To Whom Much Is Given, Shall Much Be Required

January 24, 2013

“Whatsoever your hand findeth to do, do it with thy might” (for there is no work, nor device, nor knowledge, nor wisdom, in the grave, whither thou goest)”  Ecclesiastes 9:10.  Since your IRA is primarily to benefit you prior to the grave, it would make sense that your hand (or efforts) be trained on making your investments grow.

Why should we not be as diligent with our investments as we are with our labor?  After all, the Bible also says that for everyone to whom much is given, of him shall much be required.  If we have the talent to make and save money, shouldn’t there be an additional requirement to invest it wisely?

I know that I get particularly uncomfortable when I have funds that are not invested, or those that are under-performing their potential.  For example, while many may be comfortable in owning CDs that are paying a rate of 2%, I would be distraught knowing that better yielding choices were available of which I did not take advantage.  That is the beauty, and responsibility of a self-directed IRA – it is up to you to seek the best balance of risk and reward, not a money manager or a mutual fund.

Retirement, and the costs of doing it comfortably, let’s face it, can be expensive.  Make it a priority to surround yourself with advisors that can help you in your choices.  If you are interested in real estate, introduce yourself to local real estate investment clubs, Realtors,  property managers, and others who live in that world daily.  If you want to invest your IRA in emerging businesses, speak with entrepreneurial organizations, CPAs, and attorneys that may be aware of new opportunities.

Come to NuView IRA client events, and use the ideas and energy of others to help propel your dream of retirement forward.  After all, we all age at the same rate, at least chronologically, and sooner or later, we will stop working and depend on our savings.  Use self-direction as an important tool to get there – thousands of our clients are doing it “with all their might”.

All the best in your investments…

Glen

US Financial Uncertainty Sparks Investor Interest in Self-Directed IRAs and Real Estate IRAs

January 22, 2013

Many retirement investors are concerned about how the fiscal cliff and swelling federal debt will trigger higher taxes and budget cuts in the coming year. Therefore, in light of the looming financial issues confronting our country, many savvy investors have left Wall Street and are looking to lessen the impact of higher taxes with more tax-efficient investments like self-directed IRAs and real estate IRAs.

With a self-directed IRA, an individual can invest his or her retirement funds in traditional as well as non-traditional investments without paying tax currently on any income or gains, and thus escaping the increased investment tax rates. Instead of paying tax on the self-directed IRA returns of an investment, tax is paid only at a later date when a distribution is taken, leaving the investment to grow tax-free in the meantime.

The same holds true with a real estate IRA. Instead of buying real estate with personal funds and being subject to higher income and capital gains tax rates, a self-directed real estate IRA will allow an investor to buy real estate without paying tax. Also, all income and gains generated by the real estate IRA investment will flow back to their IRA tax-free. By using a self-directed real estate IRA to make investments, the IRA owner is able to defer taxes on any investment returns until a distribution is taken, thus benefiting from tax-free growth.   Better yet, within a Roth IRA, taxes may never be due.

Taxes are heading up, not just for individual earnings, but for capital gains as well.  It makes sense to explore new avenues for investments that are more tax efficient in order to shelter the maximum earnings for your retirement.   Give our Florida self-directed IRA administrators a call today at 407-367-3472 to learn more about your options with a self-directed IRA or a real estate IRA!  We are educators and administrators, not brokers or dealers, so call us today.

Understanding the Players in a Self-Directed IRA Transaction – The First Step in Your IRA Success Story!

December 31, 2012

At NuView IRA, we want you to be able to share a self-directed IRA success story of your own! Understanding the roles and responsibilities of each player involved in a self-directed transaction is the first step in making this happen. When you understand the specific roles and responsibilities of each player, you can better avoid misunderstandings, unwanted surprises, and even possible fraudulent investments.

There are usually at least 3 key players involved in a self-directed IRA transaction:

1) The Investment Sponsor, Real Estate agent, or other provider
2) The Self-Directed IRA Investor
3) The Self-Directed IRA Custodian

The investment sponsor, sometimes referred to as the investment provider, offers an investment to the self-directed IRA investor. Because investment sponsors are challenged with the daunting task of raising capital to get their offering underway, many of them are now making sure that their investment offerings are open to IRAs.

The IRA investor decides what to invest in, researches the investments, seeks out qualified tax/investment advice, and directs the self-directed IRA administrator to complete transactions. What does the IRA investor get in return for all this responsibility? The valuable opportunity to achieve full diversification in their IRA and invest in what they know.

