Firm:
Innovative Advisory Group
Job Title:
Principal
Biography:
Kirk has been providing wealth management services to individuals, executives, entrepreneurs, and their families, as well as businesses and organizations since 1999. He works with clients to advise them on financial planning, risk management, and portfolio management. He is also an expert at using a self-directed IRA or self-directed 401K to invest in alternative investments. He particularly specializes in alternative investments such as: real estate, precious metals (gold & silver), tax liens, horses, franchises, private company stock, start-ups, intellectual property and more. Kirk is dedicated to developing lasting relationships with all of his clients.
Education:
BA, Economics, Trinity College
CRD Number:
4004975
Investing in real estate with your IRA is a great way to diversify your investments, especially if you have background experience in real estate investing. As Peter Lynch famously said, "Invest in what you know."
There are many things you will need to consider when setting up and investing in real estate in your self directed IRA.
- First, you need to understand the rules. Most people think investing in mutual funds in their IRA is the same as investing in alternative investments. While the rules are the same, the process can be quite different. If you don't understand the rules, you can easily create a prohibited transaction which can cause you to pay penalties and taxes on your IRA. This can easily be avoided by either learning the rules or finding a wealth manager that specializes in this field.
- Second, you will need to find a self-directed IRA custodian. This can be a challenge for most people. There are over 47 different custodians and administrators that specialize in self-directed IRA investing. So how do you choose? If you are going to do it yourself, then should be aware it will take some effort on your part to choose the right one. Each one is different. Each has their own fee schedule, assets they will accept, types of account they will open, customer service levels, etc. If you want to do it right, you will need to ask them a lot of hard questions. Here are some suggestions.
- Third, you will need to open and fund an account at this custodian. This will require that you either make a contribution or transfer IRA funds from another existing IRA to fund the account. (please note that IRAs require that your IRA assets be held at a custodian) Some advertisements tell you that you can buy gold and store it in your home... This is not allowed. You should also note that custodians cannot provide financial advice. They will all clearly state that, but for some reason, people take their responses to questions as advice. I have heard of a number of people getting themselves into trouble because they thought it was the custodian's job to provide them with advice. They are custodians, not broker-dealers. It is an important distinction. If you are unclear about this, then please seek the advice of a financial advisor.
- Fourth, you will need to complete the transaction. The custodian will work with you to do this. They will be the one signing for the real estate, you cannot do it. Ultimately the IRS will own the real estate, not you personally.
- Fifth, you will have ongoing maintenance of the asset (i.e. compliance, valuations, etc)
While this process can seem overwhelming, it is worth the extra effort if you have a good investment in mind. There are some notable people who have grown their IRAs quite large. Mitt Romney has an IRA worth over $100 million dollars. Peter Thiel and Max Levchin also have large IRAs. They created these large IRAs by using creativity and investing in what they know. You can do the same.
I hope you found this helpful
Cheers
Kirk Chisholm
We as human beings like to find reasons for everything that occurs. The lamp broke because someone knocked it over, a car crashed because the breaks failed. However, sometimes those reasons are too complex for us to understand. For example, why did the stock market go up today vs going down yesterday? News stories will give you reasons, but those reasons are not always accurate. The markets are overly complex, making the answers to these questions almost unanswerable. However, it makes us feel better that we have an answer to the question. I mention this because it is an important context for this question.
The real answer is that it will be different every day. Today it might be because of X and tomorrow it might be because of Y. In general Preferred stocks do not go down more than Dow Jones stocks, but sometimes they do. If you are asking about correlations, preferred stocks do correlate to equities, but not entirely. Correlation does not imply causation. If you are not familiar with this concept, you should consider it.
So, knowing that the reason will different each day, I'll give you a common reason for preferred stocks to drop unexpectedly with no obvious reason. One thing that is important to understand about preferred stocks is that they are not liquid (in general). Some preferred stocks may have an average daily volume of 5,000-20,000. If you are trying to buy or sell 50,000 shares, it will move the market. If the stock market is selling off, and someone needs liquidity and needs to sell shares of their preferred stock, it may unintentionally cause havoc with the stock price. It especially becomes apparent when the stock market gets rocky. The liquidity is one important component that most people ignore when they are investing in traded securities.
I hope you found this helpful
Cheers
Kirk
For most investors the difference is minor. However, for astute investors, it could provide some great opportunities.
ETFs are effectively entities (most commonly trusts) that hold shares of different securities (stocks, bonds, and other ETFs) in that entity. This "pool" of securities is what ETF investors own. The sponsoring institution (e.g. Blackrock) creates shares of the ETF to allow investors to buy into this pool of securities. The sponsoring entity must buy enough of the securities in the ETF to accommodate new investors into the ETF. If it is done properly, the ETF should not have a premium or discount to NAV attached to it. This means that if every share of the ETF were to be liquidated every investor would get exactly what the current value is. ETFs tend to be more liquid due to this creation of shares.
CEFs (closed-end funds) are different. CEFs are similar to mutual funds except that there are only a limited amount of share outstanding (mutual funds create more shares of the fund in a similar manner to ETFs). New shares are not created when investors purchase them. Based on investor demand, this could create a premium over NAV or a discount to NAV. For astute investors, this can create a great opportunity to buy assets at a discount. Due to the limited number of shares outstanding, CEFs can be less liquid.
I hope you found this helpful.
Kirk
www.innovativewealth.com
The benefits of social security income depend on when you start taking them. As a general rule of thumb at approximately the age of 80, you will see the benefits of waiting. If you draw at age 62 you will get an aggregate total of the income received more than the other two ages (67 or 70) until around the age of 80 at which point the other choices would exceed the income benefits of age 62 draw.
Ultimately the question comes down to how long are you going to live. If you familial genetics allude to you living well into your 90s, then you should consider starting at 67 or 70 for your social security benefits. If you familial genetics show that you will probably not live past your 80s, then you should start your Social security income earlier.
Of course this is a general rule of thumb. Your situation may be different and there are multiple factors that can affect this decision.
Lastly, don't worry about inflation. Right now based on our research and current trends, inflation will not be a significant issue in the next 10+ years. Inflation should remain low for the foreseeable future. As a side note, generally you cannot try to predict how inflation will affect your social security benefits. It is likely that the government will make additional changes to social security in the next 10 years as well, so keep that in the back of your mind.
I hope you found this helpful
Kirk
Rather than looking for high risk stocks, look for high return stocks.
There are plenty of risky stocks out there, and many of them have not done well. Instead of looking for investment that match your risk, look for investments that are solid investments. Sometimes these investments are more risky, but you can assess each one based on your risk tolerance. Trying to match your risk level to investments that are risky just because you are young is a fool's errand. In general it is a bad idea.
I hope this helps.
Kirk