Each week we talk about different self directed retirement
topics, but I thought it might be meaningful to discuss why and how I got into
this niche. Plus, I received a few emails asking me just that question.
Gary Anderson, CPA, became my advisor when I visited his local
accounting practice (Anderson AAG) in to talk to him about a real estate transaction
I was making. He gave me some great advice on how to handle and structure the transaction
in the smartest way, tax-wise and financially. As we were ending the meeting,
he said, “and next time, you might want to do this sort of thing out of your
retirement account and defer the taxes until you retire…”
Of course, that stopped me in my tracks.
That simple comment turned the spotlight on, in my mind. I
started to research this whole concept of self-directed retirement. Now I found
tons of stuff from Vanguard, Fidelity and all the rest of the large players,
but these were not what Gary mentioned. These were traditional 401k plans,
really. Gary was talking about a checkbook-controlled retirement plan, with no
custodian, and IRS-approved.
I have a bunch of different SEP-IRAs, traditional IRAs and
such retirement accounts that I’ve wanted to roll together and use for
something more useful and exciting. This solo 401k structure allowed me to do just that. I have a friend who was investing in a
technology startup here in Seattle (http://www.shiftboard.com)
which I wanted to make a small investment in. For the record, they do shift
management in a web 2.0 way so nonprofits, hospitals, and corporations can
manage paid and volunteer shifts – if you think this is an easy problem to
solve, you need to look at what they’ve built. The founder, Bryan Lhuillier, is
one smart dude.
So I had all these small accounts tied up at different
brokerages, but even combined, with very little control to make an investment
in a startup, of all things.
Gary Anderson saved the day for me. He gave me the ability
to combine all of these in one account that I had control of. Real control. I
personally wrote the check to invest in Shiftboard and it was immensely rewarding.
Why? Because I had watched so many others do this (who have also used self
directed retirement accounts), but I didn’t know that a small company owner
could do this.
Next post: The steps, the pain, the victory.