– Ben Franklin

“An investment in knowledge always pays the best interest”

More Choices More Control

Better Returns Greater Safety

Take Stock

Take Control

Take Action

Financial trends World trends Political environment

The Broader View

Debt & Deficits

Living on Borrowed Money Time

Independence Civil War WWII WWI 2006

Fiscal Cliff – Wile Style

Heck, if it works for him…

“…financial crises are things that happen • to other people • in other countries • at other times;

crises do not happen to us, here and now.”

Inflation

An Economy Hooked on Speed

S&P 500

Inflation Adjusted S&P 500

Inflation Adjusted S&P 500

SGS Adjusted S&P 500

Monthly SS

Inflation Adjusted SS

SGS Adjusted SS

CPI Adjusted

SGS Adjusted

1964 2008

S&P 500 Index in Gold Grams

2008 2013

Dollar denominated investments are in trouble long term.

2000 2030

U.S. Bank Failures Eurozone Instability Budget Deficits Bankruptcy Crisis

Inflation Brings Instability

Age of Aquarius?

Information Age Technology

Whatever

1800 — 40 acres and a mule 1900 — A house in the suburbs and a job in town. Oh! And a nice car. 2000 — ??

De-centralization?

• Information • Technology • Travel • Medicine

Growing Chinese financial muscle The U.S. dollar on the ropes Direct trade agreements without U.S

dollars

Financial Empire

Who do you think’s in charge here?

Nationalization

Is that possible? You bet!

Hungary Poland Bulgaria Belgium Ireland

France Bolivia Argentina

The governments of —

— have already seized private retirement accounts.

2013

Obama Budget Proposal for Fiscal Year 2013, endorsed “Automatic IRAs”

1. “Universal IRAs” 2. “Guaranteed Retirement Accounts” 3. “help the little guy” jargon

Watch For

Unprecedented Times Call for Unprecedented Measures!

Unprecedented Times Call for Unprecedented Measures!

IRA, 401k, 403b… Retirement Investments

Personal View

Stocks Bonds Mutual Funds ETF’s, CD’s Money Market Accts.

Typical Wall St. Plan

ERISA says your IRA Plan Trustee

must be a bank or trust company.

About Custodians

Guess who controls the banks?

Wall Street wants to control your assets so that they can be used as Wall Street sees fit.

This is no accident.

100,000,000 qualified plan accounts 11 Trillion dollars in assets 99.9% controlled by Wall Street

through banks and brokerage houses.

High Stakes Game

Like the Fox Guarding the Hens

Neel Kashkari $700 Man

Level 1

Wall Street Special

Your Investing Platform

Inflation

Counterparty Risk

Enron Unicom Tyco Worldcom Bear Sterns

Lehman Bros. GM MF Global Wachovia WaMu

It’s All About Balance

Level 2

Move to a Truly Self-Directed Plan

Wall St. IRA SDIRA $

Rollover

Level 1 Investor

Level 2 Investor

Truly Self-Directed Plan

Stocks & Bonds Real Estate Precious Metals Private Offerings Private Loans Businesses

Private Mortgages Hard Money Loans Real Estate Options Ag Land, Timber Wind, Solar Natural Gas

Your New Self-Directed Investing Platform.

Real Estate

Stocks Gold

Bonds Lending Self-Directed Notes

Tax Liens Natural Gas Water Rights Commodities Real Estate Options And More …

So, if you had to pick?

Stocks Gold

Bonds Lending

Self-Directed Plan

Wall St. Plan

Real Estate

Level 3

Direct Control of Your Plan Assets

Wall St. IRA SDIRA

Common & Familiar Hands off & Easy

(hidden fees)

Alternative Custodian More Involvement

Fees Exposed – More Choices –

Paperwork Delays

$ Rollover

Level 1 Investor

Level 2 Investor

Custodians: Charge fees Hold all plan assets Sign all the checks

Working With Custodians

Custodians: Slow or kill deals Are good at being bureaucrats

They work for you but you jump through the hoops?

