Are you doing the right thing? Our guests, Izzy and Monica from Preferred Trust Company, share with us the common problems and mistakes we make when investing using IRAs. They already gave guidance to a lot of people that is beneficial for them and for their clients. In this episode, they join Chris Seveney to provide us tips on what we can do in real life scenarios on different options people take with regards to their IRA and loans. They also offer their services as full-fledged custodians who offer cryptocurrency as an alternative investment that can also be used in your IRA. Tune in and reap the benefits of acquiring their knowledge so you could decide if it’s right for you!

—

Listen to the podcast here:

Maximizing The Full Potential Of Your IRA By Investing In Real Estate With Izzy And Monica Of Preferred Trust Company

We do have special guests. We’ve got Izzy and Monica from Preferred Trust Company. Izzy and Monica, how are you two?

We are doing good.

We are doing great. Thank you.

We are going to talk about IRA investing and deferred retirement account investing. We will talk a little bit about real estate, non-recourse loans, and crypto because I believe you are also involved in crypto. Why don’t you tell people who don’t know about your company a bit of yourself?

I want to say thanks again for having us on the show. We appreciate it. My name is Izzy. I oversee the marketing department here at Preferred Trust Company. We are a licensed and regulated custodian in the State of Nevada, specifically in Las Vegas. We provide services to allow investors to invest in multiple types of alternative investments, one of those being real estate. We do offer services with cryptocurrency, precious metals, oil, energy, gas, LLCs, and pretty much everything under the sun on that with what the IRS allows us to do.

I have been around since 2007. We are not new kids on the block. We have been doing this for a good while. We are very highly regulated, especially being here in the State of Nevada. That’s pretty much the little spiel about who we are and how we do things. We do provide a few different services compared to other custodians but a lot of the similar ones as well. You can have traditional IRAs with us and a Roth IRA in simple steps. We do IRA-owned LLCs, and the whole setup process is for people who want to do that using a checkbook LLC.

It is interesting because many people don’t realize the number of options with your self-direct, deferred retirement contracts, IRA accounts, and stuff. I know real estate is a major player in that market. Would you say the majority of the people who have their portfolios with you lean more towards real estate or go to oil, gas, or crypto? Where do people tend to lean?

It depends on the trends.

As Monica mentioned, it all depends on what’s going on. Years ago, we saw many people in a fix and flip game and doing investment properties. That has slowed down. People are looking more for a passive income, so they are going more into notes, funds, or things that aren’t as hands-on and more for the person that wants the mailbox money at the end of the day. As you mentioned, real estate is pretty much everything across the gamut with real estate.

You are not just in fixing and flipping, wholesaling, storage or any of those means. It is pretty much everything. You are doing notes, performing or nonperforming, and funds. It is pretty much everything. I don’t see as many people doing a lot of buying and holding with the real estate. They are turning investment properties. In my opinion, I do foresee that happening a little bit more than we have seen, especially with all the markets, as Monica mentioned, and everything that’s going on with those.

One of the things I’m starting to see appear, especially with blockchain technology and so forth, is the tokenization of real estate, where people have funds and have a specific asset. They can invest $1,000 or $10,000 in that one specific asset. I’m curious. It is still a traditional fund structure and so forth. Are things like that still bread and butter and something simple to do? Once you start tokenizing things like that or doing crypto, and I know it is not crypto but it is still that technology a little bit, are things different or pretty much the same from that perspective?

It is pretty much the same from our side of things, especially on the procedures, the regulations, and how we would do it. The paperwork and the transaction timing could be a little bit different. As far as the way we process it and see it, it is no different.

The real estate world depends on what’s going on right now. Share on X

You mentioned process and so forth. I’m curious because there are a lot of IRA custodians out there. How is your process? Is that typical if I had $100,000 in your company in an IRA and I wanted to invest in notes? Do they fill out a form? Is it online? What’s the process? How long does it take? How does that typically go?

All of our forms are online. We are tech-forward. Maybe an older generation needs to handwrite everything or sign it. We send the PDF version or state in the mail. Everything we do, we try to get it done electronically. As far as processing time, as long as we have everything in good order, we will get things processed within 48 hours.

