Welcome back to another episode of the IRA Cafe podcast! In this special solo episode, Kyle Moody, Business Development Manager at American IRA, takes you on a journey through the origins and mission of American IRA, his personal path to joining the company, and the vast world of self-directed IRAs.

Kyle breaks down the basics of self-direction, showcases the flexibility and diversity available through these retirement accounts, and offers anecdotes from his real estate background to illuminate practical use cases. The conversation focused on demystifying self-directed IRAs for both beginner and seasoned investors, exploring how these accounts allow for investment beyond the traditional stocks, bonds, and mutual funds, and giving listeners a comprehensive understanding of their options.

One concept discussed was the difference between self-directed IRAs and the accounts typically offered by major financial institutions, while a key theme that emerged was the importance of client self-education and responsibility when utilizing these powerful retirement vehicles. The discussion explored the types of assets you can hold in a self-directed IRA, including real estate, private lending, syndications, and precious metals, along with important IRS regulations and common pitfalls to avoid.

Several points were raised, including eligibility for different account types, leveraging accounts for entrepreneurs (like the Solo 401), the need to avoid prohibited transactions, and the unique advantages these accounts can bring for long-term tax planning and wealth growth.

Key takeaways:

1. Self-directed IRAs empower investors to go beyond Wall Street by allowing investments in real estate, private lending, syndications, precious metals, and more offering greater diversification and control over retirement funds.
2. American IRA was established to share expert knowledge at low cost and provide a true alternative to the restrictions of “self-directed” accounts offered by traditional financial firms, focusing on non-traditional assets and client education.
3. While self-directed IRAs come in many forms traditional, Roth, inherited, spousal, ESAs, and even account options for entrepreneurs like the Solo 401 they all require the account holder to be hands-on, making their own decisions and ensuring compliance with IRS rules.
4. Prohibited transactions and disqualified parties are critical considerations. Personal use of assets, self-dealing, or involving close relatives can jeopardize the tax-advantaged status of these accounts, so strict adherence to IRS guidelines is essential.
5. The true value in using a self-directed IRA lies in long-term planning: income generated and gains realized within the account are generally tax-deferred (traditional) or tax-free (Roth), so thoughtful strategy can result in significant wealth growth and tax savings over time.

Whether you’re new to self-direction or looking to refine your investment approach, Kyle offers a thorough, accessible overview to help you take confident next steps with your retirement planning.

On this episode of the IRA Cafe, we take it back to the grassroots, learn how American IRA was formed, how I joined the team, and how all of the aspects of American IRA can help you increase your investment objectives. Hi everyone, and welcome to another podcast episode of the IRA Cafe powered by American IRA. I'm Kyle Moody, the Business Development Manager here at American IRA. And we welcome you in wherever and whenever you are catching your podcast. So thanks again for spending some time here. You know, one of the things that you will always get with American IRA is just the education, right? There's always something that is good for everyone wherever you are on your investment journey. There's always something that someone can learn from, whether it's from the beginning investor, you've, you've this is your first time opening up a self-directed IRA, heck, you may not even have one yet. Or even if you are the seasoned investor and you've done lots of transactions across the spectrum of the different asset classes that a self-directed IRA allows you to have, there's always something for everyone.

But let's kind of take it back a little bit. Today's gonna be a little bit of story time with Kyle, okay? There's not a special guest on here. I'm it. So whether that's going to make you stay tuned in or flip off the switch, just don't tell me. We hope you're going to stick around though, because I want to give you a little bit of the history of where American IRA came from and then how I was able to come into the fold. Really what American IRA allows you to do as your self-directed IRA provider. Talk about a lot of the different accounts out there. How you can invest with those accounts, maybe some things to keep a watch on so that you always keep your account in check.

