Taxes, Spending, Politics And Your Self Directed IRA

In prior postings we touched on what is referred to as the Fiscal Cliff. That so called cliff is a perfect storm of events coming together at years end.

What are these events:

1. Bush era tax cuts will be rolled back thereby increasing the effective tax rate on top earners from 36% to 39%

2. Estate tax exemptions will fall back from $5M to $1M

3. Obamacare will kick in thereby increasing the taxation or collection of taxes from US citizens

4. There are spending that will be coming in an effort to reduce the budget deficit

All of these events are coming to a head at years end. There are solutions to many of these problems, but we still have not seen any political will from anyone in Washington. You will also notice that you are not hearing anyone from the mainstream media talking about the problem or what efforts are being made in Washington.

What is likely to happen

Our prediction is that we won’t actually fall off a cliff per se. There will be last minute scrambling, proposals, bill passage that will address some of the issues and not others. There will be a lot of uncertainty and the markets will likely roil as a result. The overall confidence in government and the markets will go down, as if that were possible. In the end, the average person, consumer, business person, and investor will be hurt.

What to do with your self directed IRA

Firstly, we believe that precious metals will be a must have in your portfolio. We strongly advocate holding physical metal in your self directed IRA.

Secondly we encourage you to look for investment properties that can generate cash flow. Don’t worry about price appreciation. If the economy really tanks, at the end of the day people still need a place to live.

Third, look for other non-traditional investments that invest in real projects, real commodities provide real jobs. Get away from paper assets and anything directly controlled by the stock market or the government.

Disclaimer: The information provided is for educational purposes only and are not a solicitation or offering of an investment, investment advice, or tax advice. You should consult with your tax, legal or financial advisor to determine the suitability of any investments made with a self directed IRA account.

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