Entrust New Direction Blog

Here at Entrust New Direction, our clients are constantly making interesting investments that range the gambit from front-loading tractors to foreign real estate to gold bullion. Perhaps as a result of investment scandals like Enron and Madoff, a growing number of investors are looking for investments that work not only for them, but also for the greater good. So it made sense to us to celebrate Earth Day this year by featuring an IRS-permitted green investment that potentially combats global warming, rebuilds rainforests, and builds your retirement savings at the same time.

Watch the webinar now. 

Socially Responsible Investments can be on a global scale like this example of rebuilding rainforests, but they also can be simple local solutions. Even purchasing and renovating a foreclosure in your local neighborhood can make a difference in your community. Do you have a favorite non-profit organization? Did you know that you can use your IRA or 401k funds to lend them money for important projects? Or perhaps the growing market of micro-loans has captured your interest? IRA and 401k funds are perfectly acceptable sources of capital for those as well. So next time you read the news and it raises your blood pressure to the point where you really want to do something, think about how you can get money you already have involved in your favorite cause and earn a decent return at the same time. Many of our clients are already doing it and so can you! 

Sound intriguing? Watch the recording of the webinar by following this link. Or learn more about the Socially Responsible Investing movement by visiting this area of our website. And Happy Belated Earth Day!

More about Socially Responsible Investing.

The Atlantic Monthly's Jeffrey Goldberg wrote an article this month exploring his options as a small-time retirement investor, "Why I Fired My Broker". He fired his broker, it turns out, because his broker never called him back. Fine reason, if you ask me. But he has many more reasons why everyone should fire their broker.

1. Your broker likely doesn't want you as a client.

Goldberg asked Larry Gellman, a very successful financial advisor, who described a dire situation for anyone with under $10 million to invest. Gellman said, "People like you are in a sort of purgatory because no one would ever come out and tell you that he doesn't want your business anymore. You had to figure that out by yourself."

Goldberg also asked Robert Soros (George's son and deputy chairman of the Soros fund) about his unresponsive financial advisor. Soros reports, "They were never your advisers. Do not for a moment think that a brokerage firm is your friend."

Ouch. (If your broker actually is your friend, maybe you could take him or her out to lunch. Be gentle.)

2.Your broker probably doesn't think you can make your money back.

Goldberg translates a video by Merril Lynch's top investment strategist: "You’re not going to make money on your investments in the next 10 years, or 15, or 20, so you should stop worrying about your portfolio and go to the movies like everyone else."

Of course, not everyone feels this way, especially if they have money in the stock market, but no one can predict how many years you'll need to regain the lost ground. If you've seen 20,30 or 40% loss in a matter of one or two years, do you have the patience to wait for another 10, 15, 20 years?

3. Your broker won't allow you to buy real estate.

At a cocktail party, Goldberg asks another successful investor about advice for the little guy. Bill Ackman said, in part, "Buy a house. I think it’s a great time to buy a house.... It’s one of the best investments you could make."

As we all know, real estate is pretty cheap right now. Loans are hard to find, and more and more Americans have to rent. Your IRA can be the landlord and your IRA can sell the real estate when you decide to sell, not when your broker recommends selling.

4. You can't get a loan on stocks and bonds.

Your broker can't direct you to a bank which will lend your IRA money to double your buying power. Such banks do not exist. Banks in general have not exhibited good judgement lately, but a non-recourse loan is always a good decision for the bank and an excellent decision for your retirement.

5.Your broker earns a commission on what you buy.

Many brokerage firms have products they call self-directed, but the only choice you have is among their products. Not much of a choice, if you're not a stock broker.

6. Your broker likely earns a commission on your transactions, motivating him or her to promote transactions.

Yes, if you pay excellent attention to the market, know the companies and the "rules", and wish to gamble on the uncontrolled activity, of course you should buy and sell frequently. But I prefer blackjack.

It's not your broker's fault. If your broker does call you back, tell them about self-directed IRAs. We'd be glad to get them started in a new direction.

Gallup released survey results today which may be obvious, if not a little frightening. Only 41% of Americans believe they will be able to retire "comfortably". Just five years ago, that number was 59%. This is not a survey taken in a retirement home, but among people who, in some cases, have almost fifty years to save and invest.

This speaks to the obvious. Most people's retirement money is tied up in stocks. The stock market has been wildly erratic, to be kind. What is not so obvious can be gleaned from the numbers - most Americans don't have confidence that the stocks will return, or at least will not return in time. But most Americans don't know that they have an option. Unfortunately, self-directed retirement plans are like an amazingly talented underground band that nobody knows. I believe, and maybe you would agree, that most Americans would choose to invest in what they know, not what some stock broker recommends.

The Gallup poll also reports that 52% of Americans don't think they will be able to retire comfortably. Over half. What are they doing about it? Panicking? Escaping from the unpleasant thoughts? Possibly they're hoping that the government will provide. If you know anyone in this predicament, please tell them that they have options. Retirement funds are not stocks or nothing anymore. They do have a choice.

Hopefully, you have a self-directed retirement account and can invest as you see fit. If not, fill out an application and free your retirement funds.