When you say good order, does that mean the document is completed accurately with all the information we need? Are they providing all the documents that we need, especially for that type of investment? There’s a different checklist per investment type. As long as we receive everything and you receive everything completely, then it is 48 hours.

I’m also guessing if somebody has a question, they can pick up the phone, call somebody, speak to a human being, and get the question answered.

I get that so often when people are trying to open up new accounts. They are like, “You are an actual human.” It is crazy because when dealing with people’s retirement accounts, those are their livelihood in the future. It is crazy to me that there are other companies out there who have messages saying, “We have turned off our phone systems. You will have to email us.” You hear these people and their horror stories about that. It is very interesting. You will be able to talk to an actual human being. If we don’t answer the phone, we say, “Leave us a message, and somebody will get back to you that day, I promise.” There are people here.

I have a solo 401(k). I don’t have an IRA but I had a family member who did. I used to do assist them in where to invest and so forth. They were using a company. It was the most painful process of doing notes. You go to buy a note and fill out the paperwork and stuff. Everything is good. The next go around you go to do that, “That’s not the right form. You need this form and that form.” You would wait for a week and be like, “Has this been funded?” “No, because we didn’t have the right form.”

It is like, “Were you going to tell me you needed the right form? I’m not telepathic and able to read your mind that the form was not correct because it is the same form I filled out last time. The only thing I changed was the property address and some of the mortgage information. The name, account number in the upper right, and everything else stayed exactly the same.” That’s one of the things where people sense the frustration with other custodians. That’s probably why you get that question a lot.

I agree with everything you are saying. We do hear it very often. What separates us from other custodians is that we are very efficient in what we do and streamline everything. What I mean by that is what’s important to you is knowing where everything is at. The one thing that we do here is done daily status reports, whether it is to the investment sponsors, so that they are aware of everything that’s going on. We talk to the client, “This is what’s going on.” They are filling out the transfer form, “They didn’t fill this out. This is not correct.” You can never be too sure, so we verify it. That’s pretty much how we make sure. There is such thing as too much communication but not when it comes to what we are doing.

When dealing with people’s money and, as you said, their retirement and livelihood, they would rather have over-communication than lack of communication. I know I would. With that in the process, what are some of the mistakes you see investors make with their IRA? There are two components. One is there are things that they come to you and be like, “You can’t do that,” or other things where you found out later on, or hear these stories, not with stuff that was boarded through you but other things people may have done with their own IRA when they had checkbook control. I’m curious to know some of the stories because people like to know some of the gory stuff when they read this.

I will give one story and let Monica take on one because we could be here all day if we want to talk about this stuff.

I can tell Monica is jumping at the bit. You already know, “Here we go.” Open the floodgates.

One of the ones I hear the most is prohibited transactions. People are paying for things outside of their IRAs when that’s not allowed. In a sense, it is allowed as long as the IRA is reimbursing that person. Let’s say you have an investment property and you don’t have time to call us and get a check made out for sixteen new LED bulbs that need to be put in immediately for the person living there.

You are allowed to pay for that portion but you need to immediately get us that receipt to then reimburse you for that and distribute it so that the IRA technically is paying for that specific thing. That does happen a lot. I don’t think people understand prohibited transactions when that does happen. Your IRA will be distributed, especially to those who have a lot of money in their IRAs.

I’m talking about anything that’s over $250,000, and they have to get that distributed. Let’s say it is traditional. That’s tax-deferred. It is not tax-deferred anymore because we distributed it to you. Let’s say you are making a good living and get an extra $250,000 or your annual household income went up significantly, and you are going to have to deal with taxes on that.

What’s big on us is that we educate clients to the nth degree. We can’t be there every day when you are deciding to do things. All we can do is be the teacher and tell you this. Once it does happen, I have seen it happen, and it is never a great thing to do. It is not that we want to do it. It is the way we are regulated and who we have to report to. I don’t want to get in trouble. That’s the one thing I have seen.

It is interesting because people get concerned about something similar, like when you use an LLC. Suddenly, you are at the store, and you pull out the credit card to buy something for the LLC and don’t have your card with you. What are you going to do? Are you going to drive fifteen minutes back home to get your card? Do you put it on your personal card and make a note that your company owes you that money and so forth?

