RPF0143-Kirk_Chisholm

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00:00:30.000 | So you have a bunch of money in your IRA,

00:00:32.800 | and you might have some stocks or bonds or mutual funds,

00:00:36.600 | but you feel like you might like to invest in something else.

00:00:40.800 | Did you know that you can invest in real estate,

00:00:44.800 | tax liens, private mortgages, gold and silver,

00:00:50.400 | horses, livestock, farmland, medical equipment,

00:00:56.800 | just about anything? A couple of small exceptions, but just about anything in your IRA?

00:01:02.800 | Today, we'll tell you how.

00:01:04.400 | Welcome to the Radical Personal Finance Podcast.

00:01:22.800 | My name is Joshua Sheets and today is Thursday, January 29, 2015.

00:01:29.800 | We're going to have fun today talking about one of my favorite areas,

00:01:33.400 | which is how we can use a tax advantaged account

00:01:38.800 | in a possibly slightly more intelligent or at the very least more radical way.

00:01:47.800 | I bring to you today an interview with a guest named Kirk Chisholm,

00:01:56.800 | and I met Kirk at FinCon when I went out there last year.

00:02:00.400 | I had been looking for an expert in this area to bring on the show,

00:02:03.400 | and we struck up a conversation in the hallway,

00:02:05.600 | and he said that he does, and I says,

00:02:07.400 | "I've been looking for someone like you to bring on the show."

00:02:10.400 | Because as you'll hear in the interview, even though I'm aware of some of the laws,

00:02:14.400 | this is a very specialized area of planning,

00:02:16.400 | and it's something that most of us who've been mainstream advisors don't have much experience with.

00:02:21.400 | But Kirk has set up a firm.

00:02:23.400 | Going to share with you all about some ideas and some tips and some tactics.

00:02:27.400 | We're going to mention Mitt Romney's $100 million trust,

00:02:30.400 | talk about how to make that happen,

00:02:32.400 | and hopefully give you some ideas for how you can invest in some more interesting things in your IRA.

00:02:39.400 | Enjoy.

00:02:42.400 | Kirk, welcome to the Radical Personal Finance Podcast.

00:02:44.400 | I appreciate you making time for me today.

00:02:46.400 | Great. Thanks a lot, Joshua. I appreciate you having me on.

00:02:50.400 | I've been looking forward to this conversation since we met at FinCon,

00:02:53.400 | and it's going to be a fun one,

00:02:55.400 | because we're going to talk about self-directed accounts, which is a big interest of mine.

00:02:59.400 | But as we do that, though,

00:03:01.400 | I have a lot of people that listen to the show that are interested in the financial services business,

00:03:07.400 | and I'd love for you to sketch out a little bit about your background.

00:03:10.400 | How did you get into the business? What was your path through?

00:03:13.400 | And where are you, and what do you do today?

00:03:16.400 | Okay. Yeah, actually, I started in the business in '99,

00:03:23.400 | which, of course, is the top of the market at the time, a wonderful time to start.

00:03:27.400 | I started right after college and started working at Cain Weber,

00:03:32.400 | who was acquired by UPS shortly after that.

00:03:36.400 | And that was in the wire house part of the industry, the big broker-dealers.

00:03:41.400 | And it was a good introduction to the industry.

00:03:45.400 | Actually, that was probably the first time I had sort of learned about self-directed IRAs,

00:03:51.400 | because a client of mine had asked me if he could buy an LLC with his IRA,

00:03:56.400 | and I'd never heard of that. They don't teach you that there.

00:03:59.400 | Definitely not.

00:04:00.400 | So I asked my manager, he said, "No, you can't do that."

00:04:05.400 | I said, "All right." And he asked a few more questions.

00:04:08.400 | He's like, "Well, you can, but you probably don't want to."

00:04:11.400 | I'm like, "All right, forget it."

00:04:13.400 | And then a few years after that, I went over to Smith Barney,

00:04:18.400 | which is now Morgan Stanley.

00:04:20.400 | They're starting to know its trend here.

00:04:22.400 | And when I was at Morgan Stanley, when I was at Smith Barney,

00:04:27.400 | I actually had a client.

00:04:28.400 | This is really when I first started getting into self-directed IRAs.

00:04:34.400 | And I had a client tell me that he was going to invest in a private note

00:04:38.400 | or private mortgage through this individual,

00:04:42.400 | and he wanted to use his retirement account.

00:04:44.400 | I said I had no idea. I'd heard of that concept.

00:04:49.400 | I have no idea how to do it, but I'm happy to help you through the process.

00:04:53.400 | So I went through and learned as much as I could.

00:04:56.400 | Of course, I didn't get much help from Smith Barney.

00:04:58.400 | They pretty much told me the same answer of, "You can't do that."

00:05:02.400 | So I went through the whole process and learned as much as I could,

00:05:06.400 | found some pretty good resources.

00:05:08.400 | There was a book at the time that I'd read,

00:05:11.400 | and some of the custodians had provided some pretty good learning tools.

00:05:15.400 | And I walked through the process and learned quite a bit about it.

00:05:19.400 | And at that point, I had actually switched over to an independent broker-dealer,

00:05:28.400 | not a Royal Alliance, because I was looking to expand on the alternative investment side

00:05:33.400 | as well as the self-directed IRAs.

00:05:36.400 | And it was a little complicated.

00:05:39.400 | The broker-dealer side makes things challenging because of FINRA.

00:05:44.400 | So eventually, I ended up starting an RA with my current partner.

00:05:52.400 | One of our primary focuses was to be the experts in alternatives with self-directed IRAs

00:05:59.400 | and 401(k)s as well.

00:06:02.400 | So we pretty much started our current firm back in 2009.

00:06:08.400 | Of course, an interesting time to start.

00:06:11.400 | I had my same clients that I brought over, but this was actually a really good time

00:06:18.400 | to get involved because people were looking outside of the stock market.

00:06:22.400 | So really, what we realized is...

00:06:26.400 | I mean, I'm not aware of any other advisor that specializes in what we do.

00:06:31.400 | So, you know, dealing with alternatives is one component

00:06:36.400 | because it's something that many people are not familiar with.

00:06:40.400 | And working with self-directed IRAs or 401(k)s is a whole other animal.

00:06:46.400 | Based on our research, 3% of the population is actually investing in alternatives

00:06:51.400 | with their IRA or 401(k)

00:06:53.400 | and less than 20% -- I would estimate maybe 12% -- is even aware of the fact that it can be done.

00:07:00.400 | So you really have a huge potential marketplace of people that...

00:07:08.400 | I mean, we like to say that people should invest in what they know.

00:07:15.400 | You know, if you're an expert in real estate, you shouldn't be investing in diamonds or horses.

00:07:21.400 | You should invest in the real estate that you understand and know well.

00:07:25.400 | And I've found over the years that developers or people who have a background in real estate

00:07:34.400 | don't really want to put their money in mutual funds.

00:07:37.400 | The mentality of the real estate investors is they want to put every nickel they own into real estate.

00:07:44.400 | That's the way they operate.

00:07:46.400 | And when they become aware of the fact that they can actually do this,

00:07:51.400 | their eyes just widen.

00:07:54.400 | I mean, it's just amazing to see people realize and say, "Really?"

00:07:57.400 | It's an amazing conversation, let me tell you.

00:08:01.400 | I had an experience similar to yours with regards to being in mainstream finance.

00:08:10.400 | But I was with Northwestern Mutual.

00:08:13.400 | And Northwestern Mutual doesn't do any of that kind of alternative stuff.

00:08:16.400 | Very conservative, especially in investment management.

00:08:19.400 | Just very straightforward, very conservative, very traditional.

00:08:23.400 | But I somehow developed...

00:08:25.400 | Not somehow.

00:08:27.400 | I've always had the reputation as the weirdo.

00:08:29.400 | The guy who thought about all the stuff that no one else did.

00:08:35.400 | I'd have other advisors.

00:08:36.400 | And especially in the last...

00:08:39.400 | I would say since 2008,

00:08:41.400 | I've seen a much larger percentage of the population than I ever can figure out in the past

00:08:46.400 | just simply lose their confidence in the mainstream approach

00:08:49.400 | and desire something different, or at least something different with a portion of their assets.

00:08:54.400 | And so I was the guy that other advisors would say,

00:08:57.400 | "Listen, I've got a client who's asking me about gold, gold coins. I don't have a clue."

00:09:02.400 | And they would call me and say, "Joshua, what advice do I give a client?"

00:09:05.400 | Obviously, I can't do anything, but how do I steer this person in the right direction of buying gold coins?

00:09:10.400 | They see the ads on the cable news channels.

00:09:13.400 | How do I talk them through that in a rational way?

00:09:17.400 | And so I was the guy who was answering those questions.

00:09:20.400 | Got to back off his planning for people.

00:09:23.400 | And so that was one.

00:09:25.400 | And one of the things that I always got the questions on was,

00:09:28.400 | "How do I... I don't trust stocks. I got to get out of the stock market.

00:09:32.400 | But I got all my money in an IRA. What do I do?"

00:09:34.400 | And that was what got me interested.

00:09:36.400 | It was kind of researching.

00:09:37.400 | How could we use the funds that are in a 401(k) or in an IRA or something like that?

00:09:42.400 | And how could we invest them a little bit more broadly than just whatever a mainstream basket of mutual funds might be?

00:09:51.400 | And when I started learning about what was possible, I could never do that.

00:09:55.400 | And I admire you for going through the hassle of setting up the firm to work with that.

00:09:59.400 | I can't even imagine the challenge of setting up an RIA to service that type of business.

00:10:04.400 | And how do you find custodians? And how do you...

00:10:07.400 | I want to hear more about it and your experience in doing that.

00:10:10.400 | So I always just referred people out.

00:10:12.400 | But I did always make... at least learn enough to say, "Here's how you can structure it."

00:10:16.400 | Now, whether or not you're going to be able to find a service provider or not, that's a whole other question.

00:10:20.400 | But I got to imagine if your marketing is working, this has got to be in pretty good demand right now in 2015, right?

00:10:28.400 | Yeah, and actually, setting up the firm is a funny story.

00:10:34.400 | So when we started looking to do this, originally we thought, "Hey, the broker-dealer route, we could do that."

00:10:42.400 | And then talking with broker-dealers, it was pretty much a no-go.

00:10:46.400 | There was no way anybody was going to let us do it.

00:10:48.400 | Compliance for FINRA is just a nightmare. And they said, "We just don't want to deal with it."

00:10:54.400 | So when we started, when we set up our RIA, we looked at a few different states.

00:11:00.400 | We were looking at state registration at the time.

00:11:02.400 | And we looked at Maine and Massachusetts and New Jersey.

00:11:07.400 | And I don't want to call anybody out here, so I won't say the states.

00:11:13.400 | But let's just say one of the states, we said what we wanted to do.

00:11:16.400 | They said, "You don't need to be like this. Do that."

00:11:18.400 | So we said, "All right, next."

00:11:22.400 | [Laughter]

00:11:24.400 | And one of the other states that we had gone to,

00:11:29.400 | originally, because within the first two years, they're supposed to give you an audit.

00:11:34.400 | That's a regulation that we try to do.

00:11:38.400 | And so our first audit, we had gone through with the regulators and we told them what they were doing.

00:11:44.400 | And immediately they just got frenzied.

00:11:46.400 | They said, "Wait a minute. You're doing all turnovers. Aren't those risky?"

00:11:50.400 | Right.

00:11:51.400 | "Risky like what? Risky like AIG? Like Lehman Brothers? Like Enron? What kind of risky are we talking about?"

00:12:01.400 | And so it took a lot of education of the regulators to explain that risk management,

00:12:07.400 | which is a key cornerstone of what we do,

00:12:10.400 | risk management is not about whether an asset is publicly traded or whether it's an alternative.

00:12:20.400 | It's about the asset itself.

00:12:22.400 | So AIG was AAA rated at the time.

00:12:24.400 | There's no higher rating.

00:12:26.400 | So you could argue that they were one of the safest stocks around, but that turned out to be not true.

00:12:32.400 | On the other hand, you could say investing in a piece of rentable property down the street is risky.

00:12:38.400 | But you live close. It's a rental property.

00:12:42.400 | You can do the numbers. You know what the risks are.

00:12:45.400 | You can mitigate the risks by making sure you have enough insurance,

00:12:50.400 | by making sure that you have good tenants and other forms.

00:12:54.400 | The risk of an asset is not determined based on how some third party characterizes it.

00:13:01.400 | It's really how you're looking at the risk and how you feel comfortable with them and can mitigate them.

00:13:06.400 | So we had a number of interesting conversations with regulators.

00:13:11.400 | We've taught them how to assess the risks of alternatives as opposed to just saying it's risky because it's an alternative.

00:13:18.400 | I think that is an industry norm that needs to be dispelled.

00:13:22.400 | But I found that we're hyper-focused on compliance.

00:13:30.400 | We actually set the bar higher than is what is expected because we understand we're playing in a unique space.

00:13:40.400 | If anybody comes to play at the playground, we want to make sure everybody else is abiding by those standards.

