IRA Basics

Is Your Stock Broker or Banker Lying to You? Or Are They Just Telling You Half of the Story?

Did your broker sell you on the idea of using your IRA to purchase stocks for which HE earned a commission?

If you’re one of those millions of Americans who has been told that you have to invest your hard-earned IRA dollars in stocks, then quite frankly, the commissions your broker has earned from selling you may very well buy him a new Mercedes – while your IRA dollars barely grow.

But don’t get mad – get educated. Welcome to Self Directed Retirement Plans – let us teach you about The The TRUE IRA!

Did You Know You Can Invest in Real Estate with Your IRA?

Everyone wants to invest in real estate. We have all seen our IRAs and 401Ks drop as the stock market continues it’s roller-coaster ride. How many of us would invest our retirement funds in real estate if we could? The answer; a lot!

What if you could get bank financing on those real estate purchases? Then it’s even more likely that you would want to buy real estate with your IRA.

Now, you can tap into that $3 Trillion retirement market and see your retirement income and your investment capital soar. Would you like to take advantage of investments like rental properties, lease to purchase transactions, fix-up real estate, or even commercial property? You may even be able to have YOUR OWN IRA purchase your dream retirement home right now!

It is a little-known fact that if you structure your IRA correctly, you can have 100% control and checkbook access to your assets to make the investments that are important to you; including real estate.

Too Good to Be True?

Sounds too good to be true? That’s only because these options aren’t well-known. The San Francisco Chronicle put it best when they said, “The reason you haven’t heard about them [these investment alternatives] is that there is little profit incentive for financial institutions, which primarily sell stocks and bonds to IRA accounts.” [Source: San Francisco Chronicle, January 6, 2003]

Your Banker or Stock Broker Is Not Telling You the Whole Story!

This is one of the little-known insider’s secrets that only a few of the Top Professionals across various financial professions have known for years. But it’s not enough to know this secret – the real impact comes from working with a qualified professional who knows how to grow your IRA or 401(k) assets by leveraging these secrets to make money for you by rapidly growing your asset base. And that’s why Self Directed Retirement Plans can serve as a tremendous asset to you.

What does it mean if a retirement account is “Self-Directed”?

Many custodial companies are using the term “Self-Directed” to describe the IRA and 401(k) products that they market. Unfortunately, what these companies aren’t telling you is that, when used to describe retirement plans, the term “Self-Directed” can actually have either of the following meanings:

1. Traditional IRA’s

These typically offer only limited investment options for plan owners (stocks, bonds, and mutual funds). You “Self-Direct” your account only in the sense that you choose your investments from a very limited list of stocks and mutual funds offered through your account custodian.

If you have an Ameritrade account (or similar), you have this kind of “Self-Directed” account.

2. Traditional “Self-Directed” IRAs

These expand the investment options from stock and mutual funds to also include real estate, tax liens and a host of other potentially higher-yielding investments. Although this is a step in the right direction, owners of these Traditional “Self-Directed” IRAs soon learn that there are some significant drawbacks to this type of “Self-Directed” plan:

  • Who’s The Boss? – Custodial “Approval” is required before you are allowed to make an investment. (Why should you need to get someone else’s approval to invest YOUR funds?)
  • Delays – Ready to invest? GREAT! Now fill out the paperwork and WAIT up to a week or longer! (Say goodbye to time-sensitive investment opportunities!)
  • Interest on Uninvested Funds – Uninvested funds are held in an account at the custodian that pays you little or no interest. (Shouldn’t you be the one making the interest on YOUR uninvested money?)
  • Fees – Typical fees include a yearly “Maintenance” fee (usually based on a percentage of the market value of the assets in the plan), fees for buying AND selling assests, and fees for every little service from document safe-keeping to cashier’s checks and faxes.

If you have an account with Entrust or Pensco (or similar), you have this type of “Self-Directed” retirement account.