Financial Planning

Buying Notes with your Self-Directed IRA   Now that you know the basics of a Self-Directed IRA, let’s dive into some of the leading trends in Self-Directed Investing. With all of the stock market uncertainty, investing in notes has become increasingly attractive using tax-deferred funds in your IRA or retirement plan. Notes can be a great option because the payment streams come into your IRA and in the final analysis, on a first trust deed, the worst case is that you own the property. Best of all, discounted notes can be purchased for pennies on the dollar.   Investing in real estate and notes is just like any other transaction that uses a third-party entity as the owner. Here are some rules to keep in mind when considering note-buying with your Self-Directed IRA:   The IRA owner cannot receive any benefit from the IRA or its assets. Specifically: No living on the property. No direct receipt of income related to the property. Income is only permissible when it is proportionate to the investment. The IRA cannot deal with you or any disqualified persons. This includes parents, spouses, children, and some business associates. Qualified plans assets, such as an office building invested in or by a plan, can have a certain part allocated to having you rent space for the purposes of the plan (we suggest consulting an attorney for more information).   How to get started buying notes with your self-directed IRA:   Once you’re ready to start investing, a direction of investment form must be completed when purchasing a real estate note. By utilizing an IRA administrator, you can guarantee your directions will be executed in a detailed and timely manner, assuring efficient transactions.   When a title or escrow company is involved, make sure that all instructions are provided for all documents in your account. Title or escrow companies may have additional requirements for your transactions than ours, so please be aware.   Your administrator must receive all loan documentation before funding can take place. Funding may not be initiated without a full loan package; this includes a trust deed and note, title insurance (if applicable), and appropriate vesting.   As your record keeper, your IRA administrator may receive payments directly from your payer as well as process loan payments. They also keep all original documentation for your convenience.   By investing in notes, you are investing in a tangible asset. By investing with your Self-Directed IRA, you are guaranteeing tax-free returns on those investments, making it a great alternative to the stock market. For more information on buying notes in your Self-Directed IRA, or any of the options available to you by Self-Directed investing, call us toll-free at 888-938-5872.   Take back control of your retirement and stop losing money to the fund managers. Contact us today!   888-938-5872    

Self-Directed Investing 101   The Self-Directed IRA industry is growing at a staggering pace and is expected to see over $2 trillion enter the market over the next few years. With over 45 million retirement account holders and less than 4% of those being held in nontraditional assets, the time to consider Self-Directed investing is now. The Investment Company Institute- the national association of U.S. investment companies, estimates that nearly $4.7 trillion in IRAs were held in the U.S. last year. Of this, an estimated $94 billion or a mere 2 percent are Self-Directed IRAs.   So, what is Self-Directed IRA Investing?   A Self-Directed IRA allows you to decide how to invest your retirement funds. Many people assume “Self-Directed” is a unique type of IRA. However, “Self-Directed” is not a type. Any IRA, whether it’s a Traditional, ROTH, SEP, or SIMPLE IRA can be self-directed.   Using your IRA to invest in non-traditional assets like real estate has been available to investors since 1974. You may be learning about this for the first time because large banks and brokerage firms don’t typically offer these investment options. You may ask – “Is this really legal?” The answer is yes. With the exception of life insurance contracts, collectibles, and stock in an S corporation, IRS rules allow all other investment types as long as they comply with the rules governing retirement plans.   Why Self-Direct?   Stock market volatility and the economy have many investors considering alternative assets for their retirement accounts. A Self-Directed IRA gives you control over your retirement funds by making tax-free investments in assets that you’re familiar with.   What Can I Invest in?   