[Originally Published at JeffNabers.com]

You may be wondering why I haven’t blogged about real estate investing in a while. There’s a very good explanation video at Nabers.TV for you to check out.

[Originally posted at JeffNabers.com]

Cliff notes version:

• I will be offering free one-on-one phone consulting to qualified people
• In order to make room for that, I will no longer be offering free consulting in the form of blog comment responses

Here’s the skinny >>>

I’m making some changes to how I focus my energy and how I am able to help you with your wealth preservation and wealth building, both inside a Self-Directed IRA LLC or Solo 401(k) and outside of retirement funds.

Here’s what these changes will do for you:

• If you are aimed down a path that is likely to succeed, we may get a chance to work together more intimately
• If you are aimed down a path that is likely to destroy your wealth and frustrate you, you won’t get my help

Let me explain…

The #1 biggest factor making an impact your wealth right now is inflation.

Some people are trying to “beat” inflation by taking bigger risks to hopefully get bigger returns that will be bigger than inflation.

For 95% of my readers, that won’t work. It won’t work because bigger risks increase the gains and the losses, and over the long term most people will have worse performance as a result of taking bigger risks.

Around 5% of my readers have maybe figured out how to get bigger returns by spending more energy on some sort of system or process that yields larger returns. Moving forward, I don’t think that will continue working either.

Why won’t aggressive investment strategies work in the future?

Well… they will work and they won’t work. They will work in terms of turning your dollars into more dollars. They won’t work in terms or actual value adjusted for inflation.

This is because there is no limit to the amount of money the Federal Reserve has, can, and will print.

You can go after a 15% return.

The Fed can create 50% inflation.

You can go after a 50% return.

The Fed can create 500% inflation.

The Fed can create 5000000000000000000000% inflation.

There’s no limit. And they have to print lots of money because it’s the only way the government can keep spending more money than it has. The government will keep spending until it collapses. And the Fed will keep printing money for the government until that happens.

This means that each month, more and more money will be stolen from you through inflation. Whatever savings and income you have, it will buy less and less.

That’s not stores and merchants screwing you over by ripping you off. It’s the monetary system ripping you off because you remain vulnerable and exposed.

My New Service

If you are interested in how you can become fully protected from dollar inflation, hyperinflation, or even currency collapse… I’m offering a free strategy session for a limited time.

This is really my dream come true to be able to get back to working with my clients one-on-one and helping them on a very personal, attentive basis.

So, it’s my opinion that the only way you could be headed for success is if you recognize inflation as the most powerful wealth factor impacting you, and if you know you must fix this before taking on any other wealth building objectives.

If you’re on the path to success, you can request a free strategy session.

The Path To Failure (& new blog comment policy)

I believe that right now, the surest path to failure is to focus attention and energy on anything other than inflation protection. So I won’t help you do that.

Effective immediately, I will stop offering free consulting in the form of blog comment responses. This means that if you are looking for help with…

• Structuring complex (potentially prohibited) transactions
• Trying to figure out UBIT implications
• Trying to structure a real estate deal

…then I won’t be able to help you because I will be spending all of my attention and energy on helping people with the more important objective of inflation protection.

You could structure the most clever real estate deal in an IRA LLC and then lose all of your wealth in our continued (possibly accelerating) economic and currency collapse.

I won’t help you do that.

Or you could become fully protected from inflation and be in position to survive and thrive in any economic circumstances.

Now you can download a small piece of software that turns your computer into a portal for setting up your new Solo 401(k) in minutes.

Faster Creation

You can literally bring your Solo 401(k) plan into existence the same day that you get the software. You don’t have to be full-time self employed to qualify either; self-employment activity on the side of full-time employment elsewhere still qualifies you for the Solo 401(k).

Easier Transactions & Maintenance

It also makes certain tasks easier beyond setting up and funding the plan with rollovers. For instance, if you ever need to draw on the participant loan feature that lets you borrow up to $50,000 tax-free from your retirement funds, you can just fire up the software and get the loan funds (up to $50,000) in your hands on the same day.

Making contributions has never been easier. Use the software to instantly calculate your maximum legal contribution (up to $54,00) each year. Double that if your spouse is involved in your self-employment activity because she (or he) can contribute up to the same limits as well.

Clearer Benefit

There’s even a value calculator that shows you how much your 401k plan is measurably benefiting you. Most people find it’s in the tens or hundreds of thousands of dollars per year.