00:13:46.400 | Because all it takes is one bad seat and then everybody else is painted with a bad brush.

00:13:52.400 | We're very focused on making sure all the rules are abided by.

00:14:01.400 | There are gray areas with this, but we make sure that we're in the lighter part of the gray.

00:14:07.400 | Certainly anything that... there's case law that changes all the time and they change the rules occasionally.

00:14:15.400 | So we have to make sure that we're up to speed on that and make sure that clients are in compliance.

00:14:22.400 | I think that's, from our perspective, it's very important.

00:14:28.400 | There are a number of people who try to invest in alternatives in an IRA themselves without advice.

00:14:37.400 | And we come across a lot of errors that probably shouldn't happen.

00:14:42.400 | And I think it's unfortunate, but because of the lack of knowledge in this area, people tend to make mistakes more often than they should.

00:14:53.400 | Especially, I would imagine, because this area of planning is going to attract a lot of hype, shall we say.

00:15:02.400 | A lot of times, the truth, you can be pretty close to it and just a tiny bit over, and that tiny bit over could wind up being an expensive mistake.

00:15:13.400 | I want to talk a lot about how to do this.

00:15:16.400 | And obviously, certainly, you can mention how you work with people, but I also just want to explain to people the general framework of how, if this is of interest to them, they could do it.

00:15:26.400 | I don't want to spend too much time talking about alternative investments, but I do think we need to start there to lay the framework.

00:15:32.400 | And you mentioned in your advertising material, very straightforward, and this is what shocked me when I finally figured it out,

00:15:39.400 | that there are actually only a few types of investments that are prohibited from IRAs, based upon my understanding.

00:15:46.400 | And correct me anywhere along the line I get it wrong, because you are much more well-versed in this than I am.

00:15:51.400 | But you can't invest in life insurance contracts, you cannot invest in S-corporation stocks, and you can't invest in collectibles.

00:15:59.400 | So, you can't buy artwork.

00:16:03.400 | But outside of that, pretty much just about the whole world of investing is available to you.

00:16:11.400 | And you post a list on your site of ideas of different things that can be invested in with a self-directed account.

00:16:18.400 | And including real estate, tax liens, private mortgages, farmland, timberland, airspace rights, mineral rights, precious metals,

00:16:32.400 | private businesses or franchises, as long as they are structured either as an LLC or as a C-corporation,

00:16:38.400 | private equity, venture capital, medical equipment leasing, horses, livestock, payday loans, title loans, etc.

00:16:48.400 | Is there any other restriction of what you can invest in as long as you stay away from life insurance contracts, S-corporations, or collectibles?

00:16:55.400 | Is there anything else other than that that you can't use as an investment inside of a self-directed account?

00:17:03.400 | Well, I mean, Joshua, I think you can appreciate this based on the nature of your podcast, that you're, you know, you think outside the box creatively.

00:17:11.400 | And I think the nice part about this space is that it allows you to be very creative in the way that you do things.

00:17:20.400 | So, the restrictions or the prohibited assets inside of an IRA are, as you stated, S-corps, life insurance, and collectibles.

00:17:31.400 | However, as with a lot of things in this space, there are rules and there are exceptions to those rules.

00:17:37.400 | And in some cases, there are exceptions to those exceptions.

00:17:40.400 | So, to give you an example, so you cannot invest in life insurance.

00:17:45.400 | But technically, you can't invest in life insurance on yourself.

00:17:49.400 | You can invest in life settlements, life insurance contracts on other people.

00:17:55.400 | You know, you can't invest in collectibles, but you can invest in a business that markets collectibles or sells collectibles.

00:18:05.400 | So, there are different subtleties around the rules that can be done.

00:18:11.400 | And I think that, you know, there are enough ways to get things done the way that you need to get them done.

00:18:21.400 | It's not, you know, we're not breaking any rules. We're not, I mean, believe me when I say this, you know, we're not playing in the charcoal area of the gray.

00:18:29.400 | You know, we make sure that there's absolutely no shadow of a doubt that somebody would ever get a disqualified transaction through any of these things.

00:18:41.400 | Because, you know, as an IRA, we're fiduciaries.

00:18:44.400 | So, we have a lot of liability on the hook.

00:18:47.400 | This isn't just a here, go do it yourself. We're on the hook as well.

00:18:51.400 | I think that's an important consideration that people understand is that we're in it together with them.

00:18:57.400 | So, we want to make sure that it's done right.

00:18:59.400 | Now, another example of things that are misunderstood is we had a client who was looking to buy physical gold and silver inside of his 401k, his company's 401k plan.

00:19:17.400 | So, we went through lengthy discussions with them.

00:19:19.400 | We interviewed a depository. We had interviewed dealers, coin dealers.

00:19:27.400 | We actually even met with the, we spoke with the ICTA, which is the Intangible Council.

00:19:37.400 | I forget the exact title of it.

00:19:39.400 | But at the time, their stance was this cannot be done.

00:19:43.400 | You cannot invest in gold in your IRA unless it's kept with a dealer.

00:19:50.400 | Dealer meaning a primary dealer like a JP Morgan, a bullion bank, if you will.

00:19:57.400 | And it would have to be housed there.

00:19:59.400 | But, you know, if anybody has looked at buying gold and really has thought through all of the different risks,

00:20:08.400 | one of the risks that many people in that circle think about is, you know, with the bullion banks, is that gold there?

00:20:18.400 | Are there ETFs? Do they actually house the gold?

00:20:21.400 | And if somebody wants to buy gold coins for keeping it out of the system, the last place they want to put it at is one of the banks that...

00:20:29.400 | Exactly. It's a little different.

00:20:32.400 | If you're worried about making sure that you have gold in case of the zombie apocalypse,

00:20:36.400 | there's a big difference between holding a one-ounce gold American Eagle, you know, in your gun safe

00:20:42.400 | versus having a piece of paper that indicates that the gold ETF actually has this somewhere in some mythical location.

00:20:49.400 | Right. So we had read through the rules and we actually came up with a solution to that

00:20:58.400 | and explained it to them and they concurred after speaking with their counsel that that was a valid way to do it.

00:21:05.400 | But, you know, one of the things that I like is that we challenge the boundaries, you know.

00:21:12.400 | We make sure that, you know, my business partner is probably one of the foremost experts in this area

00:21:18.400 | and you could call him the library with no books. You know, he understands things off the tip of his...

00:21:25.400 | Why am I talking to you then? Why didn't you just send me to him?

00:21:28.400 | What's the point of this conversation?

00:21:32.400 | You know, vacation.

00:21:35.400 | Join himself.

00:21:39.400 | But my point is that there are a lot of different subtleties and things that can be done

00:21:47.400 | and I think that even some of the other rules like prohibited transaction and disqualified persons,

00:21:56.400 | there are ways to, I don't want to say circumvent them, but ways to work within the rules

00:22:02.400 | that you can get things accomplished that need to be done.

00:22:07.400 | So I think it's a nice part about this space that allows you to be creative and allows you to think outside the box.

00:22:15.400 | You know, and there are multiple ways to get things accomplished.

00:22:20.400 | So some people, I'll give you an example, a big, hot, very heavily advertised area is the checkbook LLC

00:22:31.400 | or the checkbook IRA.

00:22:33.400 | Right.

00:22:34.400 | And it's a complicated area because it's marketed as a way for people to hide the assets that they're investing in their IRA

00:22:46.400 | and to have full authority to invest in whatever they want.

00:22:52.400 | And a lot of people take that as a license to break the rules because if you didn't have the LLC to shield it

00:22:59.400 | and you were to invest in those assets at the custodian, the custodian would flat out tell you no

00:23:04.400 | if it wasn't something that was legal or allowed.

00:23:07.400 | So some people take that as an opportunity to do what they want.

00:23:12.400 | And in the face of that, many of the larger custodians have flat out said,

00:23:18.400 | "We will not accept a checkbook LLC as an asset."

00:23:23.400 | And some of them have actually required a special advisor to be listed on that account

00:23:31.400 | to make sure that they are overseeing the account to make sure that everything is above board.

00:23:37.400 | So we are one of the special advisors at some custodians that are allowed to oversee it and advise on that.

00:23:45.400 | But there's enormous liability for them if they allow it, which is why they've--

00:23:50.400 | they actually shut it down for a few years and didn't allow it at all.

00:23:54.400 | And they started to recently open it back up after discussions with some other attorneys and accountants

00:24:00.400 | that are also specialized in this area.

00:24:02.400 | And they said, "Look, you can't just not do this. You have to put more guidance on there."

00:24:07.400 | So they did, which is great.

00:24:10.400 | So I think that's an area that is-- there's potential issues with.

00:24:17.400 | I mean, flat out, the checkbook LLC is no different than the IRA in that the rules don't change.

00:24:25.400 | You still have the same rules that apply.

00:24:28.400 | The only difference is you don't have somebody else overseeing what the assets are.

00:24:33.400 | And, you know, some people like that, and that's fine, but it doesn't mean the rules change.

00:24:39.400 | The LLC is a flow-through, so it's not as if you have a different set of rules for that.

00:24:47.400 | I can't imagine why anybody in this space would actually want to do and engage in prohibited transactions

00:24:54.400 | but just put up with a shield.

00:24:56.400 | When you're dealing with accounts like this, you've got the most public accounts that you could possibly come up with.

00:25:02.400 | And if you want to invest privately, just skip the whole thing and go invest privately.

00:25:07.400 | If you want to break rules and break law, then go and just work in the free market.

00:25:14.400 | Go work in the black market.

00:25:16.400 | So I don't understand why people approach it that way.

00:25:18.400 | Where I look at it is people that will follow very carefully the letter of the law

00:25:23.400 | but are looking to do a little bit more hands-on, focused investing

00:25:28.400 | and are just looking to structure their affairs in the most straightforward ways.

00:25:34.400 | I don't see why anyone would push it to the point of investing in prohibited assets.

00:25:39.400 | What types of accounts--go ahead.

00:25:42.400 | Go ahead, Fiorillo, just respond.

00:25:43.400 | I was going to say, so one of the reasons possibly is that people don't understand the repercussions.

00:25:53.400 | Let me give you an example because I think this will illustrate it as clearly as anybody would ever need.

00:26:00.400 | We were aware of an individual, and we were kind of brought into the fray a little late to do anything,

00:26:06.400 | but we were aware of an individual who had bought bus shelters inside of his IRA.

00:26:13.400 | Bus shelters?

00:26:15.400 | Yes, it's an interesting business.

00:26:17.400 | He bought bus shelters and sold advertising off of them.

00:26:19.400 | Interesting. Okay, go ahead.

00:26:21.400 | So that's his business, and he did very well at it.

00:26:25.400 | He seemed to grow his assets quite substantially.

00:26:31.400 | And this individual is the engineer type, you know, dots every I, crosses every T, knows every rule inside and out.

00:26:41.400 | I mean, this guy, you know, he didn't make mistakes.

00:26:44.400 | And unfortunately, it wasn't his mistake that was the problem because he followed the rules.

00:26:50.400 | But at the time, what was required was a qualified custodian.

00:26:55.400 | And what he used was an individual who said he was a qualified custodian,

00:26:59.400 | but in actuality he wasn't.

00:27:01.400 | And what happened was the, I think the IRS, maybe it was another federal agency,

00:27:08.400 | but I think it was the IRS, had basically caught him defrauding people.

00:27:16.400 | And of course what they do is they don't catch you when you make a mistake.

00:27:21.400 | They catch somebody else, and then they go through their list.

00:27:24.400 | They say, "Oh, look at all these people who this guy's got over.

00:27:27.400 | Let's see who we can add to our list of people we can get tax dollars from."

00:27:33.400 | So in going down the list, they said, "Oh, here's one guy.

00:27:36.400 | He didn't use a qualified custodian."

00:27:38.400 | And they took him to court over it.

00:27:40.400 | And of course, you know, this guy totally was defrauded.

00:27:43.400 | It wasn't his fault.

00:27:45.400 | And it ended up that this guy had millions in his IRA.

00:27:53.400 | It might have been over $10,000, I don't remember.

00:27:55.400 | I think it's public record.

00:27:58.400 | And basically he ended up losing it all because what happens is when you create

00:28:03.400 | a prohibited transaction today and they don't find out about it for 10 years,

00:28:09.400 | the IRS looks at that prohibited transaction and says, "Okay, that's a distribution."

00:28:15.400 | So as of this year, you owe us taxes and penalties on all of the funds

00:28:20.400 | that you've taken out.

00:28:22.400 | Of course, you didn't know that.

00:28:23.400 | So we're talking 10 years later, all of those taxes and penalties and interest

00:28:28.400 | accrue and ended up with this guy lost everything.

00:28:34.400 | And out of sheer goodwill from the judge who just felt sorry for him,

00:28:41.400 | he said, "I'll give you a one-time tax-free transfer of $1 million into a Roth IRA."

00:28:48.400 | Wow.

00:28:49.400 | So he said, "Look, you can start again."

00:28:52.400 | I laughed thinking about it, like, "Wow, that's a nice gesture."

