Ever wonder how the rich keep getting richer—legally and tax-free? It’s not luck. It’s strategy. And it starts with knowing how to use a self-directed IRA to invest in real estate, private equity, and even startups—while keeping the IRS out of your profits.
What if you could unlock the same wealth-building tools the ultra-rich use—without needing millions to start? On this week’s Exit Strategies Radio Show, host Corwyn J. Melette sits down with Adam Bergman, CEO of IRA Financial Technologies and one of the nation’s leading experts on retirement tax strategy.
A former tax attorney with over 25,000 clients and $4 billion in managed assets, Adam explains how self-directed IRAs offer everyday people the freedom to invest in alternative assets—real estate, startups, private equity—and grow it all tax-free. This conversation breaks down the exact strategies smart investors use to build generational wealth and reclaim control of their financial future.
Key Takeaways:
- 01:56 Introducing Our Special Guest: Adam Bergman
- 03:06 Adam Bergman’s Journey to IRA Financial Technologies
- 07:31 Understanding Self-Directed IRAs
- 11:12 The Power of Roth IRAs
- 14:41 Tax Strategies and Legacy Building with IRAs
- 16:54 Collaborative Real Estate Investments with IRAs
- 18:05 Leveraging Small IRAs for Bigger Investments
- 20:25 Pitfalls to Avoid in Self-Directed IRA Investments
- 22:28 Using Self-Directed IRAs to Start a Business
- 27:53 Checkbook Control vs. Custodian Controlled IRAs
This isn’t just about retirement—it’s about freedom, control, and legacy. Don’t let this powerful financial knowledge sit on the shelf. Tune in, take notes, and take action.
Connect with Adam @:
- 📺 YouTube: IRA Financial
Connect with Corwyn @:
- Contact Number: 843-619-3005
- Instagram: https://www.instagram.com/exitstrategiesradioshow/
- FB Page: https://www.facebook.com/exitstrategiessc/
- Youtube: https://www.youtube.com/channel/UCxoSuynJd5c4qQ_eDXLJaZA
- Website: https://www.exitstrategiesradioshow.com
- Linkedin: https://www.linkedin.com/in/cmelette/
Shoutout to our Sponsor: EXIT Realty Lowcountry Group
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EXIT Realty has a revolutionary compensation model training and technology that provides you with the tools you need to start and build your successful real estate career. Call EXIT Realty Lowcountry group today at 843-619-3005 that is 843-619-3005 or visit https://exitlowcountry.com/joinexit and make your Exit today.
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CORWYN:
Do you want something more? More meaningful moments, opportunities, deeper relationships, and memorable experiences? Do you want to make a difference? If you said yes to any of that, a career in real estate could be the opportunity you’re looking for. Guiding people through one of the most important decisions they ever made. The purchase or sale of their home can be both rewarding and lucrative. Exit Realty’s revolutionary compensation model, training, and technology provides you with the tools you need to start and build your successful real estate career. Call Exit Realty Lowcountry Group today at 843-619-3005, that’s 843-619-3005 or visit join.exitlowcountry.com and make your exit today.
