008 - Non-Traditional Retirement Accounts

2 Wealth Show S3 Ep8 - Non-Traditional Retirement Accounts

On Episode 8, Justin and Elizabeth interview Jason DeBono.

Key Takeaways: 
1. Invest your IRA into non-public assets
2. Invest your retirement account in mainstream, not Wall Street
3. Self-directed IRA real estate

Resources and links discussed  

• Videocast on BrightPath Notes YouTube Channel 
• Videocast on Elizabeth Maora YouTube Channel 
• BrightPath Notes Website - https://brightpathnotes.com 
• Elizabeth Maora LLC Website - https://elizabethmaorallc.com 
• Nuview Trust - https://www.nuviewtrust.com

Sponsored By: Integrated Health Solutions

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About the Hosts 

Justin Bogard – Note Investor specializing in performing Residential Real Estate Debt. He finds deals and acquires them for his own portfolio as well as educates investors while walking them through the process of owning a Real Estate Note!  

Super E – Real Estate Investor specializing in short-term rentals and the management of them. She connects investors with short-term tenants and manages everything in-between.

Connect with the Hosts: 

• @2wealthshow – Facebook/Instagram 
• @wealth_show - Twitter 

Transcript

Justin Bogard: 0:06

[inaudible] Welcome to the, 2 wealth show a show that shares how you can create real wealth for you and your family. I'm one of your hosts, Justin Bogard. And my co-host is Elizabeth Sickles AKA super E. I am a real estate note investor specializing in performing residential real estate debt. I find the deals acquire them for my own portfolio, as well as educate investors will walking them through the process of owning a real estate note. My co-host super E, a real estate investor specializing in short-term rentals in the management of them. She connects investors with short-term tenants and manages everything in between. Our show was sponsored by bright path notes and Elizabeth Maora. You can find out more information by visiting our websites at brightpathnotes.com an delizabethmaora.com. Welcome to episode number eight. Hi, super E how's it going It's going. Great. How are you today? I'm doing great. The sun is out. It's not raining. It's not cold. We got a great guest speaker today. I'm excited. Excellent. Well, let's bring him on. So today's topic is going to be focused around retirement accounts and Elizabeth, I know you have retirement accounts and so do I, and we have them in the self-directed space to where we can choose the direction of where we want to invest our retirement account. And I know super E you do real estate. I do as well, and that's where we choose to do our retirement. Um, so without further ado, we have Mr. Jason DeBono on our, as our guest today, he is the president of new view trust company, Jason, and welcome to the 2 wealth show podcast.

Jason DeBono: 1:53

Hey Justin. Hey Elizabeth. Hello. How are you guys?

Justin Bogard: 1:57

We're doing, we're doing well. I I'm digging that. Mahi mahi in the background you've got behind you, Jason.

Jason DeBono: 2:04

Well, thank you. It's one of the perks of being in Florida is we can get out most times of the year and, uh, and chase them down. And it's a lot of fun and, and certainly a passion of mine.

Justin Bogard: 2:14

You know, a little side note, I had been on a deep sea fishing, small boat, one time in the past and someone on our boat had caught a mahi mahi. And when they caught this fish, it was way out there. I want to say a couple hundred yards out there. And this thing was like flapping around in the air when they, when it was jumping and it had this weird shape to it. And those of you that aren't on the video cast on those right now, you won't be able to see what I'm talking about, but it has this like bull head to it. And I'm like, what the heck is that? That's someone who has some sort of monsters. Now this, I didn't know what a mahi mahi, wasn't my saw. It's a very distinguishable fish now that I see. And it tastes pretty good.

Jason DeBono: 2:50

It is in, in, in kind of fun fact on, on the Maki while it goes by Mahima Mahima, d irato d olphin. So it has a bunch of different names. U m, it's the fastest growing fish in the sea. Really? Yeah. And t hey're one day they're just one of the most aggressive eaters. So it's such a great fish to catch b ecause you're, t hey're so plentiful. You're not worried about, you know, catching too many a nd, and, you know, losing population t here. I mean, they multiply literally by the second. So it's great to catch a fun sport fish. That's great to eat. Right. So, u h, yeah, I enjoy them and, u h, t hey're, they're definitely worth the effort and energy to go, try to catch them. Awesome.