I have had many instances where it is late at night, and I pay for something or an invoice. All of a sudden, I’m paying with my debit card. I pull it out and realize I grabbed the wrong one or used it because I have multiple entities. Mistakes happen. You’ve got to make sure that you are aware of them and correct them pretty quickly. It is a similar instance with the IRA.

With prohibited transactions, I love reading on Facebook. People try and sit there and be like, “I want to buy a house. It is a duplex, and I’m going to live on one side. Fifty percent of it, I’m going to buy with my IRA to rent, and I’m going to live in the other half.” It is like, “I don’t think that’s going to fly.” You are like, “I don’t need my custodian. I have checkbook control. Nobody is going to catch me because I’m just a small person, and the IRS doesn’t care.” I have heard, though, that they are starting to target more of the checkbook control thing. As custodians, the handcuffs are pretty tight on you but to everyone else, that’s like shooting fish in a barrel for them to go after people.

A prohibited transaction is a prohibited transaction. The leniency is very short, and that’s what we were talking about earlier. We understand that in some instances, you can’t get the money from the IRA but you will have to go along the procedures to ensure that the money technically came from the IRA and make sure that it is done correctly in the eyes of the IRS.

It is funny you mentioned that a prohibited transaction is a prohibited transaction. I do a lot in real estate and development construction. If you ask somebody if they are done, they are like, “I’m done.” With the roofer, “Are you done?” “Yes, I’m done.” “You are not. I went up there, and the roof was not done.” “I’m done as far as I can go because I have to wait for the plumber to go put a pipe through the roof and so forth. I can’t do that until he’s done. That’s why all this is left.” It is like, “You are not done.” We always use this term when somebody says they are done. I’m like, “Are you done, or are you done-done?” It is almost like a prohibited transaction. Go ahead, Monica. I’m sure you’ve got some doozies as well.

It is like what you said. If someone is like, “It is not my son but it is his girlfriend. My son was going to live with his girlfriend but I’m going to buy the house.” I was like, “That can’t happen.” I had another gentleman who called saying he already owned this piece of property but he wanted to use his qualified funds to build on the property, “Is that okay?” I tried to explain to him over and over again why that was not okay and how that would be considered self-dealing. You will hit some crazy ones.

Try to get everything done electronically. Share on X

Another gentleman had a property that he owned through his IRA held elsewhere that he was planning to transfer to Preferred Trust Company. He had mentioned that this property was held in a traditional account, and he was using his Roth account to pay expenses for this property. They are completely different accounts at two different financial institutions. I was like, “I’m going to have to hold that real quick. You need to talk to your CPA or a tax professional. I don’t know if this is okay.”

I have two questions that popped into my head. Let’s say I have a Roth and a regular IRA. They are your retirement accounts. They are still considered completely separate. I can’t have a traditional IRA on a piece of property and have the Roth pay the utility bill and so forth. They are two completely separate entities, people, or however you want to classify them.

Some people truly forget what IRA stands for. The most important part in there is the I or Individual. People still believe, “My wife and I have an IRA together.” You don’t. It is your individual retirement account. It is not a joint account. That’s not how they work. The same thing to lead to your question and answer is that a Roth IRA is its own individual account. Whatever is owned in that Roth IRA is not owned by the SEP or whatever you have. It is individually maintained.

The next question I was going to ask is because I know somebody that did this. They owned a piece of rental property that was in their IRA. When they became retirement age, they transferred it to themselves but had to pay taxes or something like that. That’s not prohibited because you are acknowledging that you are taking that tax burden. Can you explain that a little bit?

Sometimes people get confused that it is prohibited but you eliminate the IRA component and with the property if you do it. Let’s say I have a $250,000 house that I have had as a rental. I am buying it now. In twenty years, when I retire, I want to use it as a second home. What would I need to do to do that? Can I do it? What tax issues would somebody run into?

It would be considered a distribution. You distribute the property to yourself. There are going to be tax implications.

How do you value the property? Is it based on the market value?

It is based on the current market value. We only do market evaluations once a year for that type of thing, especially rentals or any homes that people own. Everything is fluctuating so much. We do that once a year or when the person is coming to sell that specific property or distribute it as one.

