How to Become a Tax-Free Millionaire (with Tom Hegna)

David talks to Tom Hegna, an economist, author, and popular industry speaker considered by many to be the retirement income expert.

David reveals how he learned about the unstable fiscal trajectory of the U.S. and why he wrote the book, “The Power of Zero.”

The book emphasizes the importance of preparing for higher tax rates. It offers strategies to help you protect your retirement savings against the impact of potentially higher tax rates in the future.

David talks about teaching financial principles to his children–tithe 10%, save 20%, spend the remaining 70%.

Did you know Americans have 95% of their accumulated retirement dollars in IRAs and 401Ks?

It’s great that Americans are saving for retirement but the downside to this strategy is that traditional IRAs and 401Ks are tax-deferred. Taxes are deferred until the funds are withdrawn. Meaning you’ll potentially pay more in taxes in retirement. 

David reveals why it’s okay to preemptively pay taxes before the IRS absolutely requires it of you.

Tips for individuals in their 20s and 30s on how to save and invest in tax-free accounts. 

Why it’s never a good idea to spend most of your income on depreciating assets.

David shares how his system for investing differs from mainstream financial advice.

Tom and David agree that people cannot become wealthy by borrowing money to put into depreciating assets.

David’s investing principle is built on a simple formula: start saving money as early as today, put it in tax-free accounts, do it consistently for 40 years, wait, and you’ll have a great retirement.

According to David, whatever you decide to do in college, someone has to be willing to pay you money in exchange for the services you provide.

The longer your investment horizon, the more likely your taxes will be higher in the future.

Not only do you need to start investing early, you also need to invest tax-free. Remember, the longer your investment horizon, the more it makes sense for you to invest in tax-free accounts.

We are marching into a future where the cost of servicing the national debt will consume the entire federal budget. When this happens, David believes the Federal Reserve will be forced to raise taxes or risk going bankrupt. 

So, how can Americans protect themselves from the risk of rising taxes? 

First, acknowledge that taxes will be higher in the future, invest early, and start investing in tax-free accounts. 

David and Tom share their thoughts on why permanent life insurance is by far the best tax benefit in the IRS tax code.

David announces his upcoming book, “Guru: Why Financial Gurus Are Leading You Astray and How to Get Back on Track,” which critiques mainstream financial advice and offers a more personalized approach to tax-free investing.



Mentioned in this episode:

David’s books: Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code (free 3-part video series)

@mcknightandco on Twitter 

@davidcmcknight on Instagram

David McKnight on YouTube

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