Good morning. Good morning. Great morning to you guys. Welcome to another fabulous episode of Exit Strategies Radio Show. Hey, I am your host, Corwyn J. Melette, broker and owner of Realty Low Country Group in beautiful North Charleston, South Carolina. Hey, if this is your first time listening to this show, you sir or ma’am are in for a treat because our mission here is very simple. It is to empower our community through financial literacy and real estate education. Guys, we are legacy building. That is what we do. So I’m super excited. I’m super stoked about today’s show, but I got to give a shout out to those who listen to us faithfully from one end of town to the other. And for you guys that are tuning in, if you will, from around the globe, you all humble me with your commitment and your connection with our show. So I want to say thank you from the bottom of my heart, Elder and Pastor Vanderbilt, Evan Senior. You know, if I don’t put that senior on that thing, that dude will jack me up. My mom out there in Monkey’s Corner, they love you. And the people down in Hollywood, what you know, no good. Look at y’all are amazing. But my home, our home up in Muddy Mullins. Hey, thank you guys for tuning in. Not today. Whoo. Hmm. So every time we have some conversation on here about money that my ears get, they almost like Dumbo ears. They’ll start flapping and stuff because I’m like trying to get all this stuff in, all this good information and nuggets. Right. But when we start applying and talking about strategies, whoo, that thing give me a chill. So today we got like the strategist, right? This is like some. OK, I’m like all giddy and excited. And I got my own pen and paper over here to take some notes as we have with us, none other than Adam Bergman. And now Adam is the founder and CEO of IRA Financial Technologies. Now that might not mean much to you, but I’ll tell you what, if you get your little TV clicker and you click a little bit, you will see him on and will have seen him on CNN, on Business Week, on CBS. Look here. He gets around because he is a leader and an authority in this space. So I’m super stoked and excited. He took some time out to be here with us today. So don’t y’all squander this opportunity. Don’t y’all look. Just turn the dial. Don’t y’all just put this thing here down. I need y’all to pick it up, turn them grits off and let’s digest this moment. So Adam, thank you so much for taking time to be with us today on the show. Corwyn, pleasure to be here. Thank you. So, Adam, if you don’t mind, give our folks like that a level overview of who you are and what it is that you do.
ADAM:
Sure. So I’m Adam. I will give you my story because I think it translates well to how I got onto the path of alternative assets and taking control, building your own future using the US retirement system. So I was a tax lawyer. I have a law degree, obviously I have a master’s in taxation. I worked at some of the largest law firms in the world in New York City. And around my eighth year, I was doing a lot of sophisticated transactions, corporate transactions. I got asked to help a client that was a major hedge fund general partner, and he wanted to see if he could use his IRA to invest in this hedge fund. So I got lucky enough to be tasked with this assignment and I did some research and I was blown away because as a tax lawyer, someone who has a master’s in tax law, someone who I think is pretty smart, pretty sophisticated, I had no idea that you can use your IRA or 401k to invest in alternative assets like real estate. I had no idea. So I was blown away and I saw this as my calling. I can use my tax background, my law degree, and my flirtation with just taking control, freedom, being like a libertarian. And I stopped practicing law, started IRA Financial, and fast forward 15 years later, we have over 25,000 accounts, 4 billion in assets. And my passion is helping educate people on the power of the US retirement system. People don’t realize, but it’s rigged in our favor. This is how smart people get rich. Unfortunately, I always give this example. I went to, obviously I went to a good university. I went to a good law school. I have a master’s in tax law. I did not take one course on how the retirement system worked. I didn’t take one course on compounding returns, how money that is not subject to tax will grow faster. Rule of 72, if you double your money, you can double your money every eight years, assuming a 9% rate of return, double your money every 7.2 years, assuming a 10% rate of return. Very simple principles that unfortunately no one’s taught in America, except the very, very few smart ones that understand this, they get their money working for them. So that’s my passion is to help people educate people, take advantage of the power of the US retirement system, take control and don’t rely on the government, create your own luck and use the retirement system to do so.
CORWYN:
So Adam, thank you for that. And look here, so again, I’m all giddy. So listeners, look, if I start fumbling or stumble with my words, I need y’all to understand because Adam is talking my language, right? So one thing that you touched on there is that this information isn’t everywhere. It’s available. Don’t get me wrong. And there’s an old adage. If you want to hide something from somebody, you put it in a book, but short version is it’s available, but people are just not plugged into it. So was this an accidental stumble for you? Or was it like, okay, well look, I just hadn’t looked, but okay, oh wow. And then this set you on the path.