If the house were worth $250,000 twenty years from now, it would be like I’m taking a $250,000 distribution. Whatever my taxes are at that time is added to my tax basis essentially.

It is all based on your situation. I know many people, I’m not going to say smarter people, who are in certain instances in their time of life that would do that when they either didn’t have a job or made significantly less income compared to previous years. Without giving advice, I’m not trying to tell people to do that. In some instances, that does change the perspective and what the person would have to do regarding taxes.

One of the questions I wanted to talk about too a little bit because I haven’t heard it talked about a lot, and there are a lot of IRA information out there is the non-recourse loans. I know they’re available and so forth but I’m not super familiar with them. Only select companies that do them unless you get them from another private individual, which I will share with you.

I had a note investor who was new to notes and bought a note from a third party that was somebody’s IRA. It was a non-recourse loan. It was in Detroit. This person didn’t run a title search on the property and send anybody out to the property. It was a $30,000 or $40,000 loan they paid for at face value because it was 12% interest, which was still in my mind too much.

They come to find out it was a newly originated loan, too. The person who made one payment on it basically stopped paying. She called me up because she didn’t have a lot of experience. I said, “Can you send me a title report and what the property looks like?” She goes, “I don’t have any of that.” I’m like, “You didn’t go look at the property?” She said, “No.” The property hadn’t had the power turned on in nine years, and it was in an area of Detroit that is not an area you would want to walk through during the day or night.

The property had an appraisal of $4,000 and she’s like, “I will go sue this person because they still have the note.” I’m like, “It is an IRA. This is a non-recourse loan, meaning the property is the only thing you can go after.” That was my entry into it. Thankfully, it was mine. I know there are lenders out there and stuff like that. Can you speak a bit of those out of curiosity?

For a non-recourse loan, usually, someone gets the financing for the property when they don’t have enough cash within their IRA to purchase that property and whatever it is going to be used for. There are certain criteria that you should be aware of when you are taking out a non-recourse loan. You, the IRA owner, are not taking that loan out. It is the IRA itself. Hence, it has to be a non-recourse loan because if anything were to happen or default on that loan, the lender could not come after the account holder or any other assets held within that IRA. That means the only thing they can do is foreclose on the property, seize the property, and that’s that.

The other flip side of that is that we do work with a lot of non-recourse lenders. By we, I don’t mean specifically us. Our clients do. We noticed that there was a need, so we have vetted out a few non-recourse lenders that we know are very solid and efficient with the way they do things. They understand that buying real estate is all about timing.

If you are not on time, you will not get the piece of real estate. For them on that side of things, the lender can go after that as well. If you are paying, let’s say XYZ Bank, you’ve got a non-recourse loan from them, things aren’t going right, and they are going south. They have the means also to step in. You potentially lose your investment that way as well.

What they look for is they are going to look at the property and see how much funds you have in your IRA, the condition of the property, and the cashflow from that if it was going to be some type of rental. They take that all into consideration as well. Something you should ask your lender is, “What’s the timing of the loan? What are the fees associated with that type of loan?”

That’s why the due diligence period is very important, especially when you are doing this on your own.

I would have to guess that the interest rate is a little higher, and the loan to value will have more equity in the deal as well. I’m guessing typically. That’s interesting because not only is it, “Do you have enough for the down payment?” Unlike the three of us, we’ve got income generated by our paychecks every week, which lenders will look at. If an IRA is buying a $100,000-property and wants 30% down but there’s only $45,000 in an IRA, you still have the property you can go after but it is still very tight in regards to, “Do they have enough if it needs a new roof?” There’s only an extra $5,000, $10,000 to $15,000 in there. That’s not a lot of reserves.

You need to consider any expenses that the property may accrue during the time.

I heard based on that too, if you take a loan, there’s the UDFI where if you borrow 50% and put in 50%, 50% of the profit or the revenue at the end of the year is considered taxable.

They could be subject to tax. What we say for any type of investment or tax advice, we cannot give you any advice when it comes to that. Please talk to your tax professional or your investment advisor.