Finally, the self-directed IRA administrator provides the recordkeeping for the benefit of the IRA account holder.  The administrator is appointed by the custodial bank, to hold title to the assets in the IRA.  NuVuiew IRA serves as an administrator through arrangement with our Custodial bank, First Trust Company of Onaga.

Within this framework, thousands of clients have created their own success stories, building retirement wealth through investing in real estate, precious metals, private companies and much  more.  Share your stories with us, and we will publish as much information as you will disclose.

If you need to learn more, give our Florida self-directed IRA administrators a call today at 407-367-3472 to learn more about self-directed IRAs!

As We Roll into the New Year, Seize the Opportunity to Take Control of Your Retirement with Self-Direction!

December 27, 2012

As we head into the New Year, many people will likely be looking at their bank accounts and then making it their New Year’s Resolution to save more money. While this resolution is admirable for anyone, why not take it one step further and have your New Year’s Resolution be to take control of your retirement! Mentioned in an article from Fox Business, George Papadopoulos seized the opportunity to take control of him and his wife’s retirement when his wife’s employer made significant changes to her company’s 401(k) plan.

In addition to offering an extensive list of mutual funds that employees could choose to invest their money in, his wife’s company began offering a self-directed 401(k) option for employees. Papadopoulos, being an experienced investor looking to take control of the couple’s retirement, jumped at the opportunity for self-direction. “Self-directed 401(k) options are great for experienced investors like myself,” Papadopoulos said.

Even though a traditional 401(k) plan and a self-directed 401(k) plan offer the same pre-tax benefits and automated payroll deductions, the true difference between them is the investment choices you have with a self-directed 401(k). Self-direction dramatically expands your investment options from a short list provided by your employer to a variety of investments including real estate, tax liens, stocks, bonds, mortgages, notes, precious metals, and other investments.

The percentage of employers offering self-directed retirement savings plans in 2011 was 29% and this number is growing. Who knows – maybe your employer will be next to offer a self-directed 401(k) option to employees? Give our Florida self-directed IRA administrators a call today at 407-367-3472 to learn more about your self-directed retirement plan options!

Crowd Investors

December 14, 2012

In the 1978 movie “Midnight Express”, the sympathetic protagonist Billy, a US citizen,  is caught trying to smuggle several kilos of heroin out of Turkey, and is sentenced to four years in a prison under horrific conditions.  His hope for extradition seemingly dashed, he is resigned to living out his life in the mundane routine monotony of the incarcerated.  His sentence is extended due to an aborted escape attempt and is later transferred to the prison ward for the criminally insane.

For a brief one hour each day, he is afforded the opportunity to exercise in the yard with his fellow prisoners.  In a pivotal scene, instead of plodding along clockwise in formation with the crowd, something prompts him to move in the opposite direction, facing the crowd.  This unorthodox move is met with raised voices and fists, the group insisting that he return to the slow, methodical clockwise shuffle.  His singular intransigence in breaking from the crowd marks a metaphorical turning point, leading to his eventual escape from his sadistic jail-keepers.

This may be an apt metaphor for investors who choose to self-direct their retirement.  When real estate prices decline and buyers are timid, our clients start to step in and seize the opportunity to secure cash flows unheard of several years ago.  When banks no longer have the appetite to lend to investors, self-directed IRA holders emerge, meeting the need through private loans, securing great returns for their retirement plan.

Yet even within investment classes, the herd mentality of crowd investors is alive and well.  For example, in 2011, investors flocked to gold in record numbers, including those using IRAs, pushing the spot price well over $1900 per ounce.  Many of those buyers were looking to find a safe haven to protect against uncertain economic times and the Spector of looming inflation.

Since then, prices have retreated below $1700, with new investors turning their attention back to other markets.  It seems like crowd investors have moved on, yet have the fundamental reasons changed?  If gold was attractive at $1900, why is it less alluring when it costs less?

Now to be sure, I am not an investment advisor, nor would I ever pretend to be.  Yet I can’t help but think that the majority of investors, and yes, those that advise those investors, are guilty of group-think.  Why else would someone embrace the concept of owning a CD that yields 1.3% when so many other options exist that may provide better returns within their own risk tolerance?

For those of you self-directing your IRA, congratulations, you are moving away from crowd investors.  For the rest of you, think about your choices, your outcomes, and come join us – just not so many of you that it becomes a crowd.

Glen Mather is President of NuView IRA, Inc., a leading self-directed IRA administrator in Orlando, Florida. He can be contacted at 407-367-3472 or gmather@nuviewira.com.

