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2017-08-02 How Can a Self-Directed IRA Help Your Investment Plan? | By: Fellow GDREIA Members

How Can a Self-Directed IRA Help Your Investment Plan?
By Larry D. Hudson

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The answer is a resounding “yes!” according to national trainer John Bowens of Equity Trust Company. Bowens provided an introduction to a very powerful financial tool during his visit to Greater Dayton REIA’s First Wednesday meeting for August (8/2/17).
 
The aim, Bowens told the meeting, is to create tax-advantaged cash-flow. There are many ways to accomplish this, Bowens said, and added they are well-worth the concentrated study it takes to understand and implement them.
 
Most of us are familiar with the Individual Retirement Account and the 401K, accounts that provide tax advantages for retirement savings plans. Typically, the accounts are set up to accommodate investments in stocks, bonds and mutual funds.
 
Bowens said Equity Trust’s innovation was to establish a framework for the IRA to accept non-traditional investments – like real estate, options and mortgage notes. The company, in business since 1974 and now based in Westlake, OH, was the first to test the use of self-directed IRAs and set up a way to administer them as “passive custodian.” What this means, Bowens explained, is that Equity Trust never offers advice. You make your own choices about the investments allowed by law and regulation in the accounts. Today, Equity Trust serves as passive custodian to self-directed accounts valued at more than $12 billion.
 
The results for investors can be greater growth and a lower tax payout for investments, Bowens said. One very savvy investor accepted a challenge to turn a $500 investment into $30,000 in a tax-advantaged retirement account in little more than a year, he said, using real estate purchases and resales.
 
Not everyone can achieve results like that, Bowens readily acknowledged. But clearly, he said, the self-directed IRA is a powerful tool to help you grow your real estate investment and retirement savings program.
 

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