ADAM:
It was kind of a mixture. It was an accidental stumble for sure. I had no idea about the power of alternative assets and retirement account. I was of the belief, my father always said, Hey, listen, whatever you do, just max out your 401k. It’s just the smartest way to save because it’s subject, it’s not subject to taxation as the money grew. So I understood that principle, but I never really truly understood compounded returns, the rule 72. And then when you apply it to being able to invest in things you trust like real estate, right? Things are going on in the world. There’s tariffs, there’s trade wars. The stock market goes up and down every day. No one understands what’s going on. But real estate, I know, first of all, it’s a hard asset. I can touch it. I can feel it. And no matter what happens in this trade war, I know I can always rent out my Airbnb or my IRA and I can generate tax deferred income as well as potentially tax-free appreciation when I sell it. For me, it’s diversification. If you look just recently, Larry Fink, who’s the CEO of Blackstone, which is BlackRock, which is the largest asset manager in the world. He said he believes every private investor should have 20% of their assets in private investments like real estate or private businesses.
CORWYN:
Wow. Wow. So alternative investing, you know, self-directed IRA. So matter of fact, let me kind of back up and take this as an opportunity, Adam, for you to give a definition or define those two terms. So if you don’t mind, tell our listeners what that actually means.
ADAM:
Yeah, it’s a great question, actually. A lot of people get confused. So IRAs, I’ll just give everyone a kind of a quick history lesson because I’m a history buff. I think it’s easier to understand where we are today to go back and understand context. 1974, RISA created IRAs and 401ks. Before that, no one really saved for retirement, except if you worked at large corporations like Ford. They had to find benefit plans. So 1974, IRAs, 401ks were created. The idea was to let people take more control and save for themselves so they don’t become a burden on the government. So the tax code, when it addresses IRAs in section 408, section 4975 of the tax code, it doesn’t actually say the word self-directed IRA. There’s no distinguishing between an IRA and a self-directed IRA. All it mentions is IRA. So a self-directed IRA, all it is is an IRA, same tax rules as an IRA, Roth IRA, SEP IRA, simple IRA. The only difference is it allows you to do alternative asset investments. So if you go to Fidelity or Schwab or Vanguard, Bank of America, they’ll give you an IRA, but they’re only going to allow you to buy what they sell, stocks, mutual funds, ETS, which is, of course, their right. That’s how they make money. That’s their business model. But companies like IRA Financial, we’re true self-directed IRA providers. We don’t sell investment advice. We don’t sell product. All we do is we unlock your money in a tax-efficient manner and allow you to invest in what the IRS allows you to do, which is essentially everything but three things. The whole beauty of a self-directed IRA is you can do any investment you want except three things. That’s it. What are those three things? One, life insurance. You could in a 401k, just not an IRA. Number two, collectibles. You can’t buy arts or like baseball cards, comic books. And thirdly, the broadest is a found under Internal Revenue Code section 4975 that says, in sum, you can only make investments in your IRA that exclusively benefit your IRA, meaning you cannot invest in any alternative asset or any asset that directly or indirectly personally benefits you, your lineal descendants, your parents, your children, your spouse, daughter-in-law, son-in-law, or any entities 50% or more controlled by such persons. So what does that mean? That means you can’t buy a house and live in it, can’t take your IRA and buy yourself a car, can’t take your IRA to take your family to Disney. But everything else you can do, whether it’s real estate in the United States, outside the United States, residential, commercial, land, Airbnb, fix and flips, private equity, hedge funds, venture capital, private businesses, gold, cryptos, you name it, you can do it. Hard money loans. As long as you don’t violate those three categories of prohibited transactions, you can do it. So you’re not forced to buy stocks, mutual funds, or ETFs. You could. There’s nothing wrong with it. But there’s nothing more American than having the freedom, taking advantage of the tax code, knowing your rights, knowing what the IRS rules are, and then empowering yourself to invest in what you want.
