Control of your
Take
financial
future
Make the
Rest of Your Life the
Best of your Life Dive in and educate yourself as to your options for self-directing your IRA into other opportunities outside of traditional stock market products. You have the right to step up to the plate and invest in opportunities like real estate that meet your risk and reward standards. You’re plans have taken a severe hit, now it is time for you to learn how to take back control of your goals and dreams. You’ve worked hard and now your money must work even harder. Let’s go to work!
Tom and Christine are
Worried Sick!
Each and every month Tom and Christine have made a contribution to their employer’s 401k plan. Tom (56) works for a solar panel manufacturer and Christine (54) manages a large real estate broker’s office. Recently they have had to make a difficult decision. Christine’s Mom (79) lives on the other side of Phoenix and she is having more and more health problems. Just last week she fell while watering her plants outside. Thankfully, her next-door neighbor saw her go down and rushed to help her. The Doctor diagnosed a badly bruised hip but what if she had broken it, Christine shudders at the thought. After much soul searching Tom and Christine have decided to move her Mother into an apartment just a few blocks away so that they can provide the daily assistance she needs. Christine left her job at the real estate broker’s office. A month later after dinner Christine says, “Tom I need you to look at something because I have no idea what to do?” She
Sit down sweetheart, I have to tell you what happened to my 401k” hands him a thick sheaf of papers sent to her by the 401k administrator. He winces as he glances at her balance, “Good grief- that’s less money than you put into the plan all these years”. Christine shrugs her shoulders, “I know, I did everything they told me to do. I tried to keep it diversified into different mutual funds and not move the money around even though I wanted to when it kept losing money. I’m so sorry honey” she says, as tears well up in her eyes. Tom smiled and gave her a long hug “Its’ OK, we did what we were told to do. How are we supposed to know what to invest in- we aren’t financial planners”. Christine looks up with a puzzled expression and say’s ‘We?”
Tom bites his lip and says “Sit down sweetheart, I have to tell you what happened to my 401k”. Tom and Christine have much in common with tens of millions of Americans who have watched their hard-earned retirement money shrink like an ice cube in July. The damage inflicted by the roller coaster ride on Wall Street has wreaked havoc with people of all financial levels and ages. Sadly “previously retired” individuals are being forced to reenter the workplace just to pay their bills and survive. The system they were told to “trust” [that would take care of them the rest of their lives] has failed miserably. In many ways, Baby Boomers are no better off. Yes, they are working now but their dreams of an active carefree retirement are now murky and obscure. Ask almost anyone to tell you exactly when they will retire and most people simply shake their head, as they have no idea. The new catch phrase being sold to the public is “70 is the new 65”. Watching all of this unfold over the last several years, how do you feel about the 'Give us your money and we will make you rich” Wall Street financial system? Are you comfortable placing your financial security and future retirement lifestyle in the hands of bankers or, stock brokers and trusting (hoping & praying) that they will always work to protect your retirement savings and do the right thing for you and your loved ones?
One reason, consumers haven’t heard about real estate IRAs is that there is little profit incentive for financial institutions, which primarily sell stocks and bonds to IRA accounts. The Los Angeles Times So, what do you need to do to make sure you aren’t among the millions who have no idea when they will finally retire? Dive in and educate yourself as to your options for self-directing your IRA into other opportunities outside of traditional stock market products, for example- real estate. You have the right to step up to the plate and invest in opportunities that meet your risk and reward standards and that you are confident will put your precious retirement money to work earning you more and more dollars to take care of you and your loved ones down the road. Tens of thousands of people just like you have decided, “enough is enough” it’s time to call the shots and control their own financial destiny. After all who would be a better steward of your money, you or some stockbroker? Obviously, you are going to weigh the risks carefully as to, where, when and how you invest your blood, sweat and tears. A Self Directed IRA gives you the authority to hand pick tangible investments where your money has something backing it up. Hard assets such as; all type of real estate both residential and commercial and even some, government approved precious metals. In addition, you can also continue to invest in stocks, bonds and mutual funds that meet your criteria. Think of your Self Directed IRA as your financial key to the best of both worlds opening the door to a customized portfolio that you understand and feel good about.