Below are some examples of investment opportunities available to you through your Self-Directed IRA:   Types of Self-Directed IRA Investments Allowable by IRS: Residential real estate Tax Lien Certificates Precious Metals Commercial real estate Equipment leasing Factoring Undeveloped or raw land Livestock Accounts Receivable Real estate notes Foreign currency Oil and Gas Promissory notes Stocks ,bonds, mutual funds Structured Settlements Limited partnerships Private placements   LLC and C-Corp Structured Settlements LLCs, LPs and C-Corporations   What are the Rules?   Prohibited Transactions. IRS rules forbid certain types of transactions in IRA accounts. Some examples are listed below:   Collecting management fees for your properties is also prohibited as it is a direct benefit for you, the account owner. Collecting commissions on properties purchased through your IRA. You may not buy, sell, or lease your real estate from disqualified persons. All profits generated from an IRA owned asset must be paid back into the IRA and all expenses incurred by the asset must be paid by the IRA (they may not be paid with personal funds and reimbursed by the IRA). Any debt used to acquire an asset in an IRA must be non-recourse. In other words, the IRA owner is prohibited from guaranteeing the note personally.   Disqualified Persons. IRS rules define certain individuals that are unable to participate in any transaction with your IRA:   Yourself Your Spouse Your Children Your Children’s Spouses Your Parents Certain Business Partners   Additional Regulations. Here are a few examples of prohibited transactions using your IRA that you should become familiar with:   The property must remain in the IRA until distributed or sold to a third party. Property owned within an IRA will not be able to take advantage of write-offs, such as depreciation or other expenses relating to the property. All rental profits must be returned to the IRA. When purchased, the property becomes an asset of the IRA. If you are an owner, you may not lease to a disqualified person, or in any way have a disqualified person occupy the property while it’s owned by your IRA. While an IRA owner cannot manage the property, they can hire a property manager or real estate broker to collect rent and maintain the property. Neither the IRA owner nor his/her family members (siblings excluded) may have access to or utilize the property while it’s in the IRA. Borrowing money from an IRA. IRA’s are prohibited from making loans to IRA owners as well as any other disqualified persons. IRA owners are prohibited from using their IRA as collateral for any loan, as the amount they pledge as security will be deemed a distribution by the IRS. Selling assets you already own to your IRA or to a disqualified person’s IRA. Purchasing a property for personal use, either by the IRA owner and/or a family member. Purchasing a property owned by a family member who is a disqualified person. Lending money to a disqualified person.   So should I open a Self-Directed IRA account?   Self-Directed investing isn’t for everyone. For some, the idea of having total control of their investments is a daunting one. We recommend reviewing your investment strategies with your tax advisor prior to investing. For more information about what a Self-Directed IRA can do for you call us toll-free at (888) 938-5872.    

If you are like most of us, you want to invest over the long haul, buying the best mutual funds to invest in and not have to worry about it. Most people automatically make an assumption that growth stock mutual funds will provide the best returns over the long run. Often times this is a poor assumption, but in our research we found the best mutual funds to invest in were, in fact, growth stock mutual funds, but let us not forget, retirement investing is for your long term retirement goals, so you want to make the most of every dollar you put in there, so you can have enough money to retire… maybe even retire early.   Kiplinger puts out a great list of best performing mutual funds to invest in (10 years). They actually look at the best mutual funds to invest in during the last year, the last 5 years, 10 years and 20 years, but let us not digress. Their analysis is purely from a statistical perspective; e.g. which funds averaged the best returns. No doubt that it might be fun to take a look at the best mutual funds to invest in for the last year. Here one will often find growth stock mutual funds that had large investments in some of the highest-appreciating stocks and “got lucky.” The true testament comes for the funds that can endure and consistently outperform year in and year out through full business cycles. A full business cycle being about 5-7 years on