This is an introduction to self-directed IRAs and how they can be used to invest in alternative assets like Real Estate, Notes, Precious Metals, Oil & Gas, Entities, and a whole lot more.
7. What is a “Self-Directed” IRA? An IRA in which the IRA owner directs all investments in the account. There is no legal distinction between a “self-directed IRA” and any other IRA except with a truly self-directed IRA the account agreement allows the broadest possible spectrum of investments.
8. Take control of your retirement! What are the benefits of self-direction?
37. Fiduciary “F” (includes IRA Owner) Member of F’s Family Corporation “C” if F owns (directly or indirectly) 50% or more of vote or value of stock Partnership “P” if F owns (directly or indirectly) 50% or more of capital or profits interest in P Trust or Estate “T” if F owns (directly or indirectly) 50% or more of Beneficial interest in T 10% or more partner or joint venturer with C F’s Spouse F’s Ancestor F’s Lineal Descendant “LD” LD’s Spouse Officer or Director of C Highly Compensated Employee of C (10% or more of wages) 10% or more shareholder of C Person with management or administrative functions of P Highly Compensated Employee of P (10% or more of wages) 10% or more partner of P Trustee of T Highly Compensated Employee of T (10% or more of wages) 10% or more beneficial interest owner of T 10% or more partner or joint venturer with P 10% or more partner or joint venturer with T IRA
The purpose of this course is to educate individuals into the opportunities that exist with SELF-DIRECTED retirement plans. The key to TRUE self-directing is choosing investments that the individual knows best. The audience for this course will most likely be individuals who invest in these types of investments or trusted advisors such as CPA’s, Realtors, CFP’s who can provide clients for your office. The goals of this session are: Educate about the opportunities with PLANS and PLAN INVESTING Educate about the ways to invest in these investments Educate about the process to take advantage of these investments
INVESTORS NEED TO EDUCATE THEMSELVES HOW TO ANALYZE AN INVESTMENT AND COMPARE IT TO WHAT THEY HAD BEFORE – THE PURPOSE OF MOVING TO A SELF DIRECTED IRA IS TO HAVE IT DO BETTER THAN IT IS DOING NOW. THE INVESTOR TAKES CONTROL CONTD… Investors need educate themselves on what is available. Investors need to know how to analyze investment potential themselves. Investors need to look at what is being presented to them by advisors and compare it with investments that are not available from the advisor. Investors must control this process, not the advisors
Let the audience know what types of plans can be self directed. Let them know that all types of IRA and qualified funds can be used……especially those old 401k funds that are still sitting with ex-employer plans. Whether you’re an individual or owner of a business, Entrust has a solution for you. Cover the tax benefits that these individual or business plans can offer. Tax advantages through tax deductible contributions and tax deferred earnings with the potential through the Roth accounts of tax free earnings. Discuss the difference between a Traditional account and a ROTH account. KEY DIFFERENCE IS: Traditional accounts you pay tax later not now – Roth accounts you pay now not later – CONTROL over taxes NOW vs. later. What will tax brackets be in 10, 15, 20 years? SALES POINT: All types of plans can be self directed. If you qualify for a ROTH…set one up. If you have an old employer plan sitting around….move it to your Entrust account. Don’t forget to mentions those 401k plans that they have sitting around at old employers. Those can easily be rolled over to their Entrust account.
Let the audience know what types of plans can be self directed. Let them know that all types of IRA and qualified funds can be used……especially those old 401k funds that are still sitting with ex-employer plans. Whether you’re an individual or owner of a business, Entrust has a solution for you. Cover the tax benefits that these individual or business plans can offer. Tax advantages through tax deductible contributions and tax deferred earnings with the potential through the Roth accounts of tax free earnings. Discuss the difference between a Traditional account and a ROTH account. KEY DIFFERENCE IS: Traditional accounts you pay tax later not now – Roth accounts you pay now not later – CONTROL over taxes NOW vs. later. What will tax brackets be in 10, 15, 20 years? SALES POINT: All types of plans can be self directed. If you qualify for a ROTH…set one up. If you have an old employer plan sitting around….move it to your Entrust account. Don’t forget to mentions those 401k plans that they have sitting around at old employers. Those can easily be rolled over to their Entrust account.
Let the audience know what types of plans can be self directed. Let them know that all types of IRA and qualified funds can be used……especially those old 401k funds that are still sitting with ex-employer plans. Whether you’re an individual or owner of a business, Entrust has a solution for you. Cover the tax benefits that these individual or business plans can offer. Tax advantages through tax deductible contributions and tax deferred earnings with the potential through the Roth accounts of tax free earnings. Discuss the difference between a Traditional account and a ROTH account. KEY DIFFERENCE IS: Traditional accounts you pay tax later not now – Roth accounts you pay now not later – CONTROL over taxes NOW vs. later. What will tax brackets be in 10, 15, 20 years? SALES POINT: All types of plans can be self directed. If you qualify for a ROTH…set one up. If you have an old employer plan sitting around….move it to your Entrust account. Don’t forget to mentions those 401k plans that they have sitting around at old employers. Those can easily be rolled over to their Entrust account.