And then we'll wrap up with our closing, and I'll give you some figures as well. If you're ready to get started, you want to know how much things cost, and then always a way to get in touch with me. Okay, so again, thanks for joining us here for a little bit in your day or evening. So American IRA. What we specialize in are self-directed IRAs. Okay, we'll cover it a little bit more in a minute, but it is the ability for you to diversify your portfolio and invest in something that is maybe not stocks, bonds, and mutual funds related. Well, why American IRA and where did this come from? Lots of times when I'm talking to folks, I will always get, well, gee, I didn't know that this even existed. My financial advisor hasn't told me anything about this.

My CPA doesn't really know or know how to counsel me on what I'm wanting to do with my retirement account. Is this a fad? Is it a scam? Is this legit? I've heard all the questions and just everyone's concerns. And I'll go ahead and tell you, guess what, folks? The self-directed IRAs came into being in 1974 with the emergence of ERISA. So we are going into the 52nd year of you being able to invest with a self-directed IRA. And by the way, all that was put out by the IRS.

Okay.

And talking about numbers of years, our CEO, Jim Hitt, has been a lifelong investor, really the last 40-plus years. has been him investing across the country in real estate and various business. And then he really understood the ins and outs of using a self-directed IRA. And that is where American IRA came from. The dream of being able to say, hey, I want to be able to share my knowledge at a very low rate. That's going to be something different than what people are used to paying with financial advisors and more of the traditional types of houses. So that they are able to invest the same way, invest in things that they might know a little bit more about than just the stock market. And that is where American IRA originated.

So in 2011 is when American IRA actually sprouted its wings. It was another company before that, and then he made the transfer from that company to American IRA. In 2018, we also launched New Vision Trust Company, which is the custodian side of the business. So if you're working with a current financial planner or a bank, and they might say something like, okay, well, yeah, you can open up a self-directed account. Well, they really still only mean a self-directed account with them where you're still going to be investing in the stocks, bonds, and mutual funds where What you are really wanting to do is invest in the non-traditional assets. Okay? And with that, they'll say, well, you need a third-party administrator or a TPA. And that's where American IRA comes in. It is the third-party administrator that will allow you to invest in the non-traditional assets.

And we'll cover some of those assets here in just a minute. Well, where did Kyle Moody come from? Okay? The guy that you see on the camera or listen to on the speakers from time to time and who hosts these events. What was my involvement? Well, I have a real, a background in real estate in the North Carolina area, both in residential and commercial sales and then in residential and commercial property management. I actually was a broker in charge of a property management company in the Asheville, North Carolina area. And that's actually where American IRA was founded was in Asheville, North Carolina. I got to know Jim through the property management company, and he liked the fact that I had the real estate knowledge. But then also, I dealt with investors all the time on their property. And after a while, I started noticing that some of these properties were not owned by people.

They were actually owned by a really long title. And what that really long title was, was their IRA. Their retirement account is what owned those properties, not the person. And there's some great benefit to that here in just a second that we will explore. So in all my years in real estate and then in the investing, that's what kind of married the relationship between Jim's vision of American IRA and then me coming in to now be groomed all the way up to the business development manager. And I've been here going on a decade now, and it has been a wonderful ride. And mostly what it has allowed me to do is be in front of you folks all the time and making sure that I can share the talents of sharing the education for you, that you can increase your investing objectives by being our wonderful clients. Okay? So I actually speak on behalf of the entire company, the people that really work behind the scenes taking care of you on your transactions, on your deposits, your distributions.

And here you see some of our team here, you know, everyone from the front door all the way out to the very end at the back office in finance who works very hard every day to make sure that your needs are met when it comes to your self-directed IRA. So what really is the draw behind self-directed IRAs? Well, let me just go ahead and tell you this. If you are new to the game, if you've been listening to a lot of our productions, and you're ready to move forward, but you just kind of need— you still have those questions. I actually know what those questions are. I've heard them over the years. And I'll tell you this, an IRA is an IRA is an IRA. It doesn't matter where it is, whether that is at Bank of America, whether it's at Truist, whether it's at Northwestern Mutual, Edward Jones, Fidelity, Morgan Stanley, Merrill Lynch. I'm trying to think of as many places where you might have your accounts, and even those folks out there that have 401s from their previous employers.

