Mr. Romney’s aide said that the candidate “accumulated his IRA holdings through annual contributions, rollovers of sums in other retirement plans, and successful investments.”  That’s a pretty broad overview, so let’s take a deeper look.

Annual Contributions. Back in 1984 when Mr. Romney was starting to build his wealth, the annual contribution to an IRA was limited to $2,000 per year. One does not build a 8-9 figure retirement account just by making the annual contribution to an IRA. If that were the case, almost all of us would be safely cruising towards retirement. While making contributions, or saving, is definitely where he began, the results achieved were based on far more sophisticated strategies.

Rollover. It appears this was a major part of his strategy. Geoffrey Rehnert, a former Bain Capital partner who helped found the firm in 1984, said in that era it had a 401(k) plan that allowed employees to invest pretax dollars in its deals. Bain’s 401(k) plan was self-directed and wasn’t restricted to the usual set of mutual funds that most Americans are limited to. In 1984, the self-directed 401(k) structure allowed Mr. Romney and Bain to contribute up to $30k per year into his account.  I’m guessing Mr. Romney took full advantage and maxed his contributions. Then once he built his fortune in the 401(k) plan, he did a 401(k) rollover into a self-directed IRA. But $100M is still a LOT of money when you can only put away $30k per year.

Successful Investments. Obviously! What any type of self-directed retirement plan provides is an unrestricted investing environment that allows the individual to invest in what they know best. What Mr. Romney knew best was private equity deals, and he made a killing investing into them, while probably making investments into Bain Capital itself.

Tax Free Growth. Besides making successful investments, the self-directed retirement plan environment allowed Mr. Romney the ability to compound his growth without paying any taxes. People are going to talk a lot in the upcoming months about taxes on capital gains, earnings and dividends. One side is in favor of increasing them, while the other wants to abolish them. But one thing is certain. Investments in any type of retirement plan allows for tax-free growth.

So, here’s the formula to create incredible wealth in a self-directed IRA. First, create you own private equity firm and establish a self-directed 401(k) plan. Next, diligently save each year and work your as* off to build both your company and your retirement plan. Then, roll the accumulated amount into a self-directed IRA and run for President. Easy, right?

Perhaps a tad unrealistic for the majority of us. But there is a strategy that can be extracted from this blueprint. First, open up a self-directed Solo(k) plan. There are numerous ways to qualify for such a plan and today’s contribution limits allow for a husband and wife to contribute up to $98K each year.

Next, find an investment class that you understand or have an interest in learning about. Self-directed accounts allow you to invest in real estate, commodities, start-up companies (such as Mr. Romney), private loans, stocks, bonds, fishing rights, hunting licenses, Superbowl tickets…you get the idea. The IRS allows you an extremely wide investment palette to choose from, so don’t allow your savings to be limited to just one type of investment class.

The last step is protect your wealth so all of the hard work you put into becoming a savvy investor and making good decisions doesn’t go to waste. Mr. Romney’s investments currently are held in a blind trust, meaning that he no longer makes decisions about individual holdings. I’m sure that accomplishes two things. First, it provides him the impartiality he needs to govern fairly. Second, it puts the security of his assets into the hands of TRUSTED professionals that I’m sure were extremely well vetted by Mr. Romney and his advisors.

Self-directed IRAs allow investors the flexibility they need to create an investment plan that matches their sensibility. The trick for each of us is figure out what we can and can’t live without, save diligently, invest wisely, then spend our retirement years enjoying the life we’ve built.

Not sure what your options or sensibilities are? Then find professionals that you can trust and learn as much as you can from them about investing…and yourself.

What kind of real estate can you invest in? Anything, as long as neither you nor an immediate family member, lives in it. You can purchase single and multi-family rentals, commercial property, cash flow notes and tax liens. You can LEND your retirement dollars to other investors looking for short-term real estate acquisition loans. You can purchase land contracts, buy cash flow property at auction and your IRA can even get a loan to increase your real estate holdings. And all of this investing can be done with the monthly cash flow and the equity going back into your retirement account completely TAX-FREE!

