Self Directed Investor Talk: Alternative Asset Investing through Self-Directed IRA's & Solo 401k's

Rental Property Owners face a huge enemy today:  The Federal Government, which delights in creating new rules, regulations and rulings that take power FROM property owners like you and me, and redistributes that power to tenants, “housing advocates”, and of course, to the government itself.  How do YOU shield yourself from this onslaught against your rights as a property owner?  I’m Bryan Ellis.  I’ll tell you RIGHT NOW in Episode #206.

Hello, SDI Nation!  Welcome to the podcast of recover for savvy self-directed investors like you, where you learn, in bite-sized chunks every day, how to find, understand and PROFIT from exceptional investments.

My friends, here in America, a prevailing attitudes that has been taught by our public education system and reinforced by the media to the very large group of Americans I call the “oblivious lowbrows”– these are the people who have practically zero worthwhile knowledge, skills or experience, even though some of them have some or even substantial formal education – what these people have been programmed to believe is that the true EVILDOERS of the world are those awful RICH PEOPLE whose gain is undoubtedly ill-gotten and achieved on the backs of the “working man”… These folks – the unaware lowbrows – they are convinced that those RICH PEOPLE should be punished and that property and wealth should rightfully be owned by SOCIETY rather than those conniving, manipulative rich people.

The result?

An explosion in rules, regulations and rulings that virtually never favor property owners like you and me.  A good way to know that you’re dealing with a rule, regulation or ruling that does not favor you as the property owner is this:  Does the word “Fair” appear in the name?  You can always bet that the word “Fair” in a law means that the government is shifting the balance of power AWAY from the “RICH”, and towards the millions of oblivious lowbrows in our society.

You might think this doesn’t apply to you since you don’t see yourself as “rich”.  But whose perspective determines the definition of “Rich”?  Again, it’s the oblivious lowbrows.  Take as an example of this group, a woman named Jane.  Jane doesn’t have a job, but she’s not really “unemployed” in a conventional sense… she’s got income and her basic needs are provided for.  She’s compensated – by the government – to do absolutely nothing.

Most or all of Jane’s housing, her food, and her medical care are paid for by the government.  The same for her children… in fact, the more children Jane has, the more she’s paid by the government.  And Jane knows how to work the system, too… because she’s a product of it.  Jane knows that she’s eligible for even more stipends and pay from the government if her children fail to reach a certain standard of academic or intellectual performance… and thus, she’s unmotivated to emphasize education… because it certainly wasn’t emphasized to her.

Jane is unmotivated to change anything about her life because her basic needs are being provided without her doing anything whatsoever.

Why’d I take so much time describing Jane to you?  Jane is relevant to you as a rental property owner because the rules, regulations and rulings I mentioned at the top of the show are written to motivate Jane to vote for the politicians who support the programs that support Jane.

The educational system, the media and Hollywood are willing accomplices in this process, feeding Jane and her ilk an incessant flow of propaganda that the problem is NOT Jane, it’s NOT her unwillingness to work, it’s not that she and tens of millions of others like her are happy to subsist simply by sucking at the tit of the federal government… no, what Jane is taught, and is happy to believe, is that the problem is the RICH PEOPLE who took all her money.

Yes, Jane believes that the money should be hers, and that it was somehow taken from her.

And it’s from JANE’S PERSPECTIVE that the word “rich” is defined.  You see, to me and you, “RICH” means Bill Gates.  It means Warren Buffett.  It means Donald Trump.  It means Mark Cuban or Elon Musk.

But to Jane… RICH means the person living in that nice neighborhood on the other side of town.  And guess what?  That’s YOU.  YOU are the dirty, stinking, rotten, filthy, conniving RICH PERSON that Jane despises… and YOU are target of every law that has the word “FAIR” in it… YOU are who Jane perceives as having gotten what you have by taking advantage of others… and Jane believes it whole heartedly.

My friends… are you aware of this?  My description to you just now is harsh, but dead on accurate.  If you don’t believe me, I dare you to go into a part of town that you don’t normally frequent – you know where I’m talking about – and just ask a few random people how the rich people got their money.  Then ask them this question:  “Where do the rich people live around here?”  It’s very, very likely that they’ll describe YOUR side of town.

In today’s society, YOU are the rich person that’s being targeted.  So what do you to protect yourself from the fact that your preferred method of wealth building – real estate ownership – is one of the primary vehicles under attack by Uncle Sam?

There are 3 simple suggestions I have for you:

First, make sure that your property management company is legally savvy, and that they make a concerted effort to stay abreast of the changing legal environment for property owners.  Too many of them just don’t do this at all.

Second, for those of you who buy turnkey rental properties, respect your own capital enough to ONLY work with companies that take an active interest in helping you stay up to date on developments that are profoundly relevant to you as a property owner.  Two great examples of what I mean are Episodes #90 and #205 of this show, where a year ago I gave you notice and a prediction about the disparate impact ruling from the Supreme Court, and then a year later – in yesterday’s Episode #205 – I showed you how my prediction is coming true, almost to the letter.  So if your turnkey rental property provider isn’t taking an interest in how your properties are affected, then you’ve got to question whether their motivation runs any deeper than just selling you a house.

And my third and final suggestion:  This November, vote with your brain, not your emotions.  Good lord, people… when you were 20 years old, it was fine to vote for the candidate that made you feel warm and fuzzy and idealistic.  But you’re an adult now with responsibilities.  Don’t give away your vote just because that’s how you were brought up, or because that’s how people in your area vote, or because that’s how people of your particular ethnicity vote.  Vote based on YOUR INTERESTS... and remember:  When politicians talk about taxing the rich and making new rules and regulations to benefit the common man, they’re not talking about the “common man” as you and I know him.  They’re talking about Jane… they’re talking about the oblivious lowbrows who are wholly dependent on the government… they’re talking about making our country a subsistence society… and that’s COMPLETELY OPPOSITE YOUR INTERESTS… it’s completely opposite what is necessary to make America great again.

I said I had only 3 suggestions, but I’ve got a bonus suggestion for you.  Here it is:  Consider diversifying your next real estate capital deployment AWAY from property ownership into something that’s a bit easier, more predictable… and dare I say… SMARTER than outright property ownership?  I’ll tell you more about that TOMORROW in Episode #207.

Until then, my friends, remember this: Invest wisely today, and live well forever!

Hosted on Acast. See acast.com/privacy for more information.

Are you a rental property owner?  Then answer this question:  Do you believe it’s reasonable to require criminal background checks of your tenants?  Now don’t forget your answer, because I’ve got some terrifying news for you today, made possible by an insane, destructive decision by the US Supreme Court last year.  I’m Bryan Ellis.  This is Episode #205.

Hello, SDI Nation!  Welcome to the podcast of record, where we help savvy investors like you find, understand and profit from exceptional investments.

On June 26 of last year – almost exactly a year ago – I told you in Episode #90 of this very show about a terrifying Supreme Court decision that I predicted would be a horrible blight on the freedom of real estate investors in America.  The case involved an issue called “disparate impact”.  In layman's terms, this refers to a policy that disproportionately affects one group of people more than another, even if there is no intent to discriminate against anyone.

