Did you know there is approximately 10 trillion dollars tied up in IRAs and only 3% of those dollars are self directed in a manner which allows them to purchase non-alternative assets such as real estate and gold?
In order to understand how much 10 trillion dollars actually is. It is greater than or equal to every dollar that changes hands on an annual basis throughout the entire American economy. I am sure you would agree that this amount of money and it is absolutely staggering.
Many IRA holders are rolling over their IRAs to purchase alternative investments such as real estate, businesses, franchises, real estate notes and tax liens. A straightforward IRA or 401(k) rollover expands your investment opportunities and can be done without taking a taxable distribution or incurring penalties conveyancing prices melbourne.
Is this a new thing?
For many yes, however the ability to self-direct an IRA to purchase non-traditional assets has been around since the creation of ERISA 32 years ago in 1974.
Why haven’t you heard about this?
Most investors are in the dark for 3 primary reasons.
1) Many investment advisors are not trained in alternative investments. They are trained to sell products such as stocks, mutual funds, bonds and publicly traded REITs.
2) The National Association of Realtors (NAR) did not embrace the changes to the tax law, Wall Street did. However NAR has been happy buying and selling homes with traditional bank financing without the need to tell their clients that they could truly diversify their IRA portfolio by including an investment property.
3) There is tremendous amount information mishmash on the Internet. Supposed IRA gurus have become “Self Dealing Gurus” and “Professors of Doom” making their living telling the media all of the pitfalls and scarring IRA holders to believe that there are so many pitfalls in self directing an IRA that you are surely going to make a mistake and so why bother. Learn to read between the lines and keep in mind, it is in their best interest to do this. Why? Because if you become self-directed, then they can no longer collect exorbitant IRA fees from you.
There is not a “one size fits all” approach when it comes to self-directing an IRA. There are as many IRA strategies as there are personality profiles. Additionally, the United States tax laws are too varied and complex to provide a “one size fits all” concept. However, we recommend you do your own research and then partner with a competent self-directed IRA advisor who understands the best practices of self-directing an IRA.
These investments can be extremely lucrative and are completely legal under both ERISA and the Internal Revenue Code. The good news is you don’t have to sit on the sideline anymore. You can use your retirement account for participation in real estate, starting a business or franchise. Get in the Game!
A lot of money is held up in IRAs instead people try to invest in real estate, businesses. A straightforward IR could expand your business opportunities. Investment advisors should be trained in all alternative investments. They should be trained to see products like stocks, mutual funds and REITs. There are many IRA strategies which can be applied as per the personality profiles.