Solo401K/Revocable living trust

[RetiredHappy]

In order to have wages, OP will have to set up a rental business and pay salary to OP, which in turn enables contribution into Solo 401K. The issue is that turning rentals into a business and getting paid is a much more complicated process than simply receiving rentals currently. OP will also need to pay FICA on the salary received. Savings in deferred taxes may end up being a wash, after putting in much more time and money to create the business and paying OP a salary.

 

[retire to nature]

The OP shouldn't waste her time trying to understand how to set up a Solo 401K if she doesn't have any qualifying income. ( Either W-2 income or 1099 contractor income.) I do think her language barrier is the major issue in her understanding her options and the various pieces of information she is reading. Perhaps find a professional in the financial or tax world who knows the rules AND is fluent in the same language as the OP, so that the professional can explain the facts in a way the OP can understand.

Thank you for the reply. I admint I am ESL, and I am not using perfect english. But I disagree that my confusion was from language barrier. I have very good communication with business ppl they are so surprise all the time my keen analizying understanding much better than original english user.

I got the reason why I got confused after this post. Because the youtube was based on best tax saving purpose which including setting up RLT as estate planning from family to the next generation family. But my situation is not necessary at all.

I mentioned I dont believe much about the expert recommendation becaues I am kinda minority situation but all they talk about majority situation like having a kid to inherit. Or I have mostly S&P and total stock index fund with 11 rental houses. my concern was crashing rental market so wanted to reduce rental portion which was bigger than stock at that time. The consultant said you are missing REIT even though I said all my situation and asset detail.

So after this post, I learned how I can adapt all the information to myself condition better.

 

[retire to nature]

In order to have wages, OP will have to set up a rental business and pay salary to OP, which in turn enables contribution into Solo 401K. The issue is that turning rentals into a business and getting paid is a much more complicated process than simply receiving rentals currently. OP will also need to pay FICA on the salary received. Savings in deferred taxes may end up being a wash, after putting in much more time and money to create the business and paying OP a salary.

Thank you for the reply. this is the most related answer why i started to think about solo 401k.

I mentioned I was gonna plan to put the capital gain to solo401k. but I guess I was using wrong term of capital gain instead of flipping labor.

I sold one house this year, and I painted walls, refinish the floor, and repair etc. I worked almost everyday for 2 month since i have the skills. I saved alot of money not hiring ppl and shortened alot of time to be ready on market.
Also, I dont hire much of gardener or cleaner for my airbnb house either.

my original interest about solo401k was because the deduction amount was pretty big then i can sell as many houses and as soon as possible since i was concerned about tax rate after capital gain. Selling one house could change the tax rate higher plus NIIT. so I thought solo401k could be a solution since I have 9 more to go houses.

after this post, I learned more about tax issue, like self employed tax, FICA etc. So I was wondering if I can set up a company and pay to myself then i can do 401k too. or just business expense deduction could be good enough. I know it could be just calculation which could end up as loss or complication as you mentioned. Or can I get double benefit of expense deduction plus solo401k?

And it is based on how long I would have this rental business too. I hate doing it as well as it doesnt bother me either as time goes by. And I was worrying about housing market crash due to pandermic, but it seems be ok since virus mutation plus the tonado which hit around my state. It will make houses short again.

 

[retire to nature]

Why I am concerning or thinking for myself about tax is because I realized I did a mistake while probate. everybody told me about step up basis and yes I did.

But I sold 4 houses during probate and I could have saved 10k if I waited selling after probate done. I guess I was misunderstanding of some. And yes, I had two laywers and CPA, and real estate agent asked about step up basis. They never told me I would have better wait. My sister realtor even informed me I need to sell all the houses. My sister was some stupid. He is saying my sister was his best friend but treated my sister like those misinformation. I told him I dont need to sell any if i want to. He just wanted his commission.

Also, "I" found one of my house was not depreciation done almost 5year. Yes, I am the one check and confirm before filing but I didnt know much about rental business tax issue either at that time. I was stupid enough the expert will do everything right for me at the beginning of time. after I realized one house was not getting depreciation, I mentioned to my current CPA ( I had many CPA for last few years, so none of them mentioned), and he said I still need to recapture even though I didnt get benefit of deprecitaion.

Also, my sister case was she has some language issue and didnt understand about property tax deduction. She was filing many houses without property tax for many years, none of CPA(she had a few CPA change due to one CPA was retired) told her why or corrected.

So I dont believe much experty will be do all for me. I want to be a smart consumer for a service.

 

[Sunset]

....
after this post, I learned more about tax issue, like self employed tax, FICA etc. So I was wondering if I can set up a company and pay to myself then i can do 401k too. or just business expense deduction could be good enough. I know it could be just calculation which could end up as loss or complication as you mentioned. Or can I get double benefit of expense deduction plus solo401k?

No.
Expenses of a company reduce the amount remaining for employer portion of solo 401K.
Cannot double dip.

.
..... And I was worrying about housing market crash due to pandermic, but it seems be ok .....