00:28:56.400 | But if this guy had $10 million-plus and he's getting $1 million,

00:29:00.400 | that's still a kick in the gut.

00:29:03.400 | Wow.

00:29:05.400 | But the point is he would have lost everything in his IRA because of a mistake

00:29:09.400 | that he technically made but wasn't his fault.

00:29:13.400 | So if you can imagine that that's how harsh they are on people like that,

00:29:16.400 | imagine how harsh they're going to be on somebody who is deliberately breaking the rules.

00:29:20.400 | Absolutely.

00:29:22.400 | So it's very important that people understand that the rules are--they need to be obeyed.

00:29:32.400 | So, for instance, one type of transaction is if you own a rental property,

00:29:42.400 | you cannot rent it out to a disqualified person.

00:29:45.400 | And a disqualified person would be somebody who is in your immediate family,

00:29:49.400 | so it would be your lineal ascendants and descendants.

00:29:56.400 | And so if you rent the place out to your mother or your son or daughter,

00:30:02.400 | that's a prohibited transaction.

00:30:05.400 | If the roof leaks or the toilet breaks and you go fix it, that's a prohibited transaction.

00:30:13.400 | If you go fix it yourself because you're not--explain that one.

00:30:16.400 | If you go fix it yourself and you don't hire it done, that's what you're referring to?

00:30:20.400 | Right.

00:30:22.400 | You can do what they call a settler function.

00:30:24.400 | You can pay the bills.

00:30:26.400 | You can pay taxes.

00:30:28.400 | You can hire people.

00:30:30.400 | But you can't do what they call sweat equity.

00:30:33.400 | You can't swing a hammer or paint the fence.

00:30:38.400 | That's sweat equity, and they don't allow that because they couldn't value it.

00:30:42.400 | So that's why they don't allow it.

00:30:45.400 | So effectively, you have to be cautious of that.

00:30:50.400 | If you have hunting land, you can't go hunt on your own land.

00:30:55.400 | You basically can't take a personal benefit from your IRA.

00:31:00.400 | You have to look at your IRA as a local neighbor that you really don't like,

00:31:06.400 | and you would treat that IRA in the same way you would treat that person.

00:31:09.400 | So you wouldn't give them money.

00:31:12.400 | You wouldn't expect them to give you money.

00:31:14.400 | You wouldn't expect them to let you use their car.

00:31:18.400 | These type of things, you have to consider it as a completely separate entity and person,

00:31:23.400 | and you cannot take personal benefit from that IRA, even though technically you have control over it.

00:31:31.400 | So those are important considerations, and there are certain things that can be done.

00:31:38.400 | For instance, if somebody wanted to buy a property and rent it out for 10 years

00:31:43.400 | and eventually retire there, they could take a distribution of that property and then use it.

00:31:50.400 | But during the time that it's in the IRA, it can't be done.

00:31:54.400 | And, you know, in the case of real estate, if you have a property and you do need a roof,

00:32:01.400 | and you don't want to have an IRA worth $100,000 and you spend that entire $100,000 on a piece of property,

00:32:08.400 | and then the roof breaks and costs you, say, $10,000, that has to come from the IRA.

00:32:14.400 | It can't come from your pocket.

00:32:16.400 | So you have to consider the fact that if you're buying it out of your pocket,

00:32:23.400 | you have no cash to spend on the roof.

00:32:28.400 | It's the same consideration. You have to find some place to get it.

00:32:34.400 | So I think things like that are important to understand about the self-directed IRA,

00:32:39.400 | is that people have to think through all the different risks and things that can happen with their investments

00:32:47.400 | and really just make sure that they're following the rules.

00:32:51.400 | And the rules are not complex.

00:32:54.400 | There are exceptions to a lot of areas, but as long as somebody is not trying to get too tricky with their investment,

00:33:03.400 | it's generally really easy to follow the rules.

00:33:07.400 | So you keep referring to self-directed IRA, but obviously there are multiple types of IRAs,

00:33:16.400 | and then there are various other types of accounts that can also be self-directed.

00:33:21.400 | What are the different types of accounts with which you can set up a self-directed strategy

00:33:26.400 | to have a bit more flexibility in your investment plan, and what are the ones that you're not able to set up?

00:33:35.400 | Okay, so when I refer to a self-directed IRA, that has a broad scope.

00:33:42.400 | So that includes the traditional IRA, the Roth IRA, Simple IRA, SIP IRA,

00:33:48.400 | Coverdell Education Savings Account, and the -- well, I should say the Coverdell and the HSA,

00:33:59.400 | Health Savings Account, are a little bit different.

00:34:01.400 | But it also includes 401(k) plans.

00:34:05.400 | So typically the traditional and the Roth IRA and the SIP and the Simple IRAs more or less have the same rules

00:34:15.400 | when it comes to investments.

00:34:18.400 | The Coverdell and the HSAs are a little bit different.

00:34:23.400 | Unfortunately, due to some of the way that they're structured, it makes it hard to use them for alternative investments.

00:34:34.400 | Like, for instance, the Coverdell Education Savings Account, the annual contribution limit is $2,000.

00:34:40.400 | So it kind of limits what can be invested in there just by sheer nature of the amount of assets that you have to get in there to grow it.

00:34:50.400 | Now, I've seen people take small amounts of money and turn it into large amounts of money.

00:34:56.400 | I actually wrote a piece about this, about the $100 million IRA, which we can talk about later.

00:35:02.400 | It can be done, and creatively you can certainly amplify returns if you know what you're doing.

00:35:10.400 | But the HSA, unfortunately, as great of a structure as it is, effectively you're contributing pre-tax money.

00:35:20.400 | Assuming you have a high-deductible health plan, you can set one of these up, you contribute at pre-tax,

00:35:28.400 | and the money comes out tax-free as long as it's used for medical expenses, which is great.

00:35:35.400 | It's the best thing I've seen when it comes to account structures.

00:35:38.400 | Unfortunately, due to all the paperwork required by the custodians, very few custodians have these.

00:35:50.400 | I've found some at a local bank that are really, you know, they don't cost money, they're free, or they're low fees.

00:35:58.400 | Some brokerage houses have them with only mutual funds as an option.

00:36:04.400 | But with most of the self-directed IRA custodians, most of them have just said no because the paperwork is just too costly for them to do.

00:36:13.400 | Also, the market isn't big enough. There just aren't enough people who have enough assets saved to make it worthwhile for them.

00:36:20.400 | So that's unfortunate, and I really hope that changes because that is a great account for people to use.

00:36:27.400 | And then there's the 401(k), which is very similar to the self-directed IRA,

00:36:32.400 | but the self-directed 401(k) also has some other benefits to it, certainly higher contribution limits and some other pieces as well.

00:36:42.400 | Unfortunately, with the 401(k), it really is more geared towards somebody who is in control of their company.

00:36:51.400 | So if somebody has their own business and maybe works with a spouse, they can set up a solo pay,

00:36:58.400 | but if they work for a company of 50, 100 people and it's not their company,

00:37:04.400 | then there's probably very little they can do to expand beyond the traditional options of mutual funds.

00:37:10.400 | I've found it's hard to twist the arm of the higher-ups unless they personally see a benefit in doing it for themselves.

00:37:21.400 | I can't even imagine the scenario in which I, if I were the CEO of a 30-person company,

00:37:31.400 | that I would permit this degree of flexibility in a 401(k) plan.

00:37:36.400 | Just the responsibility, the level of sophistication needed to invest successfully here,

00:37:43.400 | and just the level of self-responsibility, I can't imagine authorizing it.

00:37:50.400 | I wouldn't do it. I would offer a menu of straightforward mutual funds.

00:37:54.400 | I mean, am I wrong? I just can't imagine.

00:37:58.400 | I see so many mistakes made with straightforward mutual funds that for me to give a degree of...

00:38:07.400 | I've worked with some clients who are attorneys, and I looked at their accounts,

00:38:14.400 | and they permitted some self-direction, primarily individual stocks.

00:38:18.400 | And I mean, the majority of people get hammered on those things.

00:38:21.400 | And I can't imagine being convinced that it would be in the best interest of my employees

00:38:26.400 | unless all 30 of my employees were--unless we were doing a private equity group,

00:38:31.400 | and my name is Mitt Romney, and I know my guys are all experts. Am I wrong?

00:38:37.400 | Well, I think that you're--I mean, you really hit the nail on the head,

00:38:41.400 | because what I've found is that with many companies, there's a few dynamics at work.

00:38:47.400 | The first is the hurting behavior.

00:38:50.400 | So just like mutual fund managers, most HR--heads of HR or plan trustees--are worried about their own tail,

00:39:01.400 | and they have liability issues.

00:39:03.400 | So the way they look at it is, "Well, if I offer 10 different mutual funds,

00:39:08.400 | then my liability is really, really low because everybody else is doing it."

00:39:13.400 | Exactly.

00:39:14.400 | I mean, it's the right thing, but if everybody else is doing it, I can hide in the herd of sheep,

00:39:19.400 | and I won't get in trouble.

00:39:21.400 | And, you know, there's some--I mean, you know, most--the other thing is,

00:39:26.400 | most of these people that work at corporations, larger corporations or mid-sized corporations,

00:39:33.400 | most of them are not financial professionals.

00:39:36.400 | They're not astute investors.

00:39:39.400 | They're doing what they're told or what has been told through, you know, their own education.

00:39:44.400 | I mean, you know, the HR professionals have some education, this degree,

00:39:48.400 | but they're not financial professionals, so they don't know one mutual fund from another.

00:39:53.400 | They don't know how to research them and dissect them and know, you know, which one's better and which one's worse.

00:39:59.400 | So, you know, I can't completely blame them because it's not their professional expertise,

00:40:05.400 | but on the other hand, they are offering options to people that--

00:40:11.400 | a perfect example, it's--and I see this way too frequently, in that there are five to ten offerings.

00:40:20.400 | Many times, most of them are the same asset class.

00:40:25.400 | And, you know, they--you know, even if they have an S&P 500 index fund, it would be much cheaper to use an ETF.

00:40:33.400 | You could do the same thing, accomplish the same goals,

00:40:36.400 | but it's--there are certain standards in the industry that are accepted and for many reasons,

00:40:42.400 | they continue on along that path.

00:40:45.400 | So I think with an alternative, with a 401(k) plan, it's obviously a lot more complicated

00:40:53.400 | because in the real issue for, let's say, a 20-person company,

00:40:57.400 | and they've got 15 people that are really knowledgeable about that one investment,

00:41:02.400 | let's just say they were going to buy the building that they're renting.

00:41:06.400 | So they have the office space, they're going to buy that building,

00:41:09.400 | and they're going to rent from themselves, and they're going to also rent it to, you know,

00:41:14.400 | ten other unit owners or however many people in the building.

00:41:17.400 | And they want to do it within their 401(k) plan.

00:41:20.400 | So people at the company know the building, they know the other tenants, and they're comfortable with it.

00:41:25.400 | The problem isn't the knowledgeable people.

00:41:29.400 | The problem is there's always, let's say, one or two, let's say, lower-end people, maybe,

00:41:34.400 | not an intern per se, but somebody out of college, or maybe, you know,

00:41:38.400 | a secretary that doesn't really follow the company's business or, you know, is maybe new.

00:41:43.400 | But, you know, there's people that are less knowledgeable about the business itself,

00:41:47.400 | and those are the people that you also have to cater to.

00:41:52.400 | I don't want to call it the lowest common denominator,

00:41:55.400 | but that's what the rules require you to adhere to is that everybody, you know,

00:42:02.400 | follows under the same rules.

00:42:04.400 | So you couldn't offer an alternative investment plan to only three people out of 20.

00:42:11.400 | That would be against the rules that would not be allowed.

00:42:15.400 | You would have to offer it to all 20.

00:42:17.400 | Now, they don't all have to invest in it, but it has to be offered to everybody.

00:42:21.400 | And then, of course, you know, it's the last thing the plan trustee wants is someone to come in

00:42:27.400 | and say, "Hey, what about this person?

00:42:29.400 | This could be an issue," but it's only an issue when something goes wrong, right?

00:42:34.400 | It's a different issue when people make mistakes.

00:42:38.400 | So, you know, that's one of the issues.

00:42:40.400 | I mean, we do see it frequently where a lot of professional service groups, doctors,

00:42:45.400 | dentists, accountants, attorneys, you know, they have their own practice,

00:42:51.400 | and a lot of them, you know, buy their own building or, you know,

00:42:55.400 | some real estate where they can rent out.

00:42:57.400 | And that's a very common investment for those people just because of their location.

00:43:03.400 | And it's a little bit easier to do that, but, you know,

00:43:07.400 | if somebody wanted to invest in physical gold coins or horses,

00:43:12.400 | it's a little bit further of a stretch that that's an acceptable investment

00:43:16.400 | unless everybody really has the same background and expertise.

00:43:21.400 | So that is one of the downsides of the 401(k) with alternatives is it's a lot harder

00:43:26.400 | to make those things work appropriately for everybody.

00:43:31.400 | But, you know, certainly you can--you know, there are ways that you can do it.

00:43:37.400 | You just have to be really, really careful.