I gave an extreme example, that went like this:  You’re a landlord, and you institute a policy that you won’t rent your properties to anyone ever convicted of rape.  Seems reasoanble, right?  Well, a Supreme Court decision from last year adds in a “trump card” where your policies ae concerned:  RACE.  The way it works is this:  If your anti-rapist policies have a proportionate impact on all ethnicities, then you’re ok.  But if your anti-rapist policy has a disproportionately large impact on any ethnic group – even if the disqualifier issue (like rape) happens to be a criminal matter – then you risk being targeted by a civil rights lawsuit on the basis of a legal theory known as “disparate impact”.  Basically, the Supreme Court is telling us that your rental policy is RACIST even though there’s not a single drop of racial motivation anywhere to be found.

And that’s exactly what’s happened.  There’s a civil rights lawsuit facing a landlord who is demanding proper identification so he can run criminal background checks.  This is painful, folks.  Here's the story from our friends over at The Daily Caller...

INSERT VIDEO HERE

Can you believe it?  What you’ve got is a landlord facing a VERY expensive lawsuit because a particular group of people who are BREAKING THE LAW by not having proper ID… well, they’re suing him because they believe that more people of their ethnicity break that particular law than people of other ethnicities, and so they should receive some protection from the repercussion of that particular criminal activity.

It’s DISGUSTING.  Folks, this isn't about Latinos or African Americans or caucasians or any ethnicity.  It's about the fact that the new Supreme Court decision basically places ETHNICITY as a trump card over the law... or, at least, that's the effect that will exist if the plaintiffs win this case.  It's absolutely disgusting.

Tell me something:  Where's the discrimination?  It doesn’t exist.  But what is being violated is this landlord’s right to manage his property in a safe and responsible manner.  This whole thing is mind-blowing and terrifying, just as I predicted back in Episode #90 of Self Directed Investor Radio.

Have you ever been involved in a lawsuit?  If not, let me give you a taste of it.  I’ve only really had to deal with one big legal conflict.  A former business associate went… well, his mental condition changed, if that’s the right word for it… and he went ballistic and sued me in federal court in his home town.  My lawyers got it dismissed because it was a silly claim.  He then sued me in federal court in my home town.  Again, my lawyers got it dismissed, because it was just ridiculous.  But at the end of the day, that experience still cost me about $80,000.

Why’s that relevant to YOU?  Well, the bottom line is that the Supreme Court’s decision last year make it MUCH more likely that the kind of lawsuit being faced by Waples Mobile Home Park will come to knock on your door someday, too.  Now at this point, this is still only a lawsuit.  It could still be withdrawn, it could be dismissed or it could go to trial, which I suspect will happen.  Nobody knows how it will turn out.  There's more to every story than meets the eye, and that's probably true here, too.  But here's what's so troubling to me as a real estate investor:

It cost me $80,000 to get a frivolous lawsuit DISMISSED.  That didn’t include the cost of going to trial, because the claim against me was so silly as to be rejected outright by the judge.  Yet it still cost me $80,000 to make that happen.

And now, lawsuits like the one against Waples are MUCH easier to bring against rental property owners … directly as a function of some incredibly twisted thinking at the Supreme Court.  And if the landlord in this case WINS… which is still entirely possible… it’s practically guaranteed that he’ll have to spend tens or hundreds of thousands of dollars – at minimum – defending himself against this claim.

At the top of the show, I asked you:  Do you think it’s reasonable to do a criminal background check against your tenants?  If you answered YES – and I bet virtually every one of you did – then you’re facing a real risk.

How do you mitigate that risk?  How do you steer clear of the legal landmines that our government LOVES to place in our paths?

I’ve got the answer for that question in TOMORROW’s show, episode #206… so DON’T MISS IT.  Actually there are 3 answers… and at least one of those answers is going to anger a large segment of the real estate industry.  But hey… the truth is the truth, and you deserve to hear it.

My friends, it was really great to be with you today, and I'm so grateful for your time.  And hey, always remember this:  Invest wisely today, and live well forever!

Enjoy Self Directed IRA news & updates!

Hosted on Acast. See acast.com/privacy for more information.

The U.S. government is on the attack again.  New rules from the Treasury department just killed an otherwise very big corporate merger, and the motivation is simple:  GREED on the part of the Obama administration.  This isn’t a political statement.  It’s all about YOUR PORTFOLIO, and I’ll tell you exactly how RIGHT NOW.  I’m Bryan Ellis.  This is Episode #204.

-----

Hello, SDI Nation!  Welcome to the podcast of record for savvy self-directed investors like you, where we have but one central purpose, and that is to help YOU make great investments that are simple, safe and strong.

That’s right, ladies and gentlemen… you are the hero in the story of your portfolio, not me and not any other person to whom you look for guidance.  Or… maybe you’re the goat in the story of your portfolio.  I certainly hope not, but good news:  My job is to make you be the hero in your portfolio forevermore.

Well, well, well ladies and gents… the U.S. treasury is at it again, directly interfering with business to the benefit of nobody but itself.  The latest action is rather disgusting, and I’ll tell you all about it after today’s Wisdom of the Ancients segment, where I tell you a short proverb, saying or quote that has stood the test of time and is deeply relevant to you and me as self-directed investors.  So here’s today’s proverb:

“My son, if you have put up security for your neighbor, if you have shaken hands in pledge for a stranger, you have been trapped by what you said, ensnared by the words of your mouth.  So do this, my son, to free yourself, since you have fallen into your neighbor’s hands:  Go—to the point of exhaustion— and give your neighbor no rest!  Allow no sleep to your eyes, no slumber to your eyelids.  Free yourself, like a gazelle from the hand of the hunter, like a bird from the snare of the fowler.”

Here’s what I’m seeing in that Proverb:  I’m seeing that just as you should be incredibly careful about making commitments, you should be incredibly aggressive and purposeful about resolving bad commitments.  This proverb says we should go to the other party, push the issue, and not rest until our liability has passed.  Be very careful about make commitments; be very quick to resolve bad ones.

What do you think?  I welcome your comments in the comments section below.

This has been a busy week for the U.S. government’s role as impediment-in-chief to the U.S. economy and citizenry.

Just a little while ago, the Department of Labor published new rules that change the relationship that financial advisors have to clients using retirement accounts.  It’s too soon to know for sure, because the rules came out just a few minutes ago, but I’ve got to tell you:  I’m skeptical.  I’ll give you more about this in the next episode.

But that’s not the focus of today’s show.  Today, we talk about TAX INVERSIONS.  Oh, don’t roll your eyes… not only is this easy to understand, but it’s important that YOU understand it since it may have already directly affected your portfolio.

So here’s the deal, here in the good ole US of A, corporations face the HIGHEST TAX RATE IN THE INDUSTRIALIZED WORLD.  35% for federal, and 4.1% is the average state rate, so a total of 39.1%.

Before I continue, I want you to understand the gravity of that.  Warren Buffet is considered to be the greatest investor who has ever lived.  His company – Berkshire Hathaway – has enjoyed average annual performance of nearly 20% per year for a very long time… an astounding feat indeed, that qualifies him for reverence and respect.

Isn’t it curious that the U.S. government taxes corporations at nearly 40% nearly twice the ROI number of the greatest investor who has ever lived?  No, the two numbers aren’t the same… but the comparison is stark and illuminating.

