Private Lending with a Self-Directed IRA

September 25, 2012

Over the last year, our industry has seen a growing number of retirement investors looking to use self-directed IRAs to engage in private lending transactions in order to improve their retirement fund potential.  This is because a self directed IRA gives you the option to loan money, similar to a bank. You choose the borrower, amount, interest rate, length of term, payment frequency, and amount.

IRAs can issue both secured and unsecured loans.  Secured loans are backed by collateral to ensure repayment of the loan amount plus interest.  Unsecured loans are typically offered at higher rates than secured loans and have lower borrowing amounts because they are associated with higher risk and not backed by collateral.

Many investors choose to loan money through their IRA to individuals looking to purchase a home.  When loaning IRA funds for a mortgage, you have the opportunity to secure the loan with that piece of property.  This means that if the mortgage defaults, your IRA takes possession of that property and you can decide to sell it or lease it out, providing you with additional funds within your IRA.

One major advantage of private lending with a self-directed IRA is that all gains generated by the investment are tax-deferred until a distribution is taken (Traditional IRA distributions are not required until the IRA owner turns 70.5).  However, with a self-directed Roth IRA, all gains are tax-free.

Private lending offers the opportunity for excellent investment returns today and the potential for even more profitable opportunities in the future.  With NuView IRA, you have the opportunity to self-direct your IRA in notes, real estate, mortgages, private companies, and many other investment options that most financial advisors are unaware.  Give NuView a call today at (407) 367-3472 or visit them at www.nuviewtrust.com to find out all the options available to you.

Giving Our Clients Access (Online and Human)

September 21, 2012

My name is Radha Persaud and I am a founding member of NuView IRA, a Florida self-directed IRA administration company.  It’s flattering to be known as a founder I must say.  As I came on board, Entrust Administration Services was getting ready to change its name to NuView IRA.  With the change, came many welcomed improvements and many challenges along the way, but I am so thankful that I am part of a cohesive team that always rallies together.

One of our biggest challenges during the name change was the switch to a different platform for online access.  The system was new, very different and some our clients had a difficult time adapting to the new system online.  I can understand their frustrations, as many of our clients had been with us since we first opened our doors in 2003 and were used to the old online platform.  Our President and management team heard their frustrations and wanted to make the change a more positive experience.  To that end, they elevated my title to include “the queen of on-line access”.  They wanted to ensure our clients had a live person to connect with for help with online access, rather than be transferred to a call center.

So, if you are having difficulties with our new system, or just simply want to talk with someone, I’m here for you.  From log-ons to password updates, or historical statements, your account history is either a click or a phone call away. Just call 407-367-3472!

I’ll be standing by……

Radha (on-line queen)

Women vs. Men – The Retirement Savings Battle

Did you know that 60% of working Americans have less than $25,000 put aside for retirement?  Moreover, 30% of Americans have less than $1,000 saved for retirement!

Among the individuals who do save money for their retirement, men tend to have more in their retirement funds than women.  According to a recent study by The Vanguard Group, Inc., the median retirement savings for men was $33,547, which is 56% more than the $21,499 accumulated by women.

There are several speculations about why men tend to accumulate more for retirement than women, with some people thinking that women may not fully understand the value of saving for retirement.  However, statistics show that women do understand the value of retirement and even tend to contribute more (in terms of percentage of income) to their retirement accounts than men.  The following are three myths regarding how women invest and the realties behind these misconceptions:

  • Myth – Women are less likely to take advantage of workplace retirement programs.  The reality is that when women have access to workplace retirement plans, they often have higher participation rates than men.
  • Myth – Women contribute less to retirement plans.  Statistics actually show that in general, meaning at every income level, women tend to contribute more to their retirement plans than men.
  • Myth – Women are more risk-averse.  This is a common misconception, but the reality is that there is little difference between the sexes in exposure to stocks.

Therefore, as the above realities hold true, the real reason that men have more in their retirement accounts than women all comes back to earnings.  Men are more likely to work in higher-paying jobs, more likely to work full- time, and less likely to have gaps in their employment (for example: to care for children or elderly parents).

Saving consistently and investing wisely is a simple formula for success, but challenging to put into practice.  With NuView IRA, you have the opportunity to self-direct your IRA in real estate, notes, mortgages, private companies, and other ways that most financial advisors are unaware.  Give NuView a call today at (407) 367-3472 or visit them at www.nuviewtrust.com to find out all the options available to you.

Are You Better Off Than You Were Four Years Ago?

September 19, 2012

Article by Glen Mather, President & CEO, NuView IRA, Inc:

Thirty two years ago, this question was asked during the 1980 presidential debates, and one that is often  reprised when the incumbent administration is faltering.  But I couldn’t help but translate it to, “ is your dream of retirement more secure today than it was four years ago”?