00:43:40.400 | And, you know, if you have a solo pay or a smaller company,

00:43:43.400 | it's a lot easier to work with that because, you know, if you're a solo pay,

00:43:48.400 | you've got yourself and your spouse.

00:43:50.400 | You don't have to worry too much about the other parties.

00:43:53.400 | That's exactly where I was going to go is I see the real benefit here.

00:43:57.400 | Although it is nice if you could get a professional practice group together

00:44:02.400 | and if it were structured in such a way that there could be enough agreement

00:44:05.400 | that an alternative investment could work.

00:44:08.400 | But if you take a highly productive--something like a consulting firm

00:44:13.400 | or, you know, even a blog, you know, some of the very small businesses

00:44:20.400 | where a solo pay can work, I mean, you can put--and especially husband and wife.

00:44:26.400 | Like if my business were financially productive enough

00:44:29.400 | and my wife and I are the only employees and we set one of these things up

00:44:34.400 | and I put $50,000 in for me and we write the documents

00:44:37.400 | and she could put $50,000 in for her,

00:44:39.400 | now I've got $100,000 a year that I can get into the account

00:44:43.400 | with my contributions and my deferrals.

00:44:48.400 | Now all of a sudden I can start to get some money here

00:44:51.400 | and we can start to have some fun with the investment allocation there.

00:44:55.400 | Or the people who are coming from a firm and now we've got a large IRA balance

00:45:01.400 | and we want to take, you know, $300,000 or half a million

00:45:04.400 | and this is the money that we're going to keep in a separate self-directed IRA

00:45:08.400 | and employ it strategically.

00:45:10.400 | That's where I see the real opportunity.

00:45:13.400 | Right, and I think that's certainly the easier scenario to work with.

00:45:19.400 | I mean, you know, I know we get calls frequently from people with smaller amounts

00:45:25.400 | that are trying to do something big with them.

00:45:28.400 | And, you know, from a fee perspective, from the custodian, it can be a challenge.

00:45:32.400 | You know, if you have $10,000 and you're looking to invest in small partners,

00:45:37.400 | you really have to make the performance higher to account for the fees

00:45:43.400 | because it's not like a brokerage account, e-trade or a merit trade

00:45:47.400 | or fidelity where it might be a $10 trade.

00:45:50.400 | You know, they charge us a percentage of assets

00:45:54.400 | or they charge it per transaction or both.

00:45:59.400 | And there are many different fee models, so depending on if you're going to buy

00:46:02.400 | and hold something for 20 years, you might want the transaction model,

00:46:06.400 | whereas if you're doing 20 transactions a month, you might want the fee model.

00:46:11.400 | So it would depend on what you're doing, but I think that that's--you're right.

00:46:17.400 | It definitely is a better type of setup for highly compensated people

00:46:24.400 | that are also highly educated.

00:46:27.400 | And you mentioned before--and I'll pick you up on this on Mitt Romney--

00:46:32.400 | that the GAO, the Government Accountability Office, they had done a study a few months back.

00:46:43.400 | And this study basically said that there are--let me pull it up here.

00:46:51.400 | There are 314 people in the U.S. that have an IRA of over $25 million.

00:46:58.400 | And there are 791 between $10 and $25 million,

00:47:03.400 | and there are a little under 8,000 people between $5 and $10 million.

00:47:09.400 | And this is out of 42, 43 million people.

00:47:14.400 | So there are very few people--and, you know, it's rare that I've seen

00:47:20.400 | an IRA over $2 million because it's just--back in the late '90s you saw it quite frequently,

00:47:25.400 | but now you don't see it as frequently.

00:47:29.400 | And when Mitt Romney ran for president a few years back because of his disclosures,

00:47:35.400 | it came out that he has an IRA of over $102,104 million.

00:47:43.400 | Now you'd say, you know, that's crazy. How is that possible?

00:47:47.400 | And I think there are a few different subtleties that I think he took advantage of

00:47:52.400 | that are completely legal.

00:47:55.400 | But I think also, I mean, you know, he--this gets back to the invest and what you know philosophy--

00:48:02.400 | is that, you know, he was investing in private equity bills as a gain capital.

00:48:06.400 | He had access to a lot of different deals because of his position.

00:48:12.400 | His firm did a lot of deals. And one of the benefits of the self-directed IRA is you can--

00:48:19.400 | if you really understand how the rules work and you have access to really good investments,

00:48:25.400 | you can be creative and really amp up your returns.

00:48:29.400 | And this is not saying that everybody should do this because not everybody is an expert in every area,

00:48:34.400 | but, you know, with the private equity deals, I think what he--a lot of what he was doing,

00:48:41.400 | it would require him if he maxed out every year based on his employment,

00:48:45.400 | he would have to get about 20% returns a year, which isn't that much,

00:48:49.400 | considering some of those deals, you know, prove hundreds of percents of return.

00:48:55.400 | So I think that, you know, if he can do that with--and I think that's obviously an extreme.

00:49:01.400 | That's an extreme end of the spectrum. There's probably not too many people who have done more.

00:49:06.400 | Peter Peerfield, one of the original investors in Facebook, and people who have read the book

00:49:13.400 | or watched the movie, "The Social Network," it's--you know, he was the original investor.

00:49:21.400 | And he's--I mean, his name's been out there. I think people have heard of him before.

00:49:26.400 | Right.

00:49:27.400 | He did--similar, he invested in Facebook with his Roth IRA when it was, you know, pennies a share.

00:49:33.400 | So, you know, here's a guy who's made tens of millions of dollars in his Roth IRA from one investment.

00:49:40.400 | So it's plausible that these people can, you know, generate large returns inside of a tax-free

00:49:47.400 | or tax-deferred account. But it doesn't mean that other people can't do something similar.

00:49:52.400 | I mean, you don't need to make $100 million. You can make $1 million if you invest prudently

00:49:58.400 | over a number of years. And you contribute, obviously. Contributions are a big part of it.

00:50:04.400 | So I think it's--there are certain types of professions that have access to certain--

00:50:13.400 | certain professions have access to certain types of investments.

00:50:16.400 | I'll give you another example. We had a client who had a farm in Pennsylvania, and he trained corsage horses.

00:50:23.400 | Nobody--if you haven't heard of corsage horses, you won't be long, because I hadn't either before this.

00:50:28.400 | These are the type of horses that dance. So there's a certain type of horse that dance.

00:50:37.400 | You know, it was--I wasn't involved with this transaction per se, but I found it to be extremely interesting.

00:50:45.400 | Right.

00:50:46.400 | So they would--so the farm, they would buy the horses from over in Europe, and they would train them,

00:50:50.400 | and they would sell them to very, very, very rich people.

00:50:55.400 | And, you know, the returns they'd get on that horse were, you know, quite substantial.

00:51:02.400 | But this is something they knew. This was their business. This was their bread and butter.

00:51:05.400 | So they understood the transaction. They figured, well, if I could do this inside of a Roth IRA,

00:51:10.400 | why wouldn't I?

00:51:12.400 | So I think many people have the opportunity to consider different investments that they know well

00:51:21.400 | and would have probably a lower risk in because they understand it better than most people.

00:51:27.400 | So I think that's really a key important component of, you know, of investing.

00:51:33.400 | Well, it doesn't have to be a self-directed IRA. It could be traditional investments.

00:51:36.400 | It doesn't really matter as long as you understand the investments well. That's really the important piece.

00:51:41.400 | Yeah. I couldn't stand the criticism that Romney got at that time.

00:51:51.400 | I get so frustrated by the political commentary.

00:51:54.400 | We all have exactly the same tax code.

00:51:57.400 | There's no special tax code for Mitt Romney versus tax code for Joshua Sheets.

00:52:02.400 | We all function under the identical tax code.

00:52:05.400 | And the question is, how much work are we able to put in to understanding a certain part of the market,

00:52:11.400 | to finding something that we can exploit an opportunity in,

00:52:15.400 | and/or how much money do we have to pay smart people to sit down and figure out solutions for us?

00:52:21.400 | And we all are dealing with exactly the same tax code.

00:52:24.400 | It frustrates me so much, and I know it's a dead end when we get into politics,

00:52:27.400 | but no matter how things are written, unless you just simply remove all of the rules

00:52:34.400 | and make things so dirt simple that it's not worth it to do all the work to try to find something different,

00:52:43.400 | the rich are always going to get better returns than the poor,

00:52:46.400 | because the rich can afford to pay people like you and me,

00:52:49.400 | and people ten times smarter than us, and ten times more well-versed in the law than us,

00:52:54.400 | to sit and read the code, and go through 70,000 pages,

00:52:58.400 | and find the way that things can be structured creatively.

00:53:02.400 | We all have the same opportunities, is my point.

00:53:06.400 | Now, certainly, I'm not saying that we all have the same opportunity as accredited investors,

00:53:12.400 | as part of a private equity firm, today, to go in and start structuring deals,

00:53:18.400 | and understand someone who can do discounted shares for limited marketability,

00:53:23.400 | and figure out how to do some carried interest and transfer that interest over into the--

00:53:27.400 | I'm not saying we all have that opportunity,

00:53:29.400 | but there's no reason why any single person listening couldn't be there in 15 or 20 years if they wanted to.

00:53:35.400 | That's my point.

00:53:37.400 | I would agree with you wholeheartedly.

00:53:39.400 | I think that one of the nice parts about this country is the opportunity,

00:53:44.400 | and there are a lot of tax-advantaged investment types.

00:53:50.400 | If you look at MLPs or REITs or a host of different things that can be done,

00:53:55.400 | there's no one solution.

00:53:57.400 | And you're right, the wealthy have access to better advisors, because better advisors cost more.

00:54:03.400 | Most people couldn't afford to pay them, but the Internet is a wonderful thing.

00:54:09.400 | If you look 20 years ago, you probably had to go to the library to find these things.

00:54:16.400 | I don't even remember that far back.

00:54:18.400 | But right now with the Internet, you can find the answers to most of this stuff.

00:54:23.400 | It's available online.

00:54:25.400 | You may not be able to easily find an attorney that can craft the perfect contract for you

00:54:32.400 | that will get you what you want, but there are rules that anybody can find.

00:54:38.400 | And the way that our tax code is structured obviously benefits the rich to some extent,

00:54:44.400 | even though they do pay higher taxes.

00:54:47.400 | But the benefits are there because they pay higher taxes.

00:54:50.400 | I don't buy that.

00:54:52.400 | And if you can prove that to me--I know that's the politically correct thing to say--

00:54:56.400 | but if you can prove that to me, I'll buy it.

00:54:58.400 | But every single loophole in the tax code benefits the poor.

00:55:03.400 | The entire thing is structured to benefit the poor.

00:55:06.400 | And I mean, I can't find--I'm not an expert at tax,

00:55:11.400 | but I've been studying it and studying it and studying it and studying it,

00:55:15.400 | and all I find is exactly the same law applied to every class, to every income class,

00:55:23.400 | or extra benefits to low-income earners.

00:55:27.400 | I mean, do you see something different than I do?

00:55:31.400 | No, I would agree with you, although I will point out that I think you were the first person

00:55:35.400 | to ever call me politically correct.

00:55:37.400 | Okay.

00:55:39.400 | I've never been accused of that before.

00:55:41.400 | That's one thing I could say that's probably below on the list.

00:55:45.400 | But, no, I would agree with you.

00:55:47.400 | I think that everything is available to everybody.

00:55:51.400 | There's nothing saying that unless you make this amount of money you can't participate in this.

00:55:57.400 | A lot of this is attributable to scale.

00:56:01.400 | And I think one of the unfortunate parts about our country is our media tends to exaggerate things

00:56:09.400 | to get a reaction out of people which doesn't need to be there.

00:56:14.400 | So, for instance, taking a fact of, you know, this amount of people--you know,

00:56:21.400 | I'm trying to remember the fact.

00:56:23.400 | It was maybe like probably the last election that's just when this stuff comes up.

00:56:28.400 | They were looking at what percentage of the population pays what percent of taxes.

00:56:32.400 | Right.

00:56:33.400 | And they said, well, you know, the 5% of the population pays like 85% of the tax

00:56:37.400 | or whatever it was.

00:56:38.400 | But when you actually dig into the numbers and look at what they're saying, it's not really true.

00:56:43.400 | What they're doing is taking one point, blowing it out of proportion,

00:56:46.400 | and people just eat it up.

00:56:48.400 | They just assume it's true.

00:56:49.400 | They don't bother to research it and look through it and say, well, actually,

00:56:52.400 | it's not true based on this, this, and this.

00:56:55.400 | So I do agree with you.

00:56:57.400 | I think opportunity is available to everybody.

00:56:59.400 | And it really comes down to people who are smart enough and have enough tenacity to go look for these things.

00:57:09.400 | You know, and as I said, the internet is a wonderful thing.

00:57:13.400 | It's there as a resource tool.

00:57:16.400 | I mean, there's a lot of garbage out there, but there's certainly a lot of great information.

00:57:20.400 | I mean, the IRS has everything online.

00:57:23.400 | You know, the University of Cornell has all of the tax--all of the laws online.