Needless worry, people have to live somewhere so unless you see bodies by the thousands piling up on the streets, there will be a market for houses.

 

[ExFlyBoy5]

I may not want to see an attorney but was gonna write trust and get notarized it.

I am a licensed attorney but there is NO WAY I would try and write such a complex instrument. Leave that to a professional who does that every day and has seen issues with trusts that had problems.

 

[Greddy]

Originally Posted by retire to nature
I may not want to see an attorney but was gonna write trust and get notarized it.

Originally Posted by ExFlyBoy5
I am a licensed attorney but there is NO WAY I would try and write such a complex instrument. Leave that to a professional who does that every day and has seen issues with trusts that had problems.

I think there seem to be two issues going on at the same time. First, this seems to be a case of the famous Dunning-Kruger effect, where OP is far to the left, and the last poster is far to the right, with others in between, see below.

Second, to navigate life it is absolutely essential to find professionals and friends you can trust. They do of course exist, and if you are unable to locate them, then this reflects your own lack of skill, but does not mean that everybody besides you is incompetent and cannot be trusted. If a Boeing airplane falls out of the sky, they also cannot say "It is all because of this person we hired off the street, who claimed to be an engineer, but really didn't know what he was doing, and so the screw he recommended failed". Rather, Boeing has to stand behind what they sell, and they do it by building a very powerful system to assure success in hiring competent people.

 

[retire to nature]

I think there seem to be two issues going on at the same time. First, this seems to be a case of the famous Dunning-Kruger effect, where OP is far to the left, and the last poster is far to the right, with others in between, see below.

Second, to navigate life it is absolutely essential to find professionals and friends you can trust. They do of course exist, and if you are unable to locate them, then this reflects your own lack of skill, but does not mean that everybody besides you is incompetent and cannot be trusted. If a Boeing airplane falls out of the sky, they also cannot say "It is all because of this person we hired off the street, who claimed to be an engineer, but really didn't know what he was doing, and so the screw he recommended failed". Rather, Boeing has to stand behind what they sell, and they do it by building a very powerful system to assure success in hiring competent people.

Thank you for the reply and introduced the theory to me. It is interesting and yes I do come and go from the left to right all the time with self awareness haha.

also, totally agree about all your saying. and I kinda quit to searching friends or experties so not much skilled about it. Then I got skilled to do it by myself.

My mistrust issue is not that serious like not believing Boeing. Yes I flew many times. I can call my mistrust to wisdom or maturing etc just as normal aging not anymore 20's, now mid 40's haha.

By the way, I reviewed your profile and your post and surprised you are female (not sure why I assumed you are a man). you mentioned about increase of narcissist. I can answer yes narcissists are increasing. Since my ex hubby was NPD(Narcissistic personality disorder) I read about books, and society is producing them alot now haha.

I also can call my mistrust as residue of relationship with NPD. definitely my mistrust function in my brain was kicked on so many times. I could feel the change of my brain. so walked out from the relationship.

 

[Scratchy]

Thanks. I emailed to my CPA since I am confused with this link. at the end of the page, it says i can do solo401k with passive income.

https://www.bankrate.com/investing/passive-income-ideas/

If you read that article carefully, you should not conclude that capital gains can be used for a solo 401k.

In my opinion you should find a professional you trust to advise you on the best business structure for your income and to file your taxes. If you do not, it is likely to cost you a lot of money in lost opportunities and errors.

It does appears to me you are overconfident in your abilities to understand these complex financial issues without professional assistance. I hope that is not insulting in any way. I'm also not a financial professional, and I therefore hire an accountant and a pension plan administrator on an ongoing basis.

 

[Golden sunsets]

If you read that article carefully, you should not conclude that capital gains can be used for a solo 401k.

It does appears to me you are overconfident in your abilities to understand these complex financial issues without professional assistance.

I concur. Use professionals who will clear up your confusion and set you on the correct path and check in with them periodically.


Sent from my SM-T510 using Early Retirement Forum mobile app

 

[CRLLS]

Trusts are written by trust attorneys. A certification of trust is also issued by the attorney based on the trusts. You cannot just write a trust and get it notarized. What is your purpose in wanting a revocable trust? There is no tax advantage. It only helps to avoid trust assets from going through probate when you pass away. Since you don't care about leaving money to your famiy, so why bother?

Please tell me more about this. This is not my understanding. Is this fact, or just a recommendation? It is my understanding that a revokable trust can be written by a layperson and notarized. see Nolo.com. Whether it is wise or not is a different discussion IMO. A notary's job is just to certify that the person signing a document, any document, has provided proof of their identity and is the person signing. I could write a Christmas card, and have it legally notarized; I think.

 

[RetiredHappy]

Please tell me more about this. This is not my understanding. Is this fact, or just a recommendation? It is my understanding that a revokable trust can be written by a layperson and notarized. see Nolo.com. Whether it is wise or not is a different discussion IMO. A notary's job is just to certify that the person signing a document, any document, has provided proof of their identity and is the person signing. I could write a Christmas card, and have it legally notarized; I think.