Justin Bogard: 3:28

Well, Jason, thanks for being on our show today. Obviously we're centering this around retirement accounts. Um, I have a question for you. How did you get into the retirement account space to, to be involved with Nuview Trust,

Jason DeBono: 3:42

Man? You know, I'll try to keep it short. You know, it, it really revolves around the fact that dad said you can't do it, you know, is the moral of the story I was in college, I was going to school for marketing and, uh, I was working in a department store and I was looking for kind of real work. My last semester of college, I went to an internship fair and I met new view. It was kind of a weird company, right? I mean, there was enterprising Callaway and every other kind of name that recruits to the colleges. And then there was this little company, uh, that didn't have much of a line and I kind of went over and um, and said, you know, what do you do? And it was way over my head. So I was fortunate to get an interview called my dad and my dad's, my dad's a casual, real estate investor. He's probably on six or eight properties, uh, that he's invested into rentals. And so when I called him, he's like, well, you can't do that in an IRA. And I thought, what he mean, you can't do that. An IRA. He's like, yeah, you can't buy real estate in an IRA. I'm like, well, I'm interviewing with the company tomorrow, dad, this is what they do. You know? So, uh, w when I, when I went through the interview process, it was more of an educational event and it was really my dad's reaction that caused me to take the job. Uh, we were tiny at the time was employee number three. Um, and, and, and we just, we were really trying to help educate people like my dad that, Hey, guess what? Real estate is an option in an IRA, no matter what Schwab or fidelity tells you, just because they don't do it doesn't mean you can't. And it would be no different than walking into McDonald's. And because they don't sell you tacos thinking that there's no such thing as taco bell or Del taco, or, you know, any other group. And I think that's changed a lot in the 16 years I've been doing this, uh, it's not everyday practice, but it's certainly becoming a lot more common. That's awesome.

Justin Bogard: 5:24

So dad said, no. Jason said, why not? I like what you said about, you know, your dad was in real estate and he had no idea that you can invest your retirement money in this stuff. Cause that's the exact same thing that I, I ran into when I first got into real estate was like, Oh, this is even better now. Right. And people that I talk to, but it's like, wait a minute, you can buy that stuff with your 401k. I'm like, yeah, like what? But my custodian said, well, you got it with the wrong custodian. He was like, you got to push it to a self-directed company. So let's talk about for a minute, if you will, Elizabeth, you know, jump in, um, with the next question, but I kind of want to find out for our audience that isn't familiar with what we're talking about. Can we, can we jump in and step back a little bit and to talk about what is a self-directed IRA or self-directed company?

Jason DeBono: 6:08

Yeah. Great, great question. Cause I think sometimes it's easy to, to kind of lump IRAs as IRAs and really an IRA is, is a tool that the IRS gives. That's a tax advantage tool that, that in and of itself is, is part a part B is really what you invest the IRA into. And, you know, we've all been kind of grown into the idea that banks and brokerage houses keep your IRA. And therefore you invest your IRA in whatever they tell you is available. Stocks, bonds mutual funds. The reality is really IRAs and those are completely separate and they're not married together. And so, uh, what, what people are starting to realize is there, there a group of custodians, right? We call ourselves self-directed custodians, but there's a group of custodians, still a small number of us that allow you to invest in your IRA, into non-public assets. So we kind of use the, you know, the, the, the, uh, the phrase it's like investing your retirement account into mainstream, not wall street. So we're, we're a custodian like a Schwab, a fidelity of bank. Um, we operate under, you know, state regulated trust charter. Um, so we go through a lot of the same process, but we're just willing to hold investments outside the market, predominantly real estate, private notes and private equity. Uh, whereas the brokerage firms that, that typically hold these accounts are not, and it doesn't make them bad. Uh, just like, it's not bad for McDonald's to not sell you a taco. Right, right. No, that we go to McDonald's taco bell for a taco. So I think you get the idea there, but hopefully that gives an idea of what a self-directed custodian kind of is and what makes us unique.