CORWYN:
So obviously, this could look a number of different ways, Adam. Someone can begin this journey, let’s say they’re 20, 30 years old, they begin, set up a self-directed IRA, funnel money into it. And I want you to touch on, so I’m going to hit you about two, three things in here that I want you to touch on. Because the money that goes into the self-directed IRA, does that first, does that money go in, is it taxed pre, or is it, if it’s pre-tax or after-tax dollars that go in, then subsequently when you get down the road, at some point in time, let’s say that you do buy a number of investment properties, and at some point in time, once you retire, so let’s get to that age, you get to retirement age, and you decide to convert an existing property into personal use. What do those two things look like?
ADAM:
Yeah. Great, great questions. Excellent. So let me just give, in a nutshell, real quick, in two minutes, the basics and foundation of the IRA rule. So there’s basically two types of IRAs. There’s a pre-tax traditional IRA and a Roth IRA, which was created in 1997. So a pre-tax IRA is essentially an IRA, you get a tax deduction for putting the money in. What’s a tax deduction? It’s great. It reduces your taxable income. In 2025 and 24, you can put away 7,000 or 8,000 if you’re over 50. If you pull the money out before age 59 and a half, tax and a 10% penalty. Pull the money after age 59 and a half, tax on what you pull out, income tax. At age 73, you have to take out what’s called required minimum distributions or RMDs. This is approximately 3% of the value of your IRA. Okay. Roth IRA, created in 1997. It’s basically an after-tax IRA, so you don’t get a tax deduction, but so long as you’re 59 and a half and the Roth’s been open five years, you could pull everything out tax-free. No tax. Zip. So I’m a Rother. I wrote a book in God We Trust and Roth We Prosper. I’ve written nine books, but that’s one of my favorites because all my retirement savings are in Roth. So my belief is tax deductions are great, right? Let’s say you make 100K, a $7,000 tax deduction is valuable. Assuming a 20% rate of return, 7,000 times 20, it’s $1,400 tax benefit. Not bad. Pretty good. I’ll take it. But my belief is over the next 10, 20, 30, 40 years, that $7,000 I invest in a Roth, I’m going to get far more tax benefit than 1,400 bucks. Here’s an example, right? You take a hundred grand, you buy a piece of land. 20 years later, 10 years later, you sell it for 500 grand, tax-free. Goes back to the IRA tax-free. So to answer your question, when you move money from a regular IRA at Fidelity or Schwab to a self-directed IRA at IRA Financial, it’s all tax-free. Transfers, anytime you stay, as long as you stay in the IRA world, it’s all tax-free. So you don’t have to worry about, oh man, I have all my assets in stocks and if I sell my stocks, I have to go to cash to move it to buy a piece of property, doesn’t matter. You can buy and sell stocks in your IRA, never pay tax, whether you hold it a day or 10 years. Once you get the cash, you can roll it over or transfer it tax-free to IRA Financial. And then IRA Financial, based off your direction, will invest in real estate. It will be owned in your IRA. And then when you sell it or you get rental income, it’s all tax-deferred. It all goes back to your retirement account. If you have a pre-tax IRA, if you pull the money out after 59 and a half, because you’re a kid getting married, you want to buy a house, whatever, you pay tax. If you have a Roth IRA and you’re over 59 and a half and the Roth’s been open five years, you can pull it all out tax-free, zero. Zip goes to the government, it all goes to you. So really important to understand the differences. You can convert pre-tax to Roth, but you have to pay an income tax in order to, a toll, an income tax to go pre-tax to Roth. But once you’re in Roth, so long as you’re 59 and a half, Roth’s been open five years, it’s all tax-free. The Roth IRA is the best legal tax shelter out there. Unfortunately, people don’t know about it. Smart people buy all their appreciated assets like real estate or founder stock or Bitcoin in a Roth IRA. Because if you hold it and you can wait your 59 and a half, you can pull it all out tax-free.