I cut myself and can stitch up the wound. Can I do it? Would I do it? Would I get an infection? Quite possibly. I go to the doctor to take care of my wound.

 

[OldShooter]

... It does appears to me you are overconfident in your abilities to understand these complex financial issues without professional assistance. ...

+1000

@retire to nature, you obviously believe that you are a very smart person. But you are actually not so smart after all if you cannot recognize that you have no prospect of learning all the rules and regulations pertaining to your situation and, even more importantly, have no prospect of even scratching the surface of what professional practitioners have learned in years of working in the field.

 

[Greddy]

Thank you for the reply and introduced the theory to me. It is interesting and yes I do come and go from the left to right all the time with self awareness haha.

You are not understanding correctly. On that Dunning Kruger curve, people do not move back and forth from left to right. Rather, everybody moves to the right, some more slowly than others, based on how much expertise they accumulate (the small exception is that when people later develop memory problems like Alzheimer's, or if one doesn't practice a topic much, one eventually tends to forget some of it. But these don't apply here.) A trust lawyer is far on the right of this spectrum. An earlier poster here who is a lawyer is also far to the right, but as he says, not far enough that his confidence would allow him to tackle this problem. And yet he spent many years in college, then in law school, then in preparation for the bar exam, and then probably many years helping clients.

If you are observing swings in your confidence, that just means you are still far to the left in this curve. Other versions of this curve show such swings, which are a normal part of moving from left to right, but the situation is a bit more confusing. I am including another figure that is more detailed, and has descriptive labeling from an interesting blogger called Tim Urban.

also, totally agree about all your saying. and I kinda quit to searching friends or experties so not much skilled about it. Then I got skilled to do it by myself.

That is probably also a significant misconception. You will not develop "real" expertise that is fail proof quickly. About friends, of course I don't know your personal life, but you come across as haughty, very overconfident, and generally dismissive or even demeaning of others. That generally repels people once they find out more about it. The point is, the world is full of trustworthy experts on technical issues, and it is full of trustworthy people with a good personality who can be friends. If you don't find them, then this is a problem within yourself, and not because the entire rest of the world is incompetent and crooked.

My mistrust issue is not that serious like not believing Boeing. Yes I flew many times.

You are again misunderstanding. The point is not whether you trust or mistrust Boeing. The point is that Boeing as a company can only operate if they have good mechanisms in place to identify reliable experts for the millions of separate problems that crop up when building an airplane. Boeing is an example that the system of finding trustworthy people and relying on their expertise works. If they could not find trustworthy experts, then they would fail - many companies fail exactly because of that. Likewise, people who fail in life often do because they don't have a group of trustworthy experts and reliable friends.

I can call my mistrust to wisdom or maturing etc just as normal aging not anymore 20's, now mid 40's haha.

Mistrust has nothing to do with wisdom, see Boeing. Rather, if is universal, it shows an inability in judgment, and lack of serious effort to find trustworthy people. What you are describing in your passage from 20's to mid 40s to me seems more like the drop from the very left hill in the Dunning Kruger curve to the valley just to the right of it.

By the way, I reviewed your profile and your post and surprised you are female (not sure why I assumed you are a man).

Is your surprise because I have a certain amount of confidence? I have experienced many stereotypes in my life and career about the competence of women vs men, even more in my home country than here, where they are still widespread although probably more implicit. Sadly even women often have a bias to consider men more competent.

you mentioned about increase of narcissist. I can answer yes narcissists are increasing. Since my ex hubby was NPD(Narcissistic personality disorder) I read about books, and society is producing them alot now haha. I also can call my mistrust as residue of relationship with NPD. definitely my mistrust function in my brain was kicked on so many times. I could feel the change of my brain. so walked out from the relationship

Yes you observed correctly that I studied much about narcissism, and after years of that, I would consider myself probably somewhere a little right of halfway on the Dunning Kruger curve about this topic. But I am far from an expert, and would never think of myself as one, although I would guess I studied it even more than you, and probably also more than many of the YouTube "experts". Many of them have no systematic training but use this platform as a self-healing tool about their own experiences and insecurities.

And it is true that victims of narcissistic abuse often themselves develop all kinds of problems, similar to PTSD about which you may have heard, or if it happened in their childhood, C-PTSD. Interestingly enough, one of the main mechanisms of how people become narcissists is by having been exposed to narcissism themselves. It's kind of a mechanism to "get even with the dirty ways", even if it means using dirty ways oneself. Or just not having role models for how the "clean ways" work. Another interesting thing is that people who are narcissists themselves have a tendency to blame others of narcissism even if these have not been psychologically diagnosed, as part of a subconscious mechanism to prove "others are bad as well, so I don't have to worry as much about myself".

 

[CRLLS]

I cut myself and can stitch up the wound. Can I do it? Would I do it? Would I get an infection? Quite possibly. I go to the doctor to take care of my wound.

Thanks for the reply. Your statement of "Trusts are written by trust attorneys. A certification of trust is also issued by the attorney based on the trusts. You cannot just write a trust and get it notarized. " is what I was concerned with. It read more like it can't be done rather than your personal recommendation.

