2009 March | Jeff Nabers’ Self Directed IRA & Solo 401k Blog

Book Announcement: UNLIMITED INVESTING March 31, 2009

Posted by Jeff Nabers in : Money, Precious Metals, Self Directed IRA Solo 401k, Uncategorized, real estate , add a comment

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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.

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Is my home an investment? March 18, 2009

Posted by Jeff Nabers in : Self Directed IRA Solo 401k, real estate , add a comment

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Recently I received a question from somebody looking into self-directed IRA/401(k) investment for themselves. They said, “I ran this by my financial planner in New York who said to roll over my IRA to put some of its money into my home is illegal.” This statement is technically correct. Putting IRA money into his primary residence would be a prohibited transaction. The disturbing thing about the situation is that these three people (a person, their realtor, and their financial planner) could all be on the same page about something so fundamentally ridiculous.

The misconception

In the past 10 years, many people think “real estate investing” equals “putting money into my home”. Their home can’t be an investment in the first place because they are paying for it rather than having it paid for by a renter.

When somebody wants to help people rationalize buying the stuff they sell, they often call it an “investment”. Bill Clinton started changing the way people thought about government spending (when he was increasing it) by calling it an investment.

An investment or a consumer product?

Selling a primary residence to a home buyer is selling a consumer product. It’s for their use. They can buy what they really need. Or they could get extravagant and buy the Lexus/Mercedes version of a home and spend more. Either way, it’s a consumer product if they are paying for it and using it themselves.

But realtors followed Clinton’s spin move and started calling home buying an investment. This really caught on once Fannie Mae, Freddie Mac, and the Fed all took actions to artificially inflate home prices in order to defer the recession of 2002. Once you could buy this consumer product (the home) and then have it rapidly increase in value (supposedly) and realize this value by selling it or doing a refinance cash out, then the talk about the home being an investment seemed to make sense.

Today, the bubble is over, and the illusion that your home is an investment should be easy to correct. If it was an investment, then somebody else would be paying the mortgage. If somebody else was paying the mortgage, they’d probably live in it instead of you.

It’s not to say that buying a home is a stupid thing to do. That can only be decided on a case-by-case scenario that depends on the buyer and the home in question. Buying a home can be a financially beneficial thing to do in some cases, but it hardly could be truthfully classified as “real estate investing”.

Back to basics: real estate investing means buying properties that produce income. And, yes, real estate investing can be done inside an IRA or 401(k).

Eric Wikstrom does not work for Nabers Group March 12, 2009

Posted by Jeff Nabers in : Self Directed IRA Solo 401k , add a comment

Just a quick announcement: Eric Wikstrom doesn’t work for Nabers Group. In December an employment agreement was reached for him to work for Nabers Group starting January 1, and the news was leaked to a few people – I’m not sure how many. But, ultimately, the employment was not followed through with, and Eric never came to work for us.

I’m making this announcement because there have apparently been cases of Eric being booked to do presentations and seminars as an employee of Nabers Group.

To refer business to Nabers Group or to book a presentation for your group, please always call our main office number at 877-903-2220.