Dan Kryzanowski discusses checkbook control and self-directed accounts.  Use your retirement funds with Rocket Dollar to invest in real estate, startups, funds, & more.  You will maintain all the benefits of a typical retirement account.  Visit Rocket Dollar's Knowledge Base to learn more or signup online using code DKRYZANOWSKI for up to $100 off today!

 

Show transcription:

[00:00:08] Wonderful, Larry. Great to be here.

 

[00:00:27] Sure sounds good.

 

[00:00:37] Yes. So, you know, my guess is just with the context, my background, I originally from the Northeast grew up in Scranton, P.A..

 

[00:00:43] So, you know, politics aside, but I played on Little Biden's Little League field and then I wrote up Penn with Trump Junior my freshman year. So, you know, I'm an equal opportunity investor. Let's call it from that standpoint. And, you know, my very probably a lot of folks 'specially in the northeast, you know, we're big companies, Merrill, G.E. went to war and etc. and then the financial crisis came through. And I think for me, you know, to kind of knock out a 9 to 5 at the same place for the next 30, 40 years wasn't in my blood. It's not how I'm wired. So my wife's from Mexico. We made the conscious move to move back to Austin, Texas. So we've been here for the last decade. So you could say we were smart to predict the boom down here in Austin. And it's been good for me because, you know, besides being able to keep it weird and all that, I professionally have been in a variety of fintech and real estate in my nine to five. And I think that's really sculpt it. You know, where I am and where my passion and where I feel I can help people, you know, particularly these days.

 

[00:01:57] It's primarily it's towards real estate. There's some stock, so I'll preface to say, yeah, I think it's always healthy to be diversified. And my big light bulb moment was I was fortunate to speak at a family office high net worth, Joe, where, you know, even in front of open doors, they say, you know, I'm just not 60 40 stocks, bonds. I'm kind of the opposite. You know, I've a majority my stuff in real estate, private tax advantage. And that's kind of been my mindset.

 

[00:02:24] You know, recently, I you know, I learned these self-directed accounts and being able to use your retirement dollars. Almost a decade ago, I was Codesa man in the wedding.

 

[00:02:36] And he said I said, what are you doing? All I heard him say was fifteen percent men of any sense. And then for me, you know, he said, you know, you can use your retirement dollars. And I was just mind blown like what I said, I'm stuck at like fidelity is like, no, no. So that's been a lot of my journey. And I think what I'm trying to assist folks, you know, at the very least just make people aware that they have this huge lot of money. You know, collectively we as Americans, I'll call it 10 trillion sitting on the sidelines.

 

[00:03:06] That is not active interest that you know or your community that can be moved to. I think, you know, at least the way I do my portfolio, often of lower ish risk, higher return sort of assets.

 

[00:03:46] We're.

 

[00:04:01] Absolutely. Yeah.

 

[00:04:02] Sunny with check-ins, I'm glad you brought up checkbook control because, you know, we feel folks should have access to their money at all times and it should easy to contribute. And frankly, there should be no fine print. I think, you know, people say what is true this is of the millennial mindset is I think generation. It should be easy, even folks. You said you are working hourly and there's a limited job situation, a divorce. A whole lot of things can happen where you're just not sitting on this huge pension, maybe as parents were way back when. So with that. With the checkbook control account, you know what it does, it makes it very easy to open to contribute or rollover. I mean, to use that money just like you would with your piggy bank checking account. And I preface that because the other self-directed other retirement accounts of the space are very different, that it's almost like going to mom and dad for an allowance that you're ultimately going to get. They've got, you know, full on fraud and all this other stuff for a few hours, which it's just frankly not worth anybody's time.

 

[00:05:26] Yeah, sure.

 

[00:05:49] Sure. Yes.

 

[00:06:01] Yes, I mean, first, yes. Likewise with my son, we're at the same financial institution. And that's great. I'm able to transfer money in and out. And lo and behold, you know, I see as in even now, if he ever does look back, I say, you know, print X thousand principle or, you know, a twenty dollar dividend in coming in to really show, hey, this is what was going on with your money, particularly as an investor, not just sitting.

 

[00:06:22] And, you know, point zero zero one percent savings account. So I'm a proponent. I'm a little old school like you. I still write old school checks, particularly for the first investment with a certain person.

 

[00:06:35] I feel I on to something about it that I like with that.

 

[00:06:40] It is. It isn't away, are you? It's like you at least know that, you know, you're signing your money away as opposed to, you know, it kind of gives you a second thought. And I got a feel that. That gives you that sort of just clicking and button.