That super-high rate is so high, in fact, that it’s having a palpable impact on the ability of large U.S. companies to build profits.  And profit, I remind you, is the reason that one creates a company.  It’s that profit that gives value to the company’s shares.  It’s those shares in your portfolio that builds your wealth.  It’s the wealth you build that provides for the needs of you and your loved ones.  So yes, the growth of corporate profits is relevant to you, particularly if you are an investor in stocks.

So what are some of these companies doing about the massively over-priced tax bills that Uncle Sam extorts from us all?

Well, they’re moving themselves to countries that don’t punish them.

It’s called an INVERSION when a U.S.-based company acquires or merges with a company located in another country with a lower tax rate, and then shifts management and headquarters to the lower-tax region in order to be subject to a lower tax burden.

In truth, it’s not much different than the affluent retired couple who lives in New York – where taxes are ridiculously high – but who then moves to Florida for most of the year, where there is no state income tax.  It’s the same thing, and it’s totally legal.

So a tax inversion is the same thing, only it’s done by a company instead of an individual, and it involves adjusting the organization of the company such that the corporation legally shifts the jurisdiction for income taxation from a high-tax place (like the United States) to a low-tax place (like Ireland).

This is exactly what was happening with two large drug companies, Pfizer and Allergan, who had negotiated a huge $160 billion merger, only to have it targeted by the U.S. Treasury department with new rules that target inversions generally and the Pfizer/Allergan merger specifically.  The Treasury department was going to make the move so painful that the merger was cancelled and a $400 Million termination fee was paid… by choice.  That’s how punitive the new rules were going to be.

Look, I’m not an investor in those companies, so my motivation to comment isn’t financial in nature.  Rather, my concern is one of FREEDOM.

Folks, the U.S. government is not acting like a government that has the best interests of its citizens at heart, even though that’s what today’s new Department of Labor rules demand of others.  Rather, Obama and his crew are creating rules – without the consent of Congress – that directly aim to CONTROL companies by force.

This is wrong, people.  It’s wrong.  The solution is much easier:  Make America be an ATTRACTIVE jurisdiction for big companies to begin with.  Make tax rates REASONABLE.  Reduce burdensome regulations so this country is a BEACON to entrepreneurship, not merely a stop along the way to a more attractive destination.

If the U.S. government would show even one ounce of respect for the effort and risk involved in starting, running and owning businesses, and thereby use tax policy as a reasonable revenue generation rather than a PUNITIVE CAGE, then tax inversions would disappear naturally, because there’d be no reason for them to start with.

I’m sick of it, folks.  There’s got to be change at the top.

My friends… invest wisely today, and live well forever.

Hosted on Acast. See acast.com/privacy for more information.

Billions are pouring into U.S. real estate from investors in China… and frequently, those dollars are going into deals that, to me and you, simply make no sense at all.  But there’s method to the madness, and I’ve discovered 5 important things you need to know if you want to do business with investors in China.  I’m Bryan Ellis. This is Episode #203.

------

Hello, SDI Nation!  Welcome to the podcast of record for savvy self-directed investors like you!

It’s Monday, and what a great day to be alive, my friends!  Spring is a spectacular time of year and we here at SDI Radio are champing at the bit for another great week, so let’s get to it!

First, let’s hear a bit of wisdom from the ancients, shall we?  Every episode, I share with you a proverb, quote or saying that has stood the test of time, and is important for you and me as self-directed investors.  Here’s today’s proverb:  “A fortune made by a lying tongue is a fleeting vapor and a deadly snare.”

Obvious, right?  Don’t lie to get rich, right?  Well sure, but to me, there’s more to that one.  Notice that this proverb doesn’t say that you CAN’T get rich by lying.  Bernie Madoff demonstrated that skillful deception can lead to fabulous wealth.  But Madoff demonstrated the rest of the proverb too… that fortunes made through deception are both temporary and a huge trap.  So clearly, let’s don’t grow our wealth through outright fraudulent deception like Madoff.  But one step further is this:  My view of wealth is stewardship rather than ownership.  Let us take care to be people of few words, and to make sure that the words we speak are careful and true.  There’s no great legacy we can pass to our children than a heritage of honesty… and there’s no better foundation to build wealth than through being wholly truthful in the big things and the little things.

Your thoughts on this are welcomed on today’s show page over at SDIRadio.com/203.

My friends, this past Friday, Carole and I had a really interesting lunch conversation with the president of real estate services conglomerate who owns over 5 dozen companies, several of whom have likely served some of your real estate needs along the way.

I learned quite a bit from that conversation, and one topic in particular stood out to me quite clearly:  The nature of Asian investors who seek to invest in U.S. real estate.  My colleague has first-hand knowledge of the topic, having recently spent time in China and being provided with access to substantial amounts of that capital.

Here are the things that I observed from this conversation:

1. Chinese investors prefer hard assets. By hard assets, I mean things like direct ownership of REAL ESTATE.  They seem far less interested in “structured” types of investments like mortgage notes or even hedge funds that purchase real estate.  They want REAL ESTATE – real, direct ownership of it – PERIOD.
2. Their Primary Concern Is Not ROI: Chinese investors tend to be willing to place their capital into investments that, from my vantage point, do not make a large amount of sense.  Many of these investments are relatively low-yielding in terms of cash flow and can easily be beaten by other alternatives.  But ROI is not their primary measuring stick.  Their real measure appears to be SAFETY OF CAPITAL.  The political system in China is such that one’s wealth is essentially and ultimately the property of the government, and to get that money out of their own banking system and into hard assets held in a relatively reliable jurisdiction like the United States represents something even more valuable than a big ROI:  It represents physical safety of the capital itself.  That’s where the focus of many Chinese investors is fixed.
3. It’s Expensive For Chinese Investors to send money to the US: There are substantial brokerage fees to which Chinese capital maybe subject.
4. Chinese Investors Prefer Multifamily Properties: While there is an appetite for other types of real estate also, many Chinese investors prefer multi-family residential properties, as this type of property allows them to deploy larger amounts of capital more easily in a single transaction, while still investing in residential property that is, at its core, fundamentally familiar as a concept. and Finally…
5. Chinese Investors Prefer Specific Local Markets: To the Chinese investor, not all U.S. real estate markets are the same.  That’s clearly correct, but it goes further than that.  Not even all STRONG real U.S. real estate markets are the same.  Generally speaking, Chinese investors appear to be most interested – CURRENTLY – in properties in just a few specific very large markets, with California receiving a particularly large degree of interest.

From my vantage point, I feel sympathy for Chinese investors.  What you have is, by and large, people who are very bright and have successfully monetized China’s economy, which is the biggest rival to the U.S. economy in raw size.  But China is a communist country, and so at the end of the day, the government can do anything it wants… including with the wealth of those entrepreneurs and investors who have built fortunes from their own ingenuity.  Their interest in U.S. real estate is as much a function of preservation as investment.

We here at SDI are always in search of additional ways to serve Chinese investors looking to deploy their capital into U.S. real estate.  If you have any suggestions, drop me a line at [email protected].