Are you listening to Warren Buffet’s advice regarding the real estate market?

In a recent interview with CNBC, when asked if a young individual investor should buy stocks or his first single-family home, Warren Buffett recommended buying a single-family home with a 30-year mortgage. In fact, “if the young individual investor is a handy type, he could buy a couple of them at distressed prices and find renters,” said Buffett.

Warren Buffett is a man known for his tremendous success in investing in assets he believes are undervalued, so with the US real estate market at record lows, why not heed Buffett’s advice and invest in real estate? Because of the absence of big institutional investors in the US residential real estate market, it is less competitive that even the stock market!

A great way to invest in real estate without having to pay huge upfront costs, is to self-direct your IRA into real estate. There are several ways that an IRA can participate in a real estate transaction. The self-directed IRA owner has the choice to direct the IRA to purchase the entire property within the IRA, to purchase an undivided interest alongside other investors, or to purchase a property with leverage utilizing a non-recourse loan.

If you are an experienced real estate investor, and you know you can earn an attractive return by buying raw land or fixing up rental properties, and the income you earn by doing so would normally be taxed at your ordinary income tax bracket, then you may see a tax benefit from owning real estate in your self-directed IRA. With a self-directed IRA behind the investment, the gains go back into the retirement fund either tax-free or tax-deferred, depending on your IRA.

If you agree with Warren Buffett that the real estate market is currently undervalued and you’d like to take advantage of this investment opportunity with a real estate IRA, our Florida self-directed IRA administrators are here to assist you with your self-directed real estate transaction. Reduce your dependence on the stock market, and use your knowledge and experience to drive your IRA growth. Give us a call today at 407-367-3472 to get started self-directing your investments!

Required Minimum Distributions – You Can’t Afford to Miss This Deadline!

December 7, 2012

Don’t let the little issue of RMDs or required minimum distributions get lost in the blur of the holiday season.  The IRS makes it painfully clear that they are envious of those of you that are over the age of 70.5 and have an IRA or other retirement plans.  Interestingly, the Roth IRA holders are spared the indignity of the government telling them how to manage their finances, but more about that later.

If you hold a non-Roth IRA and had your 70th birthday before July 1 of 2012, you must take a minimum distribution from your plan.  In other words, make what was tax deferred, now taxable.  How much must you take out?  It is based on an IRS provided table that calculates your estimated life expectancy.  How much is it?  Well, if you turned 70.5 this year, you will be forced to take a distribution of a little over 3.6% of your holding.  My mother, age 92, is required to take out 9.8%. For those of you yearning to know more, consult IRS publication 590 for the rules and tables.

All non-Roth IRAs are added together to calculate the RMD, and distributions can be made out of any of the held IRAs to meet the distribution requirements.

IRA holders that are in or near their RMD years should plan for sufficient liquidity in their plans to permit the easy withdrawal of funds as required.  This withdrawal can take place anytime during the calendar year – but if not done by December 31st, a penalty of 50% of the undistributed amount will accrue to the IRA holder.

Those that have contributed or converted to a Roth IRA are not forced to take any distribution during their lifetime, as all taxes have already been paid.

So, two end-of year reminders:  If you are nearing or over seventy years of age and have pre-tax IRAs, get prepared, and take the distributions as required.  If you wish to convert to a Roth this year, you must do so before December 31st.  Talk to your tax professional before the end of the year so you make all the best moves.

As always, all the best in your investments,

Glen

Riding the Foreclosure Wave with your Real Estate IRA

November 5, 2012

According to a recent article published by CNBC entitled “Buy Foreclosures With Your IRA”, many investors are beginning to take advantage of the downturn in the market by investing in foreclosures through their self-directed IRA. The article notes that Cincinnati resident Rich Pregel, an investor with experience in the real estate industry, decided to invest his money in a commercial foreclosure through his self-directed real estate IRA. Pregel is now generating almost $80,000 a year after expenses on an initial investment of $140,000 by renting out his commercial property. Pregel bought the property for a good price, put some money into it to get it up to rentable specs, and now says it’s like a no brainer. Since his IRA owns the property, all expenses that go into the property must come from his IRA account and the rental income received goes back directly into his self-directed Roth IRA tax-free.

Last month, Florida overtook Illinois as the state with the highest foreclosure rate in the country, according to RealtyTrac, a company that publishes the largest database of US foreclosure, auction, and bank-owned homes. Also according to RealtyTrac, one in every 318 housing units in Florida received a foreclosure filing last month, compared to one in every 730 homes nationally.