For me, I have read several other's Trusts and Wills. I have had a lawyer revise a Will where there were several major errors in fact made by that lawyer. I have written our own Wills and believe to the bottom of my core that my/our wishes are clearly expressed, are legal and will be easily comprehended by my chosen executor. And if necessary, would hold up in court if contested. I would have no hesitation also writing a Living Trust with the help of Nolo.

DIY is not just my personal opinion but also fact, at least in my state. I realize others may not feel this way.

 

[Doingitwrong]

OP! How's the "trust" drafting going so far?
I stopped back in because I'm in the Christmas spirit and I had my plan and TRUST document out today to be sure I didn't mess anything up during the year. The penalties can be onerous if I mess up my S-Corp payroll taxes or 401K.
You'll notice that I said plan and TRUST document above.
That was the point I was trying to make earlier - the plan is the TRUST (or creates the TRUST). A "plan" is a piece of page - it can't hold anything (cash, investments, etc).
The cover of my document literally says,

XXX, LLC
Profit Sharing Plan

ZZZ State Bank
Defined Contribution Prototype
Plan and Trust

Inside the Plan and Trust document one finds-

Article I – Definitions
Article II – Eligibility Requirements
Article III -Plan Contributions and Forfeitures
Article IV – Limitations and Testing
Article V – Vesting Requirements
Article VI – Distribution of Account Balance
Article VII – Administrative Provisions
Article VIII – Trustee and Custodian, Powers and Duties
Execution Page
Appendix A – Special Retroactive and Prospective Effective Dates
Appendix B – Basic Plan Document Override Elections
Appendix C – List of Group Trust Funds/Permissible Trust Amendments

The eight articles are made up of 42 sections where you define and/or allow/disallow such things as compensation, contribution types, disability, service hours, years of service, entry date, break in service, nonelective contributions (types, allocation, formula), annual testing, retirement age, early retirement age, acceleration on death or disability, vesting, separation distribution timing, in-service distributions/events, post-service and lifetime RMD distribution methods, beneficiary distributions elections, joint and survivor annuity requirements, allocation of earnings, valuation of trust.
That’s a sample of the section headers under the Articles; the sections have subsections. It's really just pages of check boxes and fill-in the blank.

I not sure but I don't think you can draft a plan that omits items/elections/options required by law; even if you don't think they'll ever apply to you.

While the rest of the USA is using IRS/DOL pre-approved prototype plans like mine, I understand you may not believe in or trust the IRS/DOL.
A quick goggle search tells me that the IRS user fee for submitting your plan for approval will be-
See Revenue Procedure 2020-4, Form 5300 (Application for Determination for Employee Benefit Plan) $2,700
Not my area of expertise but may be you'd qualify for user fee exemption. IRS Notice 2017-1, 2003-49, and 2002-1 pop up in google.

Good luck and Merry Christmas

PS Once you have your Plan and Trust you'll need to update it for changes in law.
The Execution Page of my plan, signed by a Trust Officer of the bank acting as Custodian for my Trust, contains the statement, " The Prototype Plan Sponsor identified on the first page of the basic plan document will notify all adopting Employers of any amendment to this Prototype Plan...
AND
The Prototype Plan Sponsor has obtained from the IRS an Opinion Letter specifying the form of the Adoption Agreement and the basic plan document satisfy, as of the date of the Opinion Letter, Code Section 401. An adopting Employer may rely on the Prototype Sponsor's IRS Opinion Letter only to the extent provided in Revenue Procedure 2011-49.

 

[retire to nature]

OP! How's the "trust" drafting going so far?
I stopped back in because I'm in the Christmas spirit and I had my plan and TRUST document out today to be sure I didn't mess anything up during the year. The penalties can be onerous if I mess up my S-Corp payroll taxes or 401K.
You'll notice that I said plan and TRUST document above.
That was the point I was trying to make earlier - the plan is the TRUST (or creates the TRUST). A "plan" is a piece of page - it can't hold anything (cash, investments, etc).
The cover of my document literally says,

XXX, LLC
Profit Sharing Plan

ZZZ State Bank
Defined Contribution Prototype
Plan and Trust

Inside the Plan and Trust document one finds-

Article I – Definitions
Article II – Eligibility Requirements
Article III -Plan Contributions and Forfeitures
Article IV – Limitations and Testing
Article V – Vesting Requirements
Article VI – Distribution of Account Balance
Article VII – Administrative Provisions
Article VIII – Trustee and Custodian, Powers and Duties
Execution Page
Appendix A – Special Retroactive and Prospective Effective Dates
Appendix B – Basic Plan Document Override Elections
Appendix C – List of Group Trust Funds/Permissible Trust Amendments

The eight articles are made up of 42 sections where you define and/or allow/disallow such things as compensation, contribution types, disability, service hours, years of service, entry date, break in service, nonelective contributions (types, allocation, formula), annual testing, retirement age, early retirement age, acceleration on death or disability, vesting, separation distribution timing, in-service distributions/events, post-service and lifetime RMD distribution methods, beneficiary distributions elections, joint and survivor annuity requirements, allocation of earnings, valuation of trust.
That’s a sample of the section headers under the Articles; the sections have subsections. It's really just pages of check boxes and fill-in the blank.