CORWYN:
You just blew my mind, Adam, because from my understanding, and I’m nowhere close to your level, but I have an affection for self-directed IRAs because it’s a strategy that I to real estate investors about employing, because if you’re trying to build your assets for retirement, then it’s a great vehicle to utilize to do so because you’re able to, if you do have a taxable IRA, you’re able to defer those taxes. But now you just gave me something I didn’t know. If it was in a Roth, converted to a Roth, you’ve already paid the penalty and you didn’t do this, you’re telling me I can build all these assets and all this wealth for all these years and then pull it all out tax-free?
ADAM:
Yeah, absolutely. And even better, as you talked about legacy building, you can leave it, God forbid you pass, your spouse gets it tax-free. God forbid your spouse passes, your kids have 10 years to pull it out tax-free. So you’re giving them a legacy, a tax-free legacy. Now, let’s say your Roth IRA owns real estate. You don’t have to sell it. You can pass it to your spouse, to your non-spousal heirs, and they have that asset tax-free. There is so many exciting tax planning opportunities. Now, going back to your point on conversion. So let’s say you have $50,000 in your pre-tax IRA. Let’s say you worked at Apple and you now retired. You got $50,000 in an Apple 401k. You now roll it to a traditional IRA at Schwab or Vanguard, and now you want to convert. So you can pay tax on that $50,000, but there’s also various strategies where you can buy the real estate in the pre-tax IRA, and then I can get you what’s called a discounted valuation, because since the real estate’s not marketable, you can get a discount of anywhere from 20% to 40% on the value. Or let’s say the real estate market suffers a bit. It’s a difficult couple of years. You can get a discounted valuation, so your tax would be lower based off the discounted value, and it would be actually cheaper to get into Roth. And then once you’re in the Roth world, you want to stay there, and then you can keep generating tax-free returns.
CORWYN:
So here’s something, and if you don’t mind, touch on this and explain this, because let’s take an employee. So let’s say that you’re working at an employer. You have a traditional IRA system there. A group of people, let’s say five people, decide, okay, we’re going to convert our traditional IRAs into Roth. So now we have five Roth IRAs. Can those five people now work together and invest in real estate?
ADAM:
That’s a great question. So absolutely. Retirement accounts are not disqualified. So you can actually, you and your spouse or you and your kids, you can transact together. So let’s say my wife has 200 grand in her Roth IRA or IRA, and I have 200 grand. We can jointly do a joint venture through an LLC or just as a tenants in common, buy the real estate, and then profits and losses would just be allocated pro rata based off ownership. So absolutely. You can even do more, Corwyn. You can do, hey, I want to put 200 grand using my IRA, and you want to use personal funds. We can do a joint venture. It’s very flexible. And why I like real estate for IRAs is obviously it’s a hedge against inflation. It’s a hard asset, great way to diversify. But generally real estate is kind of a long-term strategy, and it really marries well with IRAs since IRAs are a long-term retirement strategy.
CORWYN:
Wow, man. You just completely gave me the whole like, I need to go do this right now, right this second. Like that was it right there. I’m going to ask you another question, but I’m going to kind of change direction and basically go back and work down a different path. My question is, are there ways, let’s say that your IRA is just not large enough. Let’s say that you got 25 grand in the IRA. Are there ways to leverage that so that you can either participate in the transaction? So we did talk joint ventures. I know that’s one way, but is there a way to leverage into a larger transaction using a loan or something? Can you do that with an IRA?
