way we can grow the ETF together now to build in a hedge for this ETF and allow me some opportunities for rebalancing that is selling the Rip and buying the dip. I've included about a 15 to 20 percent Market hedge allocation in this fund. This allows me to park cash or to park assets into other hedge assets during exuberant Times by potentially again selling the rip or would allow me to buy the dip in more depressive times. It also allows me to make investments in things like just as an example, an oil stock. If let's say all of a sudden a war breaks out and a pipeline gets blown up. hence having a macro hedge to your longer term pricing power focused stocks which will make up over more generally 80 percent of this ETF Now again, hedging is just a small byproduct of this. ETF The primary focus here is innovative companies with pricing power. and while I really wanted the ticker symbol for this ETF to be MK which was available I actually decided to choose PP for Pricing Power in this video. I'd like to explain why I'm launching my PP but I Have to let you know this this: video is not personalized Financial Advice for you even though I am a licensed financial advisor and I'm now the manager of an active SEC regulated exchange traded fund I Can't use this video to give you personal tax advice, legal advice, or financial advice or really any kind of advice Now, just to be clear: I Kevin Paffrath am registered with the SEC as an Investment Advisor representative associated with Plato's philosophy: LLC Doing business as stock hack right now I'm just a dude on YouTube launching and actively managed ETF which you can learn all about by going to our website and reading the prospectus. You can learn more about the fun, that's goals and its expenses. All you have to do is go to the website for the ETF and that website is long. Kind of like going long a stock as opposed to going short to stock Pp.com So together that's longpp.com longpp.com for the meet Kevin pricingpower ETF So why did I launch this? ETF Let me get the first assumption out of the way because I know what people think, especially on the internet and I don't blame you before I make a dime of money from this ETF because it's probably gonna cost me somewhere between 250 to 500 000 annually just to run I'll probably need somewhere around 50 million dollars of money under management in the ETF before I even start making money many ETFs I See struggle just to break even unless of course your ETF goes viral like other actively managed Innovation funds. then you know you can make lots of money. but in general it seems to be pretty difficult to make money with an ETF and I just want to be transparent about that. Well, yeah, it could make money. It's possible in the future if this does very well, which I obviously hope it does. And I'm going to put everything I can into this to make sure that it does very well. although of course you can never guarantee that I'm launching this ETF to take advantage of a few different things, but one is really incredible and is unique to act actively managed. ETFs Well, it's actually unique to ETFs in general, but it's really special in our cases for an actively managed ETF and that is potential massive tax savings now. potential. Talk to your CPA about this. Okay, I'm not making any guarantees, but let me give you an example of what you like how this works in the simplest way: I could think about explaining it Many of you know I come from the real estate World A real estate background and one of the cool things that you could do with real estate is you could buy real estate and if you want to sell it, you do something known as a 1031 exchange. Buy another property and you don't pay taxes. It's pretty remarkable. Watch this. I'll give you just a quick example. Let's say, in your lifetime, you buy a bunch of properties and you end up spending one million dollars on all of those properties. I'm just making math super simple here. and you spend a million dollars on all those properties. and at some point in the future those properties are worth 10 million dollars. Now you're going to depreciate these properties. So let's say when you go to sell these properties in the future, you have to pay taxes on 10 million dollars. and I'm skipping some steps here. Just to keep it very simple, you'd probably have to pay long-term capital gains taxes of somewhere around 2.5 million dollars. Plus if you live in California you might have to pay another about 1.3 million dollars. So you could be giving up if you live in California Like, 38 of all your gains right in real estate? Well, the 1031 tax deferred exchange lets you delay all of those taxes to when you sell those in the future, so you don't have to sell them every time you move houses. But eventually you'll pay those taxes right? Well, not necessarily because if you happen to unfortunately be a hundred years old and then you get hit by a bus, there's something known as the stepped up tax basis, which could potentially eliminate all of the taxes you owe on real estate. So in other words, you exchange properties up, Up, Up, Up, Up, accruing or should I say deferring tax liability over and over and over again. And then one day when you get hit by a bus, you have your family inherit that at a stepped up tax basis and they don't have to pay the taxes, the IRS essentially says hey, sorry for your loss, We'll give you a pass on that. We'll let your family appraise these up to market value. That's a stepped up tax basis in real estate, and it's a pretty interesting way to build generational wealth. Subject of course to estate taxes and a whole host of other things. Laws could change. Always talk to your CPA right? but that's an exchange in real estate and what's neat about that is over time because generally people like, well, then how do I use the money if I just give it all away. Well, that's the cool thing about real estate, which we always teach in my courses on building your wealth. whether it's stocks and psychology, money, the Elite Hustler's course, the real estate courses zero to millionaire that I have. One of the neat things is you can borrow against those and you don't have to pay taxes. Uh, when when you borrow money against an asset and so that's what a lot of people do even like Elon Musk they'll have Tesla stock and then they borrow against it and uh, then that way they could spend money