Financial advisor Nelson Simmons III uses Roth backdoor to make ‘everyday millionaires’


ORLANDO, Fla. – This week on the Season 4 premiere of “Black Men Sundays,” host Corie Murray interviews Nelson Simmons III, a budgeting coach and financial advisor with years of corporate experience and a mission to make others richer.

It’s what he says he’s most passionate about, helping people win with their finances and doing his part to create as many “everyday millionaires” as he can.

“I kind of want to explain what an ‘everyday millionaire’ is. That’s just a ordinary person just like myself. Like, you didn’t grow up with money, we didn’t grow up with a silver spoon in our hand, we didn’t grow up — at least I didn’t — upper middle class. (We’re the) first generation soon to be wealthy,” he said.

Before going into explaining how to become an everyday millionaire, Simmons said he had to discuss the main hinderances he’s observed. One of them, he advised, is the lack or misuse of an emergency fund.

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“A properly-funded emergency fund is an account with three to six months of living savings in it, and so what ends up happening is, what hinders the people that I sit across from, is when they dip into their retirement savings because they don’t have that appropriate emergency fund set up,” he said. “You’re basically stealing from a future version of yourself to cover something that, if you just had appropriately planned for, it wouldn’t even be a issue.”

Take post-Christmas credit card bills, for instance. It’s in no way an emergency purchase, so if you’re considering spending your savings on getting those paid off, Simmons would warn that it’s probably the worst option, especially in light of how interest rates impact credit cards at the moment.

A great way to set money aside and watch it grow is putting it in a Roth IRA, and though that’s already true with calculated restrictions to contribution amounts in place, Simmons says there are methods of getting more out of a Roth than you may have ever thought possible.

“You can contribute the full $7,000 if your modified adjusted gross income is less than $146,000. So, you have a range; $146,000 to $161,000, that’s the range, it starts to fade as you make more than $146,000 as an individual, right? So once you hit that $161,000, you can no longer as an individual — if you’re filing as single or head of household — you cannot legally contribute to a Roth IRA. As a married person, $7,000 each. Wife and the husband can both contribute $7,000 to a Roth IRA. Once you start making $230,000 or more, that’s when you’re no longer allowed to contribute to a Roth IRA,” he said. “Here’s the Roth backdoor strategy. No. 1, you’re going to open up a traditional IRA account that has no prior contributions. No. 2, you’re going to open up a Roth IRA. No. 3, you’re going to contribute to the traditional IRA, but you’re going to hold the funds in a money market — just in cash — ‘til the conversion. Four, you’re going to convert the money to the Roth IRA, and inside the Roth IRA is when you start picking those investments to help grow your money tax free.”

Hear the full interview in Season 4, Episode 1 of “Black Men Sundays.”

Black Men Sundays talks about building generational wealth. Check out every episode in the media player below.

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