Wouldn’t it be nice to have a “sleep well at night” IRA? Like it or not you have come to a crossroads in your life – the most catastrophic recession in American history has taught everyone a painful life lesson. The tried and true of yesteryear are over- no longer can you invest in stock and mutual funds, place it on cruise control and over time retire rich. Those individuals that bury their heads in the sand and continue on with investing as usual are going to have to retire on whatever leftovers Wall Street gives them. I don’t know about you but that just doesn’t make sense, as I continue to see investors pummeled by losses in a market where they are exposed to one hundred percent risk.
During the last fifteen years I have had the pleasure of teaching thousands of people how easy it is to step back into the driver’s seat and get themselves back on track towards fulfilling their hopes and dreams. Most people are shocked to discover that they have had the legal right to do this for nearly forty years! I see their eyes light up when they discover a cornucopia of opportunities that they have never had available before. As you continue to read this report pay particular attention to the section- “What can my Self Directed IRA invest in?” This is just a small sampling of some of the most popular Self Directed IRA (SDIRA) investments.
Wall Street
gets a Black Eye
You are embarking on a fascinating journey towards financial peace of mind. A place where you are no longer controlled or held hostage by Wall Street and their cronies.
Welcome to a world where you are the captain of your financial ship, charting your own personal course towards wealth and security through self-directed investments. In the last few years Self Directed IRA’s have received a lot of attention. In part, because of a back lash against Wall Streets greed and the resulting massive losses in IRA’s and 401ks. The old rules of investing don’t work anymore. The stock market has changed largely in part due to the instantaneous trading available to anyone with an Internet connection and the homogenous blending of the world economy.
Political or economic upheavals that happen half way around the world have an immediate and dramatic impact on your money. How can you possibly foresee these world events or have a way to protect your money from this nauseating roller coaster
ride? Wall Street is very good at diverting everyone’s attention to the supposed riches to be made and away from the constant 100% risk to your hard-earned money. Sadly, many people don’t even want to open their IRA statements anymore. Perhaps you understand how they feel? If you are like most people your IRA isn’t even keeping pace with inflation let alone growing large enough to provide income to live on when you are retired. Americans have had enough and more and more people are searching for a better way to grow their money with much less risk. Since you are reading this report no doubt you too have decided it’s time to get serious about getting back into the driver’s seat and making decisions that are in your best interest. Although the thought of investing your IRA money into assets such as real estate may be a new concept to you, the fact is, you have had this right for nearly 40 years. Clear back in 1974 a new law was passed creating “ERISA” (Employee Retirement Income Security Act) which essentially created a tax incentivized (tax deductible) savings account. Fast forward to the mid-nineties and people begin to realize that the tax code governing IRA’s allowed them to invest in assets outside of the stock market. They could in fact, invest in all types of real estate both residential and commercial, precious metals, private businesses, commodities and so much more. When Congress created IRA’s they only singled out two investments (products) an IRA was prohibited from making; Life Insurance and Collectibles, defined as- Rugs, Stamps, Art, Coins, etc. For decades, well-informed savvy investors have been amassing enormous wealth in their retirement accounts immune from the Risk and unknown outcome of the stock market. Just a couple of years ago there was quite the social stir when it was revealed that the Self Directed IRA of a certain presidential candidate was worth, by some estimates a $100,000,000 plus. When people finally came to the realization that they had the ability to diversify their IRA into all type of profitable opportunities the rush was on. By 2011, the Investment Company Institute reported that the combined values of IRA’s for U.S. investors was, approximately $4.7 Trillion Dollars. Of that amount 2 percent or roughly $94 Billion Dollars was held in Self Directed IRA’s.
Unlike traditional IRAs, self-directed IRAs enable their owners to pursue a wide variety of investments well outside the scope of the usual holdings. Some account owners are taking advantage of the real-estate boom, putting IRA dollars into single-family homes, urban loft developments, farms, liens and mortgage notes. Investors turning to self-directed IRAs say they often take comfort from the higher degree of control the accounts provide. The Wall Street Journal Current (2103) projections estimate that Self Directed IRA’s totaling over $2 Trillion Dollars are entering other non-Wall Street markets with real estate dominating the list.
Getting Started A Self Directed IRA is an IRA held by a trustee or custodian that permits investments in a broader set of assets than is permitted by traditional IRA custodians. Most IRA custodians are banks and broker-dealers that limit the holdings in IRA accounts to firm-approved stocks, bonds, mutual funds and CDs. In other words, they only offer investments that they receive a hefty compensation from selling to you.
