What Wealthy People Know That Most People Don’t
There are opportunities to invest money earning significantly higher rates of return than the stock market,
while fully understanding, managing, and minimizing the risk.
Investing in real estate
Those who have acquired wealth understand the value of investing in real estate. Yet even if we do not have
the money to invest in prime properties, we have the opportunity to generate wealth investing in real estate.
We can lend our money to real estate investors to generate a significantly higher return than the stock
market, while allowing us to understand, control, and manage our risk. Investing at the then current rates
over the last decade would have yielded an annual return of 20%. By starting with a $100,000 investment, with
the compounding effect we would have finished the decade with almost $575,000 in our account! And these
investments are backed by actual real estate, which is a far safer investment than the stock market.
Using self-directed IRAs
Using the stock market to generate a measure of long-term wealth has not worked over the last decade. Yet most
of us believe we are required by law to invest our retirement plans in the stock market, individual stocks, or
mutual funds. This belief is widespread, but untrue.
We can control how and where we invest our retirement accounts by using self-directed IRAs that are subject to
a very limited set of restrictions (see Note 1). Because it is perfectly legal to use the money in these
self-directed IRAs to provide funding to a real estate investor, an opportunity exists to earn a healthy rate
of return while having the loan backed by the underlying real estate. Also, all of the earnings from these
transactions are deposited back into the self-directed IRA account, 100% tax-free. These earnings do not
impact your annual contributions to your IRA, so it can grow by the amount of your annual contribution, as
well as your investment earnings.
Maximizing both methods can quickly build a solid nest egg. Seek advice from a fully-qualified legal and tax
adviser for your individual situation, your eligibility, and the advisability for you to engage in such