And hey – a quick note about our private real estate fund that invests in Northern California real estate.  So many of you have asked about it, so I’ll give you a bit of an update here.  The first quarter of 2016 just ended on Friday and since today is only Monday, we don’t yet have the final numbers back from the accountant.  But I’ll put it like this:  The total net return for the first quarter alone appears to be solidly in the double digits.  That’s not an annualized return… that’s just for the first quarter.  So things are going quite well, largely according to plan.

My friends… always remember this:  Invest wisely today, and live well forever!

Hosted on Acast. See acast.com/privacy for more information.

Hey, stock market investors!  When members of the Federal Reserve are graphically expressing worry about the market, you’ve got to take it seriously.  And this news, my friends, is serious if you’re a stock investor.  I’ll tell you all about it right now.  I’m Bryan Ellis.  This is Episode #202.

----

Hello SDI Nation!  Welcome to the podcast of record for savvy self-directed investors like you!  Today’s show has one purpose:  To help YOU make great investments that are simple, safe and strong!

Let’s get started with today’s installment of Wisdom of the Ancients, where I share with you a saying, quote or Proverb that has stood the test of time and conveys truth to which you and I as self-directed investors must pay close attention.  Today’s proverb says this:  “Those who give to the poor will lack nothing, but those who close their eyes to them receive many curses.”

What does this mean to you?  To me, it means that it’s wise to live in an “others-focused” kind of way.  In other words… think of the needs of others… specifically those who are destitute.  Do you believe that the wealth you’ve accumulated was given to you solely for your benefit… or maybe, just maybe… is the reason you have that wealth to give you the chance to wisely steward resources that can be used to feed the hungry, cloth the naked and heal the sick… along with, of course, taking care of yourself and your loved ones?

That’s what that proverb means to me.  What are your thoughts?  I’d love to hear them.  This is episode #202, so you can stop by SDIRadio.com/202 – the number 2 – 0 – 2 – and share your thoughts in the comments section.

Now, on to some financial markets analysis.

The stock market is doing pretty well these days, isn’t it?  It started the year by continuing a big plunge that began late last year, but sometime in February, the direction turned and now the market is actually up for the year despite the earlier fall.

And for those of you who are in stocks, that makes me so happy!  I hope for the very best for you at all times.

But there’s cause for alarm if you’re a rational thinker.  You see, in Episode #200, which you can, of course, hear by visiting SDIRadio.com/200, I told you that the rules of capitalism are no longer the governing rules for the actions of this market.  In a healthy economy, it’s the economy itself that determines success or failure of stocks.

That’s not how things are working right now.

You see, for the past 20 years or so, the one factor that has had an outsized influence on stock prices is the Federal Reserve, a group of bureaucrats who are tasked with establishing monetary policy for the United States.  There would be precious little need for specific monetary policy if our money actually had intrinsic value.  Alas, our money is based on nothing more than confidence in our government and where the value of your money is concerned, the part of the government that decides, rather directly, what your money is worth, is the Federal Reserve.

This is important – critically important, actually – for you stock market investors.  Here’s why:  The Fed has, for the past 2-3 decades, taken as a central part of it’s mission to maintain the apparent health of the economy as measured by the U.S. stock market.

Over and over again, the Fed has intervened with the specific intent of “propping up” the economy generally and stocks specifically.  Remember the bailouts that happened as part of the great Recession a few years ago?  That money came from the Fed.

So for many years now, the Fed has been desperately using every trick in the book, like bailouts and interest rate manipulation, to keep the stock market high.  And do you know what?  Generally speaking, they’ve been very successful.

But my friends… you can’t catch fish in a dry pond.  And the Fed is out of tricks.

Note that it’s not me saying it… and it’s not just one person saying this.  But the MOST NOTABLE person sounding the alarm is none other than Richard Fisher, former president and CEO of the Dallas Federal Reserve Bank, one of the big branches of the Fed.  Fisher ran the Dallas fed for 10 years, and is currently a senior analyst at Barclay’s.  He’s a guy that’s able to speak with authority about the Fed’s role and growing impotence as a force for “good” in the market.

Fisher was on CNBC just this morning and made a very interesting comment, and the link to that interview is on today’s show page at SDIRadio.com/202.  Fisher said, essentially, that there’s nothing left the Fed can do at this point… they’ve used all of the arrows in the quiver.  He says that the Fed is “living in constant fear of market reaction and that is not the way to manage policy.”

That’s sobering.  If the Fed exists as a reactive force to the market, and if the Fed has already used up all of the tools at it’s disposal, then that’s pretty bad.

But if you take it a step further and believe, as I do, that the market run-up in stocks in the past 10-20 years in stocks is not just because the economy has been growing, but also largely because of manipulation of the capital markets by the federal reserve, then the fact that the Fed is in a reactionary mode and is wholly out of ammo is even more terrifying.

Look, I’m not predicting an immediate stock market crash.  But I ABSOLUTELY believe that the foundation of the stock market is like shifting sand… it’s a house of cards.  If you get out soon, you’ll be one of the people to have successfully “gamed” the biggest Ponzi scheme in the history of the world.

Who knows… maybe I’m wrong.  Maybe the part of the market that actually does reflect the performance of the underlying companies, and the condition of the broader economy… maybe that part of the market is what is being reflected in today’s stock valuations.  But part of me – the skeptical, “protect the money” part of me – thinks otherwise.

What about you?

Share your thoughts with me at SDIRadio.com/202!

That’s all for today.  A lot of you have been emailing me privately, asking our private equity funds.  So in the next episode, I’ll tell you a bit more about that… and that will be well timed, as we’re now at the end of Q12016, with some results to report.  Let’s just say that I’m pretty proud of what’s happened.  Hehehe

So be sure to get notified about the next episode of SDI Radio by being on our private discussion list which you can join by texting the word SDIRADIO with no spaces or periods to 33444.  Again, that’s text the word SDIRADIO with no spaces or periods to 3344.

My friends… invest wisely today, and live well forever!

Hosted on Acast. See acast.com/privacy for more information.

What a ride! Since the last day of last year, the stock market fell more than 10%... and subsequently got back all of that loss as of the market’s close on Friday. As a result, something interesting is happening in the self-directed retirement account world that is completely COUNTER-INTUITIVE… and you need to know about it. I’m Bryan Ellis. This is episode # 200.

-----

Hello, SDI Nation! Welcome to the podcast of record for savvy, self-directed investors like you where we have one, and only one goal: To help you make GREAT investments that are simple, safe and strong.

And Today, I add a new, very brief segment to this show that I’ll call “Wisdom of the Ancients”. It’s a short quote, proverb or thought that may be directly related to wealth building, or may only be peripherally related. Regardless, it’s something that’s on my mind, and I’d like to share it with you for your own consideration, because it will contribute to helping you make great investments that are simple, safe and strong.

Today’s Wisdom of the Ancients quote is an ancient proverb that says simply: “The plans of the diligent lead to profit, as surely as haste leads to poverty.” This tells me 3 things: We must have a plan, we must be DILIGENT about that plan, and we must never be hasty. If you have any additional thoughts on this, I’d love to hear from you on today’s episode page at SDIRadio.com/200 – that’s SDIRadio.com/ two zero zero.

