You may be wondering why I haven’t blogged about real estate investing in a while. There’s a very good explanation video at Nabers.TV for you to check out.

There’s something that most “successful” Self-Directed IRA investors do that can spin them out of control and get them into trouble.

I say “successful” in quotation marks because I’m talking about the particular kind of Self-Directed IRA success that is sexy enough to be frequently written about.

What is this dirty deed that leads to massive profits and the potential implosion the very same Self-Directed IRA that got those profits?

Entrepreneurship.

Bad Entrepreneur!

Yep. Entrepreneurship is so powerful that it seems to be the source of all aggressive wealth creation. So where’s the danger?

Let me explain. Some of the most [initially] profitable Self-Directed IRA stories sounds something like this…

Joe, a Self-Directed IRA investor, knows how to work real estate deals into profits. So he buys and sells real estate in his Self-Directed IRA. Sometimes he involves bank financing. Sometimes he involves private financing and partnering.

But one thing is for sure: Once Joe purchases a property, the work has just begun. He has a system. He only buys properties that meet a certain criteria. After the closing, he usually has repairs and/or remodeling work done.

And his system works. He’ll put $30k or $40k of his Self-Directed IRA money into a deal and get $80k to $100k out, often less than a year or two later.

First, applaud Joe for being a successful entrepreneur.

Did you catch that? Joe is being an entrepreneur rather than an investor. This is because his deals have his active involvement rather than the passive placement of his money.

The Pinless Grenade

Unbeknownst to Joe, he’s no longer in control of his financial outcome. His choice to try to sneak business activity inside his IRA gives the IRS an open invitation to tax the hell out of him.

How much?

Well, the IRS can declare Joe’s IRA deals to be a “trade or business” in which they’ll apply the UBTI tax. Also known as the most aggressive tax schedule in the United States. It ramps up to 35% federal tax after only $10,000 of profit.

Will the IRS make this move? When?

That’s unknown, and Joe is no longer in control of his financial outcome.

Terrible Success

All kinds of strategies fit into this same category. I have a friend who has done over 100 deals inside his Self-Directed IRA, producing a return-on-investment of over 9,000%.

And he’s hiding under a rock. He won’t returns the calls of the newspaper and magazine reporters who want him to share his strategies with the world. He rarely teaches investing seminars, and when he does he only invites people who he has personally met and known for at least 6 months. He essentially lives a life of fear because he knows the day his Self-Directed IRA gets audited is the day he gives up at least $1,200,000 plus late penalties and interest to the IRS.

Enjoyable, Controlled Success

Do you know how to do deals that turn pennies into thousands? Thousands into millions?

Fantastic.

Don’t ever consider not pursuing massive profits, and don’t ever lock away your talents and skills to be unused.

Just take a few minutes to educate yourself about the best way to structure your deals to keep you in control.

More info coming in Part Two of this post soon  :-)

Everyone is talking about health care. “How could the politicians do this with a strong majority of American in opposition?”

This video provides some insight into the never-ending string of government takeovers, and seeing the whole picture is alarming. One lesson from all of this is that complaining doesn’t work. Neither does disapproving. What does work is being prepared to defeat government takeover attempts.

Discussed in the video is what I believe is one of the most fundamental characteristics for a free society. Enjoy!

Poor economic times are not dampening the desire for entrepreneurs to start their own business. A study recently showed that there’s little change in the number of U.S. business start-ups in good or bad times. With more people out of work, many are deciding to start their own company, instead of seek employment. They’re following their passion and ideas to create their own wealth and, when they run into obstacles, they’re finding creative ways to finance their business. With traditional funding sources drying up, watch the video to find out how one successful entrepreneur, who launched his company during the recession, received funding and used his own retirement account, Solo 401(k), to help him through difficult times. In just one year his business is booming.

To learn more about the Solo 401(k) and how it can help you, visit Nabers.com or call Nabers Group: (877) 903-2220.