🎙 Passive Cash Flow Podcast EP.185 | Self Directed IRA Rules You NEED to Know
Most people don’t realize their IRA doesn’t have to sit in a Fidelity account forever following whatever the S&P 500 does. In today’s episode, we break down how self-directed IRAs work, why only a small percentage of investors use them, and how taking control of your retirement can open the door to real estate, private funds, and alternative investments you actually understand.
We’re joined by Anne Marie Rogers of Inspira Financial to discuss:
✔ The difference between traditional and self-directed IRAs
✔ Why most Americans never hear about this option
✔ How alternative investing works inside retirement accounts
✔ Common mistakes and prohibited transactions
✔ How everyday investors can diversify like high-net-worth families
✔ What you can and can’t do with retirement funds
Whether you’re looking to roll over an old 401(k), diversify beyond the stock market, or simply understand your retirement options better, this episode gives you a clear roadmap to taking control of your nest egg.
🔔 Subscribe for more conversations on real estate, passive income, and building long-term wealth.
🧠 Topics Covered:
00:00 Intro: You CAN Control Your Nest Egg!
00:47 Meet the Guest: Anne-Marie Rogers of Inspira Financial
01:03 SDIRAs 101: How Self-Directed IRAs Work
03:07 The “Why”: Why Alternatives Beat the S&P 500
04:15 CRUCIAL IRS Rules: Understanding Prohibited Transactions
05:44 The Custodian’s Role & Inspira Financial
07:00 Fee Structure & The Cash Flow Strategy
08:44 Funding Your SDIRA: Transfers & Rollovers
10:29 Who is the Self-Directed IRA Best For?
13:00 How to Get Started (The Step-by-Step Process)
14:46 Final Thoughts on Maximizing Returns
16:32 Passive Cash Flow Podcast Wrap-up
35:31 Sponsor & Outro
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⚠️ Disclaimer:
This is not a solicitation for funds, tax advice, or legal advice. This is not intended to be, and must not be construed to be in any form or manner a solicitation of investment funds or a securities offering. Peoples Capital Group LLC is NOT a United States Securities Dealer or Broker nor U. S. Investment Adviser is a Consultant/service provider and makes no warranties or representations as to the listener or viewer. All due diligence is the responsibility of the investor.
Transcript:
00:00:00:00 – 00:00:18:15
Speaker 1
You know, a lot of people out there that don’t know you could self-directed your IRA into different asset classes. And, they just figure, oh, my IRA is going to sit with fidelity forever and or do whatever the S&P 500 is doing. And I’ll just listen to them and, you know, that’s it. I can’t really control my nest egg, but nei am.
00:00:18:15 – 00:00:21:07
Speaker 1
Rene. You actually can. Is that right?
00:00:21:09 – 00:00:27:18
Speaker 2
Yeah, that’s exactly right. And that’s what we’re here today to talk about.
00:00:27:20 – 00:00:47:05
Speaker 1
All right, ladies and gentlemen, welcome back to the Passive Cash Flow podcast. I’m your host, Aaron Frag. Neato. And we have an interesting guest here today. We’re going to talk about building that nest egg, that retirement account we have. And Maria Rogers here with inspire Financial. How are we doing today Anne-Marie.
00:00:47:07 – 00:00:50:17
Speaker 2
Hey I’m good Aaron, thanks so much for having me on this morning.
00:00:50:19 – 00:01:14:01
Speaker 1
Absolutely. I’m glad you could join us here. You know, I, really enjoyed talking about, with you, about the, retirement funds, the I.R.A., the four one k’s, what we can do with all those different products and, you know, I want to switch it up a little bit here, and kind of move on from the usual conversation we may have with an IRA custodian here on the Passive Cash Flow podcast.
00:01:14:01 – 00:01:32:09
Speaker 1
And, by the way, to our guests and our listeners, our, our viewers out there on YouTube. If you’re enjoying this content, make sure to hit the like button, hit the subscribe button, and, share this with a friend or colleague who you think would get value. You know, a lot of people out there that don’t know you could self-directed your IRA into different asset classes.
00:01:32:11 – 00:01:48:04
Speaker 1
And, they just figure, oh, my IRA is going to sit with fidelity forever and or do whatever the S&P 500 is doing. And I’ll just listen to them and, you know, that’s it. I can’t really control my nest egg, but neigh. Anne-Marie. Neigh. You actually can. Is that right?
00:01:48:06 – 00:02:17:22
Speaker 2
Yeah, that’s exactly right. And that’s what we’re here today to talk about. My my favorite topic is self-directed IRAs and, and kind of how they’re different and, and I think really a good fit for most of the people out there that, that, you know, have a desire to have a little bit more control and not just park it and let it ride the ups and downs of the stock market, but that really want to be a little bit more intentional about how they’re saving and what they’re thinking about investing into, and have that autonomy over their planning.