So whether you’re looking for an alternative to Wall Street’s volatility, want to protect your retirement funds with real assets or just want to grow your IRA tax-free via regular cash flow investing, real estate is a strong asset class to consider. But this type of cash flow investing does have a unique set of rules and guidelines so make sure you’re working with a real estate professional that specializes in it.

Our team has executed hundreds of transactions through a self-directed IRA or 401(k) and can help you with both creating the new self-directed retirement account AND with finding a spectacular real estate income property! Please explore our site to learn more.

To understand the impact that Greece could have on the US economy, the stock market AND YOUR retirement account, read the following article from CNBC about how tightly woven their economic struggles are to ours. A default by Greece poses a risk to the viability of the European banking system. And the US banks will not go unscathed. If banks continue to retreat and restrict lending, consumer spending will remain flat and the impact on our “recovery” could be significant.

Think about the financial shock waves that the collapse of Lehman Bros. had on the S&P. Is this same type of situation imminent? Maybe, maybe not. But it’s hard to debate that it isn’t possible, maybe even probable. If your retirement account or other investments are completely exposed to Wall Street volatility, you run the risk of suffering major losses once again.

Yet another reason to find alternative ways of investing, such as passive cash flowing real estate, to diversify and protect your hard earned savings.

http://www.cnbc.com/id/44583151/Greek_Default_Could_Tip_US_Into_Recession

Learn more by reading the article below originally published in the Wall Street Journal.

Wall Street Journal
By ROBBIE WHELAN
VALLEJO, Calif.—Agustin Gutierrez, a construction worker from this town in the hills northeast of San Francisco Bay, lost his job in 2009, then, 10 months later, he lost ownership of his home.

Now, the husband and father of four rents the same five-bedroom ranch from McKinley Capital Partners, an investment company that’s at the forefront of a new breed of big-money landlords.

Hedge funds, private-equity firms, pension funds and university endowments are dipping into the foreclosure market McKinley, which has acquired more than 300 foreclosed single-family homes in the Bay Area over the past two years, recently teamed up with Och-Ziff Capital Management Group LLC, a New York hedge fund, with plans to buy at least 500 more foreclosed homes in the next year. Those homes, too, will be rented to people like the Gutierrez family.

Buying foreclosed homes as investment properties has long been dominated by mom-and-pop investors. But now hedge funds, private-equity firms, pension funds and university endowments are dipping into that market. The attraction is double-digit returns at a time when most bonds and other income investments yield very little. The most popular strategy is for a big investor to team up with a local company that scouts out houses and finds the renters. The hope is to flip the homes in the future when prices recover.

“It’s kind of the Wall Street meets Main Street phenomenon,” says John Burns, an Irvine, Calif.-based real-estate consultant who has discussed investing in single-family rentals with hedge funds. “The Main Street guys need the capital, and Wall Street needs the expertise.”

At the end of May, 3.5 million loans were at least 90 days delinquent or in foreclosure, according to investment bank Barclays Capital. At the same time, the country’s home ownership rate has fallen, to 65.9% in the second quarter of 2011 from its peak of 69.2% in 2004, according to figures released by the U.S. Census Bureau last month. That drop has produced millions of new renters and helped push the vacancy rate for rental housing down by about two percentage points, to 9.2%.

David Coe

American firm says US Homes have NEVER been this undervalued. Great time to acquire in real esteate. http://linkd.in/ihX6pT

More and more frequently, the choice is made to roll into a self-directed IRA because of the flexibility and vast array of investment choices available. Once in a self-directed IRA, the owner is no longer restricted to the investment choices offered by their employer plan, nor is the participant subject to any future restrictions imposed by a new employer plan. A 401(k) to IRA rollover that is done to a self-directed account offers the most flexibility and the only opportunity to TRULY diversify a retirement portfolio.