Yes, the unemployment rate is climbing. Of course everyone would rather be employed than un-. We all want money coming in. But for my tiny retirement fund, being laid off was the best thing that could have happened.

I recently went out for adult beverages with some co-workers from my old job at an international telecom company. The company had pretty good bennies overall, especially the matching 401(k) contribution. That was a benefit I only took advantage of after I was married (good thing she's smarter than I am), but free money is free money, so I'm glad I did.

Anyway, everyone had variations of the same story - "I lost 25%" or "I lost 35%" and even one guy's "I lost 45%". As some of you may know - this really hurts. Not only was it the company's match, but it was money from your sweat and tears, in the dump. Not likely to ever come back.

Luckily for me, when I left my job, I found a new job with a self-directed retirement company. One of the first things I did was move my old 401(k) into a self-directed IRA. It was really easy, and since I was out of the stock market, I didn't lose 25, 35 or 40%.

If you happen to be unemployed, laid off in the last 12 months, you can take advantage of a pretty sweet offer with Entrust New Direction (newdirectionira.com). We are waiving our normal setup fee, which means it's free to take your money from doing nothing (or worse than nothing), and roll it into a self-directed IRA so it's ready for any alternative investment that comes along. Or if you really want to stay in the stock market, you can do any combination of stocks/real estate/private company/loans.

Yes, getting laid off stinks. But at least you can let your retirement funds go free.

The modern day gold rush is ON! Commercials, neighbors and famous financial advisors tell you to buy gold. Especially in the past six months, many clients and prospective clients have asked us if they can use their retirement funds to buy gold and other metals. The answer is YES, if you have a self-directed retirement plan, your IRA may invest in precious metals. Part 1 and Part 2 of "How to Buy Gold and Other Precious Metals in your (Self-Directed) IRA" will help you answer the next question- what kind of gold and what other metals?

With so many coins and metal choices on the market, making a decision can be confusing. Following is a simple step-by-step way to determine if the metal of your choice is acceptable for an IRA investment. Note that whatever your choice, the IRS will not allow you to hold the metal personally. The IRA custodian or depository will hold the metals for your IRA.

Let's get the basics out of the way first. Your self-directed IRA can only invest in Gold, Silver, Platinum and Palladium. Note that the key word here is invest. Your IRA cannot buy collectibles - your IRA is only investing in the metal itself, not rare or attractive coins. The metal must be in a certain form (usually coins or bars) and/or of a certain purity. The purity or fineness of the metal is how the quality of the metal will be measured for your IRA.

When most of us hear about gold investment we picture the 400 ounce gold bars we have seen in movies. Extremely heavy (25 pounds), those bars are also very expensive items, particularly with the recent price increases in gold. IRAs are often priced out of the gold bar market, but, fortunately, other options exist. One option is smaller units of bullion, provided they meet the fineness, or purity level, requirement. Another option is coins.

We will provide more detail on specific coins in Part II.

Welcome to the nitty gritty details of investing in gold and other precious metals with your self-directed IRA. If you missed Part 1, check it out first.

First, some history. The IRS initially said that all coins are collectible and therefore, not a legal IRA investment. In the mid 1990’s, after realizing that a 400 ounce gold bullion bar would be too expensive for most IRAs, Congress allowed certain coins in addition to bullion.

Generally these IRA allowable coins fall into two categories:

1.Coins specifically listed in the Internal Revenue Code and minted by the US. . These include:

2. Some coins meet the minimum fineness requirements but are not rare enough to receive collector attention.

* Gold Coins - .995+
* Silver Coins - .999+
* Platinum - .9995+
* Palladium - .9995+

In addition to these American options, there are some coins issued by mints of other nations that do meet the fineness requirements. See more detail on specific coins in our coin report. If you’re not sure about the fineness, ask your self-directed IRA custodian or metals dealer.

Coins that were issued for commerce are not going to qualify for IRAs. Also, coins issued for special occasions like Olympic games or national celebrations, and those issued in small quantities, are desired by collectors and their price is generally higher than the value of the raw metal. They are not allowed in IRAs.

When you are researching a particular coin, check two things:

1) Make sure the fineness of the coin meets the required amount from the table above. If not, then it does not qualify.

2) Compare the price of the coin to that of an equivalent weight coin of the same metal and to global spot price of the metal. If you find the price for your coin of choice significantly higher than one or both of the other prices, pass it up for your IRA, as it is likely a collectible.

Your IRA’s investment in gold is just an investment in the raw metal; attractiveness of the coin should not come into play in your investment decision. In other words, consider the value of the coin melted down – not as art.

Also remember that you will not be holding the coins personally when your IRA invests. The IRA custodian will require the coins be held in a depository and you will likely never see them unless you take them as a distribution when you retire.

Now that you’re armed with good information on what kinds of precious metals your retirement account can invest in, you can join the gold rush. Thankfully, you won’t need to climb mountains with a pick and shovel and freeze your knees in mountain streams to diversify your retirement portfolio with precious metals.

For more information, check out our Precious Metals page or our page on some specific coins.