00:02:17:24 – 00:02:37:06
Speaker 1
You know, and I remember when self-directed IRA started becoming, more popular, maybe, like, I don’t know, seven years ago or something I want to say. And like at that time, it was like 1 to 2% of IRAs were self-directed. It’s still very little. I think it’s like 4 to 5% of IRA investment capital is self-directed.
00:02:37:07 – 00:02:40:16
Speaker 1
You do, you know, what the updated statistic there is?
00:02:40:18 – 00:03:08:13
Speaker 2
Yeah. So I’ve been in the self-directed industry for 12 years now, and I feel like when I very first started, it felt like such, kind of a new thing or a secret, and it really isn’t. I mean, people have had the capacity to invest in these types of accounts since the 70s. It’s just that a lot of the big players, when you think of your retirement planning, you think about maybe where you hold your brokerage account or your retirement account.
00:03:08:15 – 00:03:29:18
Speaker 2
You know, the big players in the space, you know, they don’t really dabble in the alternative side. They really stay in their lane and they stay in that publicly traded side. And so I think over, you know, to your point, the last 7 to 10 years, I think we’ve seen really an incredible amount of awareness around self-directed erase.
00:03:29:20 – 00:03:47:23
Speaker 2
And I don’t know if that’s just because, you know, more people have found out about it. And and it’s really taken off or I don’t know if that’s even just the fact that we’re on a podcast today or there’s more accessible information like there’s, you know, webinars that you can watch and social media and YouTube and all these different resources for people.
00:03:47:23 – 00:04:16:09
Speaker 2
But I think it’s kind of given them a little bit more awareness that, hey, I don’t just have to, you know, work really hard and make my money and park it with a financial advisor. You know, I can have more say and I can be more educated on what my options are. And and even if I’m not the one that wants to be actually buying real estate myself, that I can still get involved in real estate, maybe in a more passive approach and get great returns and kind of have that real diversification piece.
00:04:16:11 – 00:04:35:19
Speaker 2
But I mean, I think in terms of like percentage wise, you know, it’s probably, I would say maybe five, 6%, of account. So it still isn’t a huge amount. There’s still so many people out there that they don’t realize that this exists. But I think in the real estate space, self-directed IRAs have become a lot more prevalent.
00:04:35:19 – 00:04:39:07
Speaker 2
And and people are at least aware that that it’s an option.
00:04:39:09 – 00:04:59:03
Speaker 1
Yeah, yeah, exactly. You know, what’s interesting to me is some people will say, well, I want to avoid risk with my IRAs, so I’m going to keep 100% of it and some mutual funds that follow the S&P 500. And, you know, I understand that, you know, like there’s a pretty good chance the S&P 500 is going to go up over time.
00:04:59:03 – 00:05:21:08
Speaker 1
And if you pretty much keep it in there, it pretty much, you know, on average goes up like 8 to 10% a year, you know, maybe 8% on average or so. But you have down years and you have up years. And that makes people panic with their, their, nest egg and their retirement funds. But, you know, I was always taught that diversification was the best way to actually protect your investment.
00:05:21:08 – 00:05:41:14
Speaker 1
And people are starting to get more creative about, their investment strategies. You know what I’ve learned as well as I work with investors that are accredited and, you know, make an income of, $200,000 a year or 300,000 of their spouse or a net worth of 1 million not including their primary residence. Right. So credit investors kind of like the entry level to high net worth individual.
00:05:41:16 – 00:06:02:05
Speaker 1
Then I also work with, ultra high net worth individuals and family offices and there is a real difference, upon how they invest. I heck, I also work with school teachers, you know, and just hard working Americans that, move into our debt fund, which is structured for, non-accredited and sophisticated investors. You know, it’s a it’s a 5 or 6 B.
00:06:02:05 – 00:06:27:00
Speaker 1
So I really see the whole spectrum of how people build their wealth and, and preserve their wealth and their different investment strategies. And what I’ve seen is the ultra wealthy, the family offices, generally with a net worth of 250 million or more, are heavily, heavily in alternatives. And that can be venture capital, real estate. You know, other, other investment opportunities just outside of the stock market.
00:06:27:00 – 00:06:55:24
Speaker 1
You know, they do some equities and then stocks and bonds, but that might be 25% of their portfolio. And then what I see with more, individuals that are not yet accredited, working to become accredited and really trying to build up their wealth, but certainly, you know, still trying to build their wealth aggressively, maybe 80 to 90 or even 100% of their capital is invested in, generally mutual funds that ride the S&P 500.
00:06:55:24 – 00:07:12:20
Speaker 1
And there’s nothing wrong with that. That is, a good strategy. You should have some money, probably in a mutual fund that rides the S&P 500, but 100% of your money just sitting there. I mean, you know, it’s you’re going to have down years and up years. You’re really not able to get ahead of that 8 to 10% a year.