With a self-directed IRA, you can hold a broader selection of investments than with mainstream IRAs, which are focused around stocks, bonds, mutual funds, bank deposits and the like. You may venture into real estate, precious metals and even more esoteric stuff, such as tax liens and promissory notes. Arizona Republic News Custodians and trustees for Self Directed IRAs, however, allow investors to direct retirement funds in other types of assets such as real estate, promissory notes, tax lien certificates, and private placement securities. The increasing popularity of self-directed IRAs is the access to an array of private investment opportunities that are not available through other IRA providers. Your first step to getting started is to decide what asset class you are most interested in. For most folks, their choice is real estate because it is an investment that they understand and feel
comfortable with. As one Gentleman commented, “Rich or poor – everyone needs a place to live”. The second step is to create a list of Self-Directed IRA (SDIRA) custodians who allow real estate. Your choice should not be influenced by an impressive web site or celebrity endorsement. Rather, by carefully examining their IRA account agreement paying specific attention to their fee schedule followed by a phone interview of the prospective custodian.
Self-Directed IRA (SDIRA) Custodians in most cases, make their money from transaction fees which translated means, they charge you a separate fee for each thing they do such as; mailing a letter, sending a fax, issuing a check to pay a bill, etc. Once you have narrowed down your list to the top 3 or 4 contenders be sure to call each of their customer service departments and discuss the specific real estate investment strategy you are interested in. Do they regularly handle these types of investments and if so, what are the fees and average timelines to handle your requests? Don’t be surprised to discover a custodian may not be real comfortable with what you have in mind but another has no problem since many of their IRA investors are doing something similar. This takes some effort and time upfront but in the end this is much easier than becoming frustrated and having to switch to some other Custodian later.
Although an SDIRA custodian may advertise that they allow real estate investments, ultimately they have the final decision as to whether or not the investment can be purchased by your IRA.
What can my Self-Directed IRA Invest in? Examples of popular investments include: Residential Real Estate Stocks, Bonds, Mutual Funds Commercial Real Estate Raw Land Deeds/Mortgages Real Estate Options Mortgage and Loan Pools Commercial Paper Private Notes and Loans Tax Certificates Private Placements Foreign Real Estate Foreclosure Property Gold, Silver and Palladium Real Estate Investment Trusts Lifetime Income Annuities IRA trustees are permitted to impose additional restrictions on investments. For example, because of administrative burdens, many IRA trustees do not permit IRA owners to invest IRA funds in real estate. IRA law does not prohibit investing in real estate but trustees are not required to offer real estate as an option. http://www.irs.gov/Retirement-Plans/Retirement-PlansFAQs-regarding-IRAs-Investments
Choosing An Ira Custodian That’s Right For You Now you need to make a decision as to which SDIRA Custodian fits you the best. A major part of your decision will be based on the fees you will be charged. After all that has a direct bearing on your overall yield on your investment portfolio. So grab your notebook and list each SDIRA custodian on a separate page. For your convenience, here is a suggested checklist of some of the fees and processing requirements you need to pin down first. FEES & CHARGES o Account Set-up Fee o Annual Account Fee o Fees per asset held o Fee based on value of account • Additional annual fee for account value exceeding $ _______________ o Direction of Investment Fee to buy o Direction of Investment Fee to sell o Check issuance fee o Check receive - processing fee o Wiring fee o Mailing fee o Faxing fee o Expedited mail fee (overnight) o Document review fees o Fee to transfer account to another custodian
Self-Directed IRA (SDIRA) Custodians in most cases, make their money from transaction fees which translated means, they charge you a separate fee for each thing they do such as; mailing a letter, sending a fax, issuing a check to pay a bill, etc.
Here Are Some Processing And Paperwork Questions • What are their Investment criteria and limitations? • The average time required to approve an identified investment? • How long does it take to approve investment expense such as: Real estate taxes, insurance, repairs, etc.? • How long does it take them to issue a check to pay those expenses? • Does their account require a personal guarantee from you? => NOT ALLOWED under IRC 4974 • Where is your cash account held, is it FDIC insured and what does it pay currently? • Are there any restrictions on your choice of securities brokers? • How do they value alternative asset classes such as: real estate and precious metals? • Do they require an annual real estate appraisal to establish asset value?