 

[00:06:52] So in all seriousness, I do think that's good for, you know, initial investors to literally sign your name instead of just kind of wiring like you swipe and buy a hundred Starbucks. From that standpoint. But yeah, I mean, check control in general. You know, I think of the term more in for retirement accounts. And if I could, I mean, a brief history, so self-directed accounts have been around since the 1970s. The ladies have been custodial. So far it's been a very high priced, expensive lawyer that sets this up. In short, you do not have checkbook control. You're going to a third party that really has no insights into what you want to do with your money, etc. And you have to fill out their forms and be on their timeline.

 

[00:07:34] It can be a little bit frustrating. And so, you know, a checkbook control. It's more about the access, I think, to it. Yes.

 

[00:07:43] And also the transparency and also it's linked up to a bank.

 

[00:07:47] You bring up a great point is that, you know, by default, checkbook is part of a bank. You have a checkbook. You can look back, you can see transactions. Whereas, you know, and I've had different custodial accounts earlier in my career. And I look now I can even look back over a year, but I'm like, you know, the way I invest is longer term real estate investments and I can't even seno my dividends from over a year ago. Very frustrating.

 

[00:08:12] And this is somebody that's charging me for a setup fee, an annual fee. You know, God forbid I made some good investments, higher fees on top of that, as opposed to, you know, kind of a flat monthly fee that, you know, is common and different sort of checkbook control intensities.

 

[00:08:44] Yes, sir. The nice I'd say it depends on.

 

[00:08:48] The type of profession either way, though, it's gonna be the same. Excuse me, the same that effect. So as you said, person just opening an account. So, for example, with the dollar and associated with, let's say somebody is W2. Meaning you do not have self-employed income, especially with the tax season being pushed down another few months, assuming your fortune is off. You're feeling comfortable. I would. You know, when I look back, the best thing my parents and Bizos maxed out your stuff, which I did lie. When I finally picked up my head, I was sitting on a six figure self-directed account or IRH and set up to reconcile for millennials out there. I'd say open an account. Either if you have money to put in now, so you're getting a tax return, throw a few thousand and even do it for twenty nineteen or twenty twenty for fortunate. And then look to see what you want to invest and what I think is great. There's so many great crowdfunding campaigns. I know we have to be a little bit cautious with the profitability of a restaurant in modern times. But I would say vs., you know, five, 10 years ago, when it was kind of Wild West as an equity investor supporting somebody in your community, a lot of these crowdfunding say it's going to come off the first year revenue right off the top of tippy, tippy top. It's the most preferred that you can have to be paid back.

 

[00:10:05] There's something called a. trader. That's what land's not going anywhere. And what is it Mark Twain said by land? Is that more of it? And you know, these different platforms out there that you can get into, some might say a very solid, more conservative, higher return assets to kind of test the waters and doing it with the checkbook. So that's one. And the second thing I'd say, let's say our realtor friends out here, if you're ten ninety nine realize right off the bat you're not limited to say the six thousand like your W-2 friends say you have a true rock star a year you could salary for nineteen thousand three W2 friends within 20 percent of your net earnings. So you know, even if it's not this year and next year, the benefit of having this account open is, you know, down the road you may have one of these sort of rock star years.

 

[00:10:56] That's really cool having this account set up, because let's say you're in real estate, you like a niche, something like self-storage. And once you get to that 50k or 100k, you might say, great idea, great you're acting contribute 40 pay this year and then you can invest in something like a storage facility. So to sum up, I would say the benefit of the checkbook and. It's just to do something, have something on the side. And I think there's a lot of things where you don't have to worry about the volatility of the stock market. It's still a pretty decent return.

 

[00:11:33] Yes, we do.

 

 

[00:12:00] Yeah, it's it's a good one because it's making me think that I did the right thing.

 

[00:12:05] So I would say yes. I mean, stay the course. There's two ways about it.

 

 

 

[00:12:11] You know, if you do, let's just say you put in a thousand dollars every month on your paycheck for a hundred dollars, if you're doing dollar cost averaging and you're going to do for the next 30 years, you're going to work w to continue to do it. You know, I read a book, Forget the author, but they pretty much said at any time in history is a good time to enter the stock market. And it's really pretty. Statistically, it's a pretty correct statement. So even if you put, you know, a boatload of money in a month or two ago, I would say definitely not. So. I mean, could we be back up to 30K at the end of the year? Possible, maybe. Maybe not.