00:07:12:22 – 00:07:37:17
Speaker 1
A lot of people alternative investments. Oh my gosh. I mean, our investors, you know, we’re we’re targeting 2,021% IRR is, you know, two x 2.3 x equity multiples over five years. That’s almost double what, the average return of the S&P 500 is. So that just goes to show if you build that out over a grand scale, over a 15 or 20 year investment career, you can just do so much better with multiplying and preserving your wealth.
00:07:37:17 – 00:07:59:11
Speaker 1
So that’s right. See, and that’s really no secret that the individuals that invest more aggressively in alternatives, wisely vetted alternatives, have more wealth because they’re simply building their wealth more aggressively, and their money is working harder than the individuals who aren’t doing that. So, you know, it’s it’s an interesting mindset to I want to avoid all risk.
00:07:59:11 – 00:08:16:24
Speaker 1
So I’m going to keep all my money in one place. It’s almost like the old, the Bible story where, the, master leaves, you know, coins to one and, one slave, and he puts it in the ground and buries it. Another guy goes out and multiplies it, another guy goes out and ten, ten times ten is it?
00:08:17:04 – 00:08:38:06
Speaker 1
And you know, he’s saying, you know, you are the one who is it and multiplies it is the, is the one who’s doing the right thing. Anyway, little tangent there. So what do you see as the main reason that people are starting to actually, you know, besides the information age, people learning about this opportunity, like, what’s the frustration people have?
00:08:38:06 – 00:08:43:23
Speaker 1
And they come to you and they’re like, you know, I just want to self my I am ready to do this and learn about it. What’s usually the reasoning behind it?
00:08:44:00 – 00:09:09:12
Speaker 2
I always find that it’s people that are, kind of looking for, I think, more control. Or maybe they’re not happy with the returns that they’re getting or feel like, hey, maybe there’s another way to do this. And, and I want to be more involved. You know, oftentimes I would say our, you know, clients are coming to us and they have already got a retirement account.
00:09:09:12 – 00:09:30:03
Speaker 2
I mean, we certainly see people that they’re setting up their first retirement account and they’re making contributions. And like you said, they’re they’re working hard. But I would say the for the majority of people that are looking into doing a self-directed IRA, you know, maybe they have that retirement account from a prior job. And so they’re motivated, you know, they’ve they’ve left that job for whatever reason.
00:09:30:03 – 00:09:52:05
Speaker 2
Maybe they’ve moved on to a new role. You know, they’ve retired, whatever the case may be, but they now have access to that previous employer retirement account. And they’ve got to do something with it. And so they’re at that crossroads where they’re deciding, do I want to take that money? And do I want to put that into, you know, my current employer, 401 K or maybe should I roll that into an IRA?
00:09:52:11 – 00:10:12:08
Speaker 2
And so for people that, you know, find themselves in that position, I think as they start exploring, okay, well, what are my options for where I’m going to roll into an IRA? And then that is where I think exploring self-directed IRAs can be a great fit for people, because then you have that capacity to be able to choose all your own investments.
00:10:12:10 – 00:10:34:08
Speaker 2
And of course, you’re getting the tax advantages associated with these. You know, as you start investing into these assets and creating returns, then those are funneling back into your retirement account and they’re growing, you know, in a tax deferred sometimes even could be a tax free manner entirely. So I think that’s the really big push for people that, you know, whether they already know real estate.
00:10:34:08 – 00:10:56:21
Speaker 2
And that feels familiar to them and that, you know, they’re like, well, why am I not doing this on my retirement account or whether it’s their very first time and that, you know, they feel like, hey, there’s just another way. I think that, you know, for many, many people, self-directed IRAs can be a good fit. I think the other big thing that you have to consider is that, you know, you mentioned like investing in the S&P 500.
00:10:56:23 – 00:11:27:00
Speaker 2
Well, I think one of the big things that people need to consider is the fact that, you know, in an investment like that, you know, if retirement is just a few years away for you and you’re really looking to be using that nest egg and you’re looking to retire and start taking those distributions, then then perhaps, you know, putting 100% of your money into an alternative asset, like a syndication or a real estate based asset or something like that, where there’s less liquidity that you can have, then maybe that’s a consideration.
00:11:27:03 – 00:11:45:05
Speaker 2
But I think definitely for people that are pre retirement that they’re not living off of their IRA funds, that as long as you got some some time that you can invest and let that money grow in there, that this can really be a game changer and create that exponential type of growth that I think people are looking for.
00:11:45:10 – 00:12:04:01
Speaker 2
And while you can absolutely get great returns, and I’m a huge, huge advocate, I mean, my husband and I, of course, we have, you know, self-directed IRAs, but we’ve also got publicly traded investments as well, because you’ve got to diversify. But I think that, you know, and maybe I’m a little biased having done this for a long time.