I not sure but I don't think you can draft a plan that omits items/elections/options required by law; even if you don't think they'll ever apply to you.

While the rest of the USA is using IRS/DOL pre-approved prototype plans like mine, I understand you may not believe in or trust the IRS/DOL.
A quick goggle search tells me that the IRS user fee for submitting your plan for approval will be-
See Revenue Procedure 2020-4, Form 5300 (Application for Determination for Employee Benefit Plan) $2,700
Not my area of expertise but may be you'd qualify for user fee exemption. IRS Notice 2017-1, 2003-49, and 2002-1 pop up in google.

Good luck and Merry Christmas

PS Once you have your Plan and Trust you'll need to update it for changes in law.
The Execution Page of my plan, signed by a Trust Officer of the bank acting as Custodian for my Trust, contains the statement, " The Prototype Plan Sponsor identified on the first page of the basic plan document will notify all adopting Employers of any amendment to this Prototype Plan...
AND
The Prototype Plan Sponsor has obtained from the IRS an Opinion Letter specifying the form of the Adoption Agreement and the basic plan document satisfy, as of the date of the Opinion Letter, Code Section 401. An adopting Employer may rely on the Prototype Sponsor's IRS Opinion Letter only to the extent provided in Revenue Procedure 2011-49.

Thank you for the reply.

Actually, I understood I dont need a trust and solo401k after #30 reply on 12/15. But I guess people thought I still pursues it. Thank you for the this detail though. I may need a trust later.

 

[retire to nature]

The OP shouldn't waste her time trying to understand how to set up a Solo 401K if she doesn't have any qualifying income. ( Either W-2 income or 1099 contractor income.) I do think her language barrier is the major issue in her understanding her options and the various pieces of information she is reading. Perhaps find a professional in the financial or tax world who knows the rules AND is fluent in the same language as the OP, so that the professional can explain the facts in a way the OP can understand.

I may have the language barrier, but my current CPA is a Korean also. But not related solo401k, I have tried to consult about my situation how to sell the best way, but he was saying why to sell, just keep as long as possible. My perspective was based on FIRE since I have enough asset. But it is just standard thinking to keep long and inherit to kids way since I was planning to buy his own rental property.

Also, I asked what date is counted to sell the house I sold this year before beginning of this year since the title was changed on 1/8/21. he said the title date, but it turned out it was her death date. Some parts is his incompleted knowledge but I asked my CPA friend and her coworker etc. No one could answered. Finally, I found it in the tax book to confirm and confirmed with my CPA too.

So, I am saying asking to expert is not always right answer.

 

[retire to nature]

Thanks for the reply. Your statement of "Trusts are written by trust attorneys. A certification of trust is also issued by the attorney based on the trusts. You cannot just write a trust and get it notarized. " is what I was concerned with. It read more like it can't be done rather than your personal recommendation.

For me, I have read several other's Trusts and Wills. I have had a lawyer revise a Will where there were several major errors in fact made by that lawyer. I have written our own Wills and believe to the bottom of my core that my/our wishes are clearly expressed, are legal and will be easily comprehended by my chosen executor. And if necessary, would hold up in court if contested. I would have no hesitation also writing a Living Trust with the help of Nolo.

DIY is not just my personal opinion but also fact, at least in my state. I realize others may not feel this way.

Thank you for the reply. I have not checked my MO state. But my assumption was from my probate cases. in MO for probate, a laywer is a requirement. But I had a probate in CA. CA is fine without a lawyer, so I wrote application etc plus final statement etc by looking at nolo book. I got all through good, no problem with the probate at all.

Also, I had seen a lawyer in MO before my sis death because I had a company benefit with legal plan. I was expecting he would do things for me, but he was asking me writing my own. So I know will and trust similar and difference, so I could think I could write my own. Also, I checked a website today, yes, DIY is possible.

I am not cocky like people think here. I am more cautious on things. and that's why I came here to ask.

 

[retire to nature]

I think there seem to be two issues going on at the same time. First, this seems to be a case of the famous Dunning-Kruger effect, where OP is far to the left, and the last poster is far to the right, with others in between, see below.

Second, to navigate life it is absolutely essential to find professionals and friends you can trust. They do of course exist, and if you are unable to locate them, then this reflects your own lack of skill, but does not mean that everybody besides you is incompetent and cannot be trusted. If a Boeing airplane falls out of the sky, they also cannot say "It is all because of this person we hired off the street, who claimed to be an engineer, but really didn't know what he was doing, and so the screw he recommended failed". Rather, Boeing has to stand behind what they sell, and they do it by building a very powerful system to assure success in hiring competent people.