Awesome! you have CHOSEN your CUSTODIAN Now it’s is time to transfer your IRA(s) and/or previous employer 401k(s). Your new SDIRA custodian has the forms that you will fill out to initiate the process. Once they receive them from you, they will submit them to your current custodians and/or plan administrators. In most cases, a direct custodian-to-custodian transfer will take 2 – 3 weeks. Your new SDIRA custodian should notify you upon receipt of your funds. There still seems to be some confusion among financial planners and CPA’s as to how plans can move around. Congress actually addressed this several years ago- below is the 2011 IRS Rollover chart illustrating the portability of each type of plan.
Making Your First Investment The reason you have set-up a Self-Directed IRA is to have more control over your money and where it goes to work for you, right? Now it’s time to take a deep breath, relax, clear your mind and focus on your investment objectives and goals. Always remember, you are under no pressure or bound to any timeline to invest your money. I find that some folks almost have a knee jerk reaction of, “Oh my gosh, I have to find somewhere to invest my money right now”.
“It was a little scary jumping in to something that sounded good, but very few people have actually used”. That kind of self-induced pressure can lead a person to make hasty decisions that could have disastrous results i.e. losing lots of money! Although the SDIRA custodian has control of your money, you have become the steward in the sense your first priority should be the safety of your hard-earned money (collateral) and second, the rate of return on your money and third, the term or expected maturity timeline of the investment.
Ask yourself…”what type of investor am I?” A Mailbox Investor- You are a busy person that is focused on family and career with little time to devote to managing an investment. This type of IRA investor is searching for safe, steady passive returns. They want the peace of mind knowing their IRA is growing each and every month. Julie knows something about handling money. As the administrator of a large auto franchise and a budget in the millions, she has to stay on top of all financial matters. She also manages her own money and several years ago took a long hard look at her retirement fund. Julie knew she could do better but that would mean getting up to speed with her knowledge of the stock market. She enrolled in a class and learned how to use leading indicators and then went to work growing her money. Though she realized some moderate success, it was not enough to compensate for the Wall Street roller coaster ride. Then she heard about self-directed IRAs. “People thought I was crazy” she says with a laugh. Her friends couldn’t fathom leaving a traditional platform, and until recently that was her view as well. “It was a little scary jumping in to something that sounded good, but very few people have actually used”. After taking the leap to open a self-directed IRA, the next step was to identify a strategy and asset type that
could provide a steady, secure and fixed yield to give her peace of mind. Julie always liked the idea of adding real estate to her portfolio as savvy investors have done for many years, but she thought that was only for the wealthy. After doing some more “homework’, she learned how easy it was to grow her money passively by loaning money from her IRA to earn fixed, safe yields fully secured by real estate. An Active Investor- You are a person who is also busy with family and profession but you are not comfortable with a set it and forget it investment. You need to be “keeping an eye” on how your investment is moving along and you want on-going communication and easy access to these updates on a regular basis. Bill has come to the realization that putting all his IRA money into the stock market and hoping that it will be enough to retire on, is not a risk he was willing to take anymore. His stockbroker doesn’t have any answers, all he ever hears is; “Don’t panic “Remember, you’re a long term investor the stock market goes up and the stock market goes down but over the long term it always makes money” “In fact, now is a good time to buy more mutual funds while they are down in value so you can recoup the money you’ve lost when the markets surges up, which is anytime now” Bill decides that the first step is to take control of his retirement plan by self-directing his IRA which opens the door to many non-traditional types of investments. Bill is intrigued with the concept of using his IRA to invest in real estate. Bill says, “After all, everyone needs a place to live, right?” While conducting his research he found that tens of thousands of investors were taking a pro-active approach and earning returns well beyond what traditional investment strategies were providing. Bill considers himself an “active” investor type and by adding rental properties to his IRA he would enjoy steady consistent growth over the long haul. As exciting as the prospect of taking control of his retirement plan and owning multiple cash flowing properties sounded, there were a few problems. Bill doesn’t know a thing about being a landlord, nor does he have the time to devote to finding the right properties, fixing them up, finding qualified tenants or managing the properties. What he needs is a “turnkey” solution that will spit out cash flow profits to his IRA every month! An Experienced Investor-You are a person who is comfortable analyzing an investment opportunity and understanding