Folks, I had a very interesting conversation with a business development manager at a self-directed IRA company recently. It’s curious, the market he serves is very similar to – a subset, in fact – of the market that we serve here at Self Directed Investor Radio, and that’s you.

And his observation was fascinating to me.

He said, “Bryan, when the stock market started to get really bad late last year and early this year, we started to see a lot of people heading for the exits and jumping into the self-directed IRA world.”

Well, of course, this makes sense to me. The stock market is demonstrating the volatility for which it’s famous, and volatility is a bad thing. So it stands to reason that investors would be more inclined to diversify away from stocks.

But it was the rest of the conversation that I thought was interesting.

He went on to say, “But since the market has started to rebound, we’ve had an absolute FLOOD of new people opening self-directed IRA’s… people with some very large stock portfolios who are just getting out right now, as quickly as they can.”

That, my friends, is curious to me. Why would a person exit an investment that’s performing well… at least, recently?

My colleague had an explanation for that, too. He said “people tell me that now that they’ve recovered their losses, they just don’t want to stick around to see what is going to happen. They don’t have confidence in this economy and just want to get their money into something that they think is more controllable, more predictable.”

And you know, I think he’s totally right.

We’ve received substantial interest in our SDI Cash Flow Quick Start offer recently, which includes 3 high-quality, high-yielding rental properties along with a built-in strong asset protection plan and customized tax consultation… all for only $150,000.

I initially thought the reason for it was that the offer itself is so great, and while it is an extraordinary offer, the popularity is, I think, based on an external factor:

People are getting out of stocks “while the gettin’ is good”, as they say.

Over on Wall Street, they use the term “flight to quality” a lot. That means, in Wall Street parlance, the movement of capital from one asset to another of higher quality. And by higher quality, the talking heads on financial news stations generally mean things like blue-chip stocks or treasury bonds…

But never do THEY mean investments of greater substance like, for example, real estate.

Well, we all know why that is… real estate is a real asset… there’s an inherently limited quantity of it… and thus it’s virtually impossible to create illusory real estate… real estate that exist only on paper, in other words… and that type of illusory asset creation is at the heart of what’s done on Wall Street. They attempted to do that on a grand scale with real estate in the late 90’s through the early 2000’s, and our grandchildren and great grandchildren will hear stores of the great recession as a result. So in a very real sense, real estate simply doesn’t fit with the model of Wall Street, even though the value of U.S. real estate is estimated at about $23 TRILLION dollars.

That’s certainly not to suggest that one can’t make money on Wall Street. We all know that you can.

But what if there’s a better way… and it turns out that the only reason you’re naturally disposed to buying investments from Wall Street is because of MARKETING rather than REASON?

Consider this:

Right now, a wise investor can acquire high-quality, newly renovated rental properties in an EXCELLENT real estate market for about $50,000 each. And that asset has these characteristics:

• It’s newly renovated
• It’s occupied by a tenant
• It’s under the care of a highly experienced property manager
• The maintenance costs are guaranteed to be covered
• The monthly rent is paid every single month, and on time every time, by none other than the government itself!
• The NET cash flow is north of 10%... and that doesn’t even include appreciation or tax benefits
• And to top it all off… they’re GUARANTEED! In other words, if after a year, you don’t like how it’s going, you can get your money back!

Can you do anything like that on Wall Street? No, you can’t.

Even if you could, folks… here’s a real issue. The stock market is not being allowed to use the rules of capitalism. In other words… there’s another factor in stock values that has grown in significance to the point of rendering the values of the companies themselves as increasingly meaningless when valuing the stocks… and let’s be clear… there’s a big distinction between the value of a stock and the value of the company represented by that stock.

What is that factor that’s throwing the value of stocks so far out of line versus the companies they represent? I’ll tell you on the next episode of Self Directed Investor Radio, which will be ready for you two days from now, on Wednesday, March 23.

But my friends… please, please, please… don’t miss the EXTRAORDINARY edition of the sister show of this podcast, called SDI Money Law, hosted by attorney extraordinaire, Tim Berry. Tim has discovered something in the law for self-directed 401k and IRA owners that is absolutely SHOCKING… this could easily be the biggest legal discovery of the past 10 years.

How do you get to hear that? Very simple: Make sure you’re on the SDI Money Law email notice list by texting the words SDIMONEYLAW with no spaces or periods to 33444 right now. Again, text the phrase SDIMONEYLAW to 33444 right now, but use no spaces or periods.

If you’ve ever been concerned about the potential for performing a prohibited transaction, or for being hit with taxes over doing a real estate flip inside your retirement account, then let me tell you…. You don’t want to miss tomorrow’s episode. Text SDIMONEYLAW to 33444 right now…

And if you’re one of the wise investors looking to take this wonderful opportunity to cut and run from the stock market and redeploy some of your portfolio into assets that are simple, safe and strong… assets that make for GREAT investments, then stop by SDI360.com/consultation to set up a time to chat with us. We’d love to help YOU make great investments that are simple, safe and strong!

My friends… invest wisely today, and live well forever!

Hosted on Acast. See acast.com/privacy for more information.

Donald Trump racks up more primary victories, and it looks like the GOP establishment, and some Republican party types like Mitt Romney and Erick Erickson are pushing for open revolt.  What does this mean for your portfolio?  I’m Bryan Ellis.  I’ll tell you RIGHT NOW in Episode 199.

----

Hello, SDI nation!  Welcome to the podcast of record for savvy, self-directed investors like you, where we have one and only one goal and that is to help YOU make great investments that are simple, safe and strong.

Yesterday was the biggest day in the Presidential primary process since Super Tuesday, and again, Donald Trump appears to be an unstoppable force on the Republican side, as is true for the gaffe-prone Hillary Clinton on the Democrat side.

So folks, let’s talk about this like adults, shall we?

I didn’t vote for Donald Trump in the primary in my home state of Georgia.  I did vote for a Republican candidate, but not Trump.  I am a conservative, but I am not a Republican.

I find the whole situation disgusting, to be honest.  What we have is a situation in which Trump, a guy who – whether you love him or hate him – has shown some incredible business acumen over the years, notwithstanding the failure of a few of his businesses.  Note again that I didn’t vote for him, but I do respect much of what he’s accomplished.  I also greatly respect the negotiations philosophy used by his team, as described in detail in the book “Trump Style Negotiation” by his attorney, George Ross.

Anyway, Trump is the CLEAR choice so far in Republican primaries.  There’s a guy on the radio here in Atlanta named Erick Erickson who sometimes gets some face time on Fox News as well.  Erickson is a good example of the foolishness that’s happening right now.  He’s pushing this notion that a majority of people on the Republican side do NOT want Trump to be president because he’s not gotten the majority of the votes in any primary.

Erickson is a fool.  He’s always previously impressed me as a pretty bright guy, but Trump is totally inside his head, living rent free, and dominating Erickson’s thoughts.  It’s a statistical improbability that ANYBODY would get a majority vote in any election when there were as many as 17 different candidates on the ballots to begin with, and in fact, most of those candidates remain on the ballots to this day, despite the fact that many of them have formally dropped out, because those ballots are set months in advance.