Okay, anything that is out there as a qualified plan can still be used to launch your self-directed IRA. Well, okay, well, if an IRA is an IRA, Kyle, then why can't I just invest with Fidelity to buy the next piece of investment real estate that I want to buy. And that kind of tailors back to what I was telling you earlier. They'll let you know that you can have a self-directed IRA because they are letting you feel that, yeah, you still call the shots on the investments you want to make. True self-directed IRAs are those that allow you to diversify out of a plan that is stocks, bonds, and mutual funds and literally puts you in more control over things that you want to invest in and have that freedom and flexibility. Again, where they say, well, if you want to invest in this non-traditional asset, you're going to need that TPA, that third-party administrator, which is the American IRA side. That's where you're going to speak with me on the sales side, and then we're going to get you set up and everybody else that you would work with for your time at American IRA while you're making your investments and so on and so forth is on our operations side. So diversifying that portfolio means that you're also diversifying into a myriad of account types.

Normally we see people diversify or they will transfer into self-directed accounts That mirror the account types they already have. Okay. Well, what does that mean? Think of what you already have. This is where a lot of this comes into play for you as you are dictating how you're gonna control your account.

Okay.

You know what you have, or you should know what you have. Do you have a 401 from a previous employer? Okay. And what do those 401s have in them?

Yeah.

Are they traditional funds? Are they Roth funds? A pre-tax and a post-tax is another way that people may look at it. Do you have a current IRA at a Fidelity or a Wells Fargo? Do you have a Roth? Here's what I'll tell you. No matter the retirement account out there that you may already have, or what you're looking for, We have the self-directed version of all of it. And it's not just the traditional and the Roth, which are the most frequent, and those are the ones that are the most popular, right? But imagine if there's a husband and wife, one spouse works, the other one doesn't. There's a spousal account. Okay, so there's ways for a non-working spouse to benefit with a self-directed IRA based on the income of the other spouse. And we can talk about that later if you want to schedule a call with me. Inheritance.

An aunt or an uncle, parent, spouse passes away and you're the beneficiary, but you may not want to invest in the stock market like they did. Your knowledge rests in real estate. That is— and if you want to use those funds, you can absolutely do that with the self-directed IRA. Do you have kids? Maybe somebody that was just born, they're a year or 2 old, and you want to have something that is prepping them for college. You may know the state plans as the 529s, which is not what it is in the self-directed world, but instead it's called the ESA, the Education Savings Account, otherwise known as the Coverdell. You can use that as a self-directed IRA. How about if you have a high deductible health plan, and then you would actually want to open up the healthcare type of retirement plan. You can absolutely do that and self-direct it.

Okay, so just keep in mind that no matter the retirement account plans out there, we have the self-directed version of them. Now, obviously, on this podcast, we can't delve into all of those, and all of your scenarios are going to be different for your needs. And that's what I'm going to be here for. later to give you my information, how you can get in touch with me and we can really walk through and get you set up with what you need to meet your investment objectives. Okay. So just keep in mind all the different retirement plans that you may have out there with the more traditional type of houses. Well, now you can do that with your self-directed IRA. Okay.

So what are the types of things that you're able to invest in with a self-directed IRA? Hold onto your seats, folks, because if you haven't heard this yet, or if you haven't experimented with it yet, you're going to really love this. All right? Now, I can't tell you the difference of why one stock might be $10 one day, $12 the next, and down, back down to $9 after that. If you can explain all that, then you're sharper than I am on that. But what I know is real estate. What I also know is that real estate is the number one asset class. that someone is gonna invest in with their self-directed IRA. It doesn't stop at just real estate. Folks think that they can only invest in real estate with their IRA.