Ok, I totally misunderstood this reply. I had a long week. now get it right. I didnt mean the bold though. my language may sounded like that way. I understand. If I think like that bold way, why I am here to ask for help? it was a bit bothered when I read first time, and got all the wrong direction to understand.

 

[retire to nature]

You are not understanding correctly. On that Dunning Kruger curve, people do not move back and forth from left to right. Rather, everybody moves to the right, some more slowly than others, based on how much expertise they accumulate (the small exception is that when people later develop memory problems like Alzheimer's, or if one doesn't practice a topic much, one eventually tends to forget some of it. But these don't apply here.) A trust lawyer is far on the right of this spectrum. An earlier poster here who is a lawyer is also far to the right, but as he says, not far enough that his confidence would allow him to tackle this problem. And yet he spent many years in college, then in law school, then in preparation for the bar exam, and then probably many years helping clients.


If you are observing swings in your confidence, that just means you are still far to the left in this curve. Other versions of this curve show such swings, which are a normal part of moving from left to right, but the situation is a bit more confusing. I am including another figure that is more detailed, and has descriptive labeling from an interesting blogger called Tim Urban.
That is probably also a significant misconception. You will not develop "real" expertise that is fail proof quickly. About friends, of course I don't know your personal life, but you come across as haughty, very overconfident, and generally dismissive or even demeaning of others. That generally repels people once they find out more about it. The point is, the world is full of trustworthy experts on technical issues, and it is full of trustworthy people with a good personality who can be friends. If you don't find them, then this is a problem within yourself, and not because the entire rest of the world is incompetent and crooked.
You are again misunderstanding. The point is not whether you trust or mistrust Boeing. The point is that Boeing as a company can only operate if they have good mechanisms in place to identify reliable experts for the millions of separate problems that crop up when building an airplane. Boeing is an example that the system of finding trustworthy people and relying on their expertise works. If they could not find trustworthy experts, then they would fail - many companies fail exactly because of that. Likewise, people who fail in life often do because they don't have a group of trustworthy experts and reliable friends.
Mistrust has nothing to do with wisdom, see Boeing. Rather, if is universal, it shows an inability in judgment, and lack of serious effort to find trustworthy people. What you are describing in your passage from 20's to mid 40s to me seems more like the drop from the very left hill in the Dunning Kruger curve to the valley just to the right of it.

Is your surprise because I have a certain amount of confidence? I have experienced many stereotypes in my life and career about the competence of women vs men, even more in my home country than here, where they are still widespread although probably more implicit. Sadly even women often have a bias to consider men more competent.
Yes you observed correctly that I studied much about narcissism, and after years of that, I would consider myself probably somewhere a little right of halfway on the Dunning Kruger curve about this topic. But I am far from an expert, and would never think of myself as one, although I would guess I studied it even more than you, and probably also more than many of the YouTube "experts". Many of them have no systematic training but use this platform as a self-healing tool about their own experiences and insecurities.

And it is true that victims of narcissistic abuse often themselves develop all kinds of problems, similar to PTSD about which you may have heard, or if it happened in their childhood, C-PTSD. Interestingly enough, one of the main mechanisms of how people become narcissists is by having been exposed to narcissism themselves. It's kind of a mechanism to "get even with the dirty ways", even if it means using dirty ways oneself. Or just not having role models for how the "clean ways" work. Another interesting thing is that people who are narcissists themselves have a tendency to blame others of narcissism even if these have not been psychologically diagnosed, as part of a subconscious mechanism to prove "others are bad as well, so I don't have to worry as much about myself".

you may know about narcissists you are right, you are at the state of it makes sense way. I understand what you mean in the last paragraph, but it is not all, it is of course more complicated. I am not sure why you would gues you would know more than me because I didnt get the theory correctly first? or my language is not so good?

anyway, some of your language is somehow limited. I may used a wrong term, but you are not inferring what i meant well. Mistrust is a wisdom and residue. for example from my recent days, I got insulation work done in my house lately. I got 3 estimates. first company showed up with pretext msg to confirm, in nice company printed uniform, color brocher packet etc. he went up to attic all walked around said I had 4" insulation remained now. got 1200. second company, I got a text msg asking my sqft and remain inch. I texted back from the info from the first company. initially I called a bunch of companies, so didnt know even which company was texting me. I thought second one was third company which would show a few days later. I thought the third company is preparing in advance. but it turned out it was second company, and he didnt reponded for a few days. so third company showed up, and just his dead passed up to attic access, no measure, but saying it is 3 inches, my company is how long history and tried to make small talk for intimacy. I am not favor of this kind of business to make friendship way, so I let him go and waited for the estimate. since I noticed the second company is another one, I texted him back where is my estimate, he apologized and texted back with $920. he said about new regulation and R49 value etc, it sounded knowledgeable. But I was in sale field too, how speak is a strategy. and I got third estimate with $700. I thought $700 is cheap, and asked the third company by emailing, what I heard new regualtion is R49 are you giving me the estimate for R49(the inches of insulation, so I needed 12-13 inch more). it was email but we were like texting way. he didnt answer long time, and he will try to fit to 16". I said I didnt mind to give another number but I preferred to fit the regulation since I know buying and selling house sometimes it is in the way to meet a regulation. he said the company is lowest due to long history and no subcontract etc. I know contract work is difficult, it is not signed after all. so I signed with this company. I wanted to air leak proof, but all 3 didnt do that just blowing insulation. so I thought just blowing would be the same kind and I didnt wanna pay $500 for nice uniform. on the installation, when they finished, it was only 10" total. I asked the man worker, I was told to do get 16". so they put the hose back and blowed again, I checked it again, it wasnt 16 either and he didnt want to go into attic to do again, so was a bit upper around the entrace. I see the back way is all lower. He talked another man and he came back blowed again. much higher but not sure it would be 16". I was shy to measure the last time.

