The End of Small Business Financing with IRA and 401k Funds? (Part 3) October 21, 2009
Posted by Jeff Nabers in Self Directed IRA/401k.Tags: 401, 401k, agency, audeo, benetrends, business startup, ersop, esop, financial, financing, funding, government, guidant, ira, irs, law, plan, president, profit sharing, QES, qualying employer securities, rainmaker, regulation, robs, rollover, ruling, scheme, self directed, small business, strategy
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Ok, now it’s time to solve the mystery. (Final Post) [see previous here]
In 1978 Jimmy Carter reorganized the government with this order, and this took the issue of retirement account prohibited transactions away from the domain of the IRS and gave it to the Department of Labor (DOL).
This fact was unknown to (or possibly ignored by) the ROBS promoters who claimed the IRS ROBS letter confirmed the validity of the ROBS strategy. The truth is that the IRS letter did not say whether or not the ROBS strategy creates a prohibited transaction because the IRS didn’t have the authority to say it. It was the authority of DOL. Ah, what fun bureaucracy can be.
Speaking with the Proper Authority
Now, I’ve known about this transfer of authority ever since the creator of the IRA LLC (late attorney Debra Buchanan) told me about it back in 2004. So I’ve been in close contact with DOL employees for several years. Here’s where the bureaucracy gets funny (or scary, depending on how you look at it).
A couple of weeks after the IRS ROBS letter came out, I called my friendly DOL contacts to ask, “What do you (more…)
The End of Small Business Financing with IRA and 401k Funds? (Part 2) October 19, 2009
Posted by Jeff Nabers in Self Directed IRA/401k.Tags: 401, 401k, agency, audeo, benetrends, business startup, ersop, esop, financial, financing, funding, government, guidant, ira, irs, law, plan, president, profit sharing, QES, qualying employer securities, rainmaker, regulation, robs, rollover, ruling, scheme, self directed, small business, strategy
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[This is a continuation of a previous post. You should read that one first so this makes sense.]
The IRS Responds
For the first time ever, the IRS actually addressed the “financing a small business with an IRA or 401(k)” strategy. They called it “ROBS” for “roll over business startup,” and issued a letter on October 1, 2008. This letter basically stated:
- We know about the ROBS strategy
- We are concerned about it for several reasons
Celebrate and Ignore
Most ROBS promoters spun the IRS ROBS letter as a long-awaited government blessing for the strategy. They said that the concerns that the IRS listed were administrative errors, such as (more…)
The End of Small Business Financing with IRA and 401k Funds? (Part 1) October 15, 2009
Posted by Jeff Nabers in Self Directed IRA/401k.Tags: 401, agency, audeo, benetrends, business startup, ersop, esop, financial, financing, funding, government, guidant, ira, irs, law, plan, president, profit sharing, QES, qualying employer securities, rainmaker, regulation, robs, rollover, ruling, scheme, self directed, small business, strategy
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Guidant calls it Audeo. Benetrends calls it Rainmaker. SDCooper calls it ERSOP. It goes by many names and it’s gotten a lot of attention from the franchise industry and, as of about a year ago, the IRS. The IRS calls it “ROBS” for Roll-Over Business Startup.
What is it?
It’s a strategy where a person with retirement funds:
- Forms a C corporation.
- Uses the new C corporation to adopt a 401(k) or profit-sharing plan.
- Performs a rollover from existing retirement funds (IRA, 401k, etc) into the new 401(k) plan.
- Directs the new 401(k) plan to invest into the new C corporation by purchasing shares of stock.
- Now this person has a C corporation with some or all of their retirement funds in it, and they are told they can use the funds to run the corporation, launch a venture, buy a franchise, and even pay themselves a salary.
Special Powers – For Good or Evil?
This is a tremendously (more…)
Getting Around Prohibited Transactions August 31, 2009
Posted by Jeff Nabers in real estate, Self Directed IRA/401k.Tags: 4975, house, individual 401k, internal revenue code, ira, ira llc, irc 4975, law, laws, llc, loan, prohibited transaction, real estate, retirement, retirement account, retirement plan, self directed, solo, Solo 401k, solo k, strawperson, uni k
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Prohibited transactions is a chief topic when exploring self-directed IRA & Solo 401(k) investing. When a person first discovers that his retirement accounts have been chained to Wall Street brokerages without necessity, his mind starts to imagine the possibilities.
Real Estate? Yes.
Private Businesses? Sure.
Precious Metals? Absolutely.
Getting my hands on my retirement money now? Slow down there.
There are two types of limitations on the average retirement account. One is an unnecessary restriction of investment options to securities products. That can be eliminated through restructuring your accounts and funds. The second limitation is legal and cannot be removed.
Setting up a self-directed IRA or 401(k) is about removing limitations. Once you have it setup outside the nearly monopolistic network of securities dealers, you can invest in almost anything… but you must fully understand the legal limitations.
The general premise behind prohibited transaction rules is that the government wants you to grow your retirement account as big as possible because they plan to tax it later on when you distribute the funds to yourself for spending. Without prohibited transactions rules, anyone in their right mind would (more…)
Hiring new liberty-oriented PR specialist immediately! August 18, 2009
Posted by Jeff Nabers in Money, Personal Enjoyment, Personal Productivity, real estate, Self Directed IRA/401k.Tags: 401k, economics, freedom, hiring, investing, ira, IRA Association, jeff nabers, job, job opening, jobs, liberty, Nabers Group, pr, public relation, publicist, real estate, ron paul, self directed, solo, Solo 401k, staff, staffing
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Our publicist has done a great job getting the word out about Self-Directed IRAs, and my various writings and products related to independence, economics, investing, and freedom.
