Self Directed Investor Talk: Alternative Asset Investing through Self-Directed IRA's & Solo 401k's

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Bitcoin Prices Are STUPID, But... | Episode #284

Bitcoin Prices Are STUPID.  BUT...

http://SDITalk.com/284

You know what two things don’t mix?  RATIONALITY and BITCOIN PRICES.  Yep, I said it… Bitcoin prices are JUST STUPID.  But that doesn’t mean what you think it does.  Listen on for a point of view sure to surprise and amaze you.  I’m Bryan Ellis.  This is Episode #284 of Self-Directed Investor Talk.

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8/24/2020

Presidential Politics & Your Investments | SDITalk.com #326

Ep. 326
It seems pretty clear that ONE of the two Presidential candidates absolutely opposes everything you and I stand for as self-directed investors.I'm Bryan Ellis.Right now in Episode #326 of Self-Directed Investor Talk, I give you the proof...---Hello, Self-Directed Investors, all across the fruited plane. Welcome to the show of record for savvy self-directed investors like you, where in each episode, I help you to find, understand and profit from exceptional alternative investment opportunities.It is the season for Presidential Politics... and you know, of course, that means I'll poke my head out of the shadows and begin to share with you the harsh realities of politics as it relates to my plight and yours as self-directed investors.You and I, we think alike.We're looking for opportunity.We're looking for a way to apply that most valuable asset of them all… our minds… to fortify our financial positions for the benefit of ourselves, our families, future generations and to help the causes that matter most to us.Yesterday, Motley Fool published a list of 12 tax law changes that one of the Presidential candidates is pushing in his bid to serve in the highest office in the land for the next four years.I’ll link to it on today’s page, at SDITalk.com/326 so you can check it out yourself.Now I won’t even sully the conversation by saying WHICH candidate – obviously there’s only Trump and Biden – but I won’t shift this to being about those men.Let’s just look at the policies and how they’ll impact you and me as builders of wealth.Policy Shift #1:An increase in the corporate tax rate from 21% to 28%.That’s an obvious negative… rising corporate tax rates are ALWAYS – I repeat ALWAYS – passed on to consumers.I could say more, but I suspect it’s unnecessary, so let’s look at...Policy Shift #2:A minimum tax on corporate income.Basically the idea here is this:If a company complies with the tax law in such a way that even the U.S. Treasury is unable to fault their tax planning, and as a result that company does not have to pay income taxes, this policy would mean that that company must pay taxes ANYWAY.Basically, this is a tax on good planning.They’re targeting this one at Amazon and some others that have been astoundingly good at using the tax law to their benefit.But hey, remember:This means that all of those Amazon packages WILL be more expensive in the future… no doubt about it.More expenses for the providers means more cost to the consumers.But surely… SURELY… the remainder of these new policies won’t so directly target – and thus discourage – productive members of society… right?Wrong-o.Whether it’s policy #5 that increases marginal income tax rates for higher earners, or policy #6 that raising the payroll tax on high earners or raising capital gains taxes on… you guessed it… high earners…Well, it almost sounds like the particular Presidential candidate who is pushing for all of these changes really doesn’t like high earners or successful companies very much, does he?And don’t forget… if building a FINANCIAL LEGACY is important to you, then the STEPPED UP basis changes – that’s policy #8 – will matter to you.This is a way of making sure that a horrible tax burden is transferred to your beneficiaries when they receive your assets in the future.Right now, that does not happen… but it would under this proposed tax policy.All that isn’t even to mention the slashing of tax deductions for both personal incomes – that’s policy # 9 – or phasing out small business deductions if you happen to be a successful small business owner, which is policy #10.If you hear a common theme here, it’s because there is one.The candidate who wants these policies to be law – none other than the basement baron himself, Joe Biden – wants, quite fervently, to punish your success.In other words, if it’s your objective to minimize your taxes, creepy Joe wants to MAXIMIZE them.If it’s your objective to build a small business, creepy Joe wants to make sure your tax bill stands in the WAY of your doing so.If you want to build a basis of financial assets for the benefit of future generations, creepy Joe wants to make sure that when those future generations receive your assets, that they’re forced to sell off those assets to pay their tax bill.My friends, a vote for Joe Biden is a vote against yourself.It’s that simple.Don’t vote against yourself.My friends… invest wisely today and live well forever.
3/27/2020

