Carl Fischer

How To Get Tax Free Income

For The Rest Of Your Life!

and Even After You Die!



Now You Can Use Your Knowledge and Expertise Making Your Own Investments!

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Self-Directed IRA Saves Family Finances!

Win -Win -Win

by Carl Fischer

Sam and Barb both work, have two girls 7 and 9, own their home worth $225,000 and have a mortgage on their primary residence owing approximately $130,000.  Between them both they had 12 credit cards with a total balance of $50,000 at an average interest rate of 25%.  The credit cards started out with teaser rates and 0% balance transfers for a fixed period but ended up at the high rates.

The minimum payment for the credit card averaged $800.00 per month, which did not even cover the interest.  Each month they were falling deeper into debt (approximately $250) and had less money to live.  They saw their financial future spiraling downward in dire peril.

They tried to get a bank home equity loan or 2nd mortgage to pay off the credit cards but their credit score was now low and the income to debt ratio was unacceptable even though they had equity in their home.

They had a friend, Jim, who had talked about how he used his self-directed IRA to lend money.   Sam and Barb went to see him to find out if he could help.  They explained their situation to Jim.

Jim told them with the equity in their home he would lend them the money at 12% and one point origination fee to pay off their credit cards, thus improve their credit score so they could refinance with the bank in 6 to 18 months.  They borrowed $50,000— paid off all their credit cards and made interest only payments to Jim in the amount of $500.00/month. The loan/2nd mortgage was completed in less than a week and reduced their interest payments by more than 50%, consequently increasing their monthly cash flow by more than $300.00/ month. In addition, they had stopped the downward spiral and were able to start saving as opposed to incurring more debt each month. Sam and Barb were thankful for the advice and appreciated the loan/2nd mortgage.

A year to the date, that they had talked to Jim, Sam and Barb were able to secure a 2nd mortgage bank loan at 8% and paid Jim back.  In addition, they had a reduction in auto and home insurance because of their 730+ credit score.  The interest was now tax deductible as well, which was an added bonus to their finances.

Sam and Barb now use one credit card each, pay it off every month, and have opened IRA’s for themselves and Coverdell Education Savings Accounts for their two daughters.  Sam and Barb recognize they are simple people and both acknowledge they don’t’

 know much about stocks and bonds but they do know people who could be helped like they were.  They have vowed to “pay it forward” for two reasons:

 l. to help others and

2. to help themselves.

In summary, Sam and Barb were happy to reduce their interest rate from 25% to 12% and ultimately to 8% plus making it tax deductible.  They are now able to save for their retirement and their daughter’s college.  Jim was content making 12+ % return on his money, tax free in his Roth IRA, with a secured loan and mortgage   He knew of friends making less than half that in CD’s. The loan officer at the bank was happy to help with the 2nd loan when the credit score and the debt to income ratio improved.  I assume the credit card company was happy to be paid off without suing or charge-offs.  It seems everybody wins and it was possible because of the self-directed IRA.


Retirement Planning–You Owe It to Your Family


by Carl Fischer

Principal, CAMA Self Directed IRA LLC


Retirement planning is more important than ever before in American history. Studies have shown that only one third of affluent families have been able to transfer and grow the family fortune into the next generation. Life expectancy has dramatically increased.  At age 65, a man has a 50% chance of living to 85, and a woman to 88.  In addition you have a 1 in 4 chance of being around well into your nineties.  Most previous planners would consider only 20 years, leaving individuals under funded. They ran out money before their time was up. Adult children are helping the elderly to their own demise and leaving a legacy of the same problems for their own children. 

The simple answer is education and communication among the intergenerational members of a family.  The internet has plethora of retirement calculators and information on retirement.  You owe it to your family to have a plan—no matter what stage of life you are in. It is not as hard as you may think.  However you must understand how the rules change and what you must do to keep documents and plans current.  For example in 2006 the first $2 million you leave is exempt from taxes and that limit is expected to rise to $3.5 million by 2009, then disappear completely in 2010, and be reinstated at $1 million in 2011.  The families that are able to preserve wealth and grow it in future generations are those that pass on the tools and techniques used to build and manage wealth.  It is no longer sufficient to build only your wealth; you must teach and help family members to build wealth for themselves.  “Give a person a fish– feed him for a day, teach a person to fish– feed him for a lifetime.”

There are four major vehicles to consider in retirement spending: 1. Tax free Assets (Roth IRA’s, Roth like 401K’s, and Health Savings Accounts), 2. Tax Deferred Assets (Money in 401K’s, traditional IRA’s, qualified company savings/pension plans), 3. Taxable Savings accounts, 4.  Social security—not counting working a part time job. Health insurance and coverage is not considered in this article although it is another factor that must be accounted for to assure not burdening the family finances—managing health care costs is mandatory in preserving wealth.

It is obvious that tax free assets are the top priority because that money is all yours and may be passed to your heirs tax free. Tax deferred assets are important because of the savings you obtain by deferring the taxes. Both these categories take advantage of the compounding of tax-sheltered investments.  In essence, you are making interest on your taxes versus paying taxes on your interest.  Taxable savings accounts are “ready money” if you have to have it for a rainy day.  I suggest this stay at a minimum because in the tax deferred and tax free accounts the money can be used for emergencies in many cases without penalty, but even with the potential 10% penalty you may still net more money.  Social security is simply what the government will give back to you, if they have it, and is fairly easy to estimate.

You must become educated with these tools, especially the tax free and tax deferred type of accounts.  You must use them now.  Help yourself and your family-if you are the teenager just starting out, the adult in the prime earning years of your life, or the grandparent either enjoying or worrying about your retirement, develop a family plan.  Your plan should also consider using truly self-directed IRA’s or 401K’s so that you can take advantage of your knowledge and expertise.

 Don’t feel alone a New York Life Retirement Income survey suggested that more than half the men and women in the US are clueless on several issues such as:

What amount of savings is needed to retire comfortably?

What percentage could be safely withdrawn each year?

What is inflation’s impact on spending power?

There are many strategies that financial advisors and planners endorse but it is most important that you choose one that you are comfortable with and understand.  In conclusion, I leave you with the following wisdom from one of my clients “you need more to retire than when you are working even if your house is paid off—my house taxes and insurance are more now, than my principle interest taxes and insurance together was when I retired. In addition, medical costs, gas, cars, vacations, golfing fees, fishing costs are all more —the best thing I did for myself and family was to convert to a Roth IRA in 1998 and use the truly self-directed IRA account. Every member of my family has a Roth IRA”


Register Now for LIVE Online Training Webinar 
hosted by KREIA

DATE: Saturday, July 30th
TIME: 10am – 4pm eastern

Register Now!

Only $79

 How To Get Tax Free Profit with Your IRA Registration