ADAM:
Yeah. So another great question. There’s two rules you need to consider if you want to use leverage or a loan to buy real estate. So here’s an example. I have 100K in my IRA and I need to borrow 100K to buy an apartment, a unit to rent out. So the first rule is the loan must be non-recourse. What does that mean? A non-recourse loan is a loan you do not personally guarantee. Why? Unfortunately, under section 4975, which I mentioned the prohibitive transaction rules, an IRA owner, me personally, I’m a disqualified person. I’m not allowed to personally guarantee an obligation on my IRA. So it has to be a non-recourse loan. And then the second thing, unfortunately, with an IRA is there’s something called a UBIT tax, unrelated business income tax, which could potentially tax net profits associated with real estate based off leverage. So there is workarounds. There’s a way to, if you use the 401k, for example, let’s say you’re self-employed, I could set you up with a solo 401k and you’d get around UBIT. You still have to use a non-recourse loan, but there’s an exception to UBIT for real estate if you use a 401k versus an IRA. There’s also ways I can set up a corporation to block the UBIT. So there are ways to get around it, which is why it’s important to work with experts. But using leverage in real estate is unfortunately one of the pitfalls that people get into. They don’t understand the rules. There’s no reason the UBIT rules actually should apply to IRAs. They were put in the tax code in the 1950s to apply to charities that do unrelated business income. For example, like a hospital that has a gift shop, that’s unrelated business income. But for IRAs, unfortunately, it shouldn’t apply since IRA’s exam purpose is to grow. These rules shouldn’t apply the way it is. Unfortunately, Congress made so that these rules do apply. So that’s the thing you have to take into account. It has to be a non-recourse loan. And number two, you got to consider UBIT, but it is possible.
CORWYN:
So I love that. I mean, the fact that it’s possible should be enough to get someone over the hump and the hurdle. So let’s touch on, I’ll say maybe a parallel track to what we’ve been talking about. So we’re going to come over a little bit because my imagination says, Adam, there has to be like holes that people have stepped in along this path. So the pitfalls, if you will, what are those, what should people be watching out for that may seek to employ this strategy?
ADAM:
Well, first thing, like any investment, do your diligence, right? Know who you’re investing with, understand the economics of the deal. Something just doesn’t make sense. Ask questions. Number two, you want to work with the right IRA custodian. There are lots of different IRA custodians, like IRA Financial. We are very committed to like flat fees. We don’t believe in charging asset valuation fees. And that is something to consider because over time, your IRA is going to go up in value. It just, if you look at the last hundred years, the S&P 500’s averaged about 10%. Real estate, you’ll probably do better. So your account’s going to grow over the next 10, 20, 30 years. You don’t want to pay asset valuation fees because that’s going to have a major impact on the net value of your retirement account. And then the things I just mentioned, prohibitive transactions, you don’t need to understand these rules, right? That’s why you’d work with a company like IRA Financial or another self-directed company that will help you. They’ll partner with you. They’ll navigate these rules to make sure what you’re doing is not prohibited. Our compliance department reviews each investment to make sure it’s not prohibited. And then the last pitfall is this UBIT, which is an ugly four-letter word, which kind of rears its ugly head sometimes. You want to make sure you work with the right team that could at least spot the issue and help you navigate it so you can generate the most tax-efficient return possible.
CORWYN:
Utilizing some, I’m kind of going to reset us to an extent here because I really want our listeners to really understand this, which is with a self-directed IRA, as long as it is, you know, as long as it’s not violation or I forgot the term you just used, as long as it’s not allow usage, you can pretty much invest in anything. So you can put it into a business. Let’s start there. Adam, can someone take their self-directed IRA and leverage that to start their own business?
ADAM:
Yeah.
CORWYN:
So a couple of things.