average. (we will later explain how we define a full business cycle)   Best Growth Stock Mutual Funds to Invest In       Large company stock funds over last 10 years. Data through June 30, 2016. Source: Morningstar, Inc. Therefore, since our time horizon for this analysis is 10-15 years, we are most interested in the best performing mutual funds (10 years) over the long run. Those mutual funds to invest in which, don’t just get lucky one year, but have the skills to “get lucky” year in and year out selecting their stocks and getting out at the right time as well. Most growth funds often have a year of outperformance and maybe even 2 or 3 years. One would suggest that their outperformance really goes from “getting lucky” to actually having real talent with stock picking. However, the most skilled managers of growth stock mutual funds do it year in and year out in up markets and down markets.   By selecting the 10-year timeframe to focus our attention on, we’re looking for those best performing mutual funds to invest in that actually have gone through a major market down-turn like the one that occurred in 2008 when the S&P500 was down 37%. 2008 was one of the most painful periods for most people in their 401K. How did these funds perform during the most painful period in recent history? Did those growth stock mutual funds outperform the S&P500 during the tough years as well? Or were they susceptible to the same dips that the stock market tends to have at least once every business cycle?   Critical Big Picture Fact: Since the year 1900 there have been 19 recessionary periods. That is one recessionary period every 6.1 years on average. The last one occurred in 2008/9. Each one of these recessionary periods resulted in a 20%-80% loss in the S&P 500. Currently, we are 8 years from our last recessionary period.   The top 5 best performing mutual funds (10 years) illustrated have all had returns that have averaged over 11%. We can tell you this is great, but not as great as some tactical private wealth management funds that we have learned about.   What is the difference between a tactical private wealth management fund and a mutual fund?   A tactical private wealth management fund and a mutual fund both invest in underlying securities such as stocks, bonds, mutual funds, and ETFs and they both offer sector-type fund options (dividends, real estate, municipal bonds, etc.). The biggest difference is that most mutual funds, as detailed in their prospectus by law, typically have to be fully invested regardless of how poorly the market is doing. Every mutual fund defines this slightly differently, but it tends to mean they are required to have be invested by a minimum of 80% of the assets in the underlying stocks/bonds they are investing in. That means that when the market is going down, the mutual fund must keep 80% of all of their assets invested in the market regardless, as stated by rule 35D-1 under the investment Company Act of 1940. Rule 35d-1 restricts a mutual fund manager from liquidating and protecting your money during downturns in the market because they must stay 80% fully invested. This does not necessarily mean the mutual fund manager is a poor stock/bond picker, but rule 35D-1 simply prohibits them from selling securities in a down market to protect your money. This is one of the dirty little secrets of the industry.   Through our research, we found that tactical private wealth management funds do not operate within the same guidelines and restrictions of rule 35D-1. Tactical private wealth management funds offer investors more flexibility to sell the market.   The Best Growth Stock Mutual Funds to Invest In: Is There Something Even Better?   The key point here is that there is no trigger for the mutual fund manager to get out. They are relying on you to sell the mutual fund or your broker to sell for you. The only problem is that your broker gets paid only when you are fully invested in the mutual funds. If s/he takes your portfolio to cash, s/he just cut their own salary. I don’t know too many people that would proactively decide to cut their own income. Therefore, a broker telling you “sell everything” to protect you from losses in the market rarely occurs.   When there is