And what kind of real estate are we talking about? Okay, well, number one, it has to be an investment property. Okay, so let's just go ahead and get one of the myths out. You cannot use a self-directed IRA to invest in any property that's gonna be a second home for you. You're gonna visit it on the weekends. You cannot even spend one night in a property that you buy with your self-directed IRA because you don't own it. Your retirement account does. Think back to what I was telling you about my career in property management. I managed properties that were not owned by individuals.

They were owned by the retirement accounts, right? Okay. You can own commercial property, strip malls where things are going to be rented out to different tenants. Okay? It can be single-family residences. It can be duplexes, triplexes. It can be fourplexes. And then when you go beyond that, then you start getting into multifamily apartment buildings, condo complexes. If the money is there and you're wanting to make these types of investments, really, this— no kidding, the sky is the limit. Okay? But it's not just real estate.

Private lending is the next best thing out there that people are gonna use their account for. So in other words, you can say, yeah, I really know real estate. I know that I've enjoyed real estate, but maybe you are wanting to slow up on your real estate purchases. You may wanna stay hands-on with your real estate purchases, which keep in mind with real estate, you can't be the one that personally does any of the work on the property yourself. So you may say, yeah, I want to be able to stay hands-on with my properties, but there are other people out there that want to know and want to do what I do, but they, they might not have the financial wherewithal to be able to launch their investment portfolio, right? Well, then you can step in and allow your retirement account to be the bank to now start funding These folks. That's right, you can actually be a private lender from your retirement account, lending out money to where your IRA is now the bank. So now your IRA is the lender, the borrower is paying in each month or whatever the rate and the terms are that the both of you have a meeting of the minds on. And every month when that borrower pays in, you aren't getting money that you're putting into your bank account, Rather, they're sending it to American IRA where we deposit that into your retirement account.

Because just like the landlord on the property earlier that I mentioned, the lender this time is the retirement account, not you. If you want to invest in a syndication, a private equity, if you will, big condo complex in Eastern Tennessee, okay? And there's a capital raise. All right? So there's an overall LLC that has a general manager that is managing this LLC. And what they're doing, they are raising funds and they're going out and they're looking for all these limited partners to invest in this one LLC as a whole. That LLC is then going to go out and invest in an apartment building, a condo complex, a medical park. Okay, whatever the case may be, what they are looking for are the investors. Instead of you personally being the investor, you can have your self-directed IRA be the investor into that syndication deal. Well, what happens? Okay, the money goes in pooled with everybody else.

When the dividends start coming back out, those dividends go to all the different investors. Instead of the dividend coming back into your pocket, it's going back into your retirement account. Other things out there that you see people investing in a lot are precious metals, gold and silver. One of the things that you want to consider when it comes to that is that unlike some of the infomercials that are out there at 3:00 AM letting you know that, hey, did you know that you can invest in gold with your IRA? And they kind of show someone talking about this in their living room. You want to make sure that those precious metals are never on your person or never in a place that you own. Rather, the only way that you were able to do this is by having the metals be sent after the purchase, after your IRA purchases them, sent to a depository where they will sit and obviously grow in value. Okay, so those are, those are just a handful of things that you can do with your self-directed IRA. I could go on and on and get into really drilling down into some of the scenarios that are very, very creative that people do.

But again, I want this to be understood by a large audience. Okay, so just remember, a self-directed IRA, which is traditional, whether it's Roth, whether it is an inherited, okay, can invest in Everything that— no matter, I'll put it to you this way, no matter their retirement account, they can all invest in the same asset classes. One other account I want to tell you about really quickly is this. Are you a business owner? Okay. Business owners are a little different because if you own the business, if you're the entrepreneur, well, you don't have the benefit of somebody else kicking in a match, right? There's a lot of things that you may not have, but the IRS thought of that and they said, well, We're going to give them the most powerful retirement vehicle out there that's ever been made, and it's called the Solo 401. Just like in our title, American IRA: Self-Directed IRAs and Solo 401s, we specialize in the Solo 401. This stands out from the IRA. It differs from the IRA in 2 main ways.