Elizabeth Maora: 7:44

And Jason, just to piggyback on that, why would people want to do real estate in a self-directed IRA versus just doing real estate kind of the normal way? What, what are the advantages?

Jason DeBono: 7:57

Yeah, I think there's two ways to look at the Y the first one is, is, and I'm going to not sidestep your question, but I'm just going to the first question is why would you buy real estate instead of stocks and bonds? Because if you already have an IRA today, that's likely what you own. So you're going to have to move out of stocks and move into real estate. The reason that most people do that is because they don't want to be in the market. And, and, you know, we're in the, hopefully the tail end of a pandemic. Um, but if you look at the market, it's disjointed from reality, it's no different than going to Vegas. You might as well just take your chips, put them on the roulette table or the blackjack table, because you have no control over the outcome and the stock market. Wasn't always that way. You used to be able to look at some fundamentals, price, earning ratios, and kind of see value. Um, the world today values Tesla with$300 million of, of net profit in a very confusing accounting approach as being worth more than Walmart with over a hundred billion dollars of net profit. I mean, it's not even in the same zip code, but the market says Tesla's worth more. There's no way to make money for the average investor, uh, in it, unless you truly time it right, and hold it for the right amount of time. And that's too hard. So most people move to real estate because they see it, they touch it, they feel it. They know that they can buy it for$200,000 and rent it for$1,700. They know that if they rent it for eight out of 12 months, this is what they make. If their expenses are low and nightly rental is the weekly, the monthly, you can do that math on the back of a napkin. And while it's not easy, it's a lot easier for the lay investor to go back to your question, Sue Berea, really around why real estate in an IRA versus real estate, outside that if you've decided that you like real estate better than stocks, then self-direction is right for you. If you like real estate, um, in your IRA and outside, then really it's an investment by investment. And the beauty of IRAs is they're tax deferred. So you get to pick the investment that you think not only is best, but also that may provide you the best tax return. So if you were to go buy something, let's say, make an investment today that you thought you could flip in six to eight months. If you do that in your personal name, you're going to add it to your ordinary income or capital gains tax for the year, which makes you up 20, 30, 35% of your profit, right? If you bought that same investment in your IRA, 100% of your profit will remain tax free. So it's really a tax play, or it's an asset class play.

Justin Bogard: 10:27

Jason, what I, what I like about what I learned when I got into having my retirement accounts with self-directed company, like nuview trust, and by the way, your website, for those of you listening, didn't catch the video. Part of this is nuviewtrust.com. check out their website. They got great information and content, even a blog page, but what I'm getting at is, uh, the Coverdale educational savings account was a game changer for me too, because when I realized that not only could I use retirement money for it, but I could use like, like in Indiana, we have a college five 29 account just to put in traditional, you know, stocks and stuff like that. And I didn't know that you could use not only your retirement account, but you can also use a Coverdale account for your kid's college, and you can put it in private notes. You can put real estate and stuff. So can you touch on that a little bit?

