Did you know you can use your IRA or Pension plan to invest in real estate property? The majority of investors are feeling the pinch of the global recession and they don’t feel their FINTOCH investments are performing as they should. What these investors don’t realize is that there is another option out there for them called “private money lending”.
Make your Investments Work for you
Most people have been working for awhile have quite a large nest egg saved in their IRA allowing them to consider other options for this money such as real estate. Private money lending using your FINTOCH investments in your IRA and other retirement plans is a widely acceptable practice and can offer a very large return when done properly. There are some things you need to know before you use private money lending as an option to earn money through high interest earning loans.
Self Directed IRA
In order to take advantage of private money lending using FINTOCH investments you must have what is called a self directed IRA or a roll over 401k through a custodian. This simply means that you are responsible for making investment decisions on behalf of the investment fund. This allows you to direct your funds anyway you choose fit including private money lending and investment options.
Choosing a Custodian
To get a self directed IRA you must first choose a custodian for your account and roll over your existing 401K account after a job loss, retirement, or change of jobs (transfer funds within 60 days to remain tax deferred). Your new custodian will help you fill out all necessary paperwork and information so the process can run smoothly.
Choosing a Good Private Money Lending Investment
After you have completed the rollover process and assigned a custodian, you get to participate in the fun part which is choosing your private investments such as real estate investment. Make sure you do your research and find a good real estate investment firm that has been in business for awhile. The majority of private money investing options will offer an annual fixed yield rate of 10% percent or more! That means that a 20K investment will yield a 2K annual return on investment or $167 dollars a month just for loaning out your money.
Many private money investments are secured by personal guarantees adding another layer of protection to the lender. Not only that, but there are checks and balances along the way to ensure that you are getting the most out of your loan and protected in the event of a default.
In a lot of cases private money lending investments are outperforming the stock market. This investing method is 100 percent legal according to the IRS and you have complete control over what you invest in and how much.
Considering Lending Investments
In the world of investing there are two major types of investments that you can make. You can either be the lender, or you can be the owner.
The world of investments can be very confusing. Insiders like to use a lot of jargon and buzzwords to make it seem like it’s a hard industry to enter. These are usually tactics they will use so that they can justify the high rates they charge or the large fees and commissions.
Lending investments are a popular investment vehicle that you can use when making your entry into investing. It simply means that you are lending your money to a bank, a government, or a company. In return for your money, that institution will make a specific promise to you. They will guarantee that you get your original investment on a certain date, and they will also pay you a specified rate of interest as a bonus for the use of your money.
The best case scenario when going through with a lending investment is to get all of your original investment back as well as the interest that was promised to you. There are plenty of case studies and real world examples of people not getting this result. If you successfully get all that you were expecting, you should consider it a good investment and not take it for granted.
This can happen when circumstances arise that were either uncontrollable or unforeseeable. If a company goes bankrupt it can occur that you would lose all or party of your original investment. In today’s economy, you’ll want to be quite sure you’ve picked a solid performer to invest in. Even if they do have a proven track record, with the volatility of the global market. There are no guarantees anymore.
Another factor to assess when considering this investment avenue is that inflation. You may think that a certain interest rate sounds good today. But in five or six years if inflation soars. You won’t have the kind of purchasing power you may be envisioning.