By Eliseo Prisno, CRPC
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It?s been awhile since I talked about technical stuff?and yes the volatility of the market is still there (the normal September jitters, recall all the past Septembers, this is typical) and yes most traders/investors are waiting for the 3rd quarter report to assess what 2011 by far has brought us and if a double-dip recession is really coming. This report normally comes in on the 2nd week of October after all the economic figures are tabulated, consolidated and processed. I?m not certain if a double-dip will really happen and as what I wrote and quoted in my last article, I?m still very optimistic of our continued economic recovery. What is certain to me however is when you receive your investments statements ending 30th of September? (it be an IRA, 401K, 403B, brokerage accounts, mutual funds or what have you) and compare it with the last quarter prior, it will most likely be dented. The market had a correction of 11% from this year?s highest (last spring) and that peak was captured in the June statements, this obviously will dampen our end September figures. What can we do? What alternative do we have? Yes?key is ALTERNATIVE. In the investment universe, outside of cash, stocks and bonds (securities), there is a category which we group as ALTERNATIVES, mainly non-security investments like real estate, tax liens, tax deeds, art, precious metals and collectibles. The question now is, can we invest ALTERNATIVES say real estate in pre-tax or qualified accounts (i.e. an IRA, SEP IRA or 401K)? Yes you can and it?s easy.
Step One: Learn What is a Self Directed IRA LLC (Limited Liability Company)
Real Estate Self Directed IRAs | Self Directed 401ks
Since 2000 there has been huge growth, broader awareness and acceptance of the self directed IRA and the real estate IRA. This exceptional growth of the self-directed IRA LLC (limited liability company) and the self directed 401k is because of the intuitive nature of real estate investments. The real estate IRA has been the investment of choice, and has become the investment target of 70% of all self directed IRA plans. Whether you choose to use your self directed IRA to purchase notes, tax liens, tax deeds, foreign real estate, or further define it as a real estate IRA, this alternative qualified account approach will truly diversify your retirement holdings. In addition to real estate IRA investing, investors and entrepreneurs are funding their business ventures, franchises, and restructuring business debts with self directed 401k / IRA. A novel solution to put your retirement assets working for you way before you retire.
Step Two: Learn how to run a Self Directed Real Estate IRA
The ?How? Of Real Estate IRA / 401k
Self-directed IRAs provide investors exceptional opportunity to invest in many non-traditional retirement assets such as real estate, tax liens, mortgages and more. Self Directed 401k? on the other hand (if you?re a business owner or an entrepreneur) provides the opportunity to fund or recapitalize a small business or franchise. How will you do it? the first step is to contact a Self Directed IRA firm that can help you navigate the opportunities and identify the differences between plans. These firms will also help you set up the structure (creating and filing the LLC), finding the custodians (the entity that will keep or hold your asset or titles) and the IRS (Internal Revenue Service) compliance and reporting methods. Normally to set up one, it will cost you between $1200 to $2000 (one time fee), this covers the LLC filing, the custodian set up, IRS reporting and compliance protocols. Yearly, a fee which ranges between $100 to $120 will incur due to the annual IRS reporting. Also note that these IRA?s can also handle the traditional IRA assets such as stocks and bonds, mutual funds, annuity contracts even CD?s (certificate of deposits) and cash. All you need to do is title there accounts under the Self ?Directed? LLC, example, say the LLC?s checking account, if the cash asset is identified as part of your pre-tax portfolio or IRA, title the account using your Self Directed IRA LLC name. This set up will give you total control of your retirement assets including your pre-tax cash, thus the title Self Directed.
Now if you have real estate in your IRA investment or 401k plan, you will surely detach from the day to day volatility of stocks and bond funds and will not worry of what the numbers will look like when quarterly statements come in.
If you want to learn more on how you can control your retirement assets, get advice from your investment advisors if such approach is fit to your retirement portfolio.
P/E Capital Investments manages the wealth of select families and business owners. P/E Capital Investments does not provide tax or legal advice. It is strongly recommended you consult your professional advisor prior to implementing any of the strategies mentioned here within. This article does not offer or imply solicitation of any type. Eliseo Jojo Prisno is the Managing Director of P/E Capital Investments, Investment Advisor to FilipinoFunds Investment Management, LLC and a Chartered Retirement Planning Counselor. For over a decade he has managed client relationships and identified custom solutions for each client?s unique circumstances. If you have questions or desire a complimentary analysis of your retirement readiness, email j.prisno@PECapitalInvestments.com or call toll free to 1-888-929-2825 or like us on Facebook and follow us on Twitter.
Source: http://pinoynewsmagazine.com/2011/09/real-estate-in-an-ira401k-anyone/
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