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  1. Let me see if I got you right: In short, you’re proposing that we must become somekind of stockbrokers with our retirement assets or spend the rest of our sorry lives in utter misery ?!!! … is that it?!!!

  2. If you’re not a stock broker already, now is probably not the best time to become one… so no I am not proposing you become any kind of stock broker nor do I propose becoming miserable.

    Please read through the rest of my blog for a better understanding of what I advocate. In short, I encourage investment without any kind of unnecessary limitations on investment options.

  3. Gilmour,

    That’s an interesting perspective. Unfortunately history doesn’t support it. There is no empirical evidence that any class of wealthy people attained their wealth primarily through investment into publicly traded securities. To the contrary, Merrill Lynch publishes something called the World Wealth Report each year to describe characteristics of high net worth individuals. Among its findings over the past 5 years:

    – Less than 10% of high net worth individuals surveyed attained their wealth through investment into securities.

    – High net worth individuals’ investment into private equities results in performance more than double their investment performance from publicly traded securities

    – High net worth individuals hold less than 50% of their assets in publicly traded securities.

    In other words, high net worth individuals are diversified beyond the stock market because the stock market itself is an asset class that can undeniably move drastically as a whole. Because of this, I predict that the 2008 World Wealth Report will show that wealthy people did not experience as large a decline in their assets as everyone else – thanks to their real diversification.

    You can label it whatever you want… but if following time tested successful strategies is “insane” then I’m as crazy as it gets, and the amount of crazy people embracing the concept of having unrestricted investment options is rapidly increasing.

  4. Well I’m sorry about that, I must’ve said something that certainly induced you into believing that I was writing about ‘publicly traded securities’, ‘Merrill Lynch’, ‘ wealth through investment into securities’ and ‘successful strategies’ of ‘real diversification’ … so, retracing my steps, I would like to assure you that I’m not writing about any of those things you mentioned.

    So, my basic focus lies with those who have lost everything following wise advices such as yours … or am I debating with a software ?!!!

  5. Hello again, Gilmour. Yes, please retrace your steps. What particular aspect of my teachings are you debating and/or scrutinizing?

    For your reference, I stay in touch with my Solo 401k & IRA LLC customers, and I am not aware of a single one who has “lost everything”. You mention “those who have lost everything following wise advices such as yours”, but I do believe you are confusing me with other people or companies.

    You also mention that you are “not writing about any of those things [such as publicly traded securities]”. What exactly are you writing about?

  6. “If an order were placed for you to surrender your retirement account assets, you could simply distribute them to yourself before the order deadline. In such a case you might have to give up around 40% of your assets to taxation, but that is much better than losing 100%.”

    As I’m sure you realize, this may be the entire point of the exercise. The government gets a big hit today in income tax and early withdrawal penalties, and all future earnings on that capital will be subject to regular taxation. They only need to have this regime in place for a year or so, wait for accounts to be liquidated in response, and then say “oops, so sorry, we won’t do it after all”. By then it’s too late, you can’t contribute that capital to another retirement account even if they rescind the confiscation rule.

  7. Bob,

    Anything is possible. Adjust your plan of action according to your view point.

    Nonetheless, the take away point here is that continuing to have your retirement accounts structured in a restrictive way could cost you a lot of money – possibly 100% of your retirement account.

    The more dubious you think the government will be, the more important direct possession of your assets should be.

    Jeff

    p.s. Part of the idea is that it’s possible that those whose assets are held by a federally regulated bank or trust company may not have the option to distribute in the event of retirement account “nationalization”. They may simply have their account frozen and handed over to the government. In such a case, only someone who possesses their assets themselves would have the ability to protect their wealth.

  8. Gilmour, I believe the main point of this article was lost. There is no for sure answer or solution that applies to everyone. ‘Doom and Gloom’ isn’t necessarily coming…. but, the point is that it is a possibility.

    It’s in the best interest of an individual to have options and position themselves in the best possible way to handle what actually becomes a reality.

  9. One strategy I propose could be as follows;

    Set yourself up in a small business & Set up a self-directed ROTH small business instrument .. Solo, Solo 401K …one of the plans that allows you to maximize contributions… Roth Solo 401K, for example allows you to contribute up to $15,500..

    A SIMPLE IRA provides even greater contributions because you can do ’employer matching..

  10. I agree with Phil Lewis… the more common things in life are left to the doubts those who end up broke and working forever…. When people get creative with taxes some people call it crazy others call it genius. The tax code is simply guidelines….

    The point of this articles was that there are a lot of people in Washington That shouldn’t be there and they make decisions they should never make… They simply had the most money to get elected into office… One of Our founding fathers suggested making congress and the senate like royalty and only could pass that seat down to family memebers… Greed is the main thing you should fear not a creative idea….

    What some people need to do is start managing their own business… otherwise they will be left broke with a rich broker…. telling them I’m sorry… The market tanked again… But I made a killing selling a put on your shares you let us borrow…..

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