00:12:04:01 – 00:12:25:06
Speaker 2
But, you know, I think that really the only way that you’re going to see that really, strong like exponential type of growth is if you’re probably doing something that perhaps there is a little bit more risk associated with it. And so then you need to be educating yourself and doing your due diligence and, and making sure that you’re doing a good investment that you feel confident in.
00:12:25:11 – 00:12:34:06
Speaker 2
But that is really where you’re going to see that that growth that I think people are really looking for in that retirement account.
00:12:34:08 – 00:12:57:01
Speaker 1
Yeah, absolutely. And know the liquidity comment is spot on too. You know, there is a time and a place where you need liquidity. And that’s one of the incredible things about owning equities in the stock market in mutual funds is that you have immediate liquidity. And generally with LP shares and real estate investments, real estate is kind of notoriously non liquid there.
00:12:57:01 – 00:13:16:07
Speaker 1
Actually as a company I’m in touch with called PRI shares. So you can list your LP shares on their website and then sell your position. So it it kind of almost in a sense becomes a liquid more easily liquidated investment. You can kind of also ideally harvest some of that equity growth by selling it. So that is an option.
00:13:16:07 – 00:13:37:20
Speaker 1
But so that that’s interesting. Now let’s just go over some scenarios here. You know, I work with a lot of private investors, and maybe they’ve worked at a number of companies and they kind of have some old 401 K’s rolling around from past companies and maybe even a current 41K. And then they have an IRA say, you know, traditional IRA and maybe a Roth and and they’re putting money into that.
00:13:37:20 – 00:13:54:19
Speaker 1
And, you know, so their investments are kind of, mixed over over some different, platforms for one K and the IRA and the Roth. So how how do you help them kind of consolidate everything? What’s the process of doing that for.
00:13:54:19 – 00:14:23:04
Speaker 2
So you know, at Inspira, really what we like to do is, is to sit down and to have a conversation with people and look at that and talk about what accounts do you have, you know, what are you looking to invest into? And and talk a little bit about some, some strategy in that regard? You know, I think as I mentioned, typically our clients are coming to us and they’ve got an existing retirement account, but that can come in many, many different forms.
00:14:23:08 – 00:14:50:16
Speaker 2
That could be a 401 K from a job that you’ve recently departed from, or that could be an existing IRA that, you know, maybe you’ve been making contributions to or already converted. And that could look like other type of employer plans that we didn’t mention as well. You know, if you were a teacher or worked for the government or anything like that, you know, all of the different jobs out there, you know, there’s different types of retirement accounts other than like 401 K’s.
00:14:50:22 – 00:15:16:14
Speaker 2
And all of those really can be moved over. And so I think the first part is, is really just understanding, you know, what you can and can’t do with these accounts and, and kind of figuring out, you know, what do you have an appetite for? I mean, we see people that invest in these accounts and they are buying residential real estate, you know, a house that, you know, that you or I would live in, and they’re turning that into an investment property.
00:15:16:14 – 00:15:49:11
Speaker 2
And that looks like different strategies, right? They might be, you know, putting tenants in there and then getting that rental income, you know, tax free essentially back to that IRA. They might be, you know, fixing it up and selling it. You know, we I would say more commonly see people investing in a passive way. I think a lot of people know they want to get involved in real estate and they they have a desire for that, but they maybe fall into the category that they don’t want to have some oversight and management over a piece of real estate.
00:15:49:16 – 00:16:12:17
Speaker 2
And so I think the majority are probably investing into, opportunities that are a little bit more passive, whether they’re like lending or doing syndications. But then we see the kind of the unusual things too, right? I mean, we see, you know, people that are investing into like, you know, crypto, we see people are investing into like private tech companies.
00:16:12:19 – 00:16:32:19
Speaker 2
You know, it’s kind of, pretty diverse variety of investments that you’re able to do. But I think we talk about real estate a lot because I think that’s probably what the majority of people come to us with a desire to do. I think that, you know, they understand that, you know, or they’ve heard that you can really, you know, make a good return investing in real estate.
00:16:32:19 – 00:16:51:04
Speaker 2
And they’re just not quite sure how to get started. And so a lot of times people will look into these passive opportunities, with groups like yourself, because it lets them get their foot in the door without actually having to, like, swing a hammer and, and to do anything and manage any, you know, tenants or any of those sorts of things.
00:16:51:06 – 00:17:13:11
Speaker 1
Yeah. I mean, there’s such a learning curve to being able to really reposition a building successfully and just sourcing the deals is extremely difficult. We’ll underwrite 100 deals to find one. Everything we buy is off market. None of it’s sitting on the market, so there’s no way to even get access to the deals we buy. You know, if you’re not in in the game as we’ve been here for 11 years in North Jersey.