 

[00:12:49] So that's one second nature, folks, that kind of had a lot of money, and I know myself, I mean, I put in a fair amount and right when I left Wall Street in 0 4 0 5, my original boss, Scott Roth, sort of like the U.S. Metals Management was actually running it.

 

[00:13:04] And the.

 

[00:13:07] I haven't you know, I've been along for the ups and downs. It's OK. You know, I think you need to be a little cautious is once you're starting to depend on it for your cash flow for folks. Fifty five, sixty sixty five that are retiring. Yeah. You have to be maybe a little more measured of what you're in addition to be decision you're making. This should have been something thought about, talked with the plan or at least talked with your family over the last few years was like what am I going to be in. So with that I'm I'm not sweating it. I mean, I think it's a share in the short term. It sucks, you know?

 

[00:13:46] No doubt. But, you know, the world's going to go on.

 

[00:13:50] People are going to do stuff. And companies are going to go. The one point I would say it's funny. I mean, for those that read Barron's or even if you just pick a few articles out there, things were so overvalued.

 

[00:14:02] You know, certain sectors like even price equity was at the highest 99 percentile it's been unless, you know, 10 or so years or I just kept on reading all these stats that say eat. Now, you know, like we're bound to have a correction. So, you know, I'll put it this way. When I joined G.E., Archer said, I'll think back when Jeffrey Immelt joined G.E. the week after 9/11. You know, as great as Jack Welch was, I think, you know, he kind of left on a, you know, partial, you know, when he fell apart. False, negative. You know, upswing that. And I think the stock market was that I think it was just trading too high for a complete lack of fundamentals. I don't have an exact number to four out there, but yeah, I know round numbers up from twenty five to almost twenty nine. I think that was just people. Following the media, that was definitely not based on any sort of fundamentals.

 

[00:15:08] Yeah.

 

[00:15:38] Yes.

 

[00:15:49] Yeah.

 

[00:16:05] Yeah, I would say don't chase. Be cautious of chasing yield, as you said, some stocks have gone a lot for folks.

 

[00:16:12] So their yield is just basically, you know, the dividend divided by the price of, say, stocks trading at a hundred. The stock pays a dollar a quarter to four percent yield. So, hey, that's great. But, you know, let's assume that that stock was at two hundred dollars last week. Well, like I was, you know, realize. Yeah. Great. You're probably not getting the dividend. It's going to go a bit. Even if you still got that $4 dividend, your stock went down 50 percent. So I.

 

[00:16:38] And I say this also, maybe for some of the older folks that aren't as sophisticated. Yeah. It's like, OK, well, you know, the Fed cut rates again, which means your at your community bank or credit union is, you know, one point two percent while the five, whatever it may be. Don't be chasing yield if you're only looking to compare the dividend yield vs. the c.d rate because a particular stock may still go down. They're using an extreme example. Would you buy a Carnival cruise or one of the cruise lines from a dividend? No, probably not. They're probably going to shut them down. But that's what would be the other thing of mindset. I'm sure there's going to be some media about and of will be very positive, as you mentioned, stock some stock selling price, maybe some great yields.

 

[00:17:25] But for the average judge, an investor out there, it doesn't look at this every day. I'd just say be very cautious on chasing yield because the price could still go down for certain stocks.

 

[00:17:53] Sure.

 

[00:17:53] So, Dan, the at Rocket Dolla dot com to learn more about the self-directed account checkbook control just Rockerfeller dot com slash learn and as a courtesy hopefully says in the call notes.

 

[00:18:08] But for those that can spell my name, you got $100 off. So. D crisan Wolski d k or y 0n o w S.K. I. That will ultimately get you up to a hundred dollars off your record dollar account.

 

[00:18:20] So if it makes sense to go down the self-directed route, reach out to me directly. But of course want to send a thank you all very close here and I'm happy to take on any questions.

 

[00:18:33] We do it's called rocket. Your dollar. So a little play on rocket dollar. And this will give you a feel of both.

 

[00:18:42] Other investors, other sponsors, many people that are raising money for deals. As we talked about kind of in this 21st century diversified portfolio, whether it's from real estate, real estate, niches like self-storage, some bitcoin, some female entreprenuer, you name it. This is what I think folks are really trying to pretty up their pie charts and just follow this 60 40 stock bonds that are going into. So we bring in real people raising real money with real companies and real investors. And that gives you some really good color kind of what else is out there.

 

[00:19:26] I'll get.

 

[00:19:36] Well, I'm I'm happy to be back on. So I'm like, it's a rain check this time.

 

[00:19:43] Yes, sir.