Number one, not everybody's going to qualify for this, okay? Because You have to have your own company. And then number 2, you cannot have any full-time employees. Now that excludes you. Obviously, you're a full-time employee. It excludes a spouse who might help with the business, work at the business. And it also excludes a business partner, a high-earning business partner. Where all of you can have your own solo 401 based on the company that's adopting the plan. Okay.

Now, always remember, just the way that other retirement accounts work, the funds that you make from your income of your business still have to be earned taxed wages to be able to make the contributions into the solo 401. Every year these rates will change. So if you go back and listen to this podcast in the next year or the year after that, I'll just tell you that your IRAs, you have a certain pool of money that you're allowed to contribute each year. But depending on the income, just kind of keep in mind that solo 401s can range up to almost 10 times the contribution amounts that you can put away in those compared to the IRAs. There's also some differences that you might not have to— I don't want to say put up with— but you might not encounter with solo 401s that you do with IRAs. I'll go ahead and say this because some folks will know what I'm talking about, but if it's something that we need to discuss on your scenario, we can get together and talk about it. You can actually leverage With an IRA or a solo 401. And what I mean by that is this: if you don't have enough money in your IRA, but you want to buy a piece of real estate, you can actually do that knowing that you can use the IRA funds as the down payment.

The leverage is going to come when the remainder of that purchase price is going to be loaned in. The retirement account is going to own everything 100%. But every year when that profit is coming back in, in a total of the taxes— excuse me, in a total of the profit that's coming back in, whatever that loan-to-value was, that loan percentage could be subject to what's called a UDFI, unrelated debt-to-finance income tax. Okay, you will face that with IRAs. You don't face it with solo 401s. So There are some really cool differences in those 2 accounts, but remember, you have to be able to qualify for the solo 401 first. Just like not everyone is available to receive the benefits of the solo 401, one thing I'll go ahead and tell you this. Now, some of the companies may not tell you this, but I'm going to go ahead and tell you.

Self-directed IRAs aren't for everyone.

Right.

Okay. You may not be a real estate person. You may not feel comfortable loaning money out to folks no matter who they are, whether it's somebody you don't know or whether it's someone you do know. If you want to buy the gold and you want to hold it, you know, under a safe, under a hole in the floor, under your couch in your living room, and you don't want to put it in a depository, well, then precious metals on a self-directed IRA aren't for you. And look, that's okay. If you are the individual who just says, hey, look, you know, I've got this lump sum of money, I just want to put it in somewhere, I want someone else to choose where this is all going to go, and then I'll look at my reports about once or twice a year every time I get those thick envelopes in the mail every month. Okay, if that's you, then more than likely A self-directed IRA wouldn't be for you because all too often we will get calls and folks really want us to hold their hands and walk them through everything. And I'm going to go ahead and tell you, that is not what self-direction is.

Self-direction is where the onus is all on the client to make the choices in the account type, to determine how the money is going to be moved from an account that they've already got into the account that they are opening with us, then how they plan on using that account, then doing all the choosing and the due diligence of the asset that they're going to be investing in. Staff at American IRA is not going to let you know if this is a sound investment or not. That is, and no one across the industry is going to let you know if this is a good investment or not. We're not permitted to give you any tax, financial, or legal advice, suggestions, or opinions. You won't hear that here on this podcast. You won't hear it on any of our webinars. You won't get that in any call you ever have with me, and you won't get it with any of our back staff. Technically speaking, self-directed IRAs and the IRA companies are really only The money managers, or not even the managers, but really the money admins of your account.

We only do and only send the funds where you legally and lawfully direct us to send that. Okay? So just kind of keep that in mind. So let's stop here for a second and look at all the different things that we've talked about. Investing in the stock market versus investing in something where you have a little bit more control and freedom and flexibility over. That freedom and flexibility is going to allow you to invest in certain asset classes like real estate, private lending, syndications where dividends are going to be coming back in, precious metals where, as we've seen, as we continue to hope, everything's going to be increasing in value. What's really the difference in investing in all of these things? And this is a question I get. Well, Kyle, why would I want to use the self-directed IRA when I can actually take some of this money from my 401 or from my Roth account, make the investment into something, and then have all the money coming in myself? Hey, look, that's fine. And if that's what you want to do, then again, like I said, self-directed IRAs aren't for everyone.