00:17:13:11 – 00:17:34:04
Speaker 1
So, yeah. No, that’s that’s a good, good analysis there. And then, so let’s just kind of talk about, the process really quick and the fees, if you can get a quick summary of someone that is looking to, okay, they have their $100,000 IRA, let’s say, traditional IRA sitting and fidelity, and it’s going up and down the S&P 500.
00:17:34:05 – 00:17:57:03
Speaker 1
Say, you know, I want to take 50,000 of that. And I want to invest in this, property in Hackensack, New Jersey, with People’s Capital Group that we’re buying next to the number one hospital in new Jersey. And I see the opportunity there. I like how they’ve been around 11 years, in-house management company. I’m going to, you know, invest $50,000 as a limited partner in this deal with, Seth and Aaron and People’s Capital Group, and, but I have 100,000 fidelity.
00:17:57:03 – 00:18:02:17
Speaker 1
I’m going to take 50,000 out and self-directed in this deal. How would someone go about doing that?
00:18:02:19 – 00:18:21:10
Speaker 2
Sure. So, I mean, really, the first step is, is to decide, you know, what account you’re going to be using. And then from there, we can help you to to walk through what the process looks like. High level though, people would set their account up and then when they’re ready, they can transfer funds over, like from an existing account.
00:18:21:12 – 00:18:42:11
Speaker 2
And then from there, once they have that investment in mind that they’re ready to move forward with, they’re going to submit some investment paperwork to us, which really they can upload, you know, all online and super easy in that regard. And then from there we would fund it. So essentially the IRA purchases, you know, this investment.
00:18:42:11 – 00:19:05:07
Speaker 2
And then as there are returns, it would come right back into the account. And I would say for the average client, that looks like about 350 to 450, I’d say on average annually. So it certainly isn’t, a high cost, you know, Inspira Financial, where I work, does not take a commission or a cut of your investment.
00:19:05:07 – 00:19:23:24
Speaker 2
So it really is just, a flat custodial type of fee. But typically for clients, it’s $100. Like for the setup. And then it’s 350 annually to be able to maintain that. And that’s really it. And I think one of the other things, you know, to your earlier point is I think people have to think about diversification.
00:19:24:05 – 00:19:48:14
Speaker 2
And one of the great things about inspira that’s really unique in the self-directed space is that they also have publicly traded investments as an option to. And so that’s a really unique differentiator because there’s not many players in the space that have the capacity to be highly experienced in alternative assets like real estate or like these other alternatives.
00:19:48:20 – 00:20:07:24
Speaker 2
And also that, you know, when you have dividends coming back from your investment, you know, sometimes when it’s not a very sizable amount, you’re kind of left and, and it’s like, well, what do I do with that $500 that came in this month or that thousand dollars that that came in this month and in returns? You know, what do I do with that?
00:20:07:24 – 00:20:40:05
Speaker 2
That’s not enough to reinvest it. And so one of the great things about Inspira is that there are investment mutual funds, you know, CD stocks, different things that you can be doing. And so when you have those returns, you could redeploy those until you accumulate enough to then do another alternative deal. So I think that’s a huge thing that I always like to mention to people too, because I think we really allow you to take advantage of that compounding effect, because you can immediately reinvest those returns.
00:20:40:07 – 00:21:07:06
Speaker 1
Right? Right. That’s interesting. So Inspira has like different mutual funds that you suggest or you actually, have, developed these funds that people can roll those proceeds into because that is that is an issue I, I come across, you know, our properties produce cash flow like, right. Maybe, you know, 2 to 5, 6% a year. So if you have $100,000 in a deal, you know, maybe you’re getting $5,000 a year or so in cash flow.
00:21:07:08 – 00:21:25:19
Speaker 1
And then there’s big liquidity events on the refinance and the sale. That’s where the real profit is earned. But those can be three, 4 or 5 years down the road. So, you know, in the meanwhile, as you’re getting that cash flow, instead of having you just sit in your account, you’re saying that aspire offers mutual funds. You can kind of roll that into for the time being.
00:21:25:21 – 00:21:50:22
Speaker 2
Yeah, that’s exactly right. So, we really have, the capacity where people can be trading and doing the publicly traded side as well. So, you know, great for people that, that, you know, perhaps they want to hold, you know, their account in just one location and they have a capacity to diversify or, or for people that just have their self-directed account with us, you know, they also have the ability to immediately redeploy.
00:21:50:24 – 00:22:11:23
Speaker 2
And in fact, you know, Inspira actually does quite a number of things. So self-directed IRAs is as what we talked about today and really what you know, I’m passionate about and specialize in, but we also do a number of different things. So we’re really kind of a holistic solution in the sense that we do health benefits, retirement and wealth.