But, alas, the time has come to replace our publicist. So here’s what we’re looking for:
- Very freedom/liberty-oriented and passionate
- A basic understanding of Austrian economics and the free market
- An unlimited mindset—one that fully accepts that anything is possible and our results are up to us… only we can decide what we CAN and CAN’T accomplish together
- A realistic understanding of our world today and the terrible direction our country and our society is heading in—politically, financially, emotionally, etc. We have to be able to acknowledge and observe the problems in order to be a part of providing solutions.
- Results-oriented. We aren’t just trying to get the word out to see what happens. We are getting the word out! We set goals and then achieve them :-D
- Experience preferred, but not required. If you have experience in public relations, awareness campaigns, or dealing with the media, that is great and will be helpful. Buuuuuut, the above requirements are much more important. The actual procedure of how to promote and make contacts and pitch ideas can be learned. Being a freedom-loving, free-market-loving, truth-knowing, positive-thinking passionate person ready to change the world cannot be learned—it’s just who you are. So that is most important, and for that reason, experience isn’t required, but it is preferred.
- Start immediately!
- Monthly salary. This doesn’t have to be a full-time job, but we will pay a substantial salary.
Be a part of a team that’s changing the world! We’ll be working to promote my book (5 Steps To Freedom) as well as my companies (Nabers Group and IRA Association). Some past exposure and events have included:
- Speaking at FreedomFest
- Writing for Forbes.com
- Contributing to articles for mint.com, realtytimes.com, Entrepreneur Magazine, LA Times, and Chicago Tribune
- Featured in trade journals
- Appearing on TV shows such as Good Morning Arizona and The Pat McMahon show
..these are just a start as we’ll be working together to continue to expose people to self-empowerment, liberty, financial freedom, Austrian economics, and similar ideas.
LIVING IN DENVER IS NOT NECESSARY. We are open to remote working arrangements. If you think you might know somebody who would be great for this position, please share this opportunity, especially on Twitter and Facebook:
Applicants, please send resume to prjob@jnabz.com and include a cover letter summarizing why you think this would be a great fit. I look forward to connecting with our new PR specialist!
Is the Departure from 401(k) Perks a Bad Thing? June 17, 2009
Posted by reformedinvestor in Money.Tags: 401k, investing, self directed, Solo 401k
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You can’t pick up a newspaper today without hearing bad 401(k) news:
- Companies have cut their 401(k) matches, lessening incentives for employees to make contributions.
- 401(k) fees are confusing and exorbitant.
- Employer-sponsored plans are filled with nothing but dog investments packaged for layman investors.
With the glory days of the conventional 401(k) coming to an end, it’s no wonder that many investors have ditched or are considering ditching the 401(k) altogether.
But I ask, is the end of the 401(k) – as we know it – a bad thing?
I’m sure people like Suze Orman would (more…)
How to break America’s 401(k) addiction May 19, 2009
Posted by reformedinvestor in Money, Self Directed IRA/401k.Tags: 401k, investing, ira, retirement, self directed, Solo 401k, wall street
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[Contributed by reformedinvestor]
This is my favorite excerpt taken from the interview between Steve Kroft of 60 Minutes and Brooks Hamilton, who Kroft interviewed in his expose on 401(k)s. Hamilton is an expert in designing retirement plans for large corporations.
“The fact is that the typical 401(k) investor is a financial novice. They don’t know a stock from a bond. And we give ‘em a list of 20 or 30 mutual funds with really, really powerful names, you know, they sound like, ‘Gee, that’s where I want to have my money,’” Hamilton said.
“What are the, generally, the quality of the mutual funds in 401(k) plans?” Kroft asked.
“Mediocre,” Hamilton replied. “I’m being real honest with you, with half the funds on the list really dogs, what people would characterize as dogs shouldn’t be on the list to start with.”
So many Americans believed that the 401(k) would be the sure-fire way to safely save for retirement. In fact, it has been reported that 401(k) plans that have become the primary source of retirement income for 60 million Americans. Companies would match our contributions making it irresistible to sock away money in these mutual funds. But the truth is, as exposed by 60 Minutes a few weeks ago, that companies turned to 401(k)s as a cheap alternative to offering costly pension plans. This decision created millions of new employee investors in Wall Street – creating a boom on Wall Street and putting trillions of dollars of investable cash into the hands of unsophisticated investors.
In the 60 Minutes piece, however, experts in the field say (more…)
Bail Yourself Out May 7, 2009
Posted by Jeff Nabers in Money, Self Directed IRA/401k.Tags: business owner, capital, cash, crisis, depression, distribution, forbes, funding, ira, irs, loan, penalties, recession, self directed, solo, Solo 401k, taxes
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My new article on Forbes.com…
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For entrepreneurs, getting through these financially turbulent times may require some imaginative [read whole article on Forbes.com]
Book Announcement: UNLIMITED INVESTING March 31, 2009
Posted by Jeff Nabers in Money, Precious Metals, real estate, Self Directed IRA/401k, Uncategorized.Tags: alternative, alternative assets, alternative investments, book, chongchua, depression, economy, gold, ira, ira llc, jeff, llc, nabers, phoebe, proof, real estate, recession, self directed, self employed, solo, Solo 401k, solo k, unlimited investing, wall street
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In case you haven’t heard through the grapevine, my new book, UNLIMITED INVESTING With a Self-Directed IRA LLC or Solo 401(k): Break Free From Wall Street To Build Real Wealth With Alternative Investments, will be available soon.
I’ve joined (more…)
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