Problems : Custodian Fees Custodian Involvement

Solution: Checkbook IRA

Gain Personal Control

Wall St. IRA

Level 1 Investor

Level 2 Investor

SDIRA Checkbook IRA

Level 3 Investor

$ $

Checkbook IRA

Wall St. IRA

$ SDIRA

LLC

Investment 1

Investment 2

Investment 3

Investment 4

Investment 5

$ 100% Funded by

IRA

You manage the LLC

As LLC Manager You write the checks on the LLC bank

account.

You hold the assets titled in the name of the LLC

LLC profits flow through to the IRA

How It Works

Side-by-Side

Wall St. IRA

Level 1 Investor

Level 2 Investor

SDIRA Checkbook IRA

Level 3 Investor

Hidden Fees Few Choices

Lower Fees More Choices Paperwork Delays

No Custodian Fees Unlimited Choices Direct Ownership Direct Control No Delays

$ $

If you want – Unlimited investment choice Checkbook control Direct control of plan assets

2 Ways to Get Control

1. Checkbook IRA 2. Solo 401k

Level 4

The Elegant Solution A Solo 401k

Solo 401k

Wall St. IRA

$ Solo 401k

Investment 1

Investment 2

Investment 3

Investment 4 Self Trustee (You) Trust Bank Account Trustee Controls Assets No Custodian No Delays No Fees

You must be self-employed.

Any business will do, even part-time.

Have no full-time W-2 employees

To Open A Solo-401k

Anything you do with the intent to

make a profit is a business.

Anything

About the Business

Hobby Business Part Time Consulting Investing Contract Jobs Freelance Writing

Photography Flea Markets Antique Dealer Catering Trainer Seminar Speaker

Anything you do with the intent to make a profit is a business.

Do at least the minimum to make your business a real business:

Make It Real

assumed name (dba) tax number (EIN) business bank account keep separate books

You can have workers who:

have ownership in the business (owner- employee)

work less than 1000 hours per year

are independent contractors • follow IRS guidelines

About Employees

are non-resident aliens with no U.S.

income

are union employees

are under age 21

You Your Spouse Partners may also be included.

Who’s Included?

If your business must have full-time w-2 wage earners

The Solo 401k is not available to you.

You have 3 options:

1. Open a Checkbook IRA

2. Reorganize your employee relations

3. Adopt a 401k plan that covers you and all your eligible workers

(but still has all the choices you want)

A Self-Directed Smackdown

Both are based in ERISA but governed by different parts of ERISA, both allow:

“alternative” investments

rollover’s from other plans

checkbook control

ROTH component

How are they alike?

How do they differ?

About Rollovers

IRA Simple IRA

SEP IRA Roth IRA

401(k) 403(b) Keogh

TSP 457

2006 Pension Protection Act (PPA)

Established Plan portability

Funds in any of these plans can be moved to any other of these plans

(with rare exception).

403b TSP Roth

IRA IRA SEP

Simple 401k 457

IRA LLC Solo 401k

If you have only a ROTH IRA

You will have to use a self-directed IRA.

About Custodians

• Plans are Trusts • A trust has a Trustee and Beneficiary • The Plan’s Trustee is the Custodian • You are the Plan’s Beneficiary

IRA Trustee

A Bank 401k Trustee

Anyone

No Custodian means No Fees with a Solo 401k

You can use debt financing to buy real

estate but your plan might have to pay UDFI tax.

UDFI = Unrelated Debt-Financed Income

About Debt Financing

Tax rates vary between 15% and 39.6%

Tax is levied on income and profits based on the percentage of financing used.

If 80% financing is used –

80% of the profits will be taxed.

IRA’s pay UDFI tax — 401k’s do not

Solo-401k Loans allowed Borrow up to $50k or 50% For any purpose

About Participant Loans

Reasonable Interest – Paid back within 5yr.

IRA, No loans – 401k, Up to $50

Solo-401k Employee = $17,500 (plus $5,500 over 50 yr.) =

$22,000 Employer = 25% of w-2 income – max $50k

combined

About Contributions

IRA, Minimal – 401k, Huge

IRA

Max (over 50) = $6000

401k

Max (over 50) = $50k

The Solo-401k is simpler

About Simplifying

Checkbook IRA Structure

There are 2 weaknesses in this system.