Let the audience know what types of plans can be self directed. Let them know that all types of IRA and qualified funds can be used……especially those old 401k funds that are still sitting with ex-employer plans. Whether you’re an individual or owner of a business, Entrust has a solution for you. Cover the tax benefits that these individual or business plans can offer. Tax advantages through tax deductible contributions and tax deferred earnings with the potential through the Roth accounts of tax free earnings. Discuss the difference between a Traditional account and a ROTH account. KEY DIFFERENCE IS: Traditional accounts you pay tax later not now – Roth accounts you pay now not later – CONTROL over taxes NOW vs. later. What will tax brackets be in 10, 15, 20 years? SALES POINT: All types of plans can be self directed. If you qualify for a ROTH…set one up. If you have an old employer plan sitting around….move it to your Entrust account. Don’t forget to mentions those 401k plans that they have sitting around at old employers. Those can easily be rolled over to their Entrust account.
The IRA, because of the special tax status granted, ie, pre-tax money for which you received a tax deduction, has “strings” attached. In order to self-direct you need to understand this. Think of it as money belonging to someone else, someone who needs your help and expects you to be honest in your efforts to manage their money. We like to use the metaphor of “uncle Ira”, your older, doddering uncle. Uncle Ira will leave you his money when he passes on if you take good care of it. If you don’t take care of it he either will have no money to leave or leave it to another relative. You don’t want that to happen, do you?
It is important to keep your own business dealings and that of your family separate from those of Uncle Ira’s. The IRS rules dealing with this and other things that you may not do with your IRA are called “prohibited transactions” Prohibited transactions are all about “self dealing”, getting a direct or indirect benefit from your IRA now, rather than at retirement. The question should be “what is best for Uncle Ira? Not, how can this money help me or my family now.
The law says there are only two types of investments you MAY NOT invest in. COLLECTIBLE -anything that has a value that is based on singular uniqueness. This would include antique cars, some coins, artwork, rare wines. Beanie Babies, baseball cards etc. Life insurance is self-explanatory. A THIRD RULE THAT COULD BE LISTED WITH THESE TWO IS NO SELF DEALING, BUT THAT’S IMPORTANT ENOUGH TO GET ITS OWN SECTION IN THIS PRESENTATION.
The law says there are only two types of investments you MAY NOT invest in. COLLECTIBLE -anything that has a value that is based on singular uniqueness. This would include antique cars, some coins, artwork, rare wines. Beanie Babies, baseball cards etc. Life insurance is self-explanatory. A THIRD RULE THAT COULD BE LISTED WITH THESE TWO IS NO SELF DEALING, BUT THAT’S IMPORTANT ENOUGH TO GET ITS OWN SECTION IN THIS PRESENTATION.
Investment Choices- This is where we can show the audience what investments can be held in their Entrust Account. Reiterate that they are not limited to just securities. They can invest part or all of there retirement funds into these assets. SALES POINT: They have a world of choices with an Entrust Plan
Think about investments that you currently do outside of your plan. Are there any that would be appropriate for your IRA? Can your IRA partner with others in investments of co-workers, friends? Do you have a particular expertise in a type of non-traditional investment?
Investment Choices- This is where we can show the audience what investments can be held in their Entrust Account. Reiterate that they are not limited to just securities. They can invest part or all of there retirement funds into these assets. SALES POINT: They have a world of choices with an Entrust Plan
8 easy steps to adding Real estate to your IRA- This section is meant to give the audience a quick overview of how they would go about purchasing real estate with their retirement account. Let them know that we will get into some specific examples in a minute, but use this as a chance to show how easy it really is. Again, STRESS why use your office for performing these transactions. - A quick example to show the audience how easy it really is to buy real estate in a retirement account
We have provided you with tools on how to fund your account now lets take a look at techniques to invest in what YOU CHOOSE.
This case study shows a simple mortgage. This is an example of a long term hold for larger accounts. This is a good example to show to Doctors, Dentist and individuals with larger accounts who may be looking for an 8-10% return with little risk. Jack Brown has $100,000 in his Rollover IRA with Entrust and wants to loan funds to an investor as a 1st mortgage on a $135,000 home.
5 things to take from this class: We know we threw a lot of information at you today. Don’t feel like you need to grasp it all today. Call us with any questions or Visit our office. You are welcome to attend an upcoming CE Class. REALTORS: We would be happy to speak at an upcoming sales meeting.
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