5 Popular Investments for a Check Book IRA LLC
By Jordan Sheppherd
We’re often asked by current and prospective clients what other people are doing with their retirement money. People invest in different things depending on their location, background, and expertise, but here is a list of 5 popular investments our clients choose to do with their IRA LLC.
1. PRECIOUS METALS: GOLD & SILVER COINS
Gold and silver coins are by far the most popular investment for our clients right now. Who can blame them? I remember watching a lecture given by a Harvard lawyer on the history of monetary policy in the United States. This fellow put up a chart showing how much the U.S. dollar has depreciated since 1774. The number, as of 2009 was 96.4%. Yikes. Gold and silver have been the preferred currency for the last several thousand years, and only fairly recently have nations begun experimenting with irredeemable fiat paper currencies issued by monolithic central banks. The outcome of those experiments has been predictably awful (think France in the late 1790’s, Weimar Germany in the 30’s, and most recently Zimbabwe), and so it should come as no surprise that some people are looking to get out of a depreciating asset (the dollar) and into something that is a bit more stable.
2. RENTAL REAL ESTATE
Rental property has always been one of the most popular investments around, but after the market crash people seemed to be wary of real estate in general, and we can’t blame them. But now, we’re starting to see more and more clients get back into rental property. It depends on where you are of course, but some areas are starting to look up, and may offer some profitability. Banks are also starting to throw more and more foreclosure properties back on the market which means prices are coming down even more.
3. TRUST DEEDS
Trust deeds are one of the safest forms of investing in real estate, if done properly. It depends on which State you’re in of course, but trust deeds are a safe way to secure a loan made by your CheckBook IRA LLC, because you have the power to foreclose on a property immediately without all the red tape that you normally would have to wade through in a mortgage State. As real estate prices have come down, trust deeds have become even more popular.
4. OFFSHORE INVESTMENTS
As a piggyback to the gold and silver debate, many are starting to go offshore for any number of reasons. We’ve seen a definite up-tick in clients moving their funds offshore to countries like Panama, Argentina, Japan, and Costa Rica. Some of our clients go so far as to expatriate to a different country, and many of them want to take their retirement with them. Whether it’s real estate, or just parking your money offshore to escape what many feel will be the inevitable decline of the American Empire, quite a few people with a CheckBook IRA LLC are beginning to go offshore. Be careful though. When Dorothy remarked to Toto “We’re not in Kansas anymore” she could have been talking about foreign investments. When it comes to moving your retirement funds offshore, make sure you’re dealing with competent and trustworthy people.
5. TAX LIENS
Tax liens have been a popular but little known form of real estate investing for a long time. If you know what you’re doing, you can generally get anywhere from 10-20% yield returns on a tax lien certificate, and do it with very low risk. Contrary to popular belief, most of the time you won’t ever get actual ownership of the property, because tax lien certificates tend to redeem 99% of the time. But, having said that its still a good way to scrape in a good return. One of the nice things about a investing in tax liens with a CheckBook IRA LLC is that you’re able to personally show up and look at the property before you buy the lien, and you can do it with cash in hand…try doing that with a self-directed IRA. There are a lot of ins and outs to tax liens, and don’t let anyone tell you its simple and easy. If you don’t know anything about them, you can lose your rear end – but that’s true of anything, isn’t it?
HONORABLE MENTION: CURRENCY TRADING
I don’t know what it is, but we’ve seen an increased interest in using an IRA LLC to trade currencies. Whether you have a trader do the day to day trading for you, or whether you do it yourself (not recommended), there are admittedly attractive gains to be made in this market. The learning curve can be steep, and if done improperly, you can be left wondering how it all went wrong. But, there are competent traders out there who can offer a good return with relatively little risk.
WHAT ABOUT YOU?
Now that we’ve talked about some investments our clients choose to do, what about you? Are you investing in something that isn’t on this list? If so, chime and let us know.
Invest intelligently. Enjoy the rewards.