CoronaVirus, Warren Buffett & Greed Amidst Fear

Ep. 325
CoronaVirus has created more abject terror than anything I’ve ever seen.If we’re to believe Warren Buffett, then wise investors are to be “greedy when others are fearful”.So how, exactly, can you be wisely greedy right now?I’m Bryan Ellis.I’ll tell you RIGHT NOW in Episode #325 of Self-Directed Investor Talk.---The world changed radically a few weeks ago.Free countries went on total lockdown.The hottest commodites in the world became hand sanitizer, toilet paper and medical masks.And the stock market went on a volatility spree never seen before or since.And yet, the whole time, savvy investors kept hearing the famous words of Warren Buffet echoing in their minds:"Be fearful when everyone else is greedy, and greedy when everyone else is fearful."The question, my friends, is how to be very wisely greedy during a time when the prevailing emotion all around us is, without any doubt, not mere fear... but abject terror.The one clear answer - well supported by history and the leadership of current experts - is to invest in well-vetted, well-operated RV Parks.Now, in case you're not a user or owner of RV's yourself, I understand.I'm not either.Just in case you don’t know, RV stands for “Recreational Vehicle”… the big rolling hotel rooms like Winebagos.But whether that’s “your thing” doesn't matter.Kind of like you don’t need to live in an apartment in order to justify investing in a great apartment complex.So I’m going to make a very quick, but rather overwhelming, case to you right now that RIGHT NOW, in the height of this epidemic of terror and infection, that RIGHT NOW is the right time to jump into RV parks.And as always, I don't expect you to take my word for it.In fact, I insist that you don't take my word for it... that's because history makes this case for me in such a compelling, unquestionable way.Before CoronaVirus, the pinnacle example of economic downturn during most of our lifetimes was the Great Recession of 2007 & 2008...if any economic event was going to doom an industry where "recreation" is the literally first word in the name, the Great Recession would have been that phenomemon.But what actually happened?Well... not much.As the economy of the United States slowed and weakened with each passing week, the data shows us that average length of stays at RV parks got LONGER.Not shorter… LONGER.And I take this from a deeply authoritative source.It’s a report called “Effects of COVID-19 on the Campground Industry”.It’s written by American Property Analysts – the absolute leading valuation experts in America for the RV Park and campground industry.This report was written last week, at the request of and for the benefit of the banking industry.As the economic carnage began to mount from the CoronaVirus scare, banks who finance RV parks wanted to know where their exposure stood in connection with COVID-19, and of course, they hired the most knowledgeable experts in that field at American Property Analysts, Inc.And according to that report, when looking at the Great Recession, it’s all summed up in this quote:"What campers did not do was discontinue using their RV's."That report goes on to say that "In most locales, demand exceeded available supply" and that "attendance held fairly steady".Now remember... the setting here is the aftermath of the Great Recession, when our country suffered the worst economic contraction since the Great Depression.It was a time when, according to the respected California-based newspaper called the Orange County Register, nearly 9 MILLION jobs were lost... 4 million homes were foreclosed EACH YEAR... and 2.5 million businesses were shuttered.It was the worst of times for the American economy.But what happened in the RV park industry?Well, I remind you:"attendance held fairly steady" and "in most locales, demand