ADAM:
Yes. If you own less than 50% of the business, the business is not disqualified and you can use your IRA to invest in a business. Here’s a couple of great examples. Peter Thiel, who is a brilliant billionaire. He founded PayPal. He was one of the founders of Palantir, which is a public traded company. And he was the first investor into Facebook. So what he did, he’s got his Roth IRA is worth over $4 billion. Okay. He’s a brilliant guy. He just started this in the late nineties. So he hasn’t been doing this a long time. He started PayPal with Elon Musk and a few other entrepreneurs. He took about 2,000 bucks. That’s it, but less than 2,000 bucks, around $1,700. He invested in PayPal stock. He owned less than 50%. He paid fair value for the stock because it was a startup. He paid par value, which was like less than a penny a share. And within a year and a half, he turned that into $27 million tax rate. He then put 500 grand into Facebook. He was the first investor. 500 grand in a Roth IRA. Within, I think, five years, he turned that into almost $400 million tax rate. Okay. So I’m not saying we’re going to be Peter Thiel. I’m not as smart as him. But yes, you can start a business. If you own less than 50%, put it into a Roth IRA. You can shelter all the gains from tax. Now, what happens if you’re going to own more than 50%, right? You’re starting a restaurant, you and your wife, and you’re going to own more than 50%. There’s a strategy known as ROBS, Rollover Business Startup Solution, that will allow a 401k to own a corporation. So not an IRA, but a 401k to own a corp. And then you could use your retirement money tax-free to invest in that corp and own more than 50%. So there’s lots of strategies. That’s what tax lawyers do. We navigate the tax code to make sure there are strategies. And unfortunately, that’s why I’m excited to talk to all your listeners, because it’s unfortunate, but guess what? The rich people that could pay a lawyer $1,500 an hour, they get access to these strategies. But most Americans don’t, which really bothers me. So my idea, why I wrote nine books is, hey, the information’s there. You don’t need to hire a lawyer for $1,500 an hour. It’s not that hard to do. It’s not expensive. You can do the same stuff Peter Thiel is doing. You just need to understand how the rules work. So Adam, look here.
CORWYN:
I’m over here trying my best not to holler. So look, I’m just on my, just scream, like seriously. Because that’s something we try to share on this show. For our listeners, guys, we’re constantly pointing about mindset, and we’re constantly feeding you information and encouraging you, because we want your belief to be greater, not less than, but the greater. So we keep pouring that in. And this is one of those situations. You just told a story of $2,000. That’s money, but that’s not 2 million. So starting somewhere in how that can leverage and build all that wealth tax-free. Dad, I’m over here. I’m still about to holler. So I’m going to do my best not to. So Adam, somebody getting started. Where can people contact you, find you? First of all, your books. Because as we got on the show, I started hitting one of your sites and pulled the list of books. And I’m looking, I’m like, Oh my God, this is amazing. So where can people get in contact with you?
ADAM:
Right. So you can go to IRAfinancialgroup.com, IRAfinancial.com. And there’s so much information. Our YouTube channel, I think is amazing. IRA Financial, it’s all free. And there’s thousands of videos and podcasts on all these topics. You can just navigate and learn as much as you want, or as little as you want on this area. And the good news, like opening an account is not expensive. It’s a few hundred bucks a year. So you don’t have to be a billionaire or a millionaire to start. The most important thing is doing these three things, right? You just want to start as early as you can. You want to be consistent, right? You want to at least annually try to make contributions. Even if you’re having a tough year, put 50 bucks in, put a hundred bucks in. Just keep your good habits flowing. And the third is just trust the process. Be patient. Use the power of compounding returns. It’s mathematics. Albert Einstein said compounding returns is the eighth wonder of the world. Not me, Albert Einstein. It’s easy. That’s how smart, rich people get richer. Unfortunately, most Americans never heard of the term compounding returns, but it’s there. It works. It works for me. It works for my parents. It worked for all my clients. That’s how rich people get rich. And that’s how smart people get rich. And my passion is to teach everyone that, hey, you can do this. You can build a million dollar legacy for you and your family, and I can show you how to do it. It’s just numbers. As long as you start pretty early, you’re consistent, and you trust the process. You can have a million dollars tax rate.
CORWYN:
Look at Adam, you just told, you just said something. You just dropped something and sprinkled something right there. Quote unquote, that was a seasoning right there. That just made this entire show flavorful. Right there. That right there. I’m asking another question here. And for our listeners, guys, please, if you feel like you’re going to miss, please make sure you come, make sure you go to a website, a strategy radio show, go to your favorite podcast app, because you want to catch this right here. But under self-directed IRAs, you have different platforms, right? You have the ability to have a custodian, but then there’s also a version that you can essentially have greater control. So if you don’t mind, Adam, give a breakdown of that, but then also what it is that you advise, because you’re the professional. This is what you do day in and day out. What makes better and best sense?
