Self Directed IRA versus self directed 401K Mini Course | Self ...

I want to take this time to tell you about the issues with IRAs and self directed IRAs, and how you can do so much better with your money.

If you have IRAs and if you have a 401K you will find this article super helpful.

Self directed IRAs involve you, your money, and a custodian. The custodian is the trustee and you need permission from them to do stuff. To get around this to some degree, the folks who set up self directed IRA will often set up a limited liability company, or LLC, that is owned by the IRA.

Then you as the owner of the IRA can manage the LLC.

But, the entire IRA situation is very problematic. Here is one problem with the self directed IRA, when you open a brokerage account, you are required to issue a personal guarantee and this kills your IRA and opens you up to enormous liability.

Note: you probably already did this and already have personal liability for your IRA. Here is how it works:

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Another pitfall of the IRA is that when you and your spouse want to co-invest in something, you can?t. You violate the related party rules and this makes it very difficult not to accidentally trip up and lose your tax status.

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It is far better to use a solo 401K that you can manage yourself.

You can have more than one 401K. The requirements are that you have your own business. It can be your primary business, or a secondary business.

The 401K that I like is the solo 401K that I manage myself, the Checkbook Retirement Plan solo 401K. There are many advantages of the solo 401K this way.

• You are your own custodian.
• You have near absolute asset protection.
• You can invest using debt, and you don?t pay income tax on the profits from the borrowed money. Make sure to borrow non-recourse inside your 401K and enjoy profits from borrowed money free from taxation
• You can mix Roth and non-Roth money in one 401K. Roth money, when invested, yields profits free of tax for the rest of your life, so you can get a tax free income for life this way
• Pool your IRAs and your spouse?s IRAs in one solo 401K with huge firepower compared to numerous small IRAs.

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And here?s how one person got a 400% cash-on-cash return all free of tax (either now or until retirement) using a little-known but powerful strategy:

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Keep in mind that I?m not a lawyer or accountant and that you use these strategies only in consultation with your lawyer, accountant or financial advisor.

Please write your thoughts or comments here. Thank you.

Tags: self directed 401K, Self directed IRA, self directed IRAs, limited liability company

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Source: http://www.financialsuccessinstitute.org/help-with-taxes/self-directed-ira-mini-course/

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