Who are the most popular politicians of the last 30 years?  Probably Ronald Reagan and Bill Clinton.  If Reagan or Clinton were on a ballot with 16 other candidates, those guys wouldn’t get majorities either.

This isn’t a defense of Trump, by the way.  There’s a lot about him that I think is exciting, but there’s a lot about him I think that is terrifying.

And there’s also Mitt Romney, a guy who lost the last election so badly that he should, quite honestly, be ashamed to be seen in public.  Here’s a guy who has been in numerous political races, and has lost every one of them, excepting only his victory to become governor of Massachusetts.  He didn’t run for that seat again, because his approval rating was in the 30% range, placing him at #48 among 50 governors for approval rating.  Point is, Mitt Romney is no political or leadership dynamo, yet he’s out there encouraging people to vote for any candidate but Trump, literally.

The hysteria on the Republican side has been absolutely mind-blowing, and it proves that the job of people in politics is focused on one thing:  Keeping their power.  It’s OVERWHELMINGLY OBVIOUS that Trump is the favored candidate, and yet what you have is a national party making it clear that they hope to re-assign the nomination to someone other than Trump on the basis that THEY don’t like the candidate.

It's insanity, folks.  It’s no less ridiculous on the Democrat side, where even in the states that Hillary Clinton has lost to Bernie Sanders, Clinton has garnered more delegates for the nomination.  The Republican side is full of confusion and power-brokering.  The Democrat side just seems corrupt.

Regardless of where you fall on the political spectrum, you and I as self-directed investors have some important things to think about.  What would it look like to have a Trump presidency or a Clinton presidency?  Even bigger than that… what happens if the Republican nomination is assigned to somebody other than Trump, proving that the voice of the people is irrelevant in choosing their most powerful leaders?

Nobody knows for sure what the end result of those things will be, but we can make some informed assumptions:

• Hillary Clinton will be like Obama. There’s no evidence to think otherwise.  That means she opposes everything about business, except for the donations she receives from business people.  There will be more illegal immigration, higher taxes and bigger deficits.  But there will be plenty of entitlement programs.
• Trump would be different from Obama in most ways, but we don’t yet know how. I suspect he could be VERY good for the economy, and I suspect he’ll have a substantive impact on stemming the tide of illegal immigration.  I also suspect he’ll end up taking positions as President that he opposed as a candidate in the name of “deal making” or “flexibility” as he calls it.

What does all of this mean for your portfolio?

It’s really rather simple:  More than ever, fundamentals matter.  Your investment choices must fit the “simple, safe and strong” mold – the S3 model that we here at Self Directed Investor Society so strongly espouse.

Why is that?  What if, for example, simplicity doesn’t matter to you… you’re totally fine with making exotic investments or using complicated strategies?

Look, some people are well suited to such, and that’s great.  Like I mentioned to you in episode 198, which you can hear at SDIRadio.com/198, the terms Simple, Safe and Strong, one thing that’s certain is that those terms are flexible, and don’t mean the same for everyone.

But the other thing you learned in that episode is that there’s this thing called Perspective, and sometimes it’s helpful to consider perspectives other than your own.  And in a political environment in which the will of the electorate is being thwarted on both sides of the aisle, it’s simply a dangerous, worrisome environment in which to operate.

And that’s why fundamentals matter so much.  No matter what the state of the economy or political turmoil, real assets have real value.  What is a “real asset”?  Sure, it’s hard assets like real estate or gold, but I think there’s a better definition, and that definition is any asset that is sufficiently valuable that there’s a market for it.

For what kind of assets is there always a market?  Assets that are simple… safe… and strong.

Fundamentals matter more than ever in an environment like we have right now.  Sometimes, you can do “cute” things in your portfolio that work out profitably.  I respectfully submit to you that now is not one of the times when it will be wise to get “cute” with your capital.  Wisdom and perspective must be your guide.

Remember:  You must respect your own capital, because nobody else will.

Folks, can I ask you to stop by iTunes to give this show a 5 star rating, if you like what you hear?  I’d be so grateful.  You can do that at SDIRadio.com/iTunes.

My friends, invest wisely today, and live well forever.

Hosted on Acast. See acast.com/privacy for more information.

Is it greed, or is it ambition?  The difference is huge, but subtle.  One leads to excellence, the other to ruin… yet, they can feel very similar.   Here’s how to make the distinction, and avoid the devastation to your portfolio that awaits the greedy.  I’m Bryan Ellis.  This is Episode #198.

----

Hello, SDI Nation!  Welcome to the podcast of record for savvy self-directed investors like you, where we have one and only one goal:  To help you make GREAT investments that are simple, safe and strong.

One thing I’ve learned in working with you fine folks is this:  There’s some subjectivity to the words “simple, safe and strong”… and that’s really as it should be.  While there’s a baseline for those things –  sending money to a Nigerian prince, for example, is always foolish and never safe – what is true is that what you define as simple or safe or strong may be different than how I define it, and that’s ok.

Defining what those terms mean for you is really very important, and the answers simply aren’t the same for everyone.

But there’s a line in the sand that mustn’t be crossed on one of those factors:  Strength.  Strength refers to the results of your investment, such as whether it garners the ROI that you need, and whether it’s sufficiently stable for you to avoid the kind of stress that hurts your body and mind more than it helps your pocketbook.

On one side of the “strength” line is ambition.  Ambition is a good thing.  Ambition is the thing that drives us to be more, do more, and achieve more.  Ambition is what drives us to demand the best of ourselves, and that is why it’s good.  Pure ambition is an inherently good thing, because pure ambition is correctly aligned with the purpose of your life… it’s what drives you to be what you were put here to be.

So, curiously, having clarity about your life purpose is a key part of being a successful investor… if you’re doing it the SDI way.

Now On the other side of that line in the sand is something that feels a lot like ambition, but is wholly different:  Greed.  Greed is all about wanting more without being more or doing more.  Greed is not about fulfilling your life’s purpose… it’s about achieving a standard to which you falsely believe you’re entitled.

Greed and ambition are separated by a line in the sand, and that line is called wisdom.  A better word for it might be “perspective”.  Perspective is the difference between extraordinary investors like Peter Lynch and Sir John Templeton versus criminals like Bernie Madoff   The former experienced tremendous wealth because they earned it.  The latter stole billions because he believed he was entitled to it, but absolutely did nothing to earn it.

And that’s what greed is:  A sense of entitlement to something you do not deserve and have not earned.

So let’s connect this back to helping you to make great investments that are simple, safe and, particularly in today’s context, strong.  There are two points of evaluation you must consider where strength is concerned and they are:

First:  What is the cash-on-cash return?  In other words, how much money do you expect to pull out versus the amount of money you put in?

Second:  What is the stress-adjusted return?  In other words, how does the volatility of the investment make the investment more or less attractive for you?

That second part… the stress-adjusted return… is a factor that far too many investors fail to consider prior to taking an investment.  You might look at the cash on cash return, and be blinded by the financial potential, without ever considering that a 15% return that causes you overwhelming stress is far less desirable than a 7% return that’s perfectly reliable and predictable.  This is a critical consideration, my friends, and it can easily be reduced to a formula.

Let’s use an example, shall we?

