If you want to know the exact way to build wealth and pay little to no taxes, then pay close attention. What if I told you that you could use the same tools that other multi-billionaires have used in growing their wealth?
Would you believe me? Better yet, would you follow in their footsteps by taking advantage of the same methods in building wealth?
“If you want to be successful, find someone who has achieved the results you want and copy what they do and you’ll achieve the same results.”
– Tony Robbins
Self-Directed Investment Retirement Account
Don’t Only Be Traditional
The average American is not a billionaire. A large reason for this is that the average American does not invest the same way as a billionaire. For example, most working Americans utilize traditional retirement accounts such as IRAs (Individual Retirement Accounts) and 401Ks.
The traditional formats of the IRA and 401K permit you to invest in the following:
- Mutual Funds
- ETFs
- Stocks
- Bonds and US Treasuries
- Annuities
- FDIC-insured CDs
Traditional individual retirement accounts (IRAs) are known for their tax advantages, but how does a Roth IRA work—specifically, how does it grow over time? Your contributions help, but it’s the power of compounding that does the heavy lifting when it comes to building wealth with a Roth IRA.
What’s My Limit?
There is no limit to the number of traditional individual retirement accounts, or IRAs, that you can establish. However, if you establish multiple IRAs, you cannot contribute more than the contribution limits across all your accounts in a given year.
“Success leaves clues. Be a better observer of the winners and the losers, those who are doing well and those who are falling behind. Take mental notes and say: ‘I’m going to adjust what I’m doing based on what I see”
— Jim Rohn
What Billionaires Do Instead
Since there is no limit to the number of IRAs (Individual Retirement Accounts) that you can establish. Billionaires will establish as many SDIRA Roths as possible that vary in size and investment type or category. These will later become acquisition arms of their portfolio that will have a sole focus of growing tax-free.
Properly following the IRS guidelines they’re very few limits on what you can invest in. Making minor contributions of $1,000 to various accounts can yield large gains. For example, Peter Thiel turned his $1,664 Roth IRA contribution in 1999 to $5,001,565,722 by 2019. Earning a 3,005,748.63% ROI (Return On Investment) within 10 years.
Alternative Focused Investments For IRA:
- Precious Metals.
- Private Equity.
- Cryptocurrency.
- ETFs.
- Real Estate.
- Undeveloped or raw land.
- Promissory notes.
- Tax lien certificates.
- Gold, silver, and other precious metals.
- Cryptocurrency.
- Water rights.
- Mineral rights, oil, and gas.
- LLC membership interest.
- Livestock.
- And much more
How Much Money Will I Need?
There is no minimum amount that you have to put inside of your IRA. There will always be fees associated with creating an account which can vary based on the custodian. Typically these can vary from $100 – $300 on average.
The contribution limits for a self–directed IRA or self–directed Roth are the same as other IRAs. As of 2020, and through 2021, the annual contribution limit is $6,000 for those under 50. If you’re age 50 or above, you can contribute up to $7,000. The contribution limit applies across all IRA accounts.
Advantages
Investing through a self-directed IRA provides several unique perks that can help bolster your retirement savings. Large advantages of a self-directed IRA are:
- Greater flexibility in the investments you’re able to hold your account.
- Built-in tax breaks on the earnings from your investments.
- The opportunity to make investments that line up with your passions, knowledge, or experience.
- The chance to diversify funds by keeping some money in a self-directed IRA and other funds in traditional investment accounts or other retirement accounts.
- The option of selecting investments that may have a higher potential for appreciation.
Disadvantages
Even if you thoroughly research an asset before investing in it through a self-directed IRA, the stakes can be high. Some of the main disadvantages of self-directed IRAs include:
- You can’t invest in collectibles, life insurance, or real estate you live in.
- The investments tend to have higher risks.
- The account maintenance fees can be relatively high.
- The record-keeping and tax reporting requirements are complex.
- The IRS prohibits various types of transactions.
- You’ll have to pay penalties or taxes if certain IRS guidelines aren’t followed.
How To Get Started
Begin today in learning more about alternative investments. Reach out to a team to help you add the alternative investments that you are most comfortable with.
View investing as something that will be done for the future benefit. Become disciplined to allow the investments to grow without the desire of withdrawing from the tax-free gains. Open the proper accounts so that you’re able to invest in assets outside the traditional options of stocks, bonds, and mutual funds.
Create the proper method and criteria that can become systemized for future growth.
To learn more about how you can build wealth tax-free go to www.Job2Freedom.com
References
Next Generation Trust: https://landing.nextgenerationtrust.com/whitepaper-everything-sdiras
Lord of the Roths: How Tech Mogul Peter Thiel Turned a Retirement Account for the Middle Class Into a $5 Billion Tax-Free Piggy Bank: https://www.propublica.org/article/lord-of-the-roths-how-tech-mogul-peter-thiel-turned-a-retirement-account-for-the-middle-class-into-a-5-billion-dollar-tax-free-piggy-bank
Investopedia: https://www.investopedia.com/ask/answers/091815/how-does-roth-ira-grow-over-time.asp
Business Quotes: https://www.thebusinessquotes.com/jim-rohn-quotes/
Inc: https://www.inc.com/peter-economy/tony-robbins-19-inspiring-power-quotes-for-success.html
IRS: https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-iras-investments
Entrepreneur: https://www.entrepreneur.com/article/271873
U.S. News: https://money.usnews.com/money/retirement/iras/articles/a-guide-to-self-directed-iras