However, Keep this in mind. If you take money out of a retirement account to make a purchase, well, there's going to be a transfer out, there's going to be a distribution fee, and there's going to be taxation on that distribution. Okay? Depending on the account, you are then going to use those now personal funds to buy a piece of investment real estate. Okay. Now think about it. That real estate, whether it's a beach condo, whether it's an investment rental down the street, one way or the other, that thing is income producing by the week, by the month. Okay. And year after year, there's going to be a total amount of a pool of money there that that property has made you that is now Income because you personally bought that.

Well, what is the one thing now you have to worry about if you have not just one, but a couple or 3 or 10 properties like that? Uncle Sam's gonna come knocking because you did very well on investing in those properties, but now you've got the tax bill that you have to contend with, right? Actually, there's not much contention. You owe it. Now, take up until that point, take that entire example all over again that I just gave, and instead of you pulling any money out of a retirement account, you are actually directing your self-directed IRA company to move the funds to an attorney's office for closing. You never touched it. Let me back up for a second and tell you this. You never touched the money to come in from Edward Jones to your new self-directed account at American IRA, so there was no taxable event. You never touched the funds when you directed us to send the money to the attorney's office. And also, just as important, you never touched the money when it went from The tenant back into the retirement account.

Because why? You don't own the property, the retirement account does. And because of that, month after month, year after year, you won't face any taxation on all of that income because it's owned solely by the retirement account. And that is one of the main beauties Of the self-directed IRA. Now, if it's a traditional account, you will realize the taxation one day when you go to take your distribution. Because you may already know this, some folks don't, but when you go to take a distribution, and let's just go ahead and say that you're above 59 and a half, so you don't have to worry about an early withdrawal penalty. But when you go to take that distribution, you're going to be taxed As income that you receive. You're only going to be taxed on the amount that you're taking, not the overall value of your IRA. Okay, same thing with a self-directed IRA.

Those types of foundational parameters will be identical. All right, it's really the applicability is what is different. But I'll tell you this, take that exact same scenario all over again and do that with a Roth account. You won't owe a dime in taxes ever. And here's why. Because a Roth account is fueled only by post-tax, tax-free money. The taxes were paid when you put the money into the Roth account that grew over the years, compounded in investments that you made, and you moved that over into a self-directed IRA. Right now you're going to take those Roth funds, direct us to make a purchase of a property that you hold for 4 or 5 or 7 or 10 years.

How much did that property accrue in value? How much income did that property bring in year after year, even with maybe some of the funds you had to use to replace some appliances, change out the carpet, do some painting, spruce it up, some landscaping. Happens to every property, right? But now imagine 10 years later, how much money, how much did you, in 10 years, did you bring in? $100,000 in rent? And that's on the low end. Did the property increase $100,000, $200,000 in value? Just throwing some numbers out there. How about an extra $200,000 that is now sitting in a Roth account that you'll never owe a dime in taxes on? Pretty sweet thought, right? Keep that in mind when you're wanting to think about, huh, I want to buy a property, I want to do something, and I know that I've been able to, or I've heard that I can do this with a self-directed account. What really are those benefits? Think Long term. You don't always have to think of the now, except for getting the account set up and what that's going to look like and how you can actually use it. But if you think the long term, and any advisor is going to tell you that, okay, you're going to see things ebb and flow. But just imagine when the stock market is getting a little nuts, whether it's going up or whether it takes the dips.

