Archive for November, 2012

Self Directed IRA Fundings Top $464 Million

Sunday, November 25th, 2012

We wanted to take a moment and provide some insight o what is happening with our self directed IRA account activity. As of November 2012 we have funded more than $464M in self directed IRA deals. Below is a graph that give you a good idea of what the activity level looks like.

The significance of this is that we continue to see a steady stream of people coming in from more traditional retirement accounts invested in stocks and bonds, and moving into more hard assets investments such as real estate, precious metals and deeds of trust.

It is our opinion that this trend will not reverse itself for a generation of two. Investors have made a fundamental shift in how they view the traditional markets that we refer to as Wall Street. Investors continue to look for hard assets, investments that they understand, and most importantly investments that are out of the direct control or manipulation of the Wall Street types.

So, for those of you who are still sitting on the sidelines regarding setting up your self directed IRA, then let the numbers help you. There is no better time than now to be setting up your self directed IRA.

How Quickly Our Perception Of Paper Currency Can Change

Saturday, November 24th, 2012

Recently my bank started issuing $50 and $100 bills from the ATM machine. Every time I go to a store or restaurant to spend one these crisp bills, the clerk or the waiter either holds the bills up and scrutinize them like they are analyzing a diamond, or they call over a manager who is more qualified to determine of I am passing good paper. In some cases, like McDonalds, I can’t even give then any bill larger than a $20.

When I was a kid or even a young adult, I would have viewed getting paid in a $50 or $100 dollar bill as very cool and prestigious. If I would have had the ability to pay for goods or services with those same bills I would have thought I had arrived and achieved real success. However, I now look upon these bills as troublesome, embarrassing, and a general pain. Therefore, I will not use the ATM options where I get $50 or $100 bills.

The point of this is that this is the first time in my life I can ever remember having any preference for how I got paid in terms of currency. Money used to be money. Now, not so much. The moral of the story is that it is not so far fetched to believe that we, Americans, could suddenly change our perception of the value of US currency. It is more than plausible to think that as our government continues to debase the US dollar through printing, and deficits, and the resulting inflation that we decrease our belief, reliance, and perceived value of the US dollar. Such changes in our mindset would ultimately result in shifting our ownership to alternate forms of currency such as gold or silver or other hard assets.

As I write, I realize that I am making the case for what is already happening in our country… people are started to shift into precious metals because of their lack of faith or belief in US Government policies and the overall economy.

So what does this mean for your and your self directed IRA?

Well I think the point is clear. The Government has and continues to engage in polices that debase the US Dollar, and create the perfect storm for hyperinflation. This drives the citizens of the USA to look for alternative assets and investments that are not based in US dollars or that will be a hedge against the US dollar. That investment/hedge/asset is physical gold and silver in your self directed IRA.

Real Estate Update – Housing and The Self Directed IRA

Saturday, November 24th, 2012

The recent housing starts for October 2012 shows a 3.6% improvement. The south and midwest regions of the country are showing the most robustness. The chart below shows the historical housing starts numbers.

Chart: Housing Starts

What we see if that the bottom has been formed with clear support. Starting in Jan 2012 we see the uptrend pattern forming. With the favorable numbers shown in October 2012, we are not seeing a pattern or trend that causing a break in the upward trend line.

Multi Unit Starts

The numbers also show that we are seeing upward trends in multi unit properties. The demand continues to be there to support the starts on such properties.

What these numbers mean for self directed IRA

As we have noted in previous updates, we believe a bottom has been formed in the real estate market. Prices appreciation is still tamped down. Demand continues to be strong for rentals and multi unit rentals. The economic recovery continues to be soft and delicate. However, barring a new major meltdown, which is possible, investment properties are ripe for picking up at low prices. We continue to support hard assets in your retirement portfolio. We still believe that real estate investing is good for those self directed IRA investors that do their homework on the right investment properties.