Episode 79: Talking IRAs with Joe Campbell
'Traditional assets tied to Wall Street aren’t necessarily self-directing. It’s really everything outside of that which opens doors and allows you to truly invest in alternative assets.' -Joe Campbell Click To Tweet
Joe Campbell is the Business Development Manager at Provident Trust Group. Provident is a trust company that can self-direct your IRA. When a lot of people think of self-directed IRAs, they think of a traditional IRA where you pick from a list of investment choices where your IRA is held. There is a whole other world of self-directed IRAs that you may not be aware of.
At Provident, you can self-direct your IRA into alternative investment vehicles. It is possible to invest in many different types of real estate and real estate projects from raw land to development. Today we talk about alternative investment opportunities, getting started, Roth IRAs, traditional IRAs, types of 401k plans, having the right team and more.
You can find Joe here:'Definitely look into the Roth IRA and traditional IRA and weigh those options. The Roth is a very very exciting alternative asset vehicle if you choose to take advantage of it.' -Joe Campbell Click To Tweet
- More traditional IRA custodians have a self-directed account which lets you choose from their products. At Provident, self-directed IRAs get you outside of Wall Street and introduce you to some of the alternative assets that are available. Things like real estate, oil & gas, and huge list of potential assets.
- [02:38] How a self-directed IRA is different from a traditional IRA. With the self-directed IRA, you can invest in things that aren’t offered at a traditional IRA. Provident is an alternative asset custodian.
- [04:09] Creative kinds of deals include island development deals, a marina deal, developing raw land, or renting out land, there is a multitude of ways that real estate can come into play.
- [05:07] Emerging assets include cannabis, bitcoin, and crypto currencies.
- [06:15] You need to do vetting and educate yourself on these assets.
- [06:47] You don’t want to do anything that the IRS will view as a prohibited piece of action or deal with individuals that are disqualified. You also want to do arm’s length transactions and not buy a house from your parents or rent to siblings.
- [08:02] You can’t pay yourself to do business on properties that are held in your IRA.
- [08:25] It’s important to have a team with tax advisers, estate advisers and lawyers when doing these difficult transactions.
- [08:53] The difference between a Roth and traditional IRA. The biggest difference is paying taxes now or later. With the Roth, you know what tax brackets you will be in. Your distributions are tax free when you start taking money out at retirement age.
- [10:41] You have to pay taxes on all of your distributions when you withdraw from a traditional IRA. The Roth can be a very exciting alternative asset vehicle.
- [11:33] We don’t know what the tax rate will be in 20 years. Part of the strategy is you controlling your distributions and your plan.
- [12:33] With an IRA you need to be a US citizen with earned income. With a Roth there is a top limit, but not on a traditional IRA.
- [14:00] A 401k and a solo 401k. A 401k is associated with a retirement plan at your employer. A solo 401k is a retirement plan for your business, and you and your spouse as a small business owner or entrepreneur.
- [16:01] A solo 401k is like a self-directed IRA when it comes to investing in alternative assets. It’s the only plan that allows you to take out a loan.
- [17:13] If you are at a job, you can’t roll over your 401k until you leave that job, but you can borrow from it.
- [18:30] When calling Joe they will ask questions and find out what phase you are in and then fill out the applications. Then the accounts will be established in less than 48 hours. To get the account ready and funded it can take about 30 days give or take.
- [20:10] People in the traditional space will want to keep you where you are with high fees and more taxes.
- [20:47] A deal where a client purchased raw land and held it for over a year. She then resold it and got a premium for it by a casino company and became a IRA millionaire.
- [21:49] Mitt Romney and former Facebook employees used their Roth IRAs to invest in startups in their developmental stages. If the startups get huge, it is exciting to talk about.
- [24:19] Educate yourself on the options that are out there. There are alternative investment strategies that you can do that may be things that you are already familiar with.