00:22:12:00 – 00:22:35:07
Speaker 2
So one of the other things that may be of note for some of your listeners is that we also do 1031 exchanges as well. And so, you know, I think, one of the great things about the company is that there is really this breadth of services. And so it’s not just a one stop shop, you know, hey, I’ve got my brokerage account at this place, and I got my self-directed at this place, and I’ve got, you know, this other account over here.
00:22:35:07 – 00:22:43:23
Speaker 2
And it’s really kind of that multifaceted solution for people. So there’s a lot of different things that, you know, people can be doing with us.
00:22:44:00 – 00:23:05:17
Speaker 1
That’s interesting. I didn’t know you are a 1031 intermediary. We we have a lot of clients that come to us, that own property and are looking to sell. They’re tired of being a landlord. They’re ready to, get into a more passive position. And we do accept 1031 capital, and we can help them become more of a passive investor with a 1031 exchange and one of our opportunities.
00:23:05:19 – 00:23:24:21
Speaker 1
So, that’s interesting. And but that’s, of course, outside the IRA. Right. But you could always maybe do a 1031 and put a little money into your IRA or something like that, but that’s more of a different wealth strategy. Okay. That’s good to know. And so you do wealth management. You have, insurance options there as well.
00:23:24:21 – 00:23:29:18
Speaker 1
So you’re kind of a one stop shop for people’s, financial needs in a sense.
00:23:29:20 – 00:23:35:16
Speaker 2
Yeah, exactly. Exactly. It’s pretty diverse in terms of what we can do for people.
00:23:35:18 – 00:23:38:11
Speaker 1
How long has inspira, been around for.
00:23:38:13 – 00:24:08:17
Speaker 2
Gosh. And spire has been around for more than 20 years. I’ve been with the company for about a year now. Inspira recently acquired a couple of, self-directed companies in the space. So they acquired Quest Trust Company and New Vue, Trust Company as well. So in terms of of size, Inspira has about 8 million account holders across all their lines of business, self-directed specifically, about 100,000.
00:24:08:22 – 00:24:21:06
Speaker 2
So, you know, definitely in terms of, of length of time and, you know, that stability and security that you want and your financial company, Inspira definitely, you know, brings that to the table.
00:24:21:08 – 00:24:44:06
Speaker 1
At People’s Capital Group, we help you invest in real estate, build your wealth by owning professionally managed apartment buildings in the northern New Jersey market. We want to show you how owning real estate is attainable, even for the busy professionals that don’t have the time or experience investing in real estate. Now, we only work with select people who are serious about building wealth.
00:24:44:10 – 00:25:02:01
Speaker 1
So find out if you qualify at People’s Capital group.com. Yeah, that’s a very important thing, especially when it comes to someone’s retirement money. Right. And you want to be protected and safe and well well taken care of. So that’s great. That’s great. I didn’t realize Inspira is so large and has been around for so long. You know that.
00:25:02:01 – 00:25:22:04
Speaker 1
That’s interesting. And, that’s that’s a good. So I think I heard a quest. Yes. That’s interesting that they acquired that there aren’t you know, there’s a lot of, it’s become a more and more popular business model, these, self-directed IRA, you know, there’s a lot of them out there. So it’s you got to differentiate, amongst all of them.
00:25:22:06 – 00:25:37:14
Speaker 1
And then, so let’s, briefly talk about here before I wrap up, just kind of some of the things you can and can do with self-directed IRA. I have people get in touch me like that, like I love the self-directed IRA thing. I’m gonna buy a beach house. I’m going to go there with my family every summer.
00:25:37:14 – 00:25:55:11
Speaker 1
We’re going to stay for free. And, you know, and then I could rent it out. And when I’m not there in the colder months, I’m like, well, my friend, I don’t know if you can do that. I think you might want to talk to your IRA custodian about other people. Be like, this is great. I’m going to just, I could start a self-directed IRA account and pay myself for my IRA.
00:25:55:11 – 00:26:05:18
Speaker 1
I was like, no, you actually, you can’t get around the old tax man there. It’s still a it’s still an IRA. But, so what can and can you not do with a self-directed IRA?
00:26:05:20 – 00:26:28:00
Speaker 2
Yeah. You gave two great examples, but there’s definitely a few things that, you know, are parameters that you want to be mindful of before you start investing. You know, I think the biggest thing for people to be aware of and kind of an easy way to think about it is, you know, think about who’s in your, like, inner circle, your family tree.
00:26:28:02 – 00:26:49:10
Speaker 2
Typically and doing specific things alongside those people is going to be a no no. So, you know, that’s going to include like your spouse, parents, children, their spouses and the companies that they’re involved in. You know, that those are typically kind of outside the bounds of of what you’re going to be able to do with them. And so you gave some great examples.