without having to realize gains or losses. Again, all pretty complicated tax situations. not making any guarantees here, but in stocks. Generally when you personally sell a stock because let's say you put all your money into Tesla stock and it five x's and you're like oh my gosh. Okay, Tesla went from 200 to a thousand dollars. Uh, I Really need to diversify what happens? Well, you sell and then you're like now I have to pay either shorter long-term capital gains taxes and that could suck. That could take anywhere from 15, 20 to 50 plus percent of your income depending on your tax bracket. That sucks. But enter the basically 1031 exchange for stocks. Yeah, that actually doesn't exist, but with ETFs there's a loophole. See, when you own an ETF you actually only own the ticker symbol. And while it's possible for capital gains to pass from that ETF to you kind of like with mutual funds, ETFs have a really special operating opportunity where they can basically take a basket of we'll call them ETF units. To keep it very simple, they could take a basket of ETF units and trade them for a different basket of ETF units. Kind of like an exchange. So let's say that this basket on the left had a 50 percent allocation to Tesla. Uh, let's just say and then that's traded for a basket that has a zero percent allocation to Tesla and in its place a 50 allocation to Apple. Technically, this was a an exchange of sorts and potentially not a taxable event as long as you still hold Papi when you sell PP That's when you could potentially realize a taxable that. Now there's always the potential that taxes flow from the exchange traded fund to you. That could happen with any fund that is an ETF. But this exchange opportunity is personally wide. I Wanted to launch this ETF because I could potentially minimize, maybe even eliminate a lot of the taxes that are associated with diversifying when stocks run. The problem is I couldn't find an active fund manager who has my thesis I couldn't find a pricing power ETF that I agreed with. So I decided to get my license and pay the money to launch my own ETF in an effort to save on taxes and minimize my tax burden. Now I can manage this ETF and I can invest my own money into it. Now you can also invest into this ETF I'm not recommending that you do, you can. But if you invest into this ETF and let's say our day: one allocation for Tesla is 22.5 percent and all of a sudden Tesla 4x's and then I sell off some Tesla where rather than just selling it I expect I would use this basket approach by working with our ETF managers to make sure that we're minimizing or eliminating the taxes by just moving over the ETF basket units and not passing on, uh, all of the potential taxes that you would otherwise be subject to if you just traded the stock. This then allows me to do some really, really cool things. It basically lets me say okay, hey, I think all of a sudden Tesla has now gone into a euphoric rally. It's gotten too expensive, we're gonna sell, and we're gonna buy something else. Of course, with ETFs, we're going to be very transparent about all of our trades within the ETF longpp.com We'll we'll have our allocations and all the information. In the future. we might even launch an app, although that's not certain at this point. So the first reason has everything to do with the unique tax structure of ETFs so you can learn more about that by talking to your CPA or Googling the tax benefits of ETFs. It's pretty cool. The second reason I launched this ETF was because I was honestly tired of rebalancing the M1 Finance pies and sending different links to people who wanted to invest in a similar pie because what we used to do was we'd have like this M1 Finance pie and then I change an allocation and I'd have to send a totally different link and then somebody else would have to like manually update it. but if somebody had to manually update it, then they might not be caught up with the latest updates and then they're like ah, oh no, you know I'm no longer caught up and they get discouraged. And it was. It was a little bit frustrating for essentially changing allocations for other people, which I couldn't do because then I wasn't a financial advisor. but now that I am a financial advisor and I have an actively managed ETF I can actually change allocations for other people. So that way if I say like I did this actually happen I say hey, I think peloton's a great stock we ride Peloton and then I go oh crap, Peloton's at 113, let's sell Peloton then I could just do that I could just pull the trigger. rather than a year later somebody going do it I bought Peloton because you had talked about Peloton now it's a 10 Stock what the heck and I'm like dude I sold that like 11 months ago. where were you and they're like oh, I must have missed that video and it's like well that's another downside of not actually being able to control the actual Holdings is people might get caught like that and and my goal would be to prevent that from happening. Of course that's a goal that's not saying people won't lose money, that's always something you have to think about of and with anytime you make an investment is there's no guarantee. But the third thing I really wanted to do was launch a thematic ETF that focused on pricing power this ETF even though I'm really launching it kind of for me because of what I think are going to be these incredible tax savings and opportunities to diversify and rebalance. I Really love the theme Pricing Power I Think that is a basket or a representative of a basket of companies that will outperform in the long term. Again, no guarantees and you can learn more about the Holdings by going to Longpp.com But here it is welcome to a new actively managed ETF We'll be ringing the bell on December 9th at the closing bell for this ETF launching PP And again, if you want to learn more, go to Longpp.com Thank you so much for watching this! Wow! This is exciting! Wish me luck! Investors should consider the investment objectives, risks, charges, and expenses carefully before. Investing For A Prospectus or summary prospectus. With this and other information about the fund, please visit our website at Longpp.com Read the prospectus or summary perspectives carefully before investing investing involves a risk. Principal loss is possible and unlike mutual funds, ETFs May trade at a premium or discount to their net asset value.