exceeded available supply."But it's better than that still:To further quote the American Property Analysts report, "Waiting lists for seasonal sites popped up nearly everywhere, and many of those lists remain in place today at the more desirable properties. Some folks even paid non-refundable fees just to be on certain lists, and some of those campers are just now nearing the front of their lines."If you understood me to say that the backlog of demand created during the LAST recession still exists to this day, you understand me correctly.I can't imagine how much demand and backlog the economic fallout of the CoronaVirus pandemic will create for the RV park industry... but history suggests it will be HUGE.Am I suggesting to you that every RV park in America did a booming business during the Great Recession?No.Not at all.There will always be the superstars and the laggards, and doubtlessly that's true here as well.But what I am telling you... scratch that... what the historical data cited by the American Property Analysts report is telling you is that, overall, RV parks as an industry hardly - if at all - noticed that a recession happened at all.And my friends, history is repeating itself right now.And if you think about it, it makes complete sense for at least 3 strong reasons:Reason #1:One of the immediate results of the national shutdown from CoronaVirus was the closing of National Parks.Now that's an awful thing because I, for one, realy love and frequently visit the parks in my area.But as owners of RV Parks, we aren't sad to see it.Why?National parks are one of our biggest sources of competition.Right now, that competition is completely GONE... Kaput... poof.It'll return someday, but for now, it's GONE.Reason #2:The totally justified concern over the risk of infections connected with hotels, cruise ships and other recreational destinations likely will drive growth in the RV industry, as one's RV is a completely private space, not subject to the risk of exposure from third parties.and Reason #3: I'm happy to report to you that our EXPERIENCE is matching the THEORY I've shared with you, because presently, we've seen exactly ZERO cancellations at any of the RV parks that we already own... and there has DEFINITELY been an uptick in interest since CoronaVirus was declared a pandemic and the nation was put on lockdown.My friends, I return again to Buffett's famous advice:Be fearful when others are greedy, and greedy when others are fearful.Now here’s what you might not know about RV parks:Even average ones can be incredibly profitable.Imagine if you had all of the benefits of owning a great apartment complex, but your cash flow was more like a mobile home park.Well, it’s like that, only better.Well-vetted, well-operated RV parks don't merely compare favorably to other real estate asset classes, RV Parks dramatically outshine them and the data makes that overwhelmingly clear.So where does that leave you?If you're savvy enough to take seriously the advice of Warren Buffet, the man widely considered to be the greatest investor of our lifetimes, then the only reasonable conclusion you can draw is this:These are times of great fear... and that's your signal to be wisely greedy.And there's no better asset class - as proven by history - for that wise greed he recommends than RV Parks.The time is now.Thank you for listening in today.Every now and again, we encounter exceptional RV park investment opportunities.Best for well-qualified investors, these opportunities always fill rather quickly as only a small number of openings for outside investor partners are made available.If you'd like to be considered for participation in the next such project, please send an email now to feedback@sditalk.com, that’s feedback@sditalk.com., `to set an appointment to speak with me or a member of the team.Happy investing!
3/6/2020