Total Control

And, of course, enjoying the power of controlling the checkbook for your own 401k investments comes with unlimited, legally-allowable possibilities… such as investing in:

• Private businesses equity
• Non-dollar, safe offshore investments
• Private lending
• Real estate
• Tax liens
• Virtually anything else (just no “self-dealing” or conflict-of-interest transactions)

After thousands of private trials gone smoothly and plenty of early adoption switch-over from our existing loyal clients, we’ll be doing a big promotion to celebrate making this available for new clients.

If you’re on my email list, you’ll be the first to get access.
[You can can join it if you haven't already]

Thanks for all your support, and everyone here at Nabers Group is ecstatic about unveiling our latest way to give back to the community!

1. Be eligible for a Solo 401k in the first place. This means that you have to have self employment activity (such as Schedule C income on your 1040 or own a business), and you have to have no employees at any businesses in which you or your spouse have significant ownership. (An “employee” is somebody who works over 1000 hours per year for your business and receives a W-2).
2. Add me on Facebook. Go to my Facebook profile to add me to your friends. If you don’t have a Facebook account, just create one. It’s very simple and easy, and it will help you stay connected for updates, news, events, etc.
3. Write a brief explanation of the most powerful business or investment opportunities in our current recession. Explain the “how” and the “why” as much as you can, but be direct and to the point at the same time. Submit it in a comment on this blog post (the one you’re currently reading) OR post it to the “wall” at the bottom of the Facebook Solo 401k Contest page. I’ll review all entries, and the person with the best idea will get a Solo 401k setup for them by Nabers Group with the entire establishment fee waived.

Submission Deadline: March 15, 2009

Value: $210,585

The math: Over the past 10 years, most stock indexes have produced a return of approximately 0%. With a Self-Directed Solo 401(k) plan, the accountholder can buy real estate, gold, stock in private companies, and loan money to individuals or corporations. Surveys have shown us that over 80% of our Solo 401(k) clients have a target return of investment of 12% per year or more. An investor with $100,000 of existing funds who earns 12% per year for 10 years will generate a profit of $210,585.

We’ve never done this before, and I don’t know if we will ever do this again. Now’s your chance – start working on your entry today!

* The value is based on the potential profit you could earn and will vary based on your investment decisions. With a Self-Directed Solo 401(k), it’s up to you to find and choose investments, and only you will decide how profitable and valuable this investment vehicle will be.

We’ve never done this before, and I don’t know if we will ever do this again. Now’s your chance – start working on your entry today!

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We have seen some unbelievable things over the past few years… especially the past few months. The only thing certain is that there is a lot of uncertainty ahead. If you haven’t already done so, right now I strongly suggest you watch the 30 minute condensed version of the film I.O.U.S.A. This film features David Walker, the former U.S. Comptroller General… aka the chief accountant of the government. He tried to fix the government’s financial problems, but Dick Cheney and others told him he needed to stop because they didn’t need solving. So he stepped down from his position and decided to prove to the world just how bad of shape our government really is in.

Today some people, including congressmen, are promoting some very extreme ideas. Some of these ideas involve the government “nationalizing” (or “confiscating” for those of us who speak directly) the assets of the people. Some plans even call for confiscation of retirement account assets specifically. In one scheme called the “Guaranteed Retirement Account” all retirement assets would be liquidated and handed over the Social Security Administration for investment management in a program that would provide a guaranteed return of 3% per year. This kind of silliness doesn’t need to be gratified by anything more than a brief response:

1. We’ve already seen how well the Social Security Administration manages money. It simply doesn’t. There is no money. There is no account. It just hands its income straight over to the general spending account of the government, and (not surprisingly) it gets spent!
2. Liquidating $16 trillion is impossible. It would crash the securities market entirely, and $16 trillion would not be withdrawn. If you started liquidating people’s retirement accounts alphabetically by name, those with names that start with letters n through z would receive little to nothing because of the price free fall created by the first half of the mass sell off.
3. The real world cost of living increases do not jive with published CPI figures, and there is often a discrepancy of much more than a few percent. A 3% return on investment would likely be a steady loss of principal when accurately indexing for inflation.

While we may not see that particular scheme enacted into law, it can’t be ignored that this type of solution is being considered. This government theft approach isn’t unheard of. In fact, Argentina just did it! Don’t forget that our government “confiscated” personal gold holdings in 1933… at least sort of. It was really more of a “government request” than a confiscation. An executive order was announced that requested that citizens show up to a Federal Reserve Branch within a month to sell their gold for $20 per ounce. The notable fact here is that not all the gold was turned in. According to author John Rubino, only 22% of the gold in circulation was actually turned in. Shortly thereafter, the gold price was set to $35 per ounce, thus devaluing the dollar by 41%.