That’s always the hardest thing about specific questions, especially with what we do. We have to answer that. It is almost like we do sound like a robot. To Monica’s point, we have to say that everybody’s situation is different and all that we can know about the facts, whether you are transferring this, this is the amount that you have, and this is what you are trying to invest in. Going back to the thing we have talked about earlier the prohibited transaction is a prohibited transaction, and a self-directed IRA is a self-directed IRA at the end of the day.

It is not like the Federal Reserve, which is neither Federal nor reserve. A self-directed IRA is a self-directed IRA. It is pretty spelled out in that instance. It is interesting because I’m also working with an attorney and a CPA on something. It is funny. My attorney is like, “Your CPA needs to tell you that.” My CPA is like, “Your attorney needs to tell you that.”

The due diligence period is very important especially when you're doing this on your own. Share on X

I’m like, “I’m going to put you both on the phone together because you are giving me advice on one. You are giving me advice on another. You are telling me what my attorney is saying isn’t the best way to do it from a CPA.” They are not pointing fingers but it is two different ingredients where you are making something, and one ingredient doesn’t mix with the other very well. It is like, “Which one?”

I have the best comparison to that. This is apples to apples on this. It is your IT guy versus your developer guy. “This is what he needs to do.” You both need to come together, and we are going to both figure this out.

This is a real estate show but one of the things that I found interesting is that your firm does dip a little bit into the crypto side of things, which I’m not sure there are a lot of custodians that do that. How does that work? There are digital wallets and I don’t invest in crypto. That’s why I’m sitting in my basement. I didn’t buy Bitcoin when it was at $5,000. A lot of people would dabble in real estate and look to dabble in crypto. Your services fit both criteria. I’m curious. How does that work?

We were one of the first, if not the first full-fledged custodian to offer cryptocurrency as an alternative investment. It was a gray area when everything was coming out. We did it right at the end of 2017 or the beginning of 2018, during a time where it was at an all-time high at that time. It was a learning experience in how we want to do it. We wanted to do it so that it was the most regulated, the most secure, and in the safest way, not just for us as a company but also for our clients. I can let Monica elaborate a little bit more on how we do that specifically.

To hold digital currency within an IRA, there are two approaches with Preferred Trust Company. The first approach is out of sight, out of mind. The Preferred Trust Company acts as the custodian and stores that digital asset in what we call our cold storage. For the client, we execute the transaction of that digital currency and set them up with their nano-ledger device. Every client who has digital currency at Preferred Trust Company executes that transaction on their behalf of the IRA.

Each client has their device, and it is segregated and stored at a non-disclosed location because that’s very important, and it sits there. It is not something you would consider a hot wallet or something like day trading because it does take time. If a client wanted to sell digital currency, they would have to fill out a form. We would have to retrieve the device and call the client. It takes about 24 to 48 hours to receive if a client wants to sell some digital asset. It is not something that’s going to happen very quickly.

The other side is you can form the IRA LLC. That is a service that Preferred Trust Company does offer. Once the funds are here at Preferred Trust Company, we will help them establish their IRA LLC. Once that is all established, the client then creates the bank account for that IRA LLC. We, as a transaction, will give the client a check for them to go deposit. Then, they act as the manager of that account.

The IRA LLC is considered as the investment vehicle. Once they have that cash for the qualified funds, it is up to them how they want to invest. You have to stay between IRS rules and regulations of what you can and cannot do. Once you have the cash, they can go onto Coinbase, set up an account in the IRA LLCs name, and do day trading of digital assets if they choose to do it that way. Those are the two different ways.

That’s similar to how I have a solo 401(k). I can open an account at Robinhood essentially and buy whatever I want. That’s similar to the checkbook. The other component with the cold storage is interesting. When I hear about wallets and stuff, the thing that always pops in my head is Hot Pockets. I had a Hot Pocket commercial back when I was a kid. You mentioned some of the mistakes or things that you see people make in this space.

What are some of the areas where you think people need education? Do you provide any type of training, education, webinars, and things like that? I know you send out newsletters and so forth. I’m curious. Where do you see people after taking education and be like, “I never realized that this could be happening?” What are some of the a-ha moments that people have?

