Years ago, you probably learned that one of the best deals out there is the IRA/401(k). If you have a job where the employer will match a percentage of what you invest, it seems downright crazy to bypass this amazing form of retirement savings.
Put away enough each month to trigger the maximum match amount, and it’s free money ’til retirement.
Or is it?
To be fair, if you are currently employed and your employer is matching the money you put in then continue to take advantage of that. You can’t move it now anyway. The intent of this article is to help you discover a whole world of opportunities waiting for you that you may have been unaware of.
One more point. If you’ve been investing in the stock market with your IRAs and 401(k)s for years, it’s not the intention of this article to make you feel like you’ve made a mistake. You’re investing and taking advantage of tax incentives. We just want to show you that there are other ways to play the game Off Wall Street.
There are some incredible investments with less volatility than Wall Street with potentially bigger returns. If you’ve recently left or lost your job and suddenly find yourself with an IRA/401(k) you don’t know what to do with, you’re about to learn about some outstanding options!
Are IRA/401(k) Plans Really the Ideal Retirement Vehicle?
If you are reading this article, you probably have begun to take an active interest in how your investments have been performing and discovered the adverse impact (lag) from expense ratios, portfolio-management fees, and plan operating expenses. These are essentially the fees you pay to have your money invested in a plan like a 401(k).
Investment firms, including the one managing your IRA/401(k), charges fees.
Fees vary across the board and can vary depending on which type of investment you’re holding.
IRA/401(k) plan fees can run from around 1% to over 3%. Over a working lifetime, that adds up to paying tens of thousands (even hundreds of thousands!) of dollars more than you would with low-cost investments, just for FEES! (Over 40 years at 2% takes more than half your wealth. And that’s before taxes!)
That’s a good reason to wonder if IRA/401(k) plans are really so ideal after all.
But the real disadvantage of these retirement savings plans is the fact that it puts your money under lock-and-key for years, even decades. You’ve probably been taught to implement the “buy and hold” strategy. The big, glossed over problem is you end up losing tremendous flexibility and are unable to respond to opportunities when they knock.
Not to mention that most IRA/401(k) plans offer participants very little choice in how their money is invested. You’re pretty much stuck with whatever your employer has set up for you and your co-workers.
Those choices are typically limited to various funds comprised of stocks and bonds.
For the Most Part, You’re Stuck in the Stock Market with an IRA/401(k) Plan
What’s wrong with being stuck in the stock market? Volatility. Fluctuating economies. Uncertainty. Potentially much lower yields than the sales guy (I mean advisor) is showing you. And your money is locked away under the “buy and hold” strategy.
If you’re at all distrustful of the stock market or if you’re at all worried about global markets, you might be happy to know that there are alternatives.
Did You Know There are Alternatives?
The last few years have been marked by a large and vibrant crop of alternative investments. As people learn about them, their eyes are being opened up to the idea that these investments can oftentimes make good financial sense.
You don’t have to keep your IRA/401(k) investments all tied up in the stock market.
If you’re employed you can’t yet move that employer’s IRA/401(k), but you have some tantalizing options for any additional money you want to invest. And if you just left your job for a new job and now find yourself with an IRA/401(k) on your hands, you are about to discover a potentially big opportunity!
If Not Stocks, Then What?
For people who want a possible higher level of certainty than what’s offered by the stock market, there are a number of attractive options.
We call these Alternative Investments. They offer not only an alternative to the stock market but also the possibility of higher yields.
Perhaps it’s time to take your investing strategy up a notch.
Why not have safer investments and pursue higher yields than what you often get in stocks and bonds?
Advisors talk about creating a diverse portfolio in the stock market. How diverse are the investments if they are all in Wall Street. When the stock market crashed in 2008 – 2009 almost all funds were severely impacted.
If you want diversity, use alternative investments Off Wall Street.
Very often, alternative investments do not rise and fall with the stock market. They can provide nice returns without the potential chaos and volatility of investments that inflate and deflate with every national or global event.
What are Some Alternative Investments?
Here some examples of alternative investments available to today’s investors:
- Life Settlements
- Bridge Loans
- Real Estate
You may not be familiar with some (or all) of these investments. So let’s give you a brief summary of each just to whet your appetite a bit to the possibilities.
Life Settlements: An Excellent Investment for Growth Non-correlated with Stocks
For accredited investors looking for excellent asset growth with minimal risk, life settlements are very attractive options, offering investors a way to participate in the secondary market for life insurance policies.
Life insurance has been considered an asset class since a Supreme Court ruling in 1911 judged that life insurance policies are private property that can be assigned or sold to others at the will of the policy owner.
Life settlements invest in life insurance by purchasing policies that have become unwanted, unneeded, or unaffordable to elderly policyholders.
Life settlement investments are not correlated to interest rates, housing prices, stock prices, political events, or any outside influences. They have very limited downside risk. Life settlements are based on actuarial math, not stock market speculation. As policies are purchased for a discount and costs such as future premiums are factored in, losses are unusual.
Commercial Bridge Loans: A Top Investment for Cash Flow
Bridge loans on commercial and investment property can be an excellent choice for investors looking for immediate, steady, substantial income. Bridge loans allow investors to capitalize on real estate without the hassles of being a landlord.
No flipping, no plungers, and no buying a duplex and renting out the other half. It can be a great way to simplify your life and enjoy nice returns.
Investing in carefully screened commercial mortgages and bridge loans can provide you with reliable monthly income with high single-digit and even low double-digit returns, with low risk… provided that the loans are properly vetted.
Commercial Real Estate Investing: Proven High Yield Investments
Accredited investors will find an opportunity to invest directly in commercial real estate by becoming private lenders for commercial projects, typically cash-flowing apartment buildings.
This option provides investors with an opportunity to invest in secure cash-flowing real estate without the hassle of finding, acquiring and managing the day-to-day operations of the property.
These types of investments offer qualified investors cash flow as well as equity, and help real estate investors avoid the most common (and most costly!) real estate investing mistakes, such as limiting themselves only to properties in their local area, not evaluating enough properties before purchasing, not forecasting future costs accurately or managing the properties effectively.
How Do You Invest in Alternatives?: Enter the Self-Directed IRA
For investors who’ve been disappointed with typical Wall Street offerings and want more control over their investments, the Self-Directed IRA is a great solution.
Unlike IRA or 401(k) plans, the self-directed IRA allows the freedom to invest in alternatives like you’ve just read about.
The best news is that people who lost or left a job can simply roll their IRA/401(k) from their previous employer right over into a self-directed IRA! That means direct and immediate control over your funds, and you’re free to pursue higher yields through alternative investments.
If you have an active IRA or 401(k) with your employer, begin to think about the possibilities of investing funds “beyond the match” so that you can take full advantage of the incredible opportunities Off Wall Street!
Want to learn more? Greene offers expert guidance in language you understand. If you’d like to learn more about getting ‘unstuck’ from stocks, a self-directed IRA might be for you. CLICK HERE and you can download our 1-page, “quick-start” guide or, if you want to know more right now and get your questions answered,
Call us at (775) 624-8839.
As a customer of Ken’s, I can tell you that he saved my IRA! It was floundering and had been for over 20 years. Now it is thriving thanks to his suggestions. His brilliance is two-fold. He knows what he is doing and he knows how explain it to you in simple-speak if you don’t understand the complex financial world.
Thanks so much Carol!