Jason DeBono: 11:17

Yeah. That, that, that one, you know, that account is a game-changer for, for those that have kids or grandkids, nieces, nephews, that you want to kind of provide some support towards your education. Um, you know, I think what it boils down to Justin is, is people don't really understand what taxes are and how they work. Because if we did, we, we would be tripping over ourselves to get into IRAs. Um, the, the reason I say that is because when we really think about it, you know, people can invest to make money or to build wealth. And if you invest to make money, then all you focus on is return, right? How do I put the least amount of money and get the most amount of money out, and then celebrate what most wealthy people understand is that investment is a by-product of how much of your return you get to keep. And there's a lot of wealthy people that will make less money and more tax efficient strategies. And I'm going to give you just a quick highlight on how important taxes are in your life and how much impact they have. So I want to use Justin and I'll use super, super E as, as my test cases here. So Justin dollar super, he has a dollar. So on all accounts are the same, right? They both have an investment that's 20 years in length. So again, both the same, both of those investments are going to double every year. So again, they're both the same, so same dollar, same investment return, same time period. Justin takes that dollar out of his personal name and makes the investment 20 years from now, Justin's going to have about 78,000 bucks. Now everyone's going to go, wow, that's incredible. You turned a dollar in his 78,000 bucks, but because Justin did that in his personal name, he paid 25% tax on his profit year, over a year. Well, he doesn't think about that. He just thinks about a dollar became 78 grand. And so Justin and his circle of influence are all high five and sitting around.

Justin Bogard: 13:01

I'm a genius. Yeah. I look like I'm a brilliant,

Jason DeBono: 13:05

Super E took the same dollar for the same time period in the same investment. But she, because she understands that wealth is a by-product of return in tax benefit. She put the dollar in a Roth IRA or a Coverdale or any other account. She took the same dollar, same time period, but she wasn't subject to the 25% tax annually super read 20 years from now is going to be sitting around at a much nicer venue, drinking much higher, uh, you know, um, much more expensive top shelf liquor because she turned her dollar into just over a million dollars. So I want everyone to kind of understand that as we get so wrapped up in the investment and the return, I want to buy this because it makes money. I want to buy this because it makes money that we don't pause and say, I want to do that. But what if I just stopped and found a better vehicle? So to your point, the Coverdale, the Roth IRA, these accounts that exist, they're not investments, they're vehicles, but they're vehicles that are like supercharged because they're, you know, think of them like a, an electric vehicle. I mean, they just get better efficiency, um, out of the same investments. So we're not teaching people how to be better investors. You guys are doing that. What we're teaching people is how to keep more of what they earned by focusing on true wealth building, which is return and how much you keep, not just how much money do I make on this deal. How much money do I make on this deal? Um, so the Coverdale is, is an amazing tool because it's a tax free way to pay for your kids' education. And it's a way for you to go out and buy investments that you guys know way more about than I do. But in a vehicle it's going to just supercharge your returns to the tune of$1 million versus$78,000 for the same dollar, same investment in time horizon.

Justin Bogard: 14:53

That was an excellent explanation of what it is. And it doesn't surprise me super E is much more brilliant than I am. So I see why she made a million dollars 20 years. I had 78 grand. Yeah, buddy. I could afford a Corvette, maybe right now.

Jason DeBono: 15:08

It made it easy for me to decide who was going to be the one with one of the two.

Justin Bogard: 15:13

I know she, she's always, she's always running into the good luck,

Elizabeth Maora: 15:17

Try and try again. And, you know, Jason, there are a lot of IRA companies. I mean, it's not a lot, but it's becoming more popular. So can you tell our listeners, what is the advantage with new vote, new view? Excuse me, trust.

Jason DeBono: 15:33

Yeah. I mean, I think like any business, you know, we're not the only ones in this, in this game and it wouldn't be good for consumers if we were, uh, in fact, when I started in, in 2005, um, there were very few and I actually think the industry significantly better today. Uh, and we're busier today, even though there's, you know, probably 30 companies in this space. So we love good, healthy competition. It challenges us and reminds us to, uh, to get better every day. And it also helps educate more people that it's an option. Um, so you know, the why's of new trust, I mean, we're, we're almost$2 billion of assets. We've got 18 years of experience. Um, we are a publicly state charter trust company. Not everyone in this space is regulated in that manner. That's really the highest level of, of, um, uh, of regulation in our industry. So that's certainly important. Um, but what it really boils down to, I think are two things it's accessibility and, and education. Um, most people that come to us don't know what we do. They don't know the ins and outs, the nuances, the rules, the regulations. So finding someone on the internet that doesn't do a whole lot, but they charge 50 bucks less a year seems great until you really need to get help and understanding of, Hey, this is the deal it's complex. I'm trying to do this with this person. Is that so having that accessibility, which is being able to reach us, um, you know, we're not hiding behind a screen or hiding behind the internet. You have a, you know, a full team of experts here that are ready to help. Uh, but the second part is education. We pride ourselves on that. Uh, we do a lot of these programs because we want to partner off with what we feel is good education already in the marketplace. People that are already listening to your, your, your podcasts and episodes, because they want to be in the know. And so this is just additional content. Um, but we're always finding new ways to educate, bringing in new bits of content. And I'd say that's probably the biggest differentiator between us and the other available companies out in the marketplace.

