This week’s message focus on how to survive and profit from a US dollar crash. Here is a specific way to protect the purchasing power your IRA even if the US dollar falls. This October 27, 2004 Gary Scott message looks at ways to gain from real estate, even overseas property, international property, and ginseng in your IRA.
Yesterday’s message looked at three ideas.
Idea #1: Invest in the right real estate to protect against the fall of the US dollar.
Idea #2: Ashe County real estate can be the right real estate.
Idea #3: Ashe County real estate may be even more valuable because it is often suitable to grow woods-assisted wild Ginseng.
You can even do this through your IRA.
Our friend Larry Grossman specializes in this concept and recently shared this idea with us when he wrote:
“Contrary to what many investors have been told by their brokers and bankers, you can own real estate in your IRA.
“Over the years, advisors have wrongly convinced people they cannot own real estate, inside of their IRA and Retirement Plans. Nothing could be further from the truth. In actuality, the IRS allows a great deal of flexibility when it comes to investing the assets of your retirement account. The problem is many investors do not have a ‘self directed’ IRA or they work with a custodian who imposes their own investment restrictions. Most of these restrictions have nothing to do with the actual Code governing retirement accounts but are instead employed to make life easier for the custodian.
“Actually, the rules governing the ownership of real estate are very simple.
“What you can own:
1. Raw Land
3. Office Buildings
4. Single Family Homes
5. Multi-Family Homes
6. Apartment Buildings
7. Improved Land
“In fact, there is virtually no type of real estate you cannot own beyond the general rules governing ‘Prohibited Transactions and Self Dealing’.
“The IRS has some rather simple and straightforward rules that define what you cannot do. A simple rule of thumb is your retirement plan is meant to benefit you at retirement and not before. You may not, directly or indirectly, deal with yourself or a disqualified person. The term, ‘deal with yourself’ means you cannot lend money, extend credit, furnish goods, services or facilities to yourself or a disqualified person. You can invest in any type of real estate you want as long as it is an investment and not for your own use currently.
“The word ‘currently’ is an important part of this puzzle. Let's assume you have found your dream retirement home or the piece of property you would like to build it on.
“The solution is simple. You purchase the property using the funds in your Self Directed Plan. Upon your retirement, you would like to own the property personally (outside your IRA/Retirement Plan) and use it for your own benefit.
“At that time you take a distribution from your plan by taking possession of the property. You would be taxed upon whatever the value is when you take possession. Of course you have the option to sell the property outright at anytime.
* You may not purchase the property from yourself.
* It may not be purchased from family members, except for siblings.
* Neither you, your business nor family members may lease or live in any investment property owned by your plan.
* Only Retirement Funds may be used as the down payment or good faith deposit.
* The title must be in the name of the Retirement Account.
* You may have a fractional ownership in a property.
“The good news is you can find the dream property you have always wanted, and purchase all or part of it with your retirement assets and eventually take ownership of it. This can all be done legally and compliantly.” More details on this from Larry at email@example.com
Now consider this idea for retirement. Buy rural land at a good price now in a place where you would like to live upon retirement. Sit on it and wait for the value to grow. (You might consider planting ginseng for the future as well. It takes five to ten years to develop a good crop. Retire and support the land and enhance your retirement income!)
Tomorrow we’ll look at how to use your IRA to own property abroad.
Until then, good investing!