Imagine that you’ve got an investment opportunity that you’ve been told will yield 15%.  Now we all know that 15% is an exceedingly attractive cash-on-cash return and makes for an excellent “headline”.  Anybody who gets that kind of return on a consistent basis is a superstar, and we all know that.

But think about that for just a moment.  Which is better:  An investment that yields 15% and is fundamentally predictable and reliable, or an investment that yields 15% in the end but is so volatile that, on any given day, it looks like you might actually LOSE your investment rather than make a huge rate of return.

The answer is clear… an investment that’s highly predictable and reliable is far better than one that’s volatile, even if the rate of return in the end is the same.

So what we’ll do is to assign a “SDI Strength” factor to each investment with 10 being perfectly peaceful and reliable and 1 being just shy of suicidally volatile.

The investment which yields 15% and is highly predictable and reliable gets an SDI Strength factor rating of 9.  The investment that yields 15% but is highly volatile gets an SDI Strength Factor rating of 5.

It’s pretty easy to compare the two investments then… just make percentages of those numbers – 9 becomes 90%, 5 becomes 50%, etc… and multiple that percentage by the rate of return.  So the highly predictable investment has a stress-adjusted ROI of 13.5%, whereas the much more volatile investment has a stress-adjusted ROI of 7.5%.

The difference is far more clear this way, isn’t it?  But that’s only an approximation.  The real difference is far more distinct, and it’s based on some mathematical relationships that will only excite the engineers and math geeks among us, of which I’m certainly one.

So let’s do this:  Rather than talking about the math, I’m going to make a little spreadsheet you can download to do it for you.  What I’ll do is make a nice little page of tools for you to use, and it will be available at sdi360.com/tools.

But give me a couple days on that, please.  Right now, my dear wife Carole is having some serious health problems, and has lost a substantial amount of hearing in both ears.  I’m desperately concerned about her and will be taking her for another round of doctor visits today and tomorrow, so please bear with me and I’ll get that posted for you within a couple of days.  And, if you’d be so kind… say a prayer for her, ok?  Thanks.

But what about the whole ambition versus greed discussion?  How does this calculation help us to clarify this issue?

The truth is that there’s no way to precisely quantify the difference between greed and ambition.  But here’s a pretty good standard:  Would you be happy if your investment yielded only the stress-adjusted return rather than the more attractive headline return?  If you’d only be happy with the “headline” return – the big number in bright lights – rather than the stress-adjusted return… well, then… you’re making an emotional decision rather than a rational… and that emotion may be greed rather than ambition.

The answer is simple, but maybe not easy:  Be patient.  Find another investment where the numbers – including the SDI Strength Factor – actually line up to achieve the goals you seek.  Because it’s not greedy to demand strong performance for your capital.  But it’s the very essence of greed to demand that your investments achieve more than they can truly be expected to achieve.

My friends… invest wisely today, and live well forever!

Hosted on Acast. See acast.com/privacy for more information.

Want the sexiest, most explosive way to blow up a retirement account that you can ever imagine… and it’s hiding in plain sight?  Get ready to have your mind blown YET AGAIN, my friends.  I’m Bryan Ellis.  This is Episode 197.

-----

Hello, SDI Nation!  Welcome to the podcast of record for savvy, self-directed investors like you, where we have one and only one purpose:  To help you make great investments that are simple, safe and strong!

And BOY-oh-BOY do I have a great strategy for you today!

Let’s take a journey into imagination, shall we?

Imagine that you’re presented with an array of dozens of locked “treasure” boxes.  You can buy any of these treasure boxes you want for $1,000.  And when you do so, if you’re able to get the treasure box opened, there’s a multiple of your investment waiting inside… maybe $20,000…. Maybe $75,000… maybe much, much more.

Of course, there’s the chance that there’s nothing inside at all.  And there’s the chance that you never figure out how to get the treasure box unlocked to begin with… and thus, your $1,000 is wasted.

Sounds like a gamble, doesn’t it?

But what if the predictability is MUCH higher?  What if a certain portion of those treasure boxes have a particular marking on the outside, which means that there’s treasure to extracted from within?

And what if, before ever ponying up your $1,000, you were able to closely inspect the lock itself, to determine with a high degree of accuracy whether you can break the lock and pull out the treasure?

Well, my friends, that’s exactly what I’m going to teach you to do today, and for those of you who are looking for a way to increase – potentially dramatically increase – the size of your portfolio, this is a special strategy… and it works particularly well for those of you using a self-directed IRA or 401k.

Here’s how it works:

There are hundreds of thousands of houses out there that have real value – they’re treasure boxes – but unfortunately, that treasure is bound up because of tax debt.  The owner of the house has some tax problems, there’s an IRS or state tax lien against them, and because of that, all of the equity in their treasure is totally ZAPPED.  It’s worth absolutely nothing.

And that’s why it’s possible to buy these houses for virtually no money at all… because they are, from a wholly objective perspective, worthless.

But why would you buy a worthless house, even if only for a small amount of money?

It’s because you know two things:

1. What the house would be worth without those liens against it, and
2. How to pick the lock – how to have those tax liens reduced far enough that there’s a big profit waiting in it for you!

Here’s an example that’ll really get your juices flowing:

Tim, a member of the SDI Team, recently found a property that’s worth a bit over $400k.  Unfortunately, there was about $900,000 of debt against that property, nearly all of which was tax debt.

This house was to Tim one of those treasure boxes I mentioned to you.  Because he was able to acquire title to that property for virtually no money at all.

But why would he do that?  Sure, it’s a $400,000 property… but it’s got absolutely no value.  And isn’t it just a crapshoot to invest in a property on the assumption that you’re going to be able to get the owner’s tax debt reduced?

Well sure… it would be a crapshoot if that’s all the information Tim had.  But it wasn’t.  Tim was able to determine, in advance of putting a single dime into the property, that the entire situation – the owner, their financial situation, the property location and property value, all of the pertinent details – Tim was able to determine in advance that all of those things lined up such that there would be an overwhelmingly strong probability that he’d be able to work with the IRS and state taxing authorities to either reduce the debt or just remove it from the property, such that Tim would be left with a substantial amount of equity and a strong profit potential.

So Tim’s “treasure box” gave clear signs on the outside that there was some real treasure inside, because he could see that the property was worth over $400,000.  And the lock on the treasure box – the tax liens – gave Tim enough information to know that there’s a very, very good chance that he could “get at” the treasure inside.

The net result?  Well, Tim’s received a cash offer to buy this house for $374,000.  And when it’s all said and done, he’ll pocket around $90,000 in profit…

…all from a house that most investors would see as being utterly valueless, but is anything but that.

This treasure box was stuffed with cash, and Tim was able to make a highly informed, high-probability decision whether to risk a tiny amount of capital – usually from $1,000 to $5,000 – in order to extract many, many multiples of his investment less than a year later.  He did have to get some funding to carry the property for a brief interlude, because the IRS isn’t flexible about the deadlines they set for payment arrangements.  But no matter… the numbers worked, and worked incredibly well.

Think of it, my friends… think of the potential for buying well-selected “worthless” real estate like this in your IRA or 401k…  for a TINY amount of money… and then by using some legal expertise that can be purchased for a few thousand dollars, you’re able to “pick the lock”, creating substantial equity spreads that simply did not exist before you came into the picture?