Why real estate? Real estate is a proven method for building wealth. Long-term real estate ownership historically has proven to be a strong vehicle yielding sustained appreciation… far superior to other retirement asset choices. Real estate is also an excellent investment to hold within a retirement account versus stocks and mutual funds because it earns CASH FLOW and doesn’t solely rely on appreciation.

A typical client will take $150K from an old employer’s 401k plan and roll it into a self-directed IRA. The process usually takes 4-6 weeks. Once the funds are in the new IRA, the IRA will take title to real estate that can include residential homes, commercial properties, trust deed loans, tax liens or raw land. It’s the conservative, steady growth that our clients covet, removing some, if not a majority of their assets from the volatility of the market.

More and more are “unplugging” out of large corporately held retirement plans that are designed in the company’s, not the employer’s, best interest and moving into an individually controlled retirement account. This is the fastest growing segment of the retirement industry and will continue to see sustained growth.

Finding out that Memphis was #1 was icing on an already mouthwatering cake. What I found in Memphis were solid neighborhoods, homes that have been properly remodeled, quality property management, a superstar real estate agent, one hell of a pulled pork sandwich and some great blues music. What can I say, my hotel was only 1 block off Beale St!

Our partner in Memphis is OCG Properties. OCG is based here in Southern California and run by Mathew Owens. OCG has purchased and renovated over 200 properties in the last few years and really knows the intricacies of the Memphis market. Besides being a real estate investor, Matt is also a CPA and specializes in the due diligence of each investment.

After a few negative experiences with property managers in Memphis, Matt decided to open up his own property management company. He hired his old friend Lester and set him up in a great place in Southern Memphis. Lester is on the ground and he and his team oversee all renovation and property management issues. Like I always say, any investment can go south quickly with poor property management. OCG has the right solution in place to protect thier clients’ investments.

To see my photos of the properties in Memphis, click here. Be sure to check out the Statue of Liberty, Memphis style! I spent two days with Matt, Sean and Lester looking at a wide range of SFR investments. All of their properties are currently rented (a good sign) but one tenant did allow us inside to take a look at the interior renovations. They do sensible renovations that minimize costs to the investor while offering enough touches to help attract quality tenants. You can see the color scheme they use, the crown molding, the new hardware and lighting, new windows (when appropriate). Roof, plumbing, electrical…all major systems…all seemed newly renovated. We also explored a few new listings so I could walk through the “before” condition of some of these foreclosures. These properties are not that old and most of the renovations needed are cosmetic in nature.

Of course, I wouldn’t be writing about this at all if the properties didn’t offer solid returns. The price-to-rent ratio in Memphis is as good as any market you’ll find in the US. And the discounted foreclosure prices that Realty Trac reported leads to great fix-and-flip opportunities, as well as longer term buy-and-hold deals.

Speaking of, the one part of the OCG system that I felt needed improvement was in liquidation of the fix-and-flip properties. OCG’s focus when selling a newly renovated property is find another investor. While still turning a profit, the maximum return can be found in selling the property to an end user…a first time home buyer. To do that, we needed to find a local agent that specialized in selling homes, not just listing homes. I found that partner in Jennifer Carstensen with Keller Williams. Jen has built her business specializing in social media and digital marketing. She’s smart, aggressive and implements marketing that matches how today’s home buyers shop for homes. While I was in Memphis, I was fortunate to hear Jennifer speak on a panel about the state of the Memphis real estate market. Having her on our team is a key addition and allows for multiple exit strategies on each investment.

Like I always say, there’s no “I” in real estate. Real estate investing is a team sport and I feel like the team that’s assembled to handle investments in Memphis is a strong one. If you would like to learn more or see the returns on a specific property, please let me know.

It’s rumored that a trader accidentally put in an order to sell billions of P&G shares instead of a millions. (Millions of P&G, really?) This created an unexpected 30-40 pt drop in the P&G stock price, which combined with a protest in Greece that got out of hand, triggered a market free fall. Pre-set trading instructions were initiated by P&G’s drop, which then caused the DOW to drop, which then caused other triggers to initiate, which then….well, you get the drift. This free fall caused the DOW to drop 700 pts in 15 minutes! The market recovered quickly, also propelled by automated instructions and ended with a more “manageable” loss of only 350 points for the day. While that still represents a 3.2% drop in value, most felt pretty relieved that the losses weren’t even more staggering.