Politics aside, the economic challenges of investing wisely has undergone significant shifts in the past four years.  Stocks, as represented by the S&P 500, are at the same point now as they were in 2008.  Gold has more than doubled, while the average sales price of a new home has dropped by 20%, and of course existing home sales prices have dropped much more.  The US prime rate has remained unchanged at 3.25% with the target rate of fed funds at 0-.25%.  Meanwhile, the Federal Reserve continues to artificially drive rates down by buying debt and increasing the inevitability of future inflation.

It’s difficult to make sense of it all, yet the inevitability of being one more day closer to retirement is a drumbeat that none of us can ignore.  The professional money managers are moving to alternative investments as a way of increasing diversity and yield.  According to Research Magazine (Oct 2011), 78% of all advisors are now using alternative investments in their clients’ portfolios.  Morningstar also reported that in the ten year period from 2002 through 2011, alternatives outpaced stocks by over a three to one margin.

The attraction of a NuView self-directed IRA permits the alternate investor the broadest range of choices, even beyond the Wall Street offerings of Real Estate Investment Trusts (REITS), hedge funds, and oil leases.  Our clients take advantage of bank lending constraints to gain yields of 6-15% or more on their self-directed loans.  Instead of a stock-based real estate investment, they  may prefer buying a duplex and having the rent accrue tax-free to their IRA.  Others find entrepreneurs  and help fund start-ups, gaining future profit potential.

No matter whether you watch Fox News, MSNBC, CNN or avoid the news altogether, no one will care more about your retirement than you.  Get involved, make good choices, and your retirement dream will be much better four years from now.

To take control of your retirement future, contact NuView IRA at (407) 367-3472. With a self-directed IRA from our Florida self-directed IRA administration company, you’ll have the opportunity to invest in many ways you may have never thought possible!

Retiring – Then Living with your Kids: The New Reality

My household situation is not as rare as it may seem.  My wonderful 91 year-old mother lives with me,  a very patient daughter-in-law, and four grandchildren.  While God has blessed her with great health and vitality, I’m not sure that living with her son would have been her dream several decades ago when she was in the workforce.

According to the MetLife Mature Market Institute, there are over 10 million adult children taking care of their aging parents.  Still others are contributing to assisted living care, which averages about $3,500 per month.

While having my mother with us is an incredible blessing, many senior parents would choose, if financially able, to be on their own.  Indeed, the financial fall-out of the past five years has robbed many seniors of a healthy retirement nest egg and resulted in very limited choices for the years that were to have been “golden”.

At NuView IRA, our clients think every day about their view of retirement and what choices they need to make to achieve their dream of retirement.  Unlike others, they not only think and dream, they act.  We have clients that lend their IRA to investors secured by recorded mortgages, with note rates ranging from 6-15% and more.  These types of investments are particularly attractive to seniors who may need to live on the interest earned.

Through joint ventures, a rollover IRA holder can partner with a real-estate rehabber to purchase a wholesale property, fix it up, and put a renter in the home, with all the net proceeds due to the IRA deposited tax-free.

Fact is, the choices with a self-directed IRA are considerable, and the potential returns may be far more attractive than what is offered by the stock market.  So do your homework, make good choices, and plan for a retirement that will allow plenty of visits to your relatives – but not force you to move in!

How Will You Spend Your Retirement?

September 12, 2012

Thanks to a seating assignment onboard the Monarch of the Seas on a cruise to the Bahamas, I was recently able to meet a delightful couple with whom we shared breakfast.  When I inquired about what they do when they weren’t cruising, they said they were retired (partially).   Come to find out, they live in the Villages, a large retirement community in Central Florida, and have purchased rental real estate both inside and outside their IRA.

Mary finds tenants, collects rent checks, and oversees the maintenance of the five houses they own.  She requests expenses to be paid from her IRA for those homes held in a self-directed IRA account.  John is nearing Required Minimum Distribution (RMD) age from his IRA, which will occur when he turns 70.5.  They are not concerned, as the rental properties they have purchased in their IRA are providing cash flows of 8-10%.

Because they have good tenants and friends who assist them in looking after the properties, they spend over 100 days per year on cruises.  Evidently Mary scours the internet looking for last minute deals on cruise lines and usually pays less than half-price for their travels.  They use the rental income from their non-IRA owned rentals to help fund their time on the water while amassing their IRA rental funds for future retirement needs.

After a good breakfast with Mary and John, it dawned on me that most of our self-directed clients are much like them – wanting to stay in control.  Whether on the seas or simply walking on the beach, NuView IRA is ready to help you achieve your retirement dreams on your own terms. Give our Florida self-directed IRA administration company a call today at 877-259-3256 to discover your retirement options.