That, my friends… is brilliance in investing, and that is why you listen to SDI Radio.

And you know what?  You’ve heard of this strategy before, but under a different name.  You’ve heard the term “short sale”, right?  That’s when you ask a lender to take less money than they’re owed because, in the grand scheme of things, it makes sense for them to do that.  Well, this is a short sale, too… only with tax debt.

It turns out that it’s possible – in SOME cases – to do that with tax debt.  Just like with mortgage short sales, you can’t reduce just any tax debt.  There are certain situations where the IRS isn’t going to budge, and they shouldn’t.  But as much as we all dislike the notion of having the IRS breathing down our necks, the truth is that they’re not stupid, and in some situations, it makes sense for them to work with taxpayers who are in trouble.

And it is those situations which create this opportunity.

Want to know more?  Then be sure you’re subscribed to the SDI Radio private email discussion group by texting the word SDIRADIO with no periods or spaces to 33444.  That’s because on Monday, I’m going to email everyone on that subscriber list an invitation to a special webinar where we’ll teach you how you can profit from this strategy, without having to be an expert in any piece of it!  So again, be sure to text the word SDIRADIO with no spaces or periods to 33444.

My friends… invest wisely today, and live well forever!

Hosted on Acast. See acast.com/privacy for more information.

Last episode, I gave you 5 shocking reasons that you should seriously consider NOT putting real estate investments inside of a self-directed IRA.  But there are two sides to the coin, and today I give you 5 great reasons that your IRA is a perfect home for great real estate deals.  I’m Bryan Ellis.  This is episode 196.

-----

Hello, SDI Nation!  Self Directed Investor Radio is here for one purpose:  To help YOU make great investments.  So let’s do that right now.

Ok, so I know, I know, I know.  If you heard yesterday’s show – which is available to you right now at SDIRadio.com/195 – I’m betting you think I’ve flipped my wig, as I spent the entire episode giving you really strong reasons NOT to use your IRA to buy real estate.  This is, after all, the Self Directed Investor Radio, where self-directed IRAs are a key focal point.

But look… the truth is that I’m primarily interested in helping you to make GREAT investments, and a big part of that is the legal structure under which you acquire your assets.  And sometimes an IRA is the perfect solution.  Other times, it’s really not.  Unlike your IRA custodian, I don’t have a bias towards any particular structure.  The only result that matters is that you make a great investment.

So today, I give you the counter argument – 5 strong reasons that your IRA is a GREAT place for your real estate investments, starting with #1:  Tax savings.

Yes, that’s right… there are a lot of taxes to be saved by properly using an IRA.  Specifically, if you’re using a Roth IRA, you could save a ton, because those profits will be 100% totally tax free… and that’s the best possible scenario.  But even if you use a traditional IRA – which has the nasty side effect of subjecting your profits to very high ordinary income tax rates rather than comparably low capital gains tax rates – it could still be tax-wise to go that route if you expect your income to be relatively low during retirement.  Honestly, it’s a murky question.  Best to get advice from your financial advisor.

So that leads us to reason #2 to use your IRA to invest in real estate:  That’s where the money is!  This one is practical, sure.  But here’s the deal:  If you’ve got a great real estate deal that requires $200,000 in capital, and the only place you happen to have the capital available is in your IRA – even a traditional one – then by all means… go for it!  You’ve got to invest that money somewhere, and you can’t pull your profits out of the IRA without penalty before retirement anyway.  So don’t generalize my tips from last episode so much that you miss a good opportunity.

Reason #3 to invest your IRA funds into real estate:  It’s called Turnkey Rental Property.  Why do I say that?  For those of you who may not be familiar, Turnkey Rental Property is a cool situation in which an investor purchases a property that’s already renovated, occupied by a paying tenant, and under the watchful eye of a competent manager.  So it’s a complete package, and on the very day you buy the property, you start collecting cash flow, and the property manager handles basically everything for you.  Why is this relevant to your retirement funds?  It’s because one of the biggest risks of investing in real estate through your IRA is that you’ll somehow, someway deliver “services” to your IRA.  What is a “service”?  Well, it’s not really defined, but one thing we know:  If you do it, you’ve committed a prohibited transaction, and that means your IRA is going to take a MASSIVE hit in taxes, penalties and interest.  And by investing in Turnkey Rental Property, you’re doing a very strong job of insulating yourself from delivering any “services” and thereby protecting your retirement portfolio.

Reason #4 to invest in real estate through your IRA:  Real estate can be molded to fit your specific needs.  For example:  If you have 30 years before retirement, you might consider investing in real estate with overwhelming potential for appreciation.  If you pick your market wisely, that appreciation could make you very wealthy.  On the other hand, maybe you view rental property primarily as a way to generate substantial current income, and you only want to invest where you’ll have a high ROI from cash flow, with less regard to appreciation potential.  Well, with real estate you can do both.  I know that one of the markets where we’re very active – northern California – really offers almost nothing in terms of cash flow, but the market there is blazing hot with really strong appreciation.  On the other hand, we’re also very active in Birmingham, Alabama, where real estate is slow-moving and rather predictable… but the cash flows are simply outstanding.  Whatever your need or preference, selecting real estate wisely can really help with achieving your goals.

And Reason #5 to use your IRA to buy real estate:  IRAs, by law, offer some really, really great protection from lawsuits and other ugly parts of life.  So, let’s say, God forbid, that you are the victim of a frivolous lawsuit or you have to declare bankruptcy, as long as you’ve followed the IRA rules correctly, then the contents of your IRA will have a very strong degree of legal protection, so your retirement portfolio will remain safe and available to you when you need it.

So there are 5 good reasons to use your IRA to buy real estate.  Those aren’t all of the good reasons, either.  To be perfectly blunt, I think one of the best reasons to do so is because the IRA basically forces you to reinvest the cash flow you earn from real estate, since you can’t access that cash flow before retirement without penalty.

As such, the strategy I call the Wealth Snowball works incredibly, incredibly well for retirement accounts.  By using this strategy with properties we offer, it’s plausible to invest around $150,000 one time, and 20 years later what you end up with – just by reinvesting your net earnings into more property – is that you own 13 houses producing a net income of nearly $100,000 per YEAR!  Imagine having your IRA produce that kind of cash every year, totally passively, net of all expenses!  That’s exactly what the Wealth Snowball Strategy can do, and using that strategy inside of a retirement account is a perfect place to do it.

So there you have it, my friends… 5 strong reasons – plus a bonus reason or two – that an IRA is the PERFECT place to put your real estate investments.

Now every time I mention the snowball strategy, I’m deluged with questions about it, because it’s pretty freaking sexy to invest about $150,000 one time, and have a six-digit income 20 years later.  Some people do that early enough in life that they can use that income during their own retirements.  Others do it specifically to leave a strong financial base for future generations.  Whatever the reason you’re interested, if you’re seriously interested in that, drop me an email to [email protected] and we’ll reach out to you right away!

My friends, thank you for listening in today as we focus on the one thing that matters most here at SDI Radio:  helping YOU make great investments.  Until next time, remember:  Invest wisely today, and live well forever!

Hosted on Acast. See acast.com/privacy for more information.