1. Custodian Intervention

2. Government regulation of the LLC

Wall St. IRA SDIRA

LLC Investments

1

2

Gov’t Mandates Rule Changes Forced Distribution

Regulatory Changes Increased Taxes Increased Filings Fines

Solo 401k Structure

Wall St. IRA Solo 401k Investments

Simpler is better

No moving parts 1. No Custodian 2. No LLC

Plan Trust is formed by a private document.

No gov’t. entity needed.

None or Minimal

IRS Filing Requirements

IRA Custodian does filing

Solo-401k Under $250,000 – no filing Over $250k – Form 5500ez (2 page form)

IRA LLC Solo 401k

Comparison

or

Investment Choice Portability

Checkbook Control Debt Financing Tax Free Loans

Large Contributions

Legal Structure Trustee

Custodian Required LLC Needed

IRS Filing

Trust Bank Yes Yes No

Trust Anyone

No No

No/Minimal

IRA LLC Solo 401k

Comparison

or

How NOT to use your self-directed IRA.

Prohibited Transactions

“You got to know your limitations”

— Dirty Harry

Avoiding Problems

The IRS can disqualify your plan

entirely if you participate in a prohibited transaction.

You could pay tax on a distribution of the entire balance of your account.

If You Break The Rules

Penalties reach back to the date the

transaction occurred.

You will pay tax at 15% per year plus…

If not corrected within the current tax period you pay a 100% tax on the amount involved.

1. Disallowed Investments 2. Prohibited Transactions – 2 Rules 3. Disqualified Persons

What you can’t do & why.

Art and Collectibles any work of art, any rug or antique, any metal or gem, any stamp or coin, any alcoholic beverage, or you get the idea…

Don’t Invest In

Remember

No Self-Dealing

Rule 1 Your plan cannot buy, sell, transfer or exchange assets with you or any disqualified person.

Easy Rule 1

Remember

No personal benefit derived from plan investments.

Rule 2 Your plan cannot enter into a transaction which benefits you or any disqualified person.

Easy Rule 2

Remember

Don’t put your plan into deals with disqualified persons.

You and your linear ascendants and descendants & their spouses.

1. You and your spouse. 2. Your parents and grandparents. 3. Your sons and daughters and their

spouses. 4. Your grandchildren and their spouses.

Who are disqualified persons?

5. Plan fiduciaries & spouses. 6. Businesses, trusts, or other entities

controlled by you or any disqualified person.

Also Disqualified

Your plan can partner with – your daughter’s plan

– your wife’s plan – anyone’s plan

Or with anyone who is not a

disqualified person.

Bottom Line

• Don’t buy collectibles.

• Use Rules 1 & 2 as a Litmus Test for all your creative investments.

Some Advantages Diversify Geographically & Politically Invest in Growing Economies Low Entry Prices (better than U.S) Cannot Be Forcibly Repatriated Future Retirement Home Retirement Income

Offshore Real Estate

Real Estate Tax Deals

The Government is Your Friend Tax Lien Certificates Tax Deeds (Texas @ 25% in 6mo.) Tax Lending (with option)

Real Estate Notes

Buy Discounted Cash Flows Earn 18% Buying Discounted Notes Earn 35% Buying Partials Hope for a Default

Private Mortgages Owner Financing

Secured and Unsecured Notes Hard Money Lending to Investors 14-18% secured by real estate 8-10% to professional hard money lenders

“Private Bank”

Private Lending

Lifestyle Investing

Renewable Energy Security

Lifestyle Investing

Offshore Income Real Estate Sustainable Living

Businesses

Equipment Leasing Self Storage

Food demand on the rise People always need to eat

Income from production Asset appreciation

• Aggregate income 10%

Offshore – Low entry price

Productive Land

It’s not really thinking outside the box.

The box is just bigger than you think.

The real voyage of discovery consists not in seeking new landscapes, but in having new eyes.

~Marcel Proust