You got 2 or 3 houses inside of your IRA and a couple of loans out there. Your borrowers are paying every month and your tenants have never missed a rent payment. Guess what? You're sleeping well at night no matter what the stock market is doing because your self-directed IRA is still holding completely steady because you chose to diversify a platform that you already had, started your self-directed IRA. Now you've got the power Let's kind of round some things out here and just tell you about a couple things you need to watch out for. Okay, things to watch out for are this: disqualified parties. There are some folks that you just can't do business with with your self-directed IRA. And guess what? Believe it or not, you're one of them. Whether it's you personally, any entity that you control, so your LLC or your personal business, your spouse, spouse, anyone in your upline to infinity, and anyone in your downline and their spouses.

And by the way, any companies that any of those people that I mentioned, they're disqualified from doing business with your retirement account. So what does that mean? You can't buy your parents a retirement home for them to move into, or in a retirement community. Okay, you can't buy a condo on the beach that you're going to use for a rental, but that you might go down a couple of times a year, even if it's for only one night to check on the property. You can't ever spend even one night in it. Okay? Keep that one in mind. Kyle, got a vacation mountain home that we want to be able to use. It's going to be vacation mountain home for everybody else, but we're probably going to stay up there. I don't know, maybe about 6 weeks out of the year.

Can't do it. Okay, you cannot lend money to your kids for them to go out and buy their house. You can't lend money to your kids at all. Business partners, anyone that you do close business with, you want to make sure with your CPA if it's going to be a legit investment that you're going to make. With those folks. Okay? Hands-on with any of your properties. It's easier to talk about real estate like this because all too often we'll have contractors, we'll have seasoned real estate investors who want to do, who want to stay status quo with everything that they've always known and how they've grown their real estate empire. But I'm going to go ahead and tell you, when you start using retirement dollars to invest in real estate, The rules change and they change very quickly.

You can stay hands-on with those properties that you currently have. What you have to remember is though, you don't own the properties that are now owned by your self-directed IRA, and because of that, the IRS prohibits you from going in and putting in any sweat equity. Now folks, that means that if it's an Airbnb, you can't go in and pull the linens and the towels and take those home and wash them and take them right back. You can't take them to a laundromat, use your own quarters, and, and do all this work because now it's self-dealing and it's sweat equity. Okay, so keep that in mind. You can't do those types of things. The property's a few houses down the street from your primary residence, and you want one of your teenagers over the summer to go in and mow the property. They can't do that because now you're using a disqualified party to mow the property.

Whether you pay the kid or not, it's actually something where it is benefiting your IRA. Look at it like this: anything that personally benefits the IRA in one direction, or anything that the IRA benefits the account holder in either direction, is going to be considered a prohibited transaction because of the disqualified parties. Okay? So just keep that in mind. The overall beauty of the self-directed IRA, again, is for you to be able to take retirement dollars— and here's where I'll change this up— that you might not even knew that you had. There are retirement dollars out there that you might know that you have, but imagine the ones that sit with an old 401 from a previous employer that you grew to 6 figures And you just let it slip your mind. You might not even open up the envelopes that come from time to time. You may have moved, but that old 401 still exists. And guess what? That's your money.

Now, obviously you're not with the employer anymore, so they're not matching, but that's some good money that you are able to— yes, leave it to your loved ones, sure. But what do you want to do with it while you're still here? Well, guess what? Those rollovers are going to be able to come into a self-directed IRA where you're going to buy a piece of real estate. You're going to lend that money out. You're going to invest in some precious metals, or you're going to invest in a capital raise and let somebody else do all the work so that all those dividends come back in. In all of these, you've chosen the asset, you've chosen the borrower, and then you are hands-off. Okay. You always, yes, need to keep an eye on your account, but you're hands-off from the maintenance of any of this. And with all of that, those profits are going to come back in month after month, year after year, to where you're going to grow your retirement and not have any taxation to worry about.

Okay.