Self-Directed Investing 101   The Self-Directed IRA industry is growing at a staggering pace and is expected to see over $2 trillion enter the market over the next few years. With over 45 million retirement account holders and less than 4% of those being held in nontraditional assets, the time to consider Self-Directed investing is now. The Investment Company Institute- the national association of U.S. investment companies, estimates that nearly $4.7 trillion in IRAs were held in the U.S. last year. Of this, an estimated $94 billion or a mere 2 percent are Self-Directed IRAs.   So, what is Self-Directed IRA Investing?   A Self-Directed IRA allows you to decide how to invest your retirement funds. Many people assume “Self-Directed” is a unique type of IRA. However, “Self-Directed” is not a type. Any IRA, whether it’s a Traditional, ROTH, SEP, or SIMPLE IRA can be self-directed.   Using your IRA to invest in non-traditional assets like real estate has been available to investors since 1974. You may be learning about this for the first time because large banks and brokerage firms don’t typically offer these investment options. You may ask – “Is this really legal?” The answer is yes. With the exception of life insurance contracts, collectibles, and stock in an S corporation, IRS rules allow all other investment types as long as they comply with the rules governing retirement plans.   Why Self-Direct?   Stock market volatility and the economy have many investors considering alternative assets for their retirement accounts. A Self-Directed IRA gives you control over your retirement funds by making tax-free investments in assets that you’re familiar with.   What Can I Invest in?   Below are some examples of investment opportunities available to you through your Self-Directed IRA:   Types of Self-Directed IRA Investments Allowable by IRS: Revocable Living Trust2 Residential real estate Tax Lien Certificates Precious Metals Commercial real estate Equipment leasing Factoring Undeveloped or raw land Livestock Accounts Receivable Real estate notes Foreign currency Oil and Gas Promissory notes Stocks ,bonds, mutual funds Structured Settlements Limited partnerships Private placements   LLC and C-Corp Structured Settlements LLCs, LPs and C-Corporations   What are the Rules?   Prohibited Transactions. IRS rules forbid certain types of transactions in IRA accounts. Some examples are listed below:   Collecting management fees for your properties is also prohibited as it is a direct benefit for you, the account owner. Collecting commissions on properties purchased through your IRA. You may not buy, sell, or lease your real estate from disqualified persons. All profits generated from an IRA owned asset must be paid back into the IRA and all expenses incurred by the asset must be paid by the IRA (they may not be paid with personal funds and reimbursed by the IRA). Any debt used to acquire an asset in an IRA must be non-recourse. In other words, the IRA owner is prohibited from guaranteeing the note personally.   Disqualified Persons. IRS rules define certain individuals that are unable to participate in any transaction with your IRA:   Yourself Your Spouse Your Children Your Children’s Spouses Your Parents Certain Business Partners   Additional Regulations. Here are a few examples of prohibited transactions using your IRA that you should become familiar with:   The property must remain in the IRA until distributed or sold to a third party. Property owned within an IRA will not be able to take advantage of write-offs, such as depreciation or other expenses relating to the property. All rental profits must be returned to the IRA. When purchased, the property becomes an asset of the IRA. If you are an owner, you may not lease to a disqualified person, or in any way have a disqualified person occupy the property while it’s owned by your IRA. While an IRA owner cannot manage the property, they can hire a property manager or real estate broker to collect rent and maintain the property. Neither the IRA owner nor his/her family members (siblings excluded) may have access to or utilize the property while it’s in the IRA. Borrowing money from an IRA. IRA’s are prohibited from making loans to IRA owners as well as any other disqualified persons. IRA owners are prohibited from using their IRA as collateral for any loan, as the amount they pledge as security will be deemed a distribution by the IRS. Selling assets you already own to your IRA or to a disqualified person’s IRA. Purchasing a property for personal use, either by the IRA owner and/or a family member. Purchasing a property owned by a family member who is a disqualified person. Lending money to a disqualified person.   So should I open a Self-Directed IRA account?   Self-Directed investing isn’t for everyone. For some, the idea of having total control of their investments is a daunting one. We recommend reviewing your investment strategies with your tax advisor prior to investing. For more information about what a Self-Directed IRA can do for you call us toll-free at (888) 938-5872.