so three of companies can be called experts here. I am not sure how 2 other companies would perform. If I just trust this expert company would do it right with like trustworty ppl mind, I wouldnt check. But I dont mean this guy is totally bad person either. But ppl lie easily for their own survival reason. And I am pretty sure, the company didnt think I really would go up to check or I looked poor since my street isnt that good area. But I am pretty sure they do to other houses too and all three estimate were not clear about inches or sqft etc.

I asked the third company to estimate my airbnb house. he seemed to be surprise that I was the big house owner. And I said I am not sure the real attic sqft due to attic room renovation. the attic floor is half size of my own living. and I would like to get insulated the slope part too. again, he was just peeking with few inch head up, not even checked the side, the side is all blocked. here is my residue. I always filter each sentence, if it is correct. "I" went up again, it was just covered with insulation. So experts say things not even checking and I have to believe that whatever they said? I asked if it can be hard due to 3 story building, he said i have window to use and street will be cleared then no problem.

He gave me 2k this time. it was way higher than I expected. so I asked what number is putting for estimate, floor is smaller and remain inch was the same as 3". he said it will be complicated due to 3 story building. so I didnt feel good about it, I didnt signed that one.


From your writing I became a totally bad person in your perspective because you believe the friendship and relationship, trustworthy ppl more than I do. Yes, my interaction with ppl is like above not with boeing employees.(actually, I have a boeing employee as my airbnb house haha. yes, I can say the tenant is exellent.)

But my point is you cant demeaning me either because you believe your own ina big way. all people are differnt. if you dont understand people it doesnt mean all in insecurity. My knowledge of world is the very right in the first theory as it is very complicated. also, you have seen a big copmany scam like platinum partners hedge fund, teranos and I am sure more exists. And I am pretty sure you are working a good company but why you cant understand your narcissist boss if you are so respect of experies and their experiences?

I understand it was from a trust and trust lawyer, so you could misunderstand. but still a trust can be done DIY. I was a bit honestly irritated with your last reply because as you mentioned you are over-confident(I would like to say narcisstic actually because you think yourself so valued up) and accusing others but yourself is doing the same thing.

your writing is very good but I kinda sensed my ex's way. it all looks good but it is in a box. and this theory etc. life is not that simple. and a theory is a theory. When vaccine is safe based on low number of side effect before release, was it experimented on the total population? it cant be insisted a theory said so.

Sorry wanna more to say, but it will be forever. I didnt mean the experts are useless. I meant I have a tendency not to be cautious of using experts.

Anyway, thank you for the time for the long replies.

 

[FIREarly]

To my understanding on RLT, and it's limited, is that it's a good way to keep your RE out of your name. Yes, it does more than this, probate etc.., but some people like to own their homes in business names.

What is the reason famous singers and athletes buy homes in LLC?

 

[gumshoe]

I think there seem to be two issues going on at the same time. First, this seems to be a case of the famous Dunning-Kruger effect, where OP is far to the left, and the last poster is far to the right, with others in between, see below.

If anything, the right portion of the Dunning-Kruger chart/graph seems more representative of the OP than the left portion of the chart where someone claims to "know everything".

The Dunning-Kruger Effect describes the phenomenon in which low competence individuals or businesses lack the ability to recognize such incompetence. A core component of the Dunning-Kruger effect is meta – ignorance, or ignorance of one’s ignorance. Critical thinking with the goal of improving is the best way to overcome the Dunning-Kruger effect.

There is no indication the OP has Dunning-Kruger because her posts clearly show she is trying to add to her knowledge to help her make better decisions; she knows she does not have all the answers, and that's why she's asking so many questions! Conversely, a good example of someone who has Dunning-Kruger: Jenny McCarthy, the Playboy model turned immunologist who has been promoting chelation therapy and attributing vaccinations to autism for years....with no credibility.

 

[Greddy]

If anything, the right portion of the Dunning-Kruger chart/graph seems more representative of the OP than the left portion of the chart where someone claims to "know everything".

The Dunning-Kruger Effect describes the phenomenon in which low competence individuals or businesses lack the ability to recognize such incompetence. A core component of the Dunning-Kruger effect is meta – ignorance, or ignorance of one’s ignorance. Critical thinking with the goal of improving is the best way to overcome the Dunning-Kruger effect.

