We are Our Own Investment Opportunity

July 1, 2019

The global population is aging at a rapid pace; the world population of seniors (60+) is expected to double by 2050[1]. This trend is apparent in the US as well – by 2030, older people (65+) are expected to outnumber children (18-) for the first time in US history[2]. Alternative investment strategies focused on age-related technologies and life sciences offer a unique “do good, do well” opportunity.  Florida in particular may be an especially interesting market by being at the epicenter of these demographic trends along with aging technology and life science innovations.

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Self-Directed Accounts: No Longer A One Size Fits All

Planning for a successful retirement can be an intimidating task, to say the least. While many people are saving for retirement through employer-sponsored plans like 401(k)s or 403(b)s, there are additional options that can make all the difference between getting by and continuing to build wealth into your golden years. IRAs have been around since 1975, and while most people are somewhat familiar with them, very few people are aware of the full scope of opportunity offered by these accounts. There are several major considerations when choosing which strategy is right for you.

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Introduction to Checkbook Control

May 31, 2019

Since the concept of individual retirement accounts (IRAs) was introduced in 1974, there’s been a lot of misunderstanding about how they work and what types of investments are eligible to be held.

From a strictly legal perspective, there are very few things that an IRA owner is prohibited from investing in with their retirement account. In fact, the IRS code only identifies life insurance and collectibles as prohibited investments.  However, because such accounts must be held by third party custodians, it didn’t take long for banks and stock brokerage companies to realize that if they would act as the custodian, they could effectively limit what was offered through such accounts to only those investments which generated profits for them. In fact, custodial services are often offered by such firms for free or for fees so small that they don’t even cover the related administrative costs.

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Overseas Adventure? Take Your IRA with You!

May 1, 2019

Whether it’s the lure of an affordable beachfront condo, or a hillside villa, more Americans are choosing to live either partially or fully outside the country now more than ever.  Central America, including Costa Rica, has seen a sharp increase in growth of expats.  According to an article quoting the US Ambassador to Costa Rica in 2017, over 100,000 Americans now live in Costa Rica alone.

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Private Equity and Venture Capital in IRA Accounts

Alternative Investments Are Becoming More Common in Diversified Portfolios

A recent PEW Charitable Trusts study shows a sharp rise in alternative asset investment (ex., private equity, venture capital, or real estate) over the past decade among large pension and trust investors. From 2006 to 2016, funds have more than doubled their allocation to alternative investments[1]. These large fund professional managers are capitalizing on the return and correlation characteristics of this asset class.  A recent trend in this class has been an increase in the relative percentages of private equity and venture capital as compared to real estate holdings.

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Is it Still a Good Time to Lend on Fix & Flip Properties?

March 29, 2019

For several months there has been a steady drumbeat of news showing the housing market is slowing down and prices are softening.  For investors buying rental properties for long term cash flow, this is not a concern and may be a welcome development so they can buy properties at better prices.  However, the fix & flip strategy is impacted by lower prices.  If you’re loaning money to flippers, a decline in housing prices can be a concern.

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Common Misconceptions About 1031 Exchanges

March 1, 2019

There are several common misconceptions about the Internal Revenue Code 1031 exchange process.  To keep investors on the right track and focused on what is important to that investor, let’s clear up a few of these most common misconceptions:

Misconception #1:  To execute a 1031 exchange the investor may only file a form with the IRS and as long as the seller doesn’t utilize, spend or touch the proceeds from the sale of the property they are relinquishing, the investor can perform an exchange at any time.

Wrong!  THIS IS FALSE.   The investor may not have actual nor constructive receipt of the sale proceeds.  This action will trigger a taxable event.  Investors need to use a special non-related “middleman” called a Qualified Intermediary [“QI”] or Accommodator who is required to hold the sale proceeds for them and who then uses those proceeds to buy any replacement property at their express direction. Once the sale of the property the investor is relinquishing closes, funds must be directed to the investor’s QI until the purchase or “up-leg” portion of the exchange is completed.

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