Tired of the 1.9% the Bank Pays You on Your Certificate of Deposit (CD)? Learn how and why you can buy wholesale annuity payments in the secondary market guaranteed by a Triple-AAA rated and recive a 4% to 7% return   Using investments resulting from Lottery and Courtroom Settlement winners who sell future payments from their Existing Annuities for a lump sum of money today.   Learn more with a presentation here: <astyle=”color:#DAE2EE;” href=”//finance.ultratrust.com/structured_settlements.pdf” target=”_blank”>structured_settlements.pdf Show me real secondary market deals available right now   Most people today love a bargain. Just walk into any TJ Maxx, Marshalls, or Ross stores and witness the excitement on people’s faces knowing they bought a shirt for $15 that was $100 down the street at Bloomingdale’s. You can get an interest rate bargain on returns on your money as well, if only you knew where to find these bargains.   The “retail banks” don’t have these discounts; nor do the local banks; not even banks such as Bank of America, JP Morgan, or Wells Fargo. The local branches of these major banks are retail locations similar to other overpriced retailers throughout the country. But instead of buying and selling clothes, they buy and sell money. They profit on everything they buy and sell. You need to find the bargains not offered by these banks.   A major profit source for the bank is taking deposits. By paying the retail investor, you and me, as little as possible, 0-2% on our checking account or Certificate of Deposit (CD), and lending our money to other people and businesses for 5–10% or more, they make profits on the spread of what they borrow and what they lend. This is retail banking.   Read Mary’s story:     Mary Opening Her Monthly Interest Check For example, Mary retired with $100,000 in a CD at Bank of America. Five years ago, she earned a monthly interest check of $300 to help pay her bills. Six months ago the bank gave her a mere $80 per month on her CD. Working hard for 35+ years, she now found it impossible to make ends meet every month. After hearing about the structured settlements described here, she took her money and bought a secondary guaranteed annuity. Now she earns monthly interest in the amount of $446. That extra $366 really helps with her monthly bills and she uses the extra to splurge on her grandchildren from time to time. Mary felt confident putting her money in the annuity because Prudential and the State of Massachusetts (if something went wrong with Prudential) guaranteed it. Secondary market guaranteed annuities are available to everyone that knows about them. Banks don’t want you to know about these because promoting them would reduce the profits that they earn on low paying CDs. Knowing about them can put extra money in your wallet. If you are savvy like Mary and want to learn more, follow the link below to find real live inventory available right now. Learn more with a presentation here: structured_settlements.pdf Show me real secondary market deals available right now   Buying a CD at 2% from Bank of America is like buying a sweater at Bloomingdale’s for top dollar when everyone knows they can go down the street to TJ Maxx and buy the same thing for less or get interest paying 4–7%; equivalent to a 50% discount at the retail store. In the world of interest–bearing instruments, the lower the price for the future payments results in a higher overall rate of return. Say, for example, Bill gave an investor $50,000 and received $1000 per year, creating a return of 2% a year. Now, Bill needs money immediately to pay for a new car, fix the roof of their house, pay medical bills, or college for their child. What can he do? Bill could sell it to somebody else in a secondary market. Bill, in order to pay these expenses quickly, sells it to Ted for $25,000. Ted gets the same $1000 per year, but only paid $25,000. Ted, now getting a 4% return, just doubled Bill’s original rate of return and tripling his bank’s lousy rate of return.   You want to be Ted, the savvy investor in the secondary market.   Now you see the difference between buying a CD from a bank in the “primary” market versus buying the same cash flow in the “secondary” market. You get the monthly income for half as much, thus doubling your overall rate of return. What is the downside to this? Well, your large chunk of money, in this case, $25,000 is tied up in monthly payments. Not a big deal if you are saving for the future, but if you get yourself in a pickle like Bill did, you have options. Because you negotiated such a good price, you could resell it for more or less what you paid. You may not see this occurring in the real world, but these transactions happen everyday and they are guaranteed by the most secure insurance companies in the world. Those payments are typically insured again by the state of origin, creating a very safe investment.   Continue with part 2: Finding Interest-Bearing accounts Paying 4-7% with minimal risk Learn more with a presentation here: structured_settlements.pdf Show me real secondary market deals available right now