What you are describing, which is often stated in a particularly catchy way as "they know so little that they don't know how little they know", is only one portion of the Dunning Kruger effect, although perhaps the most widely popularly discussed. The other is that people on the right half of the curve are actually often less confident in their knowledge than is appropriate, because they are very aware of what they don't know yet, and they often have a different critical misunderstanding, namely they often overestimate how much others know about the matter. This is the territory of the so-called imposter syndrome and similar effects.

There is no indication the OP has Dunning-Kruger because her posts clearly show she is trying to add to her knowledge to help her make better decisions; she knows she does not have all the answers, and that's why she's asking so many questions!

What is happening is that OP is moving a little to the right from the very left end of the curve, just as any serious learner would. But to me it appears clear that she is still far away from the right end of the curve, where you find trained specialized lawyers who could with confidence draft the necessary documents that OP had hoped to put together by herself.

So it is not a matter of whether OP "has Dunning Kruger", as this is not some kind of disease, but it is a natural phenomenon that applies to most kind of new learning. The issue is that in the very beginning, OP was so far to the left of the curve that she could not judge sufficiently clearly how much she knows, in particular that her skill wouldn't be enough to reliably move forward with drafting the desired documents. For perspective, my expertise is far from such legal matters, and while I have used Nolo a few times myself (immigration law, and even purchasing a home without RE agent), I am also on the very left of the curve about this topic. However, after 5-10 min of snooping around online, it appeared clear to me that this topic is very complex, and I myself would not feel confident to touch it. So I ended up in the big hole near the beginning, and had no interest to learn more. But I could see that OP had not reached that hole at that time, while she may be closer to it now.

Conversely, a good example of someone who has Dunning-Kruger: Jenny McCarthy, the Playboy model turned immunologist who has been promoting chelation therapy and attributing vaccinations to autism for years....with no credibility.

From what I can gather by snooping around a bit, she seems stuck on the very left end of the curve without any visible movement to the right. But in her case, that may even be a business decision, since her goal is to sell snake oil to consumers who are themselves at the very left of the Dunning Kruger curve and cannot judge appropriately. Such methods are unfortunately all too common, a known cable channel comes to mind which attracts viewers by speaking very critically about vaccinations, while having a company policy that staff be vaccinated.

 

[retire to nature]

If anything, the right portion of the Dunning-Kruger chart/graph seems more representative of the OP than the left portion of the chart where someone claims to "know everything".

The Dunning-Kruger Effect describes the phenomenon in which low competence individuals or businesses lack the ability to recognize such incompetence. A core component of the Dunning-Kruger effect is meta – ignorance, or ignorance of one’s ignorance. Critical thinking with the goal of improving is the best way to overcome the Dunning-Kruger effect.

There is no indication the OP has Dunning-Kruger because her posts clearly show she is trying to add to her knowledge to help her make better decisions; she knows she does not have all the answers, and that's why she's asking so many questions! Conversely, a good example of someone who has Dunning-Kruger: Jenny McCarthy, the Playboy model turned immunologist who has been promoting chelation therapy and attributing vaccinations to autism for years....with no credibility.

Thank gumshoe,

you read me clearly. I didnt reply some of other replies which misinterpreted me of lack of english or other lacks. One of case is I was in a hurry to go out, so I reviewed the link quickly and understoond I was not qualified but just wanna make sure if I read right and I knew RetiredHappy and I were online at the same time. So quickly asked her for confirmation. But she pointed out rental income is passive income. And I knew the term for rental income, but I was thinking since I have a rental business and the landlording is not just passive job in my opinion. So it was my starting confusion. Like you felt something from Greddy's reply, I felt she is misunderstanding me. Actually, I was hesitated to reply her, but I did because many other people would think I was stupid, and it would be the last one to her reply.

Even though she misinterpretted me but I kinda confirmed why I pull the narcissists, and how I can distinquish them better. I felt all others' replies were trying to help me but hers was sounded like helping but it was a feed to herself and put others down then she is better one way. I know the mechanism and that's why my marriage took 6year to realize all. many other divorce reason are there too. But the mainly they can make sound all good but it is all about to make themselves feel better and others down. thats why I really have to filter each sentence. they are so good to make all looks good but like you feel easily there is a flaw.
and I can sense some unstable vibration if they are narcissists, and I felt some from her reply also. the best rules for narcissists is ignore them not to be sucked my energy. they are fishing all the time to get feeding for themselves and you got caught, too.

I may be wrong but I know there can be a lot of narcissists too they exist in certain percentage of society.

I didnt give up the trust because I sensed the hole, but I was clearly understood intially I was the only one, no beneficiary. like you said, about why ppl use LLC to protect. The youtube I was watching was about the same concept. to do things on RLT to protect the business or to save taxes.

Like CRLLS pointed out, it can be written by not lawyers which I confirmed, but because a lawyer said that it doesnt mean one only fact way. the expert could be wrong and I know all so good. It doesnt mean the wound was sutured up by a doctor, it doesnt mean there is no complication possible. there are tons of malpractice cases, and that proves it.