00:57:28.400 | The information is there.

00:57:30.400 | It's not hidden from people.

00:57:32.400 | You can easily find this stuff.

00:57:34.400 | You don't even have to go to a library anymore.

00:57:37.400 | So, you know, the tax code is certainly not my forte.

00:57:41.400 | I mean, we know the areas that we specialize in, but, you know,

00:57:45.400 | there's a lot of areas that people get paid very good money to be experts in,

00:57:51.400 | and, you know, that's what experts are for, right?

00:57:53.400 | They specialize and they're there to help people who want certain things in that area.

00:57:59.400 | You know, I don't mind having a good debate with somebody over a certain policy objective,

00:58:04.400 | but I can't stand it when a debate is predicated based on lies.

00:58:08.400 | And that's what I find so frustrating, is that we have a majority of our population--

00:58:13.400 | and this is my data, not anything I'm citing--

00:58:16.400 | a majority of our population is massively ignorant when it comes to tax law.

00:58:21.400 | I have asked hundreds of people, "How much did you pay in income tax last year?"

00:58:26.400 | And the vast majority of them immediately say, "Oh, I got back, you know, about $500."

00:58:33.400 | I say, "No, how much did you pay in income tax last year?"

00:58:38.400 | "Oh, I don't know."

00:58:40.400 | And I have not yet met in the years that I've been doing this,

00:58:45.400 | the hundreds of people I've talked to, I've not yet met the employee--

00:58:49.400 | and the business owners know this number--

00:58:51.400 | but the employee that can tell me how much of their paycheck on a percentage basis

00:58:55.400 | is deducted for their employment taxes.

00:58:58.400 | And so when you're wandering away,

00:59:01.400 | and you lose 7.65% of your income as an employee right off the top,

00:59:08.400 | and you don't even know what that number is,

00:59:10.400 | and we're all bickering about how do I get a 2% raise,

00:59:13.400 | you're losing 7.65% of your income right off the top

00:59:17.400 | and you don't even know what that number is,

00:59:19.400 | you're losing 7.65% of your income right off the top.

00:59:22.400 | And so you're losing 7.65% of your income right off the top.

00:59:26.400 | And so you're losing 7.65% of your income right off the top.

00:59:29.400 | And so you're losing 7.65% of your income right off the top.

00:59:32.400 | And so you're losing 7.65% of your income right off the top.

00:59:35.400 | And so you're losing 7.65% of your income right off the top.

00:59:38.400 | And so you're losing 7.65% of your income right off the top.

00:59:41.400 | And so you're losing 7.65% of your income right off the top.

00:59:44.400 | And so you're losing 7.65% of your income right off the top.

00:59:47.400 | And so you're losing 7.65% of your income right off the top.

00:59:50.400 | And so you're losing 7.65% of your income right off the top.

00:59:53.400 | And so you're losing 7.65% of your income right off the top.

00:59:56.400 | And so you're losing 7.65% of your income right off the top.

00:59:59.400 | And so you're losing 7.65% of your income right off the top.

01:00:02.400 | And so you're losing 7.65% of your income right off the top.

01:00:05.400 | And so you're losing 7.65% of your income right off the top.

01:00:08.400 | And so you're losing 7.65% of your income right off the top.

01:00:11.400 | And so you're losing 7.65% of your income right off the top.

01:00:14.400 | And so you're losing 7.65% of your income right off the top.

01:00:17.400 | And so you're losing 7.65% of your income right off the top.

01:00:20.400 | And so you're losing 7.65% of your income right off the top.

01:00:23.400 | And so you're losing 7.65% of your income right off the top.

01:00:26.400 | And so you're losing 7.65% of your income right off the top.

01:00:29.400 | And so you're losing 7.65% of your income right off the top.

01:00:32.400 | And so you're losing 7.65% of your income right off the top.

01:00:35.400 | And so you're losing 7.65% of your income right off the top.

01:00:38.400 | And so you're losing 7.65% of your income right off the top.

01:00:41.400 | And so you're losing 7.65% of your income right off the top.

01:00:44.400 | And so you're losing 7.65% of your income right off the top.

01:00:47.400 | And so you're losing 7.65% of your income right off the top.

01:00:50.400 | And so you're losing 7.65% of your income right off the top.

01:00:53.400 | And so you're losing 7.65% of your income right off the top.

01:00:56.400 | And so you're losing 7.65% of your income right off the top.

01:00:59.400 | And so you're losing 7.65% of your income right off the top.

01:01:02.400 | And so you're losing 7.65% of your income right off the top.

01:01:05.400 | And so you're losing 7.65% of your income right off the top.

01:01:08.400 | And so you're losing 7.65% of your income right off the top.

01:01:11.400 | And so you're losing 7.65% of your income right off the top.

01:01:14.400 | And so you're losing 7.65% of your income right off the top.

01:01:17.400 | And so you're losing 7.65% of your income right off the top.

01:01:20.400 | And so you're losing 7.65% of your income right off the top.

01:01:23.400 | And so you're losing 7.65% of your income right off the top.

01:01:26.400 | And so you're losing 7.65% of your income right off the top.

01:01:29.400 | And so you're losing 7.65% of your income right off the top.

01:01:32.400 | And so you're losing 7.65% of your income right off the top.

01:01:35.400 | And so you're losing 7.65% of your income right off the top.

01:01:38.400 | And so you're losing 7.65% of your income right off the top.

01:01:41.400 | And so you're losing 7.65% of your income right off the top.

01:01:44.400 | And so you're losing 7.65% of your income right off the top.

01:01:47.400 | And so you're losing 7.65% of your income right off the top.

01:01:50.400 | And so you're losing 7.65% of your income right off the top.

01:01:53.400 | And so you're losing 7.65% of your income right off the top.

01:01:56.400 | And so you're losing 7.65% of your income right off the top.

01:01:59.400 | And so you're losing 7.65% of your income right off the top.

01:02:02.400 | And so you're losing 7.65% of your income right off the top.

01:02:05.400 | And so you're losing 7.65% of your income right off the top.

01:02:08.400 | And so you're losing 7.65% of your income right off the top.

01:02:11.400 | And so you're losing 7.65% of your income right off the top.

01:02:14.400 | And so you're losing 7.65% of your income right off the top.

01:02:17.400 | And so you're losing 7.65% of your income right off the top.

01:02:20.400 | And so you're losing 7.65% of your income right off the top.

01:02:23.400 | And so you're losing 7.65% of your income right off the top.

01:02:26.400 | And so you're losing 7.65% of your income right off the top.

01:02:29.400 | And so you're losing 7.65% of your income right off the top.

01:02:32.400 | And so you're losing 7.65% of your income right off the top.

01:02:35.400 | And so you're losing 7.65% of your income right off the top.

01:02:38.400 | And so you're losing 7.65% of your income right off the top.

01:02:41.400 | And so you're losing 7.65% of your income right off the top.

01:02:44.400 | And so you're losing 7.65% of your income right off the top.

01:02:47.400 | And so you're losing 7.65% of your income right off the top.

01:02:50.400 | And so you're losing 7.65% of your income right off the top.

01:02:53.400 | And so you're losing 7.65% of your income right off the top.

01:02:56.400 | And so you're losing 7.65% of your income right off the top.

01:02:59.400 | And so you're losing 7.65% of your income right off the top.

01:03:02.400 | And so you're losing 7.65% of your income right off the top.

01:03:05.400 | And so you're losing 7.65% of your income right off the top.

01:03:08.400 | And so you're losing 7.65% of your income right off the top.

01:03:11.400 | And so you're losing 7.65% of your income right off the top.

01:03:14.400 | And so you're losing 7.65% of your income right off the top.

01:03:17.400 | And so you're losing 7.65% of your income right off the top.

01:03:20.400 | And so you're losing 7.65% of your income right off the top.

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01:03:26.400 | And so you're losing 7.65% of your income right off the top.

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01:03:35.400 | And so you're losing 7.65% of your income right off the top.

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01:03:41.400 | And so you're losing 7.65% of your income right off the top.

01:03:44.400 | And so you're losing 7.65% of your income right off the top.

01:03:47.400 | And so you're losing 7.65% of your income right off the top.

01:03:50.400 | And so you're losing 7.65% of your income right off the top.

01:03:53.400 | And so you're losing 7.65% of your income right off the top.

01:03:56.400 | And so you're losing 7.65% of your income right off the top.

01:03:59.400 | And so you're losing 7.65% of your income right off the top.

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01:04:35.400 | And so you're losing 7.65% of your income right off the top.

01:04:38.400 | And so you're losing 7.65% of your income right off the top.

01:04:41.400 | And so you're losing 7.65% of your income right off the top.

01:04:44.400 | And so you're losing 7.65% of your income right off the top.

01:04:47.400 | And so you're losing 7.65% of your income right off the top.

01:04:50.400 | And so you're losing 7.65% of your income right off the top.

01:04:53.400 | And so you're losing 7.65% of your income right off the top.

01:04:56.400 | And so you're losing 7.65% of your income right off the top.

01:04:59.400 | And so you're losing 7.65% of your income right off the top.

01:05:02.400 | And so you're losing 7.65% of your income right off the top.

01:05:05.400 | And so you're losing 7.65% of your income right off the top.

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01:05:50.400 | And so you're losing 7.65% of your income right off the top.

01:05:53.400 | And so you're losing 7.65% of your income right off the top.

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01:05:59.400 | And so you're losing 7.65% of your income right off the top.

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01:09:53.400 | And so you're losing 7.65% of your income right off the top.

01:09:56.400 | And so you're losing 7.65% of your income right off the top.

01:09:59.400 | And so you're losing 7.65% of your income right off the top.

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01:10:11.400 | And so you're losing 7.65% of your income right off the top.

01:10:14.400 | And so you're losing 7.65% of your income right off the top.

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01:10:23.400 | And so you're losing 7.65% of your income right off the top.

01:10:26.400 | And so you're losing 7.65% of your income right off the top.

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01:10:32.400 | And so you're losing 7.65% of your income right off the top.

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01:10:41.400 | And so you're losing 7.65% of your income right off the top.

01:10:44.400 | And so you're losing 7.65% of your income right off the top.

01:10:47.400 | And so you're losing 7.65% of your income right off the top.

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01:10:59.400 | And so you're losing 7.65% of your income right off the top.

01:11:02.400 | And so you're losing 7.65% of your income right off the top.

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01:11:08.400 | And so you're losing 7.65% of your income right off the top.

01:11:11.400 | And so you're losing 7.65% of your income right off the top.

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01:11:23.400 | And so you're losing 7.65% of your income right off the top.

01:11:26.400 | And so you're losing 7.65% of your income right off the top.

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01:11:32.400 | And so you're losing 7.65% of your income right off the top.

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01:11:38.400 | And so you're losing 7.65% of your income right off the top.

01:11:41.400 | And so you're losing 7.65% of your income right off the top.

01:11:44.400 | And so you're losing 7.65% of your income right off the top.

01:11:47.400 | And so you're losing 7.65% of your income right off the top.

01:11:50.400 | And so you're losing 7.65% of your income right off the top.

01:11:53.400 | And so you're losing 7.65% of your income right off the top.

01:11:56.400 | And so you're losing 7.65% of your income right off the top.

01:11:59.400 | And so you're losing 7.65% of your income right off the top.

01:12:02.400 | And so you're losing 7.65% of your income right off the top.

01:12:05.400 | And so you're losing 7.65% of your income right off the top.

01:12:08.400 | And so you're losing 7.65% of your income right off the top.

01:12:11.400 | And so you're losing 7.65% of your income right off the top.

01:12:14.400 | And so you're losing 7.65% of your income right off the top.

01:12:17.400 | And so you're losing 7.65% of your income right off the top.

01:12:20.400 | And so you're losing 7.65% of your income right off the top.

01:12:23.400 | And so you're losing 7.65% of your income right off the top.

01:12:26.400 | And so you're losing 7.65% of your income right off the top.

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01:12:32.400 | And so you're losing 7.65% of your income right off the top.

01:12:35.400 | And so you're losing 7.65% of your income right off the top.

01:12:38.400 | And so you're losing 7.65% of your income right off the top.

01:12:41.400 | And so you're losing 7.65% of your income right off the top.

01:12:44.400 | And so you're losing 7.65% of your income right off the top.

01:12:47.400 | And so you're losing 7.65% of your income right off the top.

01:12:50.400 | And so you're losing 7.65% of your income right off the top.

01:12:53.400 | And so you're losing 7.65% of your income right off the top.

01:12:56.400 | And so you're losing 7.65% of your income right off the top.

01:12:59.400 | And so you're losing 7.65% of your income right off the top.

01:13:02.400 | And so you're losing 7.65% of your income right off the top.

01:13:05.400 | And so you're losing 7.65% of your income right off the top.

01:13:08.400 | And so you're losing 7.65% of your income right off the top.

01:13:11.400 | And so you're losing 7.65% of your income right off the top.

01:13:14.400 | And so you're losing 7.65% of your income right off the top.

01:13:17.400 | And so you're losing 7.65% of your income right off the top.