It is not beyond possibility for our government to aim to take our wealth to pay for its financial problems. The difference between the gold confiscation of the 1930s and the threat of retirement account confiscation today is this: In the 1930s it was effectively voluntary to surrender your gold, while today over 99.9% of retirement assets are in the hands of custodians who are regulated by the federal government. While the 1933 confiscation was only 22% effective, a confiscation today would be 99.9% effective because of our unfounded trust in the financial services industry.

If a wealth “nationalization” plan were pursued, the outlook is grim for the overall population, but you can protect your wealth by simply taking direct possession of it. With an IRA LLC or a self-directed, self-trustee Solo 401k plan, you can legally hold your retirement account assets yourself directly. If an order were placed for you to surrender your retirement account assets, you could simply distribute them to yourself before the order deadline. In such a case you might have to give up 40% or more of your assets to taxation, but that is much better than losing 100%.

Again, I don’t like to come off as spreading “gloom and doom”, but unbelievable economic events are occurring left and right. The acts of the Fed (in concert with Fannie Mae and Freddie Mac) may have already devastated your first pillar of wealth – home equity. Don’t let further acts of foolishness destroy your retirement account.

Spend your time looking at the lighter side of things – investments that perform well; investments that you can understand and have predictable results. Just make sure that you are protected from losing your assets due to lack of optimal structuring. Whether you use a Self Directed IRA or Solo 401k to invest in a variety of alternative assets, make sure you set yourself up for direct possession of your assets.

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Precious Metals

Gold, silver, and platinum coins

Precious metals can offer a secure way to ensure wealth preservation. Gold has been used directly as money for the vast majority of human history. Own the only asset that has been time tested for thousands of years.

Real Estate

Cash purchased or leveraged, residential, commercial, land, options, tenants in common, mortgage notes, trust deeds, domestic or foreign

Owning real assets can be a predictable and understandable way to protect and grow wealth.

Private Companies

Stock in corporations, membership units in LLCs, promissory notes, private placements memorandums, hedge funds, domestic or foreign, revenue participation agreements

Invest in the startup or expansion of private companies… others’ or your own.

Miscellaneous

Foreign bank accounts
While you are probably familiar with holding the U.S. Dollar as a liquid asset in a U.S. bank account, today’s inflationary dollar policies create a strong incentive to hold liquid reserves in foreign banks denominated in a foreign currency that is likely to be more stable than the dollar.

Foreign stock markets
The crash of the American economy doesn’t have to leave you moping around waiting for it to be rebuilt. Take a look at the vibrant economies of other countries. Your Solo 401k can invest directly into stock markets in other countries.

American stock market – Expanded options
With our Self Directed Solo 401k, you can buy and sell options, trade on margin, sell stocks short, and invest in many stocks and funds that are usually unavailable to conventional IRA and 401k accounts.

What is and isn’t allowed

The only specific assets that aren’t allowed are collectibles and precious metal bullion. Rather than list allowable investments, the law names what is disallowed.

In addition to the 2 disallowed investments, “prohibited transactions” are not allowed. These are generally transactions that involve or benefit yourself or your family – outside of taxable distributions from your retirement account.

While there are flawed theories that attempt to convince Joe the Plumber to use the stock market as his sole source of investment opportunities, actual data suggests that across the globe the two leading sources of wealth are real estate and business ownership. Annual wealth reports also often dictate that the wealthy enjoy returns from their private investments far superior to their returns from publicly traded securities.

A winning investment strategy simply insn’t likely with a severely restricted investment platform. With a Self Directed Solo 401k, you can enjoy unlimited possibilities.

1. Presence of self employment activity – This can be as a sole proprietor or more formally organized as a Corporation, Partnership, or LLC. It’s okay to also be employed elsewhere even if that is your full time job and you participate in a 401k there.
2. Absence of full time employees – To meet this requirement you cannot have full time employees at a business that you own. Part time employees (those who work under 1000 hours per year) and independent contractors (those who receive a 1099 rather than a W-2 at the end of the year) are okay to employ.

If you meet this requirement, you are likely to qualify for a Solo 401k. For a free consultation, call us at 877-SOLO-401K.

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The stock market implosion of 2008 has millions of Americans feeling financially helpless.  Yet individuals who are investing their 401k & IRA money in ventures outside the stock market are singing a different tune. Janice and Jack Stoddard, real estate professionals in Arkansas, heard about self directed investing from a seminar that taught how to invest IRA money into real estate.