an IRA/401(k) LANDMINE for Affluent Investors

Ep. 324
There’s an asset class that affluent investors REALLY love… extraordinary cash flow is the norm and the tax benefits are the best around.But there’s a HUGE LANDMINE just waiting for affluent investors who try this in their self-directed retirement account.I’m Bryan Ellis.Today, you affluent investors learn how to sidestep certain disaster in Episode #324 of Self-Directed Investor Talk.-------Hello, Self-Directed Investors, all across the fruited plane.Welcome to the show of record for savvy self-directed investors like you, where in each episode, I help you to find, understand and profit from exceptional alternative investment opportunities.For you folks with a bit higher net worth, you need to pay close attention today.So for those of you who may not yet quite be in the high net worth world, something you should know about your wealthier brethren is that one of the most popular asset classes among them is one I’ve mentioned here before, but only very briefly… and that is oil well drilling.It makes perfect sense because the cash flow beats the heck out of basically everything else, and the tax benefits makes real estate and other supposedly tax efficient investments look like child’s play.Yes, the risk is theoretically higher, and that’s why this is the domain primarily of accredited investors.But to set up this dilemma, and the brilliant solution for it, let’s consider a scenario, with real numbers. So here’s the deal.This investor… we’ll call her Tara… has decided to invest in an oil drilling deal.It looks like a pretty good one, I’m actually quite familiar with it… she’s got to invest $150,000 to buy into the deal, and based on the preliminary geological research, the expectation is that she’s going to bring in something on the order of $12 to $13,000 per month or so, based on current oil prices.Now if you’re doing the math, you know that $12,000 per month equals $144,000 per year, which is shockingly close to being a 100% cash-on-cash return.Well, that’s one of the reason high net worth investors love this stuff… the cash-on-cash numbers are just breathtaking, enough so that the additional risk is quite regularly totally worth taking.So that’s great, right?Tara makes this investment, and assuming it works like expected, then she yields a MASSIVE cash-on-cash return for 5-7 years until the oil well runs out… and then she’ll likely do it again, if she’s like most high net worth investors I’ve worked with.And to make it better, she’s doing this in her Roth IRA… so all of that juicy ROI is totally tax free!Right?Right?Isn’t it tax-free?Well… no.Here, my friends, we consider an important distinction between the two types of income:Earned and Unearned.Earned income is just what it sounds like… money you earn from a W2 job or a 1099 contracting position or something like that.You work, you get paid.That’s earned income.Unearned income, on the other hand, is profit from investments… it’s a more passive type of thingSo if you buy stocks and they rise in value or pay dividends, that’s unearned income.If you buy real estate and it appreciates and/or generates cash flow for you, that’s unearned income. If you make a loan and are repaid for that loan, that’s unearned income.So here’s the thing:it’s widely believed that IRA’s and 401(k)’s – particularly the Roth variety – are just not taxable.Unfortunately, that’s not true.It’s almost ENTIRELY true that any UNEARNED income – the kind from stocks and real estate and loans, for example – pretty much all of that will be tax-favored inside of a retirement account and that’s great!But this is where we return to Tara’s oil & gas deal.Yes, she’s going to make a lot of income from that deal.But there’s a catch.Federal tax law makes it abundantly clear that under most circumstances, the income generated from drilling an oil well and selling that oil is NOT UNEARNED income, but is EARNED income.That means two things:First, that the money is taxable.And second, that the tax rate that’s relevant in that case is NOT personal income tax rates, but is the income tax rates for TRUSTS, since both IRA’s and 401k’s are, under the law, types of trusts.And that, my friends, is BAD news.You see, income tax rates for trusts are, for all intents and purposes, 37%.That’s astronomical.If Tara brings in $12,000 per month on average as expected, that equates to $144,000 per year.37% of that is over $53,000… so her IRA would have to stroke a check for over $53,000 to pay income taxes.That would leave her with a net of nearly $91,000 per year which is still just off-the-chain exceptional… but still… that’s a BIG tax bite.What to do, what to do?Most of the time, investors do oil & gas deals OUTSIDE of a retirement account because the VERY BEST tax benefits in oil & gas don’t really apply to IRA’s and 401k’s.But in Tara’s case, that’s where she happens to have the available capital, and quite justifiably, she doesn’t want to miss this opportunity.So here’s what I recommended to her:Since we can’t eliminate those taxes, why don’t we just slash them dramatically?You may remember that one of the thing that President Trump’s signature tax bill did was to slash corporate tax rates to 21% as the maximum.So I suggested that Tara form a c-corporation inside her IRA, and capitalize it with $150,000 from the IRA.She could then buy the oil & gas interest with that money, inside the corporation.That money – we’ll just say $144,000 per year – will still be taxed, but not at 37%.It’ll only be taxed at 21%.Bottom line… she’ll pay about $23,000 PER YEAR less in tax this way!Over the course of 5 years, that’s a very real saving of over $100,000… just by using the subtle brilliance you learned right here on Self-Directed Investor Talk!Now before I sign off for the day, I’ll go ahead and answer the question I know is coming:Maybe.The answer is maybe.The question, of course, is something like:“Bryan, I just heard you talk about the crazy results people are getting from oil and gas deals… can you hook me up with some of those opportunities?”Well, the answer is MAYBE.There are some qualification requirements.So the best path to take is this:If you’re interested in learning more, just text me now at 678-888-4000 and I’ll be happy to have a team member talk this through with you.Again, just send a text to me at 678-888-4000 and we’ll chat about it right away.My friends… invest wisely today and live well forever!