01:13:20.400 | And so you're losing 7.65% of your income right off the top.

01:13:23.400 | And so you're losing 7.65% of your income right off the top.

01:13:26.400 | And so you're losing 7.65% of your income right off the top.

01:13:29.400 | And so you're losing 7.65% of your income right off the top.

01:13:32.400 | And so you're losing 7.65% of your income right off the top.

01:13:35.400 | And so you're losing 7.65% of your income right off the top.

01:13:38.400 | And so you're losing 7.65% of your income right off the top.

01:13:41.400 | And so you're losing 7.65% of your income right off the top.

01:13:44.400 | And so you're losing 7.65% of your income right off the top.

01:13:47.400 | And so you're losing 7.65% of your income right off the top.

01:13:50.400 | And so you're losing 7.65% of your income right off the top.

01:13:53.400 | And so you're losing 7.65% of your income right off the top.

01:13:56.400 | And so you're losing 7.65% of your income right off the top.

01:13:59.400 | And so you're losing 7.65% of your income right off the top.

01:14:02.400 | And so you're losing 7.65% of your income right off the top.

01:14:05.400 | And so you're losing 7.65% of your income right off the top.

01:14:08.400 | And so you're losing 7.65% of your income right off the top.

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01:14:14.400 | And so you're losing 7.65% of your income right off the top.

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01:14:44.400 | And so you're losing 7.65% of your income right off the top.

01:14:47.400 | And so you're losing 7.65% of your income right off the top.

01:14:50.400 | And so you're losing 7.65% of your income right off the top.

01:14:53.400 | And so you're losing 7.65% of your income right off the top.

01:14:56.400 | And so you're losing 7.65% of your income right off the top.

01:14:59.400 | And so you're losing 7.65% of your income right off the top.

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01:15:59.400 | And so you're losing 7.65% of your income right off the top.

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01:18:41.400 | And so you're losing 7.65% of your income right off the top.

01:18:44.400 | And so you're losing 7.65% of your income right off the top.

01:18:47.400 | And so you're losing 7.65% of your income right off the top.

01:18:50.400 | And so you're losing 7.65% of your income right off the top.

01:18:53.400 | And so you're losing 7.65% of your income right off the top.

01:18:56.400 | And so you're losing 7.65% of your income right off the top.

01:18:59.400 | And so you're losing 7.65% of your income right off the top.

01:19:02.400 | And so you're losing 7.65% of your income right off the top.

01:19:05.400 | And so you're losing 7.65% of your income right off the top.

01:19:08.400 | And so you're losing 7.65% of your income right off the top.

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01:19:17.400 | And so you're losing 7.65% of your income right off the top.

01:19:20.400 | And so you're losing 7.65% of your income right off the top.

01:19:23.400 | And so you're losing 7.65% of your income right off the top.

01:19:26.400 | And so you're losing 7.65% of your income right off the top.

01:19:29.400 | And so you're losing 7.65% of your income right off the top.

01:19:32.400 | And so you're losing 7.65% of your income right off the top.

01:19:35.400 | And so you're losing 7.65% of your income right off the top.

01:19:38.400 | And so you're losing 7.65% of your income right off the top.

01:19:41.400 | And so you're losing 7.65% of your income right off the top.

01:19:44.400 | And so you're losing 7.65% of your income right off the top.

01:19:47.400 | And so you're losing 7.65% of your income right off the top.

01:19:50.400 | And so you're losing 7.65% of your income right off the top.

01:19:53.400 | And so you're losing 7.65% of your income right off the top.

01:19:56.400 | And so you're losing 7.65% of your income right off the top.

01:19:59.400 | And so you're losing 7.65% of your income right off the top.

01:20:02.400 | And so you're losing 7.65% of your income right off the top.

01:20:05.400 | And so you're losing 7.65% of your income right off the top.

01:20:08.400 | And so you're losing 7.65% of your income right off the top.

01:20:11.400 | And so you're losing 7.65% of your income right off the top.

01:20:14.400 | And so you're losing 7.65% of your income right off the top.

01:20:17.400 | And so you're losing 7.65% of your income right off the top.

01:20:20.400 | And so you're losing 7.65% of your income right off the top.

01:20:23.400 | And so you're losing 7.65% of your income right off the top.

01:20:26.400 | And so you're losing 7.65% of your income right off the top.

01:20:29.400 | And so you're losing 7.65% of your income right off the top.

01:20:32.400 | And so you're losing 7.65% of your income right off the top.

01:20:35.400 | And so you're losing 7.65% of your income right off the top.

01:20:38.400 | And so you're losing 7.65% of your income right off the top.

01:20:41.400 | And so you're losing 7.65% of your income right off the top.

01:20:44.400 | And so you're losing 7.65% of your income right off the top.

01:20:47.400 | And so you're losing 7.65% of your income right off the top.

01:20:50.400 | And so you're losing 7.65% of your income right off the top.

01:20:53.400 | And I think, you know, if people--

01:20:56.400 | in many cases, I will warn people if they're thinking of doing that,

01:20:59.400 | you don't sign up the offer in your own name because otherwise you can't do it.

01:21:04.400 | You know, with the contract, it has to explicitly state that the IRA is signing it, not you.

01:21:10.400 | As with all documentation, it's very important that the individual IRA account owner never signs anything.

01:21:19.400 | The custodian always signs documents.

01:21:21.400 | And if the owner ever signs a document, that could actually create a prohibited transaction.

01:21:26.400 | So they should be aware of that.

01:21:28.400 | But I think you're right.

01:21:30.400 | The scale is very important.

01:21:33.400 | You know, if you're going to invest in a self-directed IRA for 6%, you know,

01:21:40.400 | given the deflationary environment that we're in, that could actually--you could rate a return.

01:21:45.400 | But I think ideally you don't want to shoot for that.

01:21:48.400 | You probably want to aim a little higher if you can.

01:21:51.400 | [laughter]

01:21:53.400 | I'm with you there.

01:21:55.400 | That leads me perfectly to kind of the last, I guess, question basically that I had,

01:22:01.400 | which is I'd love your insight into custodians and the people that are involved in someone--in this type of transaction.

01:22:10.400 | Most people are not aware of the, I guess, the parties that need to be involved in a 401(k).

01:22:18.400 | Most people, if you say--many people who are employees, if you say, okay, TPA, what's a TPA?

01:22:24.400 | What's a custodian?

01:22:26.400 | What do you refer?

01:22:27.400 | What are you talking about?

01:22:29.400 | So could you walk through the major parties that are involved in a self-directed account,

01:22:34.400 | let's just stick with a self-directed IRA,

01:22:36.400 | and then how you find those different people and, for example, we mentioned one of the things that's tough is

01:22:43.400 | how do you find a custodian who's willing to work with a health savings account?

01:22:47.400 | So who are the parties that are involved, and to what extent can you get people out of it,

01:22:53.400 | and to what extent do you have to hire these different roles done to follow the rules?

01:22:58.400 | Okay.

01:22:59.400 | So the first person--so if you want to open up a self-directed IRA, you have to find a custodian,

01:23:07.400 | and we have actually a good piece of choosing a self-directed custodian

01:23:12.400 | because I think it's an important component that is--it's not--the terminology is not clear

01:23:20.400 | in a lot of the advertising and marketing that people do.

01:23:23.400 | So just to put it simply, there are brokerage firms which more or less buy and sell stock.

01:23:30.400 | It's the easiest way to describe it.

01:23:32.400 | There are custodians which custody assets.

01:23:36.400 | A brokerage firm can also be a custodian, but rather than confusing their listeners,

01:23:40.400 | I'll just keep it separate.

01:23:42.400 | So a custodian would be the type of firm that would hold--that would custody the IRA account,

01:23:50.400 | and they would hold all the assets that are there.

01:23:52.400 | They do the recordkeeping.

01:23:54.400 | They deal with the tax component of it.

01:23:57.400 | They at least send you the tax statements anyway.

01:24:01.400 | But they deal with that component.

01:24:02.400 | So custodians are a very important part of the equation.

01:24:06.400 | There are also what are called--there are facilitators, and then there are--oh, I'm drawing a blank here.

01:24:19.400 | There are TPAs.

01:24:21.400 | TPA stands for third-party administrator.

01:24:24.400 | Yes, sorry, third-party administrator.

01:24:26.400 | So there are custodians, administrators, and facilitators.

01:24:31.400 | The custodians is the necessary piece of the puzzle.

01:24:34.400 | Administrators are a group of firms, and there are quite a few out there,

01:24:39.400 | and they typically advertise the gold IRA or the real estate IRA or the checkbook LLC.

01:24:44.400 | They have their marketing pieces.

01:24:47.400 | But effectively what they do is they act as a middleman between the client and the custodian.

01:24:55.400 | So what they'll do, they'll go find the custodian, usually a bank,

01:24:59.400 | and the bank will agree to custody assets, and the administrator will provide all the administrative services.

01:25:07.400 | The custodian, or at least the larger custodians, do all of this.

01:25:12.400 | You don't need an administrator for these custodians.

01:25:15.400 | The TPA is effectively created--it's not a qualified custodian in the sense that some others are.

01:25:23.400 | I'll give you, for instance, some of the larger self-directed IRA custodians are

01:25:28.400 | Pensco Trust Company, Equity Trust Company, Millennium Trust Company.

01:25:32.400 | Those are some of the larger three.

01:25:34.400 | There are some others, but those are kind of well-known.

01:25:37.400 | What was the first one that you said? Because it broke up just a little bit.

01:25:40.400 | So you said Equity Trust Company, Millennium Trust Company, and the first one was?

01:25:44.400 | Pensco Trust Company.

01:25:46.400 | Pensco. P-E-N-S-C-O?

01:25:49.400 | Yes.

01:25:50.400 | Okay.

01:25:51.400 | And there's actually a lot of consolidation going on in the industry.

01:25:55.400 | I know Pensco just acquired Lincoln Trust Company,

01:25:58.400 | and a few years back, Equity Trust Company acquired Sterling Trust Company,

01:26:02.400 | and Sterling specialized in precious metals.

01:26:05.400 | So there is some consolidation going on in the industry, but those are the major players.

01:26:11.400 | I think that there are a number of things that people have to consider when they look at each,

01:26:17.400 | because there are a lot of components.

01:26:19.400 | It's not just about the fee.

01:26:20.400 | It's also about the service, about the expertise, and the customer service.

01:26:28.400 | What I mean is they're prompt, and they get back to you, and they're knowledgeable.

01:26:31.400 | I think that's important.

01:26:33.400 | And then there's facilitators, which are kind of a hodgepodge.

01:26:38.400 | They don't really fit in the administrator or custodian bucket.

01:26:42.400 | They're just people that work with self-directed IRAs,

01:26:45.400 | and I honestly couldn't give you an accurate definition of what they do.

01:26:49.400 | I can just tell you that they exist.

01:26:53.400 | How's that for a ringing endorsement?

01:26:59.400 | I don't want to call anybody out, but it's just they exist, and they're not bad.

01:27:02.400 | They're not good.

01:27:03.400 | They're there, and I couldn't accurately describe them.

01:27:09.400 | But I think that the--so in setting up a self-directed IRA,

01:27:13.400 | the individual would go to one of these firms.

01:27:15.400 | They would set up the IRA, and then they would work with that firm.

01:27:18.400 | They'd find the asset, and that firm would work with them to purchase the asset,

01:27:23.400 | to manage it, and to sell it.

01:27:26.400 | That's the simple way to do it.

01:27:29.400 | There is a requirement, which--it's funny because there are a lot of IRA rules

01:27:35.400 | which apply to every single IRA, whether it's the self-directed type or not.

01:27:39.400 | If you have a brokerage account, it's also required.

01:27:42.400 | But because of the nature of a brokerage account, most of it is--you don't see the needs.

01:27:49.400 | One is evaluation, which you're required to get an annual evaluation on all alternative assets.

01:27:55.400 | So that is a requirement.

01:27:57.400 | It could be a problem depending on the asset you're invested in.

01:28:02.400 | For instance, some assets are easy, like a real estate investment is.

01:28:06.400 | You can look at a broker's opinion or competitive market analysis.

01:28:13.400 | You can look at a few different ways.

01:28:16.400 | But there are some gray areas around the valuation that the IRS has not made entirely clear.

01:28:22.400 | One is, what is required? Is it a qualified valuation or just a regular CPA's opinion?

01:28:34.400 | They haven't made it clear.

01:28:36.400 | I know they kind of prefer it one way, but the case law is unclear.

01:28:41.400 | So it's hard to say.

01:28:43.400 | I think a lot of people have taken the stance of it's okay not to go through

01:28:46.400 | the really expensive qualified appraisal,

01:28:49.400 | as long as you're not going through any significant "events."

01:28:54.400 | Like if you're taking distributions or if you inherit the IRA or something,

01:29:00.400 | that might prompt a qualified appraisal.

01:29:03.400 | But generally speaking, most assets I think you can get away without getting the true qualified.

01:29:09.400 | But I don't want to give you that as advice because it's unclear.

01:29:14.400 | Most people are not standing strong on that.

01:29:17.400 | They're just kind of hoping for a direction from the IRS at this point.