The Power of IRAs

August 29, 2012

According to the Investment Company Institute, there are 46 Million US households with IRAs. What is remarkable is the difference in those households that have an IRA, and those that do not.

Assets of an IRA household were 8 times larger than those households that did not have an IRA. Eight times! While the IRA may not be the holder of all the wealth, there is little doubt that the discipline involved in saving and contributing to an IRA is likely illustrated by other choices made by the members of the IRA household.

Your ability to achieve your retirement dream is dependent on two variables: saving and contributing consistently, and investing wisely. For many, investing wisely is the most difficult challenge. The super investor Warren Buffet is often quoted as saying, “Never invest in a business you cannot understand.” Most of us that are invested in mutual funds and selected stocks seldom have any idea on what our investment dollars are doing.

If you are a bit frustrated with not being in charge, the answer may be to self-direct your IRA. We have thousands of clients who feel much more confident in their own choices that those brokered by others. Private placements, real estate, tax liens, and joint ventures are just some of the ways you can seize control of your retirement plan through NuView IRA, while earning tax deferred or tax free profits.

If you would like to learn more about your investment options with a self-directed IRA, contact our Florida self-directed IRA administration company by calling 407-367-3472.

What will happen to the tax rate once the Bush tax cuts expire?

August 24, 2012

Regardless of your political opinions, Congress agreeing to keep taxes low while we are experiencing the highest deficit in our nation’s history may be unsustainable. As the House and Senate pass versions of bills that neither will sustain, the taxpayer is left more confused than ever.

If you have already put funds into a traditional IRA account, the government may have given you a tax write-off on your contributions and let you defer the tax on any earnings. Now, the government may be changing the tax rate you have to pay when you withdraw the money in the future. In addition to this, when you turn 70 1/2, the government does require you to take at least the required minimum distribution (RMD) from your IRA each year to force you to pay that tax.

You can think of your IRA as if it has a mortgage on it and next year the government may be raising the rate you have to pay. However, converting to a Roth IRA is like paying off the mortgage on your IRA early, and at these lower rates.

Nearly everyone is a candidate for a Roth conversion this year. However, executing a Roth conversion requires professional assistance. Contact our Florida IRA administrators at NuView IRA today to learn how to convert your IRA. Call 407-367-3472 today!

Mitt Romney and the Mystery Behind His IRA

August 17, 2012

During Romney’s time at Bain Capital LLC, the company used a SEP-IRA that had a maximum contribution limit of about $30,000 per year. Assuming Romney maxed out these tax-deferred contributions, he would have invested approximately $450,000 in his individual retirement account during his tenure at Bain. BUT, he may have up to 227 times that amount in his IRA! The baffling mystery about Mitt Romney’s significant wealth is how he was able to build up between $21 million and $102 million in his IRA during the 15 years he was at Bain Capital.

So how did he do it? Of course, we don’t know, but there are several theories out there that attempt to make sense of it all.

One theory is that Romney contributed to his IRA using the low-basis, low-value stock he received as a partner at Bain Capital in the different buyouts the company did while he was there. Another theory is that Romney contributed limited-partnership interests to his IRA in Bain’s buyouts, and quite possibly only at a fraction of their market value.

While there are limitations concerning the amount of money that can be contributed tax-deferred to an IRA, there are no restrictions on the amount that the contributed funds can earn, and can continue to earn, on a tax-deferred basis, even after the contributions have stopped. Therefore, in the future when Romney withdraws funds from his IRA, the IRS will get a hefty sum of money in taxes. Too bad his money isn’t invested in a Roth IRA!

Diversify!

August 13, 2012

Diversification is a strategy that should be deployed by anyone who cannot accurately predict the future – which is just about everyone. While the stock market provides an ability to spread investment risks over geography, company size, market sectors, and other categories, the fact remains that public exchanges cannot provide full diversification.

You cannot own titled real estate purchased from your broker in your IRA – instead, he will likely offer a choice of publically traded Real Estate Investment Trusts (REITS). You cannot own gold bullion in your IRA if you rely on the stock market – rather, the market will proffer equity interests in mining companies instead. Most business startups have no access to public markets at all, with investors unaware of the potential attractive returns to the early equity participants.

Without a self-directed IRA from our Florida self-directed IRA administration company, it is unlikely that full diversification can be achieved in a retirement account. Whether you are looking for cash flow from property rentals, private lending and investing in tax liens, or instead investing for future appreciation in precious metals, limited partnerships or new business ventures, the choice is yours with a self-directed IRA. Call us at 407-367-3472 to learn more!

True diversification lies with understanding you choices, taking time to know the market, and executing your purchases with confidence, then staying involved in your investments.