how it makes money. You have experience in making financial decisions. Perhaps, you are self-employed or have a home based business on the side. Once you have all the facts you can make a choice and move forward. Joe is a contractor and his wife Cindy, is a teacher at a local college. After taking a closer look at their retirement accounts they realized that their mutual funds returns were all over the place with most ending up in the toilet. Although, they have recently gained back some of their market losses, they are no further ahead than they were several years ago. While they are both earning a good living, they felt if they could somehow combine some of their retirement savings, they could accelerate the growth of their long term plan. As a contractor, Joe understands the real estate market. He and Cindy have done quite well by rehabbing a couple of properties and selling them. “While this is a profitable strategy in the short term it doesn’t solve the issues surrounding our retirement income, I have no intention of rehabbing houses in our 80’s” chuckles Cindy. Joe and Cindy want to use their IRA to amass retirement wealth without paying taxes on it now. “We’ve learned that our investment gains will be substantially higher if we use our IRA money to invest in real estate rather than our personal funds” Joe comments. Joe adds; “We both agree that real estate offers some solid long-term opportunities but what we don’t understand is, whether or not we can pool our retirement money together and invest passively to earn a fixed return as well as equity yields? “
Did you identify with any of these investor types? Although they all have different situations and goals they share one thing in common. They found that the key to unlocking the growth potential of their IRA required a self-directed IRA account. Now they have the freedom to invest their IRA as they see fit. Choosing opportunities that they understand and feel confident will produce strong consistent growth in their IRA.
A Fork in the Road How many times during the worst recession in American history did the media run a story about the huge performance bonuses given to elite Wall Street executives for- “a job well done”, while at the same time, main street USA was watching helplessly as their retirement savings were eaten alive in an orgy of greed and corruption? But, that is “old news” – what is done is done. Would you agree that the past should not dictate the future?
You see it no longer matters what caused the meltdown of our economy or who was responsible. What matters is what you do about it from this day forward. It’s time to learn from the past and use that new wisdom as a springboard to propel yourself forward. Invest your time, do your homework and learn how easy it is to take back control and manage your money using the same tools that the wealthy use. Like it or not our world has changed forever. The old investing strategies of buy and hold have turned into “buy and hope” for tens of millions of people. The reality is, your financial security is your responsibility. The financial decisions you make from this day forward will determine the quality of your retirement lifestyle.
A Self Directed IRA will open up opportunities you have never had before. Did you know limited partnerships and real estate syndications can be a powerful alternative to investing in the stock market? Did you know you can get all the advantages of being a real estate investor without the hassle of dealing with tenants? Did you know there are a host of ways you can reap the tax benefits of real estate investing like the wealthy have been doing for decades? Did you know there are strategies to pay yourself instead of the IRS? I have seen time and time again that the people who invest their time and energy to discover proven financial solutions and then take action are the ones who usually retire without the fear of outliving their money, much to the envy of others who let personal fears or the opinions of others dissuade them from stepping up to the plate. As you move towards your goal take small steps, stick your toe in the water, so to speak, with ventures that you are comfortable with. If you find that something isn’t working as you expected – STOP. Adjust your course, do your research and take action with another opportunity. PLEASE RESIST the ”shiny object ” syndrome that some people fall into – chasing opportunities that offer the dream of tan-
talizing riches without any thought as to the safety (collateral) net protecting their hard-earned savings. As your experience and confidence grows you will discover that true diversification means a mix of investments that are independent of the ups and downs of the traditional markets. Your goal should be to select investments that combine reasonable consistent returns with hard collateral or assets like real estate backing up your money. After all – no one cares about your money like you do – or should!
Would you agree that almost no one was prepared for, or even thought the financial collapse was possible? If you are tired of watching your retirement plan lose the race with inflation and want to learn how to make smarter choices about your retirement investing by using a self -directed IRA, call us today for your no obligation, no strings consultation. It is time to learn what is possible. Get off of the Wall Street rollercoaster and enjoy some piece of mind. Take control of your retirement plan and put your money to work. Make the call now & learn how, so you won’t outlive your money.
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