The 1000 point drop in the DOW, or nearly 10% of its value, happened and then recovered in a matter of hours. That is a breathtaking display of the market’s volatility and reminded me of one the attributes that I like most about real estate. Real estate is a slow moving index. In fact, it’s near-impossible for real estate to drop, or rise, quickly or unexpectedly. Even when the bubble burst in 2007 and real estate in some markets lost 40+%, it happened over a period of years, not hours. Conversely, real estate will also take years to recover, while the stock market might make up today’s losses in a matter of minutes tomorrow morning. Again, the stock market is far more volatile.

When we recommend using real estate to diversify a retirement portfolio, we’re attempting to hedge against more than the direction in which different markets move. We’re also trying to hedge against the speed in which different markets move. Real estate is methodical, lumbering, glacial. Stocks are comets streaking across the investment horizon. Real estate helps to keep a retirement portfolio grounded and can help limit the radical swings.

For example, if you had a retirement portfolio that was worth $100K and was split evenly between real estate and stocks, today’s 3.2% drop would have merely been a 1.6% hiccup. And if you factor that the real estate actually earned money today due to rent payments and a days worth of appreciation, the decline is slightly less. Again, holding real estate also limits the upside growth when a big day in the market happens. But diversification is about limiting the losses not maximizing the gains. Real estate fills that role ideally within most retirement portfolios.

Stock prices are measured by the minute for a reason. So the next time the DOW, the S&P or the NASDAQ makes a radical movement and the volatility has your stomach twisted into knots, think about shifting some of your holdings into real estate. It may be boring and staid, but it’s also proven and stable.

Why real estate? Real estate is a proven method for building wealth and has made more individuals wealthy than any other asset class in the history of mankind. Long-term real estate ownership has proven to be a strong vehicle yielding high appreciation, far superior to other retirement asset choices. Real estate is also an EXCELLENT investment to hold within a retirement account and the antidote to the mutual fund blues. Here are my top five reasons why real estate is ideal for your retirement account.

1. Tax Free Cash Flow: Real estate investments provide monthly cash flow to help grow your retirement in addition to any appreciation. Since the asset is held within a tax-free environment, there are no taxes to pay (in most cases) until you withdraw money from your IRA. And if you own the asset in a Roth IRA, the monthly cash flow and capital gains can we withdrawn at retirement completely TAX FREE! 
2. Create Leverage: Your IRA can borrow money and create leverage allowing you to expand your holdings. You could also borrow money from another IRA holder since the law also allows IRAs to lend money. 
3. Control: Want to improve the value of your investment? Add a new roof. Put in carpet. Update the kitchen. All of these improvements can increase monthly cash flow and ultimately improve the value of your asset. These costs have to be paid out of your IRA, but name another investment that you can improve with your own free will. 
4. Less Volatility: All investments are cyclical and have their ups and downs, but real estate is more predictable and less volatile than the stock market. Ever see the value of real estate tracked by week, day or minute? You haven’t because it just doesn’t move that fast. Timing the peaks and valleys of real estate is an easier task than timing other asset classes, especially market based investments. 
5. Diversification: Real estate offers a great way to diversify your portfolio. How many people had their ENTIRE retirement portfolio in the stock market? Nearly 80%. Use real estate to balance your portfolio, along with other asset classes, so retirement doesn’t get postponed due to a bear market.

The first step towards owning real estate in your retirement account is to set up a self-directed IRA or 401(k). Once the new account is established, funds are transferred from the old IRA to the new IRA, You can then start looking for real estate opportunities. Freedom Growth specializes in all aspects of owning real estate in a retirement account and guides each client through the process. Check out our website to learn more.