And that is a beautiful, beautiful thought. One last thing I'll talk to you about is if you wanted to do certain investing and to have a little bit more freedom and flexibility, American IRA also affords you the ability to invest with an LLC. Earlier, you heard me talk about how you can invest into an LLC for syndications and so on and so forth. In this case, If you wanted to invest in certain asset classes like livestock, like crypto, like fix and flip pieces of real estate, tax liens, foreclosure properties, things that are a little bit more time is of the essence for someone to receive their funds, you're in luck. Now, not everybody will allow this, or do they even have the means to do it? But not only do we allow the use of the LLC. We also have an in-house sister company that can put the whole thing together for you. And basically what it is is this: setting up just like I told you before, the setup of the account, the funding of the account, and now the transaction that takes place is funding the LLC that you'll be able to put together and have that housed at the banking institution of your choice. And once you move your retirement dollars into that LLC business bank account, you're able to make your timely investments investments from there.

Now keep in mind, you can't just arbitrarily put money in and take money out of the LLC, and it has to be operated the exact same way you would expect us to do the operation of your self-directed account in-house with your custodial admin staff. What does that mean? You can't just use the LLC as freedom and flexibility to do things that we wouldn't be able to do in-house with the directions that you give us. However, what it does, it gives you that freedom and flexibility for more timely investments. Foreclosures at the courthouse steps, they need the money immediately. You've got the check from the retirement funds that are sitting in your business LLC bank account, and it's the LLC now that's making the investment. The tenants are paying the rent into the LLC's business bank account, and that is a wonderful tool for folks, again, who time is of the essence, uh, on, on their investments. Keep in mind, I don't normally bring up LLCs on calls or when I'm in sales unless someone else brings it up to me first. Because if you're brand new to the self-directed IRA idea, and if you've never used an LLC before, and if you really don't have your tax and legal team to help you kind of shape what you're looking to do with that LLC.

You really want to have that experience, okay? And so I just wanted to share that with you, that that is an amazing option for you. So folks, we covered where the company began with the CEO. We covered my involvement in it. And again, I'm going into my decade here with American IRA. We covered why self-directed IRAs. We talked about what actually is a self-directed IRA and the types of IRAs. We talked about how you can fund that with an old 401 or a current account that you might already have. We talked about the different asset classes that you can invest in with your self-directed IRA.

We talked about if you're a business owner, when you can scale up to a solo 401.

Right.

We talked about if you wanted to now use your funds to invest in an LLC to give you more freedom and flexibility and a little bit more fast-paced if time is of the essence on your investment. We talked about disqualified parties, who you can and can't do business with, and if you did, what a prohibited transaction is and what that looks like. All of it comes together in the overall beauty of you being able to diversify a portfolio that you've already got to invest in a completely different arm of your retirement dollars, therefore adding to the productivity of your investment objectives. I'm Kyle Moody again with American IRA, and our company is what powers the IRA Cafe that you tune into all the time, whether it's our podcasts or our live weekly webinars. We're always happy to have you. And if you now think that this is your time, that you want to speak with me, I am never too busy for a call from you, an email from you, or any of your referrals. You can reach me directly at 828-412-8123. And I'll repeat that again.

It is my direct phone number, folks. It comes right here to my desk.

828-412-8123.

412-8123. And you can always email me at [email protected]. For everyone here that I'm speaking for, uh, in our back office and our operations team, I'm Kyle Moody. We appreciate your time today, and we'll see you next time.

American IRA LLC. A North Carolina LLC, acts as a third-party administrator for NuVision Trust Company, a state-chartered South Dakota trust company. As a neutral self-directed IRA administrator, American IRA does not recommend or endorse any investments, individuals, or entities, including financial representatives, promoters, or companies. American IRA and the IRA Cafe are not responsible for other statements, representations, or agreements, nor do we evaluate the quality or profitability of any investment. American IRA does not endorse guests on the IRA Cafe podcast. Guest opinions are their own and do not necessarily reflect the views of American IRA, its subsidiaries, associates, or custodian. Participation in the podcast is voluntary and no compensation is provided. American IRA is not a fiduciary and cannot offer financial advice.

Please consult your CPA or another professional before making financial decisions.