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Digg it UP - Don't Overlook Alternative Assets in Retirement Investment Planning
Confidence sells. Ever wonder if those geeks with wrinkled shirts, greasy hair, and pocket protectors will make it out of the high school commons?They didn’t, they’re still there snorting at bad jokes, pointing at girls in short skirts, and slapping their legs with that hideous thud of ignorance. They think they know where they want to go, but they’ll never arrive there, because they haven’t achieved the level of confidence required to step outside their limited circle of friends.Power hungry zu
As we now know, beginning in March 2000 the stock market began its bear market that lasted for over two years. At the same time the real estate market began its bull run for almost five years. Thi
The main purpose of outsourcing is to provide companies with services that they are often unable to give much attention to because of much more preoccupation with operational, transactional activities regarding the nature of their business which they need in order to progress.Outsourcing takes place whenever a company chooses a consultant or application service provider to manage components of its internal IT structure, staff, processes and applications. Which allows the organization to remain fo
Keep in mind that you do not have to "cash out" your IRA to do this type of investing - these investments are made within a Self-Directed IRA. Rolling current retirement funds from an existing IRA for 401(k) account into a Self-Directed IRA to do this type of investing is penalty-free. Additionally, the taxes due on the growth of the investments are deferred until distribution begins at retirement. If the Self-Directed Roth IRA is involved, the principal and earnings are tax-free when distributed at retirement.
I spoke to executives at PENSCO Trust Company. PENSCO Trust is a regulated IRA custodian that exclusively focuses their services on the administration and custody of non-traded and non-traditional assets, such as real estate and private placements.
They gave me an example of how investing directly into Real Estate within a Self-Directed IRA can be a lucrative retirement strategy:
Steve is interested in purchasing an office building with his IRA funds. He has found a building in a growing executive park, which is 100% occupied. The asking price is $400,000 but he only has $200,000 in his IRA. The current owner of the office building is willing to do seller carry-back for the balance of the loan. Therefore, Steve’s IRA has directly funded 50% of the purchase price and has financed the remaining 50% with the seller carry-back mortgage of $200,000.
Rental income from the office building now flows directly back to Steve’s IRA as a return on investment. His IRA uses a portion of that income to pay off expenses related to the running and maintenance of the building, such as the monthly mortgage payment to the seller, insurance coverage, property taxes, snow plowing and so forth. At the end of the year, Steve’s IRA will have a net income of $20,000, after all expenses are paid.
However, since Steve’s IRA used financing to make the purchase, the portion of the income that is attributable to the financing is subject to Unrelated Debt-Financed Income, or UDFI. In Steve’s case, since his IRA financed 50% of the purchase price, then 50% of his net income, or $10,000, would be subject to UDFI tax. Since UDFI taxed at trust rates, generally around 40%, he will end up paying approximately $4,000 in UDFI taxes. However, his IRA will still end up with a net gain of $16,000 for the year. Even though his total IRA income was impacted by the UDFI tax, his net gain is still much more than his annual contribution of $4000 would have added, or even the return on most publicly-traded investments. Twelve months after the debt is paid off, UDFI ceases to apply to rental income generated. Steve’s IRA will then continue to earn rental income and years down the road, when he is ready to retire, his IRA can sell the office building for a nice profit and all capital gains from the sale flow back to his IRA as a return on investment. When he retires, his IRA distributions are taxed at his lower, retired tax bracket. If he makes this investment with a Self-Directed Roth IRA, all of the return on investment is tax free upon distribution.
As we now know, beginning in March 2000 the stock market began its bear market that lasted for over two years. At the same time the real estate market began its bull run for almost five years. Thi
I'm always on the look-out for that essential leg up needed to give my business that competitive edge to stay ahead of the other guy. And being in the web design & development game means that can be a tough game to play!With that in mind, I thought I'd share with you what I've managed to learn about web design, Search Engine Optimization and Internet marketing in the hope that what I know might be of use to someone else.Think like a person and not a machine!Now you're
I spoke to executives at PENSCO Trust Company. PENSCO Trust is a regulated IRA custodian that exclusively focuses their services on the administration and custody of non-traded and non-traditional assets, such as real estate and private placements.
They gave me an example of how investing directly into Real Estate within a Self-Directed IRA can be a lucrative retirement strategy:
Steve is interested in purchasing an office building with his IRA funds. He has found a building in a growing executive park, which is 100% occupied. The asking price is $400,000 but he only has $200,000 in his IRA. The current owner of the office building is willing to do seller carry-back for the balance of the loan. Therefore, Steve’s IRA has directly funded 50% of the purchase price and has financed the remaining 50% with the seller carry-back mortgage of $200,000.
Rental income from the office building now flows directly back to Steve’s IRA as a return on investment. His IRA uses a portion of that income to pay off expenses related to the running and maintenance of the building, such as the monthly mortgage payment to the seller, insurance coverage, property taxes, snow plowing and so forth. At the end of the year, Steve’s IRA will have a net income of $20,000, after all expenses are paid.
