Hold on to your Assets!

by Peter Rizzo

Life Settlements in a Retirement Account? Think Again.

I ran the article below a couple of years ago, but after the news about the FTX exchange, I thought it was apropos to run it again.

One of the benefits of self-managed accounts like Check Book IRA, LLCs, and our Solo 401(k)’s, is that you have the ability to control your assets. In addition, you are able to choose the type of assets you invest in.

You can control where your gold is stored or where your crypto keys reside or how your real estate is titled. This is often an over-looked feature, as many self-directed plans don’t allow you to have asset control.

You get a certificate showing you that you own X amount of gold or crypto. This is fine, but if things go south, the assets disappear rather than just drop in value.

Take a look at your portfolio this week and imagine the worst-case scenario. If you don’t have control of the assets, maybe it’s time to get it.

This might seem like a simple phrase and you might think, “of course I’ll control my assets”– but do you really?  If you own gold, can you look at it? If you own real estate, can you sell it tomorrow if need be?  As pension plans diminish and more people will be dependent on their 401k and IRAs for retirement income, it’s vitally important that you control the ownership of your assets as much as possible.

When the economy is strong and assets are constantly gaining in value, investors forget about history and the pain that was brought on by the mortgage crisis, Madoff Ponzi scheme and the collapse of Allen Stanford’s Firm in Houston, Texas.

The only way to do this with your retirement accounts is to have a pure checkbook-controlled IRA or Solo 401K.

 There are many self-directed IRAs for specific investments that allow you to only invest in that particular investment and you must have the custodian be a partner in the asset – That meaning they control the process for asset purchase, sales and storage location. You should also know if the asset really exists.

If I’m buying metals, I want to see them and not just a certificate that says I have them. If I’m buying bitcoin, I want the keys not just a promise to deliver if I want to cash out, and, lastly, if I’m investing in real estate, I want to see my trust or LLC on the title in some form. Here are a few tips to help you get or keep control.

  1. If you have a Bitcoin or any other Crypto IRA, make sure you can roll it over to another custodian if you desire. Ask for the identifying keys for self-storage if available and, if not, ask for proof of ownership. If that’s not possible, just realize that you have an account, but you are relying on the entity or club to deliver, if you want to cash out. There are many good clubs that handle the trading of crypto and store at an exchange – choose wisely.
  2. If you have any metal IRAs, make sure you just don’t have ownership by certificate, but in actual coins that are stored and you have the ability to roll into another custodian. Many custodians will list the actual number of coins and location certification.
  3. I explained earlier about Real Estate – find out how your ownership is titled and what the process for roll over or asset sale is. You want to have the ability to liquidate if possible. We recently did a webinar with a group called Beckstone partners. I was asked repeatedly about the investment safety. We don’t push various investments, but I did state the one thing I really liked was that you had title to a specific property and the ability to touch and feel your investment. While not ideal, you could manage it yourself if need be.

These are three of the most popular assets we see, but there are many more. If you have invested in any of the others, look at what you have, not what it can be. I’m not trying to be an alarmist or a Debbie Downer, but in a time of prosperity, we want to be sure and keep our guard up. If someone ever gets irritated because you ask a lot of questions, they are someone you don’t want to invest with.

The best way to have control and to hold on to those assets is by Checkbook Control.

 

 

 

 

 

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