Justin Bogard: 17:28

Well, if I can, Jason kind of brag on you a little bit. I have been to many different real estate conferences over the last five or six years, and I've, I've heard, um, several different IRA, uh, companies talk with, with their national speakers and stuff. And you by far have stood out over any of the speakers that I've heard and your explanations on how the account works and the different types of retirement accounts and how you dumb it down to someone as simple as me that can understand it and flow through it, like your dollar to dollar comparison, where super E, you know, a millionaire compared to me, uh, is a great example of how you, you get up on stage and you educate. So when I, I saw you think it was last year, I saw you speak in LA at a conference. And I had told super E. I was like, you gotta listen to this guy. You gotta, you gotta get involved with nuview trust because they really know what they're talking about. And you talked about how much education you put out, which what makes you guys one of your differentiators compared to other companies out there that are the same, uh, trust level that you are, uh, you're right. You guys have a lot of information. You have a webinar, I believe once a week, right. That you do. And then you have a quarterly and annually annual events that you do. So you put a ton of content out there. So I just commend you on what you guys have done and commend you personally, as to how well that you speak about the retirement space, just to get more people to understand like your dad, we talked about at the beginning, that you can do this stuff and your retirement account. And it is absolutely a mind boggling, uh, idea that you want, Oh my goodness. Like everything in your life changes when you consider investing in real estate, in your retirement account,

Jason DeBono: 18:58

I appreciate those kind words shall send. And, uh, we, we do, we've got a great team here that, that does. We emphasize content and we have to remind ourselves, you know, 16 years ago when I started, I didn't know the first thing. And, and sometimes experience can, can, you know, unfortunately be a, uh, a deterrent to education because you know, it inside and out. And we have to remind ourselves that most people that come to us don't know much about it, if anything at all. And so we really do try to start from ground level and, and if we can accelerate quick and into the advanced stuff, great. And if we've got a, you know, slow player way into kind of walking a little bit before we start crawling, you know, we, we try to produce content, uh, for, for all facets and walks. And that's the beauty of self-direction people enter it in different phases. You don't have to be level expert to do it, and it's okay to be level novice. Right. Um, you know, there's no right way to, self-direct so long as you're evaluating what your options are, uh, in the marketplace.

Justin Bogard: 19:54

Yeah. That's a good point. You bring up, I was, when you were speaking, I was thinking about, um, it was, it was Colonel Sanders when he had first had the KFC franchise. He really didn't get it going until I believe this was late sixties when he finally got it. Go on. So that's just a test, like you're never too old or too young to invest or in your retirement account. And I would say, even if you haven't discovered the retirement accounts, just because you're 50 or 60 years old, doesn't mean you shouldn't try to put it in a self-directed account. There's tons of advantages that you can do that. I know we don't even have time to touch on all the aspects of self-directed. So speaking of that, to kind of clue in, um, on new view trust, where can besides your website, is there other places that you would like to direct our viewing and our listening audience to go, to, to get more information about new view trust and how they can learn more about this and specifically how they can get an application to have an account with you? Yeah. I mean, the website