However, since Steve’s IRA used financing to make the purchase, the portion of the income that is attributable to the financing is subject to Unrelated Debt-Financed Income, or UDFI. In Steve’s case, since his IRA financed 50% of the purchase price, then 50% of his net income, or $10,000, would be subject to UDFI tax. Since UDFI taxed at trust rates, generally around 40%, he will end up paying approximately $4,000 in UDFI taxes. However, his IRA will still end up with a net gain of $16,000 for the year. Even though his total IRA income was impacted by the UDFI tax, his net gain is still much more than his annual contribution of $4000 would have added, or even the return on most publicly-traded investments. Twelve months after the debt is paid off, UDFI ceases to apply to rental income generated. Steve’s IRA will then continue to earn rental income and years down the road, when he is ready to retire, his IRA can sell the office building for a nice profit and all capital gains from the sale flow back to his IRA as a return on investment. When he retires, his IRA distributions are taxed at his lower, retired tax bracket. If he makes this investment with a Self-Directed Roth IRA, all of the return on investment is tax free upon distribution.
As we now know, beginning in March 2000 the stock market began its bear market that lasted for over two years. At the same time the real estate market began its bull run for almost five years. Thi
As you probably already know, list building is the most important thing you need to do for your business, whether it's an online business or an offline business. Of course, when I write about list building, it's usually the online kind because that's the kind of business I'm very good at and know very well.With that being said, what are some of the ways you enhance your list building efforts?ArticlesBloggingEzine AdvertisingDirect MailPress Releasesffice building with his IRA funds. He has found a building in a growing executive park, which is 100% occupied. The asking price is $400,000 but he only has $200,000 in his IRA. The current owner of the office building is willing to do seller carry-back for the balance of the loan. Therefore, Steve’s IRA has directly funded 50% of the purchase price and has financed the remaining 50% with the seller carry-back mortgage of $200,000.
Rental income from the office building now flows directly back to Steve’s IRA as a return on investment. His IRA uses a portion of that income to pay off expenses related to the running and maintenance of the building, such as the monthly mortgage payment to the seller, insurance coverage, property taxes, snow plowing and so forth. At the end of the year, Steve’s IRA will have a net income of $20,000, after all expenses are paid.
However, since Steve’s IRA used financing to make the purchase, the portion of the income that is attributable to the financing is subject to Unrelated Debt-Financed Income, or UDFI. In Steve’s case, since his IRA financed 50% of the purchase price, then 50% of his net income, or $10,000, would be subject to UDFI tax. Since UDFI taxed at trust rates, generally around 40%, he will end up paying approximately $4,000 in UDFI taxes. However, his IRA will still end up with a net gain of $16,000 for the year. Even though his total IRA income was impacted by the UDFI tax, his net gain is still much more than his annual contribution of $4000 would have added, or even the return on most publicly-traded investments. Twelve months after the debt is paid off, UDFI ceases to apply to rental income generated. Steve’s IRA will then continue to earn rental income and years down the road, when he is ready to retire, his IRA can sell the office building for a nice profit and all capital gains from the sale flow back to his IRA as a return on investment. When he retires, his IRA distributions are taxed at his lower, retired tax bracket. If he makes this investment with a Self-Directed Roth IRA, all of the return on investment is tax free upon distribution.
As we now know, beginning in March 2000 the stock market began its bear market that lasted for over two years. At the same time the real estate market began its bull run for almost five years. Thi
Coastal Vacations is a powerhouse business opportunity. However (as with most things) there is a right way and a wrong way to work the business. Taking the time to discover what works and what doesn't is the key for both short term and long term Coastal Vacations success.You must stand out and apart from everyone else working the business. Chances are high your prospects have already heard about Coastal Vacations and have spoken to other Coastal Vacations directors. You need to offer s
However, since Steve’s IRA used financing to make the purchase, the portion of the income that is attributable to the financing is subject to Unrelated Debt-Financed Income, or UDFI. In Steve’s case, since his IRA financed 50% of the purchase price, then 50% of his net income, or $10,000, would be subject to UDFI tax. Since UDFI taxed at trust rates, generally around 40%, he will end up paying approximately $4,000 in UDFI taxes. However, his IRA will still end up with a net gain of $16,000 for the year. Even though his total IRA income was impacted by the UDFI tax, his net gain is still much more than his annual contribution of $4000 would have added, or even the return on most publicly-traded investments. Twelve months after the debt is paid off, UDFI ceases to apply to rental income generated. Steve’s IRA will then continue to earn rental income and years down the road, when he is ready to retire, his IRA can sell the office building for a nice profit and all capital gains from the sale flow back to his IRA as a return on investment. When he retires, his IRA distributions are taxed at his lower, retired tax bracket. If he makes this investment with a Self-Directed Roth IRA, all of the return on investment is tax free upon distribution.
As we now know, beginning in March 2000 the stock market began its bear market that lasted for over two years. At the same time the real estate market began its bull run for almost five years. Thi
People negotiate differently and behave differently during the negotiation process.We can observe different styles of negotiation and how different types of behaviour can affect the outcome of negotiations.In commercial negotiations, some people negotiate quickly and take risks, others take their time and try to avoid risk. Some buyers are very loyal, others will automatically shop around. Some negotiators can be quite intimidating to the point of being rude; others are quite passive and
As we now know, beginning in March 2000 the stock market began its bear market that lasted for over two years. At the same time the real estate market began its bull run for almost five years. This proves that diversification in all asset classes should be considered. Make sure you ask your financial advisor about alternative investments and self directed IRAs for your retirement.
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