We like to do this one presentation. It is the Misconceptions of a Self-Directed IRA. It is the fact or fake thing. The number one thing since I have been here at Preferred Trust is I always hear people not understand that when you are moving money from IRA to IRA, it is not a taxable event. When they learn that because of whoever told them, “If you are moving money from TD Ameritrade or Schwab and move it over to a self-directed IRA, you are going to get taxed on it.”

That is not true whatsoever. The only time you will get taxed on it is if you are doing a conversion. That’s when you are going from a traditional to a Roth because of the tax implication with tax-deferred to tax-free. If you are moving your money and want to get into alternative investments, your money is over at Edward Jones, and you want to move over $50,000, you can do that transfer. There is nothing taxable about that.

The other thing is that other custodians and institutions will only allow a check to be sent. They physically are going to write that check over to you. When people have that check-in their hand, they are like, “I’m going to get taxed on this.” The IRS allot you a certain amount of time to get that money put back into a qualified plan of the same length of time. That’s always the a-ha moment for people because they have been told for so long by other financial institutions that it is a taxable event, and they get scared. Nobody wants to pay taxes on the money, especially in the amount that people are moving over.

My a-ha moment was when I was right around 40 and switching jobs. It was only the third time in my career I switched jobs. I had my 401(k) and had a good amount of money in there. I realized, “I could even self-direct this.” When you leave, they are like, “You’ve got two options. You can keep it here and move it to your new employer.” I finally learned or realized that there are other options with this. The company’s best interest is to keep collecting the fees of leaving it or moving it into somebody else. That was my a-ha moment.

That’s a big one. Another a-ha moment that’s not as positive is that many people assume that they can transfer over their 401(k)s into a self-directed IRA. I’m not saying it is impossible. It all depends on the plan documents that you have for the 401(k). I have personally never seen it done yet. I’m not saying it can’t be done, but many people have that misconception of, “I’m currently here. I can move over this money.” You don’t know how many times but I’m sure Monica deals with it. It is probably 99% of the time. That’s not true. You can’t move over.

It is possible but every circumstance is different. You would have to talk to your plan sponsors and see if they will allow you to move the funds. It is possible but it is very rare.

With 401(k)s and stuff, can you take a loan out against those and pay it back over five years? Can you do that with IRAs?

No.

I thought I would ask. Do you deal at all with solo 401(k)s and getting those setup or is that a different animal on its own?

It is different. I would say the only deal we would use is IRA LLCs.

As we get wrapping up this episode, one of the things we like to mention is a feel-good story. Is there any type of feel-good story where you have helped a customer, client or somebody? I know you can’t provide financial advice. You tell them, “Here are the rules to play by and stuff.” I’m sure there has still been some type of story where you have educated somebody to give them their a-ha moment as well.

I will say this to a general group of investors that we have had. We have been in business since 2007. That means that we have had a lot of clients who went through the downturn from ‘08 to 2011. A lot of those people had their IRAs and were not performing. People also lost a lot of their livelihoods and retirements. The one thing that we have always done that’s very positive is that those clients have stuck with us. They don’t know what they want to do. They did it because somebody either talked them into it, and they thought it was a great idea to make a lot of money at this time. It turned out it wasn’t so much a great idea.

The IRS just tells you what you cannot do. So as long as you don't do any of those, you're good. Share on X

The one thing that we have always done is we have a resource page. Our resource page has listed on there several companies that we have personally vetted ourselves and gone through. The clients have utilized them, and they have provided a very substantial income for IRAs. That’s how we get away from not advising people. We are not telling them to go but we are saying, “These are companies that our client base utilizes and has had a good experience with.”

We had a very large group of people who invested in fix and flips back in that time and who pretty much lost a lot of their money all throughout their entire IRAs. Through the webinars that we have provided through the co-webinars and all these different types of things, some people have bounced back very well, invested in companies, and thanked us a lot for that. They understand that we can’t tell them where to go but at least the one thing that we can do is like, “Here are about 6 or 7 different companies that other people have had very good success with. Maybe this is something that you want to look into.”

Let’s say they decide to go on there. They are like, “I want to talk to ABC Funding.” I’m like, “Here’s our contact and who you need to talk to.” It is beneficial for us not just as their custodian and servicing their account but also for everybody involved. It is not their fault that either they were in a bad situation or invested at the wrong time. It is all depending on where the market is at and what their strategy was. If we can help out and at least do that for them, some of these people have recovered almost everything they lost during that time.