Energized by the idea, the Stoddards established two IRAs, rolling over money from their traditional IRAs to fund them.  They used the IRAs to make small real estate transactions, purchasing and reselling property at a profit with all proceeds staying in the IRA.

In 2006, an opportunity to buy and then immediately re-sell 60 acres of undeveloped land at a profit came up.  Concerns over structuring the deal and keeping everything above board led the Stoddards to consult with us at Nabers Group.

“Jeff helped us establish a Solo 401k that could be used to handle the 60 acre transaction. The Solo 401k was a key component to our funding because we were able to contribute 10 times more to it than we could to an IRA.  Meanwhile, our son, who works in oil and gas, alerted us to keeping our eyes open for property with mineral rights for future transactions,” Janice says.

With the proceeds from the 60 acre sale, the Stoddards began looking for their next investment.  They found a 57 acre property with 54 acres of undeveloped land and a house that was sitting on three acres.  The property, valued at $435,000, was more than the couple had in cash in their Solo 401k, so they began looking at options. They contacted friends in Dallas and asked if they’d be interested in joining them in the investment. Their goal was to buy it and sub-divide it for resale in five and ten acre parcels.  Their friends, both physicians, agreed. We helped the couples form a Limited Liability Company for purposes of purchasing the land.  The LLC is owned jointly by the Stoddard’s Solo 401k and their friend’s IRA.

The owner had originally listed the property for $5,250 an acre with only 50% of the mineral rights.  At the time no drilling was taking place on the property and no natural gas had been pulled from the ground.  The Stoddards negotiated for full mineral rights and bought them with the property for $5,875 per acre. Over the next few months, natural gas producer Chesapeake Energy put a well on the property, and soon the LLC was receiving large monthly royalty checks for the natural gas on the property.  Over 18 months, those checks totaled more than $100,000.  When the Stoddards were approached by a buyer who wanted to purchase the mineral rights and not the land for $8700 an acre, they sold the rights, netting another $465,000 while retaining the land, now valued at an estimated $435,000.

A key to their success is that Janice knows real estate and knew how to identify an under-valued property that was a good investment.  With her son’s knowledge of oil and gas, her strategy became as much about the mineral rights as the real estate.  Mineral rights prices had been skyrocketing, lease values had been increasing in her area, and Janice knew she could resell the land and improvements alone and at least break even while keeping what she was really after – the mineral rights.

Within six real estate transactions, the LLC’s asset value had gone from $350,000 to more than $950,000 in under two years. The Stoddards have more than quadrupled their initial investment, and they aren’t stopping there.  Other property and mineral rights deals are already on the table for purchase with their Solo 401k funds. Our firm regularly structures Self Directed IRA & Solo 401k investment plans, and although the growth in the Stoddards’ investments is exceptional, it is not unique for someone who is as diligent in their investing as they are.

“I will admit to being a researcher,” Janice Stoddard says.  “When I found out that as a self-employed individual I could set up a retirement plan that would allow me to invest in real estate, which is something I know very well, I was excited about that.  The hard part was finding a financial expert who would embrace the concept of self directed investing.  Everyone I talked to told me I should buy stocks instead.  The Nabers Group has a wealth of experience in this area and Jeff has been very instrumental in giving us a thorough understanding of our options and the opportunities,” she says.

Today Stoddard advises other real estate professionals to do the same thing, and she’s joined the IRA Association of America to ensure that she is aware of regulations and new opportunities available to individual investors. “I talk to my friends, and they are absolutely despondent over what is happening to money they thought they had for retirement or college.  A lot of people have lost a lot of money in recent months.  When I tell them I didn’t lose a dime and that I’ve quadrupled the value of my Solo 401k over the last eighteen months, they want to know how,” Stoddard says.

Here at Nabers Group we are seeing our business grow because there are plenty of people who are not willing to ‘wait and see what happens’ with the stock market.  They want control over their finances, and they want to replace their restrictive IRA or 401k with one that offers unlimited possibilities.

Stoddard says she never hesitates to tell people to take charge of their own retirement money. “If we had not established our self directed investment accounts we would not have the cash available for investing that we now have. That’s what allows us the ability to act fast with real estate and mineral rights opportunities.   It’s a lot different than helplessly watching the market, and it has absolutely changed our future,” she says.

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We’ve just relaunched solo401k.com on this blogging platform to allow for regular information updates and easy navigation.  Use the categories at the bottom of the page to learn more about the world’s most powerful investment vehicle – the Solo 401k!

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