ADAM:
Right. So there’s a traditional self-directed IRA or custodian controlled where, for example, I want to invest $100,000 in real estate. This is the step. I open an account in IRA Financial, step one. Step two, IRA Financial pulls the money tax-free from Fidelity or wherever you have it. Step three, IRA Financial at your direction invests, sends the money to the seller of the property. The buyer is IRA Financial Trust Company for the benefit of John Doe IRA. And then when you sell the property, all the money goes back to the IRA tax rate. That’s the easy vanilla common approach. The second approach is something called checkbook control, whichever two books on is one of the first companies in America to work with them. The structure is around over 15 years ago. And essentially what a checkbook control structure is, it’s the same thing as a regular self-directed IRA, but the only difference is after step two. So once the money gets to IRA Financial, the 100,000 bucks is now at IRA Financial. What IRA Financial does is it sets up an LLC, a limited liability company, any state, we do it for you. The IRA owns it, okay? And you manage it. So because you manage it, you have checkbook control. So instead of having to go to IRA Financial every time you got to pay a contractor or a landscaper, pay taxes or do anything, you got the checkbook. You got the bank account on your phone. You can Zelle, Venmo, send people money as the manager. The money’s not going to you. This is IRA money that you control as the manager. And when you sell the property or there’s gains, the money flows back to the IRA tax-free since an LLC is a pass-through entity. There’s no entity level tax for an LLC, unlike a corporation. So it’s very clean. No tax return. There’s no tax. You control it. You get limited liability protection, meaning your assets outside of the LLC are protected. You get privacy anonymity because the LLC owns the real estate, not you individually. And it’s a great structure. Who should do the LLC versus the regular IRA? The LLC should be done. If you’re going to do a lot of transactions, if you’re going to do lots of transactions, I would do the LLC. If you’re just going to hold or invest in a real estate fund, you don’t need the LLC. But it’s your choice. There’s no right or wrong. It’s whatever you want to do.
CORWYN:
And that’s all new information, if you will, Adam, to me. So I appreciate you sharing that here with us here on the show, because these are strategies that make sense. They exist because they made sense. There’s a reason for it to help people. We always, well, sometimes, I say always, but we’re oftentimes limiting ourselves when if you take a turn, the road opens wide open. Why be in the crowd, if you will, when you can take a turn down a side street and have a clear run, if you will, to your destination, which is to build and or increase wealth and or to build your legacy. Thank you so much for sharing that. Again, a quick recap. Where can people reach you, get in contact with you? How can they find you and make sure they stay connected?
ADAM:
I think our websites generally is the best place to start and then YouTube channel. IRAfinancial.com, IRA Financial Group. You can Google us, check out YouTube. There’s so much great info to just go through. If you want to check out the books I’ve written, Mastering the Self-Directed IRA. It’s the latest one I wrote approximately a year or so ago. That’s probably the one I would suggest, because it’s short, sweet, gets you all the info you need. And it’s organized by chapter. So you can pick and choose if you want to kind of learn more of the basics or you know the basics, you want to go to more advanced topics. You can just navigate the book pretty easily.
CORWYN:
Awesome, awesome. Well, Adam, I want to thank you for taking time out of your busy schedule to be here on the show with us. I’ve had an amazing time. You’ve dropped some tremendous knowledge on all of us today. So I’m appreciative. And thank you so much for taking time out today.
ADAM:
Yeah, it was a pleasure. Thanks so much for having me.
CORWYN:
You’re welcome. So for our listeners, guys, look, you have gotten it. Do something with it. Don’t let this information just sit. Make sure that you keep it on a constant boil. So not only does it simmer, but it marinates as it does. So, guys, thank you so much for tuning in this week. Y’all know how I feel. Y’all know what I say. You can always put the two of those things together and I give it to you this way, which is tell you I love you. I love you. And we’re going to see you guys out there in those streets.