It has taken about ten years but it is something that we like to do. The best feel-good story I would say is that we educate clients no matter whether they were in a bad situation or if they were in a need situation. We are continuing to educate them and offering them free education. We don’t charge for any of the webinars that we do or the collateral that we provide. We do it because that’s what we do. We are providing a service.

Here’s a quick question out of curiosity. This all intrigues me because it is not tough to get money out with IRAs, but it is not as simple as cutting a check to get money out the door, and you have to find the right investments. One of the things I have heard is people sometimes say, “Leave a lot of cash sitting around in the IRAs. Don’t get it out the door.” Without getting specific because it is confidential information that you have, I’m guessing a decent percentage sits and is unfortunate.

I would honestly say the saddest part is that we have seen it from time and time again. Some people forget the 401(k). We have people who forget about their 401(k)s at their old employers all the time. When we bring that up to them like, “You should contact them to move it over.” They are like, “I never knew I could do that.” It is the same thing with IRAs. Some people will forget. They will have bad taste in their mouth from an investment that they had, and they will forget.

All that’s ever happening to them is their annual fee is getting taken out year-over-year. It is not that we don’t contact them. We contacted them several times but, A) They don’t have the education, B) They don’t have the want-to-do-it. You can lead a horse to the water but you can’t make it drink. That’s the sad part. People will leave cash sitting in there, and all they are making is money market interest at that time.

Monica, did you want to add anything at all to that?

When it comes to cash sitting within the account, we always preach to reinvest if you can. If you don’t know anybody to talk to, we do have our resource page. That goes anything from real estate, precious metals, digital currency, and natural resources. There are options out there. The IRS just tells you what you cannot do. As long as you don’t do any of those, you are good.

What’s the best way for people to reach out to you?

PreferredTrustCompany.com is a great way. We have something called BoldChat, which allows you to chat with somebody live and not a robot. We can answer a few questions. If it gets very extensive, we always will request that you call us in. We are always able to answer a few quick questions and anything that people may have on there. The other thing is to shoot us an email. Our email is Info@PTCEmail.com.

That goes out to all employees, and somebody is usually there to get picked up pretty quickly. We are very efficient here, we streamline everything, and we have a good team environment. That’s the biggest thing, to what Monica has brought up. We have had that robot type of conversation over the entire time of this recording. That’s the biggest thing. When you call, we will answer.

Interestingly, you mentioned chat because my wife and I lease our cars. They are coming up to expire so we had been online looking. You can’t find cars at dealerships. They don’t even have any so I will go online. I hate speaking to dealers because they are like, “When will you come in?” “Do you have the car?” I will go on the chat. You can tell it is a generated robot, “Who am I talking to? This and that. What’s your interest?” “I’m interested in XYZ.” They will ask me for more questions like, “Let me get you over to a sales rep.” This new person comes on like, “What’s your name?” I’m like, “I filled out all that information for absolutely nothing.” Get a new chatbot because you can usually store all that information.

We don’t have time for that. Your time and our time are valuable. We want to get you the answers that you need.

We even have clients who get on there like, “I need a form.” I would be like, “Here, send Julie. There you go.”

The ease of communication is if you look at the pain points of people that I have seen who deal with their IRAs. I don’t have one but I deal with many investors, help them, and stuff. The biggest challenge is sometimes it is too much paperwork. They do it once and think it is right, and then next time it isn’t. It is getting somebody on the phone to whom they can physically talk or chat and not be put on hold for twenty minutes.

Get the chatbot and something. It is great to see people going back to what I will call the Stone Age of using telephones and communicating. It is amazing. I’m going to wrap up this episode of the show. I would like to thank Izzy and Monica from Preferred Trust Company. As always, everybody, make sure to leave us a review on your favorite station and go out and do some good deeds. Thank you all.

Thank you.

Important Links:

• Preferred Trust Company
• Coinbase
• Robinhood
• Misconceptions of a Self-Directed IRA
• Edward Jones
• Resource page
• Info@PTCEmail.com