01:29:23.400 | So the valuation is important.

01:29:26.400 | Like I said, some assets are harder to value than others.

01:29:29.400 | But that's an important component.

01:29:31.400 | But outside of that, that's pretty much it.

01:29:34.400 | They should also find an attorney or accountant that is knowledgeable of this area.

01:29:41.400 | We find that most are aware of it, but they're not as knowledgeable as they should be.

01:29:47.400 | And not because they're not smart people, but because it's not a common thing.

01:29:52.400 | Unless the attorney or accountant specializes in this area,

01:29:55.400 | they're not going to have enough day-to-day experience to be up on all the rules

01:29:59.400 | and regulations and case law.

01:30:02.400 | Because most people I talk to, they say, "Yeah, I had one person in 20 years ask me about it."

01:30:08.400 | So there's no reason for them to stay up to date.

01:30:10.400 | But there are lists around that people can find,

01:30:13.400 | and custodians provide these lists of people that are qualified that do specialize in this area.

01:30:20.400 | So I think it's important to have one that understands this,

01:30:23.400 | because it is such a niche area that when it comes to tax preparation, like for instance,

01:30:30.400 | it is possible that you would have to file a tax return for your IRA.

01:30:36.400 | And most people are not aware of that, but that could be a requirement,

01:30:40.400 | depending on what you're investing in.

01:30:43.400 | Another reason to have a qualified accountant is it is possible you would have to pay taxes

01:30:50.400 | on the investment inside of your IRA.

01:30:55.400 | Usually that comes down to if you're using leverage.

01:30:59.400 | The leverage portion is potentially taxable.

01:31:03.400 | So there are some subtleties that people have to understand, but in the IRA it's a lot simpler.

01:31:10.400 | With a 401(k) it's more complicated, because you really should use a TPA.

01:31:16.400 | You really should use a custodian that works with 401(k)s.

01:31:23.400 | You have other components of the possible.

01:31:25.400 | If you're investing in precious metals, you have to find a depository.

01:31:30.400 | You have to find a dealer to buy the coins or the metals from.

01:31:35.400 | So depending on the asset, there may be other components or vendors in the equation that have to be added.

01:31:43.400 | But for IRAs it's generally a lot simpler.

01:31:48.400 | Yeah, this is one of those areas where I think I would definitely--

01:31:55.400 | this is definitely as deep as I want to go on the show.

01:31:58.400 | It's one of those things where I wanted to make people aware of some general input.

01:32:03.400 | When we ran into each other at FinCon, I thought--

01:32:06.400 | and this has been great as far as just a good overview--

01:32:09.400 | but you need good advice here.

01:32:11.400 | Don't play games here.

01:32:13.400 | And don't try to save a buck.

01:32:15.400 | There's so much shady stuff on the internet.

01:32:17.400 | I would get multiple--me personally--I would get multiple opinions,

01:32:22.400 | and I would want to work with people who specialize in this.

01:32:24.400 | That's what I love about the world we live in in 2015 as compared to even--

01:32:29.400 | like you said, when you joined Paine-Weber in '99.

01:32:32.400 | I mean, in '99, it seemed like it was so much more difficult to have a specialized presence.

01:32:40.400 | You had to be all things to all people.

01:32:42.400 | I mean, you probably started cold calling, and you're just talking the general to everybody else.

01:32:47.400 | But now, with the ability to get your message out, and it takes time and it takes work,

01:32:52.400 | then people can specialize, and you can have specialty firms, specialty accountants,

01:32:58.400 | someone like you, a specialty advisor, a specialty fiduciary who can work.

01:33:04.400 | And the key is for the right clients to find the right providers.

01:33:09.400 | But I would not try to save money if I were doing on this.

01:33:12.400 | I wouldn't do it myself if I didn't have substantial--

01:33:16.400 | like, if you've got $5,000 in an IRA, don't waste your time.

01:33:19.400 | Go and--I would say, go and make some money.

01:33:23.400 | Or you better have like 1,000%--1,000-fold potential investment, and you know it,

01:33:30.400 | and you're trying to do something.

01:33:32.400 | But I would expect fees are high.

01:33:35.400 | I would expect you need someone who's an expert, and make sure you pay for good advice.

01:33:40.400 | I mean, do you agree? Am I right?

01:33:43.400 | I would agree. I would definitely agree with that.

01:33:46.400 | I mean, depending on the amount of assets, it could range between 1% and 3%

01:33:51.400 | for custodians if they're fee-based.

01:33:55.400 | If you've got $5,000, the percentage is maybe upwards of 3%.

01:34:00.400 | People look at that and say, "Wow, that's high," but it's not really.

01:34:04.400 | Oh, that's nothing.

01:34:06.400 | I can't imagine you would take--I wouldn't.

01:34:08.400 | I mean, if I were in your business, there's not a chance in the world I'd take a $5,000 account,

01:34:11.400 | unless there were $5 million somewhere sitting there.

01:34:15.400 | It's just--I mean, we've got to be realistic here.

01:34:18.400 | That's why I try to shoot straight on the show, and you've got to be realistic about--

01:34:24.400 | we're all in business. We've got to make money, and we've got to make money,

01:34:27.400 | and there's got to be a good fit between client and service provider.

01:34:32.400 | And doing all the work and exposing yourself to the liability for $150, 3% of $5,000.

01:34:42.400 | Yeah, I agree.

01:34:46.400 | I mean, from our perspective, we're not looking for small clients.

01:34:54.400 | Most advisors, their business is very scalable.

01:34:58.400 | They buy one mutual fund over 200 clients.

01:35:01.400 | It takes them five seconds.

01:35:03.400 | They have to research it, but the process takes five seconds.

01:35:06.400 | If I were to buy one piece of real estate for one client, it could take us days.

01:35:10.400 | We'd have to go to the registry, file the documents.

01:35:12.400 | It's complicated.

01:35:14.400 | So the way I look at it is, because we are really the only advisors doing this,

01:35:22.400 | if people call us or email us, I'll always point them in the right direction,

01:35:27.400 | if it's not a good fit.

01:35:29.400 | From my perspective, everything has to be a personality fit.

01:35:33.400 | Like, I won't work with jerks.

01:35:35.400 | Somebody calls me up and they start treating me like a jerk right off the bat.

01:35:41.400 | I say, "Sorry, it's not a good fit."

01:35:43.400 | But we come across a lot of people who have less than an optimal amount.

01:35:48.400 | I'll always just give them some general advice.

01:35:50.400 | I'll say, "Look, here's how you should do it.

01:35:52.400 | Here's what you should do.

01:35:54.400 | You should probably get an accountant or attorney to help you with this

01:35:57.400 | because they'll at least give you some guidance."

01:36:00.400 | For the most part, it definitely needs to be a reasonable amount of money

01:36:07.400 | to make it worthwhile for us and for them.

01:36:09.400 | It has to make sense.

01:36:13.400 | I think that's--as you said before, it's something that is different.

01:36:23.400 | It's worthwhile, but it doesn't fit every situation.

01:36:27.400 | You shouldn't try to fit a square peg in a round hole.

01:36:31.400 | If somebody has $2,000 or $5,000 and they're not getting multiples return on something,

01:36:38.400 | then they should save up more and wait.

01:36:41.400 | I'll be the bad guy for you, and I do want to give you a chance to plug your service

01:36:45.400 | and explain, kind of give your elevator pitch,

01:36:48.400 | and hopefully maybe you'll be a good fit for somebody in the listening audience.

01:36:52.400 | You could be a resource for them.

01:36:54.400 | But I'll be the bad guy so you don't have to do it.

01:36:57.400 | Two things. Number one is, remember, apply the lens of scale.

01:37:01.400 | Like I talk about on the show constantly, if you've got $5,000 saved,

01:37:05.400 | there's not a chance in the world that, A, you should even have an IRA,

01:37:08.400 | unless it's a Roth IRA and that's just your emergency fund

01:37:11.400 | and you're just a super brilliant 16-year-old setting aside money in a Roth IRA from an early age.

01:37:18.400 | The percentage of impact that you can make to try to invest in the difference between 10% in an index fund

01:37:26.400 | versus 35% rate of returns is absolutely meaningless when you have a count that's that small,

01:37:34.400 | at least in one or two or three years.

01:37:37.400 | So a much better plan is focus on something where you can increase your income by $20,000, $30,000, $50,000, $100,000

01:37:44.400 | and save that money so instead of $5,000 you have $105,000.

01:37:48.400 | So don't spend your time trying to figure out how do I increase my percentage rate of return

01:37:53.400 | when that's not the best use of your time.

01:37:56.400 | Number two, on amounts of money that small, you're far better turned,

01:38:01.400 | and I'm using it just simply as a metaphor,

01:38:03.400 | you're far better off spending time setting up the right business structure

01:38:08.400 | or taking the right deductions on starting something that's actually going to make you some money.

01:38:13.400 | Now over time you do transition to a point where an extra 2, 3, 4, 5, 20% return annually

01:38:23.400 | is going to make a massive difference, but focus on where you are

01:38:26.400 | and recognize that someday you'll be the big fish,

01:38:32.400 | but you've got to increase your income and build a business so that you have large amounts of money

01:38:37.400 | to where then you can use it in a creative way.

01:38:40.400 | That would be my point one.

01:38:41.400 | Thing two would be if you're interested in this kind of stuff,

01:38:45.400 | if you're the kind of person, if you're looking to do something shady,

01:38:50.400 | just simply don't.

01:38:51.400 | Don't invite scrutiny in the most public of any investment you can make,

01:39:00.400 | which is going to be in one of these accounts.

01:39:02.400 | So don't call Kirk and say, "Hey Kirk, I've got this shady deal."

01:39:08.400 | If you're looking to do something in a straightforward way and just simply use the laws that exist,

01:39:12.400 | then that would be, I would say, a good fit.

01:39:15.400 | So hopefully that will screen a few people if anyone can use your services.

01:39:18.400 | Kirk, plug, what you guys do, give us your elevator pitch of who you can serve effectively

01:39:23.400 | or at least the type of things that you're able to offer.

01:39:28.400 | Okay, great.

01:39:30.400 | I couldn't have said it better.

01:39:33.400 | I think the other point that you made is in understanding the rules,

01:39:39.400 | definitely do not try to break them.

01:39:41.400 | You're not smarter than the IRS, believe me.

01:39:44.400 | I've seen many cases, and what people have tried to do, just don't do it.

01:39:50.400 | I wouldn't try to do it.

01:39:51.400 | I don't think anybody should because you will get caught,

01:39:54.400 | and it will be in a place that you will not be happy with.

01:39:58.400 | So definitely don't do it.

01:40:00.400 | So I guess in a transition to us, my firm, Innovative Advisor Group,

01:40:07.400 | we are an innovative wealth management firm,

01:40:12.400 | basically bridging the gap between traditional and nontraditional investments,

01:40:16.400 | although we've talked a lot about alternative investments on the show.

01:40:20.400 | We also do a lot with traditional assets in an innovative way.

01:40:25.400 | Risk management is a cornerstone to what we do.

01:40:28.400 | I think that's probably the most important thing that we tell people

01:40:33.400 | and our clients is risk management comes first.

01:40:36.400 | Don't look at what returns you're going to get.

01:40:38.400 | Look at what you're going to lose.

01:40:40.400 | And if you can deal with that, then the returns will take care of themselves.

01:40:44.400 | So that is a very important point that anybody should consider with their investments.

01:40:51.400 | So with our services, we provide financial planning services for our clients.

01:40:57.400 | We manage assets for them, like I said, both traditional and alternative.

01:41:02.400 | We specialize in self-directed IRAs and self-directed 401(k)s.

01:41:09.400 | We assist with the structuring.

01:41:11.400 | We are not attorneys or accountants, but we do work with your attorney and accountants

01:41:17.400 | because in many cases they're not familiar with all of the necessities,

01:41:22.400 | and we will work with them to make sure that it's as it should be.

01:41:27.400 | We can also act as a special advisor and custodians if you're not interested in having us

01:41:35.400 | necessarily manage the assets but would like us -- if you wanted to do a checkbook LLC

01:41:40.400 | and needed a special advisor, which is a requirement now, on that checkbook LLC,

01:41:46.400 | then we can assist in that fashion too.

01:41:50.400 | And we also do strategic consulting, if you will.

01:41:53.400 | So that's kind of more of a hodgepodge.

01:41:56.400 | We do on special projects that people need an outside-the-box thinker to work on a strategy,

01:42:02.400 | whether it's self-directed or otherwise.

01:42:04.400 | We have a varied set of background and interests, both my partner and I,

01:42:10.400 | so that I think is something we can offer too.

01:42:15.400 | You know, if you're interested in learning more about self-directed IRAs

01:42:20.400 | or any of the other subjects we discuss on the show, we have a website.

01:42:25.400 | It's innovativewealth.com.

01:42:28.400 | And we also have a blog.

01:42:30.400 | This is something we have once a week.

01:42:34.400 | We have a post.

01:42:36.400 | So we try to put as many resources on the site.

01:42:38.400 | There's a number of things we're going to be putting up in the next month,

01:42:41.400 | which are also going to be valuable, like a list of IRA custodians,

01:42:45.400 | administrators, and facilitators.

01:42:48.400 | We should have that up shortly.

01:42:50.400 | And a few other things that I think people will benefit from.

01:42:54.400 | One last point I'll mention is we have a new service called the Inflation Monitor on the blog.

01:43:00.400 | It's free.

01:43:01.400 | But we created it to help measure inflation,

01:43:05.400 | and so people can accurately not just look at the CPI and say, "Oh, we have this amount of inflation,"

01:43:11.400 | but actually see the effects of inflation on the economy rather than just looking at a number,

01:43:16.400 | which some people think may not be necessarily accurate.

01:43:19.400 | So that's a new service we've offered.

01:43:23.400 | We're tweaking it a little bit, but I think it's been very helpful to a lot of people.

01:43:27.400 | So I want to check that out as well.

01:43:29.400 | I'll make sure there's links to innovativewealth.com and to the blog in the show notes.

01:43:34.400 | And then all your info is there, the contact info and everything is there.

01:43:39.400 | Last question as you go.

01:43:41.400 | Any insight, comments, opinion on--I mean, it's been a year now,

01:43:46.400 | but since you're so involved in the self-directed IRA scenario,

01:43:50.400 | on the proposal last year and the president's budget proposal for the $3.4 million cap,

01:43:56.400 | do you have an opinion or comment on that issue?

01:44:00.400 | Well, you're certainly not going to get a politically correct answer on this.

01:44:06.400 | You know, I think that getting back to the--and I think this was--some of this

01:44:11.400 | stemmed from the Romney IRA when people--there's been some subtle movements

01:44:19.400 | in the political background.

01:44:22.400 | A, well, people have heard about it and they're upset, where the government wants to,

01:44:27.400 | let's just say, take people's retirement funds and give them treasuries instead,

01:44:33.400 | or they want to cap the amount you can have in an IRA, saying that you don't need more than that.

01:44:38.400 | I think the day we start doing that is the day that--well, I shouldn't say the day that capitalism dies,

01:44:44.400 | because I think it's already slowly dying.

01:44:46.400 | But I think the reality is that if you're not incentivized to get whatever you want to get,

01:44:53.400 | if that's $100 million, great. If it's you want to own a new car, fine.

01:44:58.400 | But if you're not allowed to do that, then you're really killing capitalism,

01:45:04.400 | because that's what drives people.

01:45:06.400 | What drives people is the ability to do better, the people to be better, and to better society.

01:45:12.400 | And I think if you don't allow people to do that, then you're really changing the dynamic.

01:45:21.400 | So having a cap on an IRA, looking at the numbers just from the GAO report,

01:45:31.400 | it should be fairly obvious that there are not a lot of people who fit that bill.

01:45:37.400 | I mean, over $3 million, you're talking about 36,000 people who have over $3 million in their IRA.

01:45:43.400 | These people didn't get there because they just got lucky.

01:45:47.400 | They got there because they did the right things, they invested right, they stayed,

01:45:52.400 | they took advantage of the tax code as it was. And I applaud them.

01:45:58.400 | I think they've done what they should have done.

01:46:02.400 | There's plenty of people who are bad investors who lose money because they don't pay attention,

01:46:07.400 | don't know what they're doing.

01:46:09.400 | And I think that we shouldn't rain on the parade of the people who are successful,

01:46:16.400 | but rather try to bring the rest up to meet them.

01:46:20.400 | Yeah, it's interesting, and certainly I don't disagree with you from how it should be.

01:46:25.400 | This is a tough issue for me. I'm still pretty conservative, I'm not too worried about it.

01:46:31.400 | But I'll tell you what, and I've been open on the show, it's a research project of mine to try to figure things out.

01:46:37.400 | I've generally looked at it and said, there's not a chance of this stuff happening,

01:46:41.400 | because it's hard for me to imagine, you change the IRA rules, you start taxing IRAs,

01:46:48.400 | you start taxing 401ks, etc.

01:46:51.400 | Even though there aren't that many people who have 10 million and up in them,

01:46:55.400 | but still they're so popular now, it's hard for me to imagine the population of the US

01:47:01.400 | not essentially rising up and demanding something different.

01:47:05.400 | But it's also hard to imagine how, facing the fiscal situation in this country,

01:47:12.400 | how something's not going to be required.

01:47:14.400 | And what has bothered me is how little...

01:47:17.400 | Yes, it was only the President's budget proposal last year, and it didn't go anywhere.

01:47:21.400 | But just a couple days ago, with his proposals on changing 529s and covered out ESAs,

01:47:29.400 | what's bothering me is how little uproar I hear about that.

01:47:35.400 | I just didn't hear much uproar, and maybe I'm not tuned in enough,

01:47:39.400 | but I'm a little concerned that if I didn't hear that much uproar, even at the mention of it,

01:47:44.400 | maybe my political analysis is wrong.

01:47:47.400 | I'm watching it carefully, and it's an ongoing research project of mine to try to figure out...

01:47:53.400 | Here, try to predict politics. You're going to have good success with that, right?

01:47:58.400 | I think... I mean, think of it from another perspective.

01:48:01.400 | I mean, look when the individual income tax was instituted.

01:48:06.400 | It was only on wealthy people.

01:48:08.400 | It was only on people making over a certain amount.

01:48:10.400 | And the only reason they got it passed was because they said,

01:48:12.400 | "Oh, it'll never be on everybody else. It'll only be on the wealthy."

01:48:15.400 | Well, eventually everybody got caught under that burden.

01:48:21.400 | And it's how government works.

01:48:23.400 | They start with something that only affects the really rich people that nobody really cares about,

01:48:28.400 | and eventually politicians slowly work away at the foundation,

01:48:33.400 | and eventually it affects everybody.

01:48:36.400 | And I think that is... the underlying theory of that is very dangerous.

01:48:43.400 | And that's why I think it's important for everybody to really stand against the fact that they try to do this.

01:48:50.400 | However, as much as people hate Wall Street, one thing I will say,

01:48:56.400 | that if the government ever tried to take an IRA or 401(k) and confiscate it in the sense of,

01:49:03.400 | "Oh, we'll give you money and we'll do this for your retirement,"

01:49:06.400 | I guarantee you Wall Street has one of the strongest lobbying groups in existence.

01:49:11.400 | That wouldn't fly, because think of all the assets they would lose.

01:49:15.400 | All the money they would lose, that would never happen.

01:49:20.400 | That's a great argument. That is true.

01:49:23.400 | But I'll make the flip side, and we'll let it go as unresolved.

01:49:27.400 | And it's one of those things that we'll just have to continue to watch

01:49:30.400 | and continue probably to argue among ourselves.

01:49:33.400 | But looking at this Government Accountability Office report,

01:49:37.400 | the reason that Obama in his proposal last year picked that $3.4 million number,

01:49:43.400 | the GAO estimates that 36,171 total taxpayers have IRA balances in excess of $3 million.

01:49:53.400 | Excuse me. Let me run this percentage.

01:49:56.400 | So it's 36,171 plus 79,52 in excess of $5 million plus $791 in excess of...

01:50:05.400 | It's looking about 45,000 somewhere.

01:50:07.400 | Right. Okay. Because I just realized these are exclusive bands. They're not cumulative.

01:50:11.400 | There's 45,228 accounts with $3 million and over.

01:50:15.400 | If we divide that by 300 million people, that's .0001%.

01:50:25.400 | So it's 1 with three zeros. Anyway, .0001%.

01:50:30.400 | And in today's world, I'm sorry, I just don't see...

01:50:34.400 | We have such a populist economic system where that is so easy to spin.

01:50:38.400 | We're only affecting .0001% of the population.

01:50:42.400 | This is the wealthiest .0001%.

01:50:45.400 | And don't you know that the average retiree has $11,000 saved.

01:50:50.400 | So when it comes down to the politics of the 99% versus the 1%, I don't know. We'll see.

01:50:59.400 | I agree. But think of it this way.

01:51:01.400 | How much would they be getting from that .0001%?

01:51:07.400 | That's not the point. I agree with you, but that's not the point.

01:51:11.400 | How much would they be getting?

01:51:14.400 | They waste more toilet paper than that.

01:51:16.400 | No, you're right. But how much more would they be...

01:51:19.400 | Yeah, anyway. That's a long conversation.

01:51:22.400 | And I try to stay... I try to do the bare minimum of politics that matters on this show.

01:51:27.400 | So, Kirk, this has been super fun. I think this is going to be one of the more popular interviews.

01:51:31.400 | And if you've got ideas, if you've got developments of things that are going on in this market,

01:51:36.400 | keep me in the loop.

01:51:37.400 | And if you've got things in the future that you think would be interesting,

01:51:41.400 | I'm sure my audience will really enjoy.

01:51:43.400 | We'd love to hear from you again.

01:51:45.400 | So you're welcome back in the future.

01:51:48.400 | Great. Well, thanks a lot, Joshua.

01:51:49.400 | I really appreciate you coming on the show and I had a lot of fun as well.

01:51:53.400 | Hope that information can be helpful to some of you.

01:51:56.400 | For most of you, you probably should never think about investing in some of those other alternative investment classes.

01:52:03.400 | If you don't know anything about horses, just because you have money in an IRA doesn't mean that you should buy a horse.

01:52:08.400 | But for a few of you, the light bulb probably went off.

01:52:13.400 | And for those of you for whom it did, for those of you who can think of an intelligent way to leverage some unique knowledge and insight that you have,

01:52:22.400 | hopefully that can be a useful resource for you.

01:52:25.400 | Please feel free to check out Kirk's firm.

01:52:28.400 | I can't give necessarily an endorsement.

01:52:31.400 | You can judge for yourself based upon how knowledgeable he seems from the interview.

01:52:35.400 | I met him only one time. I haven't worked with him nor have I sent any clients to him nor have I heard.

01:52:39.400 | But you can judge for yourself.

01:52:41.400 | He certainly seems to be a knowledgeable, knowledgeable gentleman.

01:52:45.400 | And check him out, InnovativeWealth.com.

01:52:47.400 | Speak to him, speak to his partner, share with them your situation and maybe they can be of service to a few of you.

01:52:53.400 | I love exposing people who might be able to serve you and just make sure you do your homework.

01:52:58.400 | This is one of those areas where I would not go it alone.

01:53:01.400 | I would make sure that I got some excellent advice.

01:53:03.400 | As he pointed out, the penalties can be stiff for getting things wrong.

01:53:07.400 | And when you get into some of these more unique areas that aren't mainstream, it's not that things can't be done.

01:53:13.400 | It's just that they need to be done right.

01:53:15.400 | And you definitely, I think, want to work with an expert.

01:53:17.400 | So feel free. Give Kirk a call.

01:53:20.400 | And if any of you are able to work with him, give me some feedback personally just so I know.

01:53:25.400 | But he certainly seems to be very knowledgeable here.

01:53:28.400 | And Kirk, thank you so much for coming on.

01:53:30.400 | I really do.

01:53:31.400 | I thank you.

01:53:32.400 | I thank you for coming on.

01:53:34.400 | Thank you so much for listening.

01:53:35.400 | Thank you so much for your support.

01:53:37.400 | If you would like to support the show, consider joining the membership program.

01:53:40.400 | The irregulars, details are at RadicalPersonalFinance.com/membership.

01:53:44.400 | That will be gone at the end of this month, replaced in the future with a new idea.

01:53:50.400 | I'll talk to you next week about that as we get things launched.

01:53:54.400 | I want to thank you to all of you who have joined and for your support.

01:53:57.400 | It allows me to keep bringing you the in-depth content, information, education, inspiration that you need here five days a week.

01:54:06.400 | Appreciate you all. Have a great day.

01:54:08.400 | [Music]

01:54:29.400 | Thank you for listening to today's show.

01:54:31.400 | If you'd like to contact me personally, my email address is Joshua@RadicalPersonalFinance.com.

01:54:38.400 | You can also connect with the show on Twitter @RadicalPF and at Facebook.com/RadicalPersonalFinance.

01:54:45.400 | This show is intended to provide entertainment, education, and financial enlightenment.

01:54:52.400 | But your situation is unique, and I cannot deliver any actionable advice without knowing anything about you.

01:55:00.400 | Please, develop a team of professional advisors who you find to be caring, competent, and trustworthy,

01:55:09.400 | and consult them because they are the ones who can understand your specific needs, your specific goals, and provide specific answers to your questions.

01:55:21.400 | I've done my absolute best to be clear and accurate in today's show, but I'm one person and I make mistakes.

01:55:28.400 | If you spot a mistake in something I've said, please help me by coming to the show page and commenting so we can all learn together.

01:55:36.400 | Until tomorrow, thanks for being here.

01:55:39.400 | Unwrap the holiday savings at Citadel Outlets.

01:55:42.400 | Shop the early access Black Friday sales for the best deals of the season.

01:55:46.400 | The all-night shopping party starts Thanksgiving night at 8 p.m.

01:55:49.400 | Visit CitadelOutlets.com for more information.

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