Guaranteed annuity payments from the wholesale secondary market receive 4% to 7% returns. How and why these guaranteed annuity payments can offer such a high return while minimizing risks substantially by cash flows guaranteed by the most secure insurance companies.   Most people today love a bargain. Just walking into a TJ Maxx, Marshalls, or Ross stores and you can see the joy on people’s faces knowing they bought a shirt for $15 that was $100 down the street at the mall in Nordstrom’s. The same thing can be done in finance, but most of the public does not know where to find these discounts.   In this day and age, when conservative investors are unhappy with the low rate of return on Certificates of Deposits (CDs), Government Bonds and Annuities, one question being asked is, “Where can we put our money that is extremely safe, and at the same time yield a high rate of return – at least double or triple what you could get at Bank of America with the same low level of risk?”   The answer: buy guaranteed annuity payments in the secondary market that lottery and Courtroom Settlement winners sell for “cash now,” at a discount. This is a transaction that people have heard about on TV and radio, often from a different perspective, through ads by companies such as JG Wentworth and Peachtree Funding. These ads invite people who have lottery payments and structured settlement payments to sell these cash flow streams (annuities) at a discount in exchange for a lump sum payment.   These companies (Factoring Companies or FCs) then sell them in huge packages to European Banks and large pension funds. These securities are guaranteed by major insurance companies and States (for lottery payments). The guaranteed rate of return is 4% to 7% (effective interest rate) – more that TWICE what one could get at the bank using the same kind of risk parameters.   Sounds too good to be true,   How does the Guaranteed Annuity Payments work and what is the catch?   In the United States, the most litigious country in the world (94% of all lawsuits are instituted here), about $6 Billion per year is generated in legal settlements for personal injury or wrongful death claims that are settled so that the claimants (plaintiffs, annuitants) get their settlements in periodic payments over time. The payments, if set up under a provision in the law – IRC Section 5891 (c)(1), are totally tax-free and guaranteed by highly rated life insurance companies (and back-stopped by State Guarantee Funds).   For most people, this works out to be a wonderful arrangement, and in fact, there are about $100 Billion worth of these contracts in force with US carriers today. However, some of these claimants find that their circumstances change and they cannot wait 5 years for their monthly check, so they sell their future monthly checks at a discount. About $2 Billion of these settlements are sold to FCs each year at a discount of approximately 50% of their original purchase price. Thus, an investment guaranteed by a life insurance company at 3.00% could now be guaranteeing 6.00%, with the same benefits and assurances that the original purchaser enjoyed.   There has been some confusion among both advisors and their clients as to how these arrangements are transacted and regulated, and why the rate of return is so high when the risk is so low. For the winner of a lawsuit, it is very easy to get into a structured settlement, but very difficult to get out of it – it is like a lobster trap. Because the payments are set up by the insurance companies to be for a set period of time without any system to get an advance on future payments – there is no meaningful liquidity unless they wait. Claimants cannot go to a bank and get a loan based on these payments. A bank cannot foreclose on annuity payments the way it can, for instance, when someone doesn’t pay their home mortgage.   Also, the Courts don’t want people to get out of the payment stream unless there is a compelling reason. To sell one of these annuities, one has to obtain a court order. All of this takes time, knowledge of the legal system, and involves significant legal fees. However, because of this system, all sales are carefully monitored and underwritten so that at the end of the day there are no liens or encumbrances against the annuity policy so that annuity payments would not be able to be intercepted.   The process for transferring payments from a claimant to you or me and a new owner (investor) is very similar to buying a house. After a complete investigation of the contract, the insurance company sends out an assignment letter to the assignee (the investor) stating that he/she is the new owner of the future payments (structured settlement payment rights).   In order to make the future sale or transfer (for estate and/or gifting purposes) of the payments easy and without any delays, these transactions are set up to be serviced and processed through a third party – a large, well-capitalized title company. That way, there is no delay or publicity when a contract is sold or transferred at some time in the future.   The question comes up, “who are good prospects for this kind of conservative investment?” The answer is, almost any individual or entity that wants a rate of return in the range of 4% to 7% – more than twice what you can get today from comparable investments with the same amount of risk. The fact that these investments have a great deal of liquidity to them makes a strong case for putting a portion of one’s portfolio into this asset group.   Although these annuities are totally tax-free to the Courtroom Settlement winner who originally got them, they are taxable to almost all other investors (except charitable institutions).