Emily is a professional woman with an active business and is a very busy person. So busy in fact, she depends on her financial advisor to invest her hard-earned retirement savings with the hopes of compound wealth with safe, secure investments. Emily is lucky. So far, she has not lost a dime through her financial advisor.
However, not everyone is so lucky. On February 21, New Jersey’s Courier Post, published a front page story about a recently-deceased financial planner, who had clients that are now missing money. The amount is currently at $5 million, and growing. Where did the money go? So far, there are about 20 clients involved and that number continues to expand. All of them, like us, could not afford to lose the money.
A pillar of society, this advisor put many of these people in Certificates of Deposit (CD) that were fraudulent. How do I know this? My mother was one of those people. It has now turned into a class action suit and a potential criminal investigation. Certainly, the claimants will not be receiving 100% return on principal. Additionally, it has cost them even more money to retain attorneys.
I tell this story because all of us have the potential for a parent, child, friend, or others we know to fall prey to bad people. This is not to say every financial planner is bad, actually the majority are good.
Would these people involved in the lawsuit have been better off investing their retirement plans themselves?
Though Emily has had success, she is allowing other people to vote on her money. With a self-directed IRA or Individual (k), people have the ability to “drive their own bus” to wealth. Yes, this takes work. Perhaps the perception is that since we as customers are not experts in whatever assets we consider for our retirement plan, we think we need a professional to guide us. In many cases that is true.
But, would we be better off having some accountability and control for investment decisions that are made? What is the worst that could happen? With education and initiative, could we do a better job ourselves? With Entrust as your self-directed IRA administrator, you have the ability to educate yourself on how self-directing works, the different types of assets that are available, and how to do this yourself with your IRA.
Paralysis is not a good thing. Sometimes, we need to be in control. Though my mother is over the age of making contributions in her IRA, she is learning how to control what she has and not allow others to vote on her money. We are now looking at real estate together, me for my IRA, and her for cash flow.
When you have a goal, can create a road map, are open to learning how to take care of yourself, and learn how to know and understand what you are investing in, you have a better chance to grow your wealth. Or, you can let others do this for you. The choice, of course, is yours!
Lisa Moren Bromma has been a real estate investor since 1978, an investor in private mortgages where the seller finances the sale of a property (this is an excellent strategy to getting financed without a bank loan) since 1988; a professional speaker on the subject since 1991 and a consultant to many businesses in the financial services community that have a real estate focus since 1998. View an interview with Lisa from InvestClub for Women. Watch and listen as Lisa shares her experiences as a successful investor for over 30 years!
She is a member of the National Speakers Association, and has taught over 1,000 workshops and seminars on the subject of real estate and marketing. Lisa also sits on the board of Directors of the National Real Estate Investor’s Association and has been a presenter at several national and international Real Estate events.
Lisa is the author of Promote Your Note Business, a marketing program for the private mortgage industry, Soup to Nuts, a CD ROM series on everything you need to know to become a successful real estate investor, as well as Real Estate Investing for The Utterly Confused and Wise Women in Real Estate. Her new book, How to Make Money in Alternative Investments was released in October, 2009.
She is Advisor to The Entrust Group, the nation’s largest administrator of self directed retirement plans. She is also the editor of the IRA & 401(k) Insights newsletter.