While this does not bode well for Florida homeowners’ credit scores, it does offer a potentially profitable investment opportunity for those looking to grow their retirement funds and diversify their portfolio. Many of these distressed and foreclosed properties in Florida can be purchased for a steal, and with the power of a self-directed IRA behind the investment, the gains go back into the retirement fund either tax-free or tax-deferred, depending on your IRA.

To take advantage of the foreclosure wave and invest in foreclosures with your IRA, it must be a self-directed IRA. To do this, you need the assistance of a qualified and experienced self-directed IRA custodian to facilitate your self-directed investments. Give our Florida self-directed IRA administrators a call today at 407-367-3472 to learn more about self-direction and Florida real estate IRAs!

How to Take Advantage of a Self-Directed IRA with Just $5,000

October 29, 2012

There is a common misconception out there regarding self-directed IRAs that you have to already have a lot of money in your IRA to get started with self-direction. Here’s an example of an investor who started out with just a 5,000 contribution to her self-directed Roth IRA.

This particular investor had some friends in the real estate business who specialized in buying and selling Real Estate Contracts. Her friends helped her find an individual who was looking to get some cash by selling his Real Estate Contract for a small piece of property in the Appalachian Mountains. The contract was originally sold to him for $23,000 and he had invested a significant amount of equity in the property and paid down the contract considerably. In fact, if he were to continue making payments, he would have the property paid off in roughly two and a half years.

Therefore, the investor decided upon what she would like to offer the seller for his Real Estate Contract, and after some negotiation, agreed upon a price that would earn her 10% on her money over the next 2.5 years. A check was sent to the seller through her self-directed IRA, completing the entire transaction in less than a week!

You may not think that 10% on $5,000 is very much money, but what if you have 10 investments like this or you start buying bigger contracts? The possibilities are endless with a self-directed IRA. Whether you are looking to issue notes or mortgages, invest in tax liens, or purchase real estate, the choice is yours with a Florida self-directed IRA from NuView. Call us at 407-367-3472 to get started!

Retirement Obsession Disorder

October 17, 2012

There are certain phenomena that can only be explained through experience.  Once such event is what happens when you achieve the age of fifty.

When I was thirty, my viewpoint of those meeting the mid-century milestone was a bit jaded.  It seemed that the “older” generation’s musical tastes included artists such as Johnny Mathis, Andy Williams and perhaps the more wild confessed to owning an Elvis record or two.  This graying set drove large, boat-like cars, the men wore their pants a bit higher and tended to schedule their dinner out earlier.  They never could effectively communicate with us younger types and seemed overly concerned with their investments.  Certainly I would never become like them.

Then I turned fifty.

Everything changed – perhaps not all at once, but certainly in rapid fashion.  Let’s see.  My musical tastes tend to be reunion tours of geriatric groups such as the Eagles, Bruce Springsteen, and even an occasional Broadway musical.  I now drive a Cadillac, though I would like to point out that it isn’t the size of my Father’s car.  While the waistline of my pants hasn’t risen too much, I must confess, I have become more obsessed than ever with funding my retirement.

The equation is quite simple.  If I want to retire at age 65, I now have 15 years to take what I have managed to save so far, contribute more to it, and invest it wisely enough to live out my years in blissful retirement.  This may be easy to understand, yet hard to execute, especially if the gains are subject to taxation.  It becomes even more difficult when traditional, relatively “safe” investments are providing sub-standard yields.

Retirement obsession disorder (ROD) has hit me hard.  One cure that I have found to this malady is self-direction of my retirement plan – and partnering with smart people that can help guide me to the best combination of risk/reward  to accomplish my objectives.  Through a self-directed IRA, I am able to reinvest my returns, without the tax toll gate that diminish the gains of those who choose to use after-tax money for those same investments.  Rental real estate, private lending, and new business start-ups are all part of my IRA investments, along with a few Wall Street funds.

As the principal of NuView IRA, a self-directed IRA administrator in Florida, I share the perspective of thousands of clients investing hundreds of millions of dollars with the objective of improving their retirement outcomes.  If you suffer from ROD, seize control of your retirement funds and start self-directing your IRA.  Stay involved, save slavishly and invest in things you know and understand.  If you are over fifty, best of luck avoiding those pesky AARP applications.  If you are younger, listen to your elders and start your retirement early, much earlier than I did.

All the best in your investments,

Glen

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