Jason DeBono: 20:48

Is going to be the best starting point. There's some branches that'll, we'll go off of there we have a YouTube channel, we have some other, um, you know, educational platforms just depending on how you'd like your education to be delivered. Um, certainly in, in kind of the pandemic environment we're in we've, we've obviously done, uh, the vast majority of everything has been digital, although, um, you know, we're excited to kind of start w we've started attending some events and we're looking at the possibility of hosting our own event, which, you know, almost seems crazy that we have to tell them about hosting a live event as if it's, you know, some sort of prehistoric, um, you know, animals, but, um, but that is the reality and we have to adjust and adapt just like everyone else in this, in this, not just business within the world. So, um, yeah, take a look at the website, you know, get, get acclimated there. There's a blog section. Uh, I know Justin you've done some content for us and, and, uh, that can be found on there as well. So, um, you know, I would say we try to split it about 50% of our own content. Uh, and then we try to bring in people from the marketplace that can just touch on the stuff that we really aren't, um, you know, experts on we're experts on IRAs we're experts on how they work self-direction, but we're not experts on investing in, you know, you guys do a great job of educating the listeners on what investments are out there and how do you look at them, see them and evaluate them. And that's the hardest part of self-direction. What we do is easy. If you want to self-direct, we can help you do it, but what we can't help you with is what to buy. And so, you know, use us as, as a good resource to feel comfortable, but, but continue to, to use shows like this, to help you get comfortable with the actual investment side and strategy.

Elizabeth Maora: 22:21

Absolutely. We've got time for one last question. Okay. So this might be a really dumb question, but can you have you're the millionaire? You can't have a dumb question. can you put your personal property? So your homestead in an IRA.

Jason DeBono: 22:40

Great question. Um, short answer. No, uh, the, the, and, and it really goes back to why you're a millionaire and why justice, the IRS, you know, they, they fence off IRAs because they're tax tools and they, they don't want you using your IRA or this tax tool to buy anything that you personally own, or most of your family members own or live in or operate today. Um, they want it to be new investments that are passive. And if you think about it, right, we'd all take our primaries and throw them in. We'd go through our, you know, you'd pull out your, uh, your short-term rental cooling while I'm sure most of them are successful. We always have a couple of dogs, right? The dogs for the losses on our first little tax return. And we'd throw the home, runs into our IRAs for the tax-free growth. And the IRS says, look, we're not even going to police it. We're just going to tell you if, if your name's on it in any way, shape or form are most of your very immediate family members names on it. It can never end up in your IRA.

Elizabeth Maora: 23:41

Okay. Excellent. Awesome. Thank you. You're welcome. Got any closing thoughts for today? I would just highly encourage you all to check them out, um, to their points. It doesn't matter your age, however, young or however old. It's a great, great retirement strategy. So Jason, thank you so much for being on. We really appreciate it. Thanks so much for having me really, really appreciate being here and certainly enjoyed the discussion.

Justin Bogard: 24:04

Absolutely. Yeah. Thanks Jason. And thanks for being a sponsor for BrightPath notes, broadcast monthly broadcast that we do, which really appreciate that as well. Thanks for your thanks for your time today. You're a very good speaker on this, on this matter. And I can't wait to hear the next time you get up on stage and talk about retirement accounts. Cause I feel like I always learned something every time where I forget something every time as well. So it's good to get that repeat now. So check out nuviewtrust.com, their website, tons of information out there. Um, don't forget the video cast on this episode today. Episode number eight is going to be on the bright path notes, YouTube channel and Elizabeth Maora's YouTube channel as well. I'm Justin Bogard from Brightpath notes

Elizabeth Maora: 24:42

And I'm Elizabeth with Elizabeth Maora.

Justin Bogard: 24:45

All right, Jason, we will see you next time, my friend. Bye everybody.

Elizabeth Maora: 24:49

Thank you.

Justin Bogard: 24:53

2 wealth show was produced by Justin Bogard and super E sponsored by Brightpath notes and Elizabeth Maora. Thanks for listening and watching for our show.