00:26:49:10 – 00:27:14:19
Speaker 2
So, you know, if you have your IRA by, beach property and it was an investment property for, you know, all of the weeks out of the year, except for one of them where you wanted to go down with the family and, and, you know, you were going to stay in the property that your IRA owned. That would be something that would be a no no in the account, because you’re getting some type of like personal benefit you and your family for staying there.
00:27:14:22 – 00:27:35:11
Speaker 2
So really, I think the important thing for people to think about is that whenever you’re doing these investments, it’s got to be for the benefit of the IRA, not for the benefit of you or for your family. And so, you know, when you’re doing the investment, I think and you think about it through that lens, you know, it kind of, makes it a little easier to think through.
00:27:35:11 – 00:27:56:23
Speaker 2
So, you know, an obvious one staying in the property. If people are, you know, fixing up a property, you know, you can’t drag your family down there on the weekend and be like, all right, we’re going to go and, like, fix up the property ourselves. Now, you know, something like that is again, not, you know, permitted, but you know, you can invest into any private company.
00:27:56:23 – 00:28:18:10
Speaker 2
You can invest into any type of like syndication or buy any real estate, as long as it’s not like something that you already owned or your family already owned or or your family’s business that you guys own 100%, you know, those are not going to be things that you can do. But but any other type of, you know, investment opportunity in that space is is fair game.
00:28:18:14 – 00:28:31:23
Speaker 2
So that’s I think the biggest thing that people get tripped up on, is really just kind of keeping that arm’s length away from themselves and their family and, and the transaction that you’re doing in the IRA.
00:28:32:00 – 00:28:52:23
Speaker 1
Yeah. Yeah. That’s good. Yeah. There’s more stuff you can do than you can’t do. And that’s kind of the purpose of the IRA custodian is to guide you on what you can and can’t do. Now, does Inspira allow the self-managed LLC where you create an LLC that’s owned by your IRA but managed by you, the checkbook IRA account as it’s called.
00:28:52:23 – 00:29:09:00
Speaker 1
Is that something, inspired a lot. I know a lot of IRA Snowden’s kind of, encourage against that because there’s there’s a lot more risks to it. Essentially, you’re taking the responsibility of making sure you don’t break the rules. And people tend to break the rules. By mistake often. It is inspire a lot of that.
00:29:09:00 – 00:29:12:14
Speaker 1
Or is it something that you, your group, frowns upon?
00:29:12:16 – 00:29:37:18
Speaker 2
We do offer that, though. I think for the first time investor that’s looking into this, I don’t know if it’s always a fit or even necessary. Typically, you know, if people are investing, you know, passively into an investment, it’s probably just not something that they need to add that extra layer and to set up an LLC and to be self managing it, though, you certainly can.
00:29:37:18 – 00:30:03:01
Speaker 2
And we do offer that. And you know, you certainly have the capacity to choose that. I think that for the majority of people, it’s it’s probably just not really a need for them. But we do offer it. I, someone that I previously, had worked with used to use an expression and say that, you know, these checkbook IRAs, they’re not like a prohibited transaction washing machine.
00:30:03:03 – 00:30:28:09
Speaker 2
And so, you know, they say that, meaning that just because you add this extra layer and that you set up this LLC in there, it doesn’t mean that those prohibited transaction rules go away. You know, so I mentioned, like, you cannot invest with your in, you know, with your family members and and you can’t you know, personally benefit or like extend a service to your IRA.
00:30:28:11 – 00:30:46:06
Speaker 2
You know, those rules don’t go away just because you put an LLC in place. And so I think that for people that understand them, maybe they’ve got a couple of these investments under their belt or they they are, you know, very educated on the topic and have really taken the time to understand what are the do’s and don’ts.
00:30:46:12 – 00:31:03:18
Speaker 2
Then I think that exploring a checkbook account, I think is a great option. You know, it might give you that more flexibility where you are really like, you know, they call it checkbook control because you’re the one that’s like writing the check and you’re in charge of the bank account associated with the LLC. So I think it’s a great thing.
00:31:03:18 – 00:31:21:09
Speaker 2
I just think that it’s maybe not necessary for the majority of people out there, but that because it’s a hot button issue and some offer and some don’t, you know, it tends to get like a little controversy, I suppose, in our industry. But I think it’s good for some people. But, you know, for the majority.
00:31:21:11 – 00:31:43:17
Speaker 1
That’s a good point. You make their, you know, that, I remember a story I had from an investor who had a, checkbook IRA account. He’s like, yes, it’s great. I was just at Home Depot and I got a, credit card, you know, for my self-directed IRA account. And I was like, buddy, I don’t think, you’re supposed to get recourse debt for your IRA.
00:31:43:17 – 00:32:08:20
Speaker 1
You might want to check with your IRA custodian and, you know, so that that’s the thing. You know, you’re not supposed to get recourse debt, of course, for your IRA, LLC. So the whole idea of the checkbook IRA account is you can get access to the money faster. You don’t have to go to the IRA custodian, say, hey, I need a, you know, $100 check to pay my landscaper, and they’ll say, okay, there’s a three business day processing and like a $10 fee or something, you know, so like the idea is, you know, you get the money faster.
00:32:08:20 – 00:32:27:00
Speaker 1
But there are the risks to it for sure. And I think, probably more people than not tend to break the rules a little bit, you know, and like that example, getting a credit card for the LLC, you can’t do that or you can’t self deal or whatnot. So, or pay yourself a management fee really, you know, so, yeah.
00:32:27:00 – 00:32:43:20
Speaker 1
So that that’s, one of the challenges there. But, all right. Very good. And now it’s been nice, chatting with you here about IRAs and, we’ve we’ve really dug in here and into the nitty gritty. So how can people learn more about inspire Financial and, and get in touch with you?
00:32:43:22 – 00:33:07:02
Speaker 2
The best way to get in touch with me directly or to the team that I support here, would be to send an email. You can email me directly. Happy to answer any questions. But my email is Anne Marie period Rogers at Inspire financial.com. Otherwise people can visit the website at Inspira financial.com and select self-directed IRAs.
00:33:07:04 – 00:33:29:14
Speaker 2
There’s lots of opportunities that, you know, you can see for education. We’ve got, you know, articles and whitepapers and we actually do webinars a couple times a month where we educate people on on different investment opportunities and strategies and trends and, different topics about IRAs, too. So we’d love for people to tune in and listen to that.
00:33:29:14 – 00:33:42:20
Speaker 2
And, and just get an understanding of, of how you can really take advantage of this and, and have, like I said at the very beginning, really that control and and that autonomy over what you’re doing with your future and your retirement.
00:33:42:22 – 00:34:07:17
Speaker 1
Absolutely. And I might pop up on one of those webinars later this year I think. So, keep an eye out for, People’s Capital Group. They’re on the inspire education section, so yeah, that’ll be great. Yeah. Looking forward to that. Thank you. Thank you so much, Marie. And by the way, our listeners who are, listeners, not viewers, it’s ING with an E, a and E Marie Rogers.
00:34:07:17 – 00:34:09:23
Speaker 1
So, what was that? Email one more time, Emery.
00:34:10:00 – 00:34:15:19
Speaker 2
It’s Anne Marie, period. Rogers. Inspira financial.com.
00:34:15:21 – 00:34:16:17
Speaker 1
Okay, great.
00:34:16:20 – 00:34:17:10
Speaker 2
That’ll come. Right?
00:34:17:10 – 00:34:33:05
Speaker 1
I mean, yeah, absolutely. And, your website does have a lot of information, so check out Inspira financial.com. And there’s a lot of content on there. You can enjoy for free. And they can get you set up with your IRA. Just answer any questions you might have about it or all the other services. I didn’t know you offer that.
00:34:33:05 – 00:34:50:19
Speaker 1
1031 that’s pretty cool. Yeah, or, so let’s say you’re doing a 1031. Get in touch with Anne-Marie. Get in touch with me. Let’s make it happen. She could be the intermediary here. And we can. I’m moving into some passive investments. So to our listeners and our viewers out there, thank you so much for engaging with the Passive Cash Flow podcast.
00:34:50:19 – 00:35:12:23
Speaker 1
We come out with a new episode every two weeks, and we have, all of the types of guests you can see here, people, practicing, their, their arts of, all different types of financial services, tax advice, investment, professionals as well. And, we focus on real estate primarily, but other asset classes as well.
00:35:12:24 – 00:35:31:23
Speaker 1
But our reason here talk about income investing. And, so always a new guest every two weeks here on the Passive Cash Flow podcast. I think we’re up over 190 episodes just doing this since, 2019. Boy, if I knew then what I knew now. So, just, working hard here to bring some quality content to our listeners and our viewers.
00:35:31:23 – 00:59:45:22
Speaker 1
So hit that, like button. Hit that subscribe button if you’re enjoying our content and share it with a colleague or a friend or family member who you think would gain value from, this episode of the Passive Cash Flow podcast. Thanks a lot for listening. Have a good day.
00:59:45:24 – 01:00:08:22
Speaker 1
At People’s Capital Group, we help you invest in real estate, build your wealth by owning professionally managed apartment buildings in the Northern new Jersey market. We want to show you how owning real estate is attainable, even for the busy professionals that don’t have the time or experience investing in real estate. Now, we only work with select people who are serious about building wealth.
01:00:09:01 – 01:00:13:01
Speaker 1
So find out if you qualify at People’s Capital group.com.
