Jeff Nabers’ Self Directed IRA & Solo 401(k) Blog

I just got done interviewing John Rubino, co-author of The Collapse of the Dollar - Make a Fortune by Investing in Gold & Other Hard Assets, and it was quite interesting. Rubino stated that:

Over the last 7 years the stock market has dropped [as significantly] as it did during the Great Depression.

“WHAAAT?!!” you say. He explains that our perception of this strong bear market has been softened by the declining value of the dollar. In the spirit of comparing apples to apples, we must first consider that in the late 1920’s and early 1930’s the dollar was fixed to gold. So, in essence, the stock market’s decline was measured in gold. According to Rubino, you would see a depression-like chart if you were to measure the past few years of the stock market in gold.

The most convincing thing about his perspective is that he accurately predicted the burst of the housing bubble… in 2003. He forecasted that those who would suffer the most from the popping bubble would be homebuilders’ stocks, Fannie Mae & Freddie Mac, and real estate prices in “hot” (at the time) areas. He even went on to explain that the contributing factions would spill over into other parts of the economy including financial services companies, and banks themselves. At that time, the idea of one of the country’s largest investment banks (Bear Sterns) becoming insolvent sounds crazy, but Rubino warned us all with How to Profit from the Coming Housing Bust: Money-Making Strategies for the End of the Housing Bubble. In fact, if you would have followed his advice to the “T”, you would have profited immensely , provided that (more…)

With gas prices and virtually every other cost of living rising, responding to the declining dollar is something we all have probably thought about by now. One option available to us all is precious metals: namely gold, silver, and platinum.

The trick with getting metals into a retirement plan is in the Internal Revenue