N'DIGO - MoneySmart Guy Matthew Sapaula

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Sick of Your IRA and 401(k) Going Up and Down?

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Matt Sapaula

I am a proud father, financial strategist, TV commentator and financial talk show host of Money Smart Radio

Today, the Dow Jones Index closed out #FollowFriday dropping over -323 points.  Again?  For those who follow the stock market and consider their success of failure based on the performance of the 30 companies within this index, may the force be with you.  It seems for most, me included, that the ups and downs of our stock market has gotten old...consumer confidence is way out the window.  Think about this.  If you have lost 30% in your retirement savings, you need a 43% return the following year just to get you back to where you started.  Where are you going to find that, you ask?

It seems as if managing your hard-earned savings and employer match to your retirement plan is more difficult than trying your luck in Vegas.  "Stay the course" and "Buy and Hold" are the cliche buzz words being told.  In the meantime, you are tired of watching the account statements pile up for the fear of opening them awaiting a big negative number to numb your gut.  

Yes, this recession is real.  And how real are the possibilities of you really getting ahead?  Well, how about real estate?  More so, using the savings in your IRA and 401(k) to invest in real estate...which is something that we found that most brokers, financial planners and bank advisors won't tell you.

Why?

The last thing they want is to lose your cash from their accounts, or management, since most of their compensation is tied to how they can best handle your money.  

Bottom line, you can use your IRA and former 401(k)s that you may have left behind from a previous employer to buy, sell and rehab properties.  Then all the profits and gains would flow right back into your IRA...drum roll please...tax-deferred.  In other words, you can make $50,000 from a real estate investment and all this profit can flow right back in to your self-directed IRA.  No tax is due until you decide to use this money for income down the road.  Of course, you'd have to make sure you have a self-directed IRA in order to do this.

Watch the video above for details as I interviewed Mick Hersh, Chief Operating Officer of Security Trust Company, a self-directed IRA administrator.

Obviously, there are more details to this...but I hope you get the jist.  Contact me directly with your personal financial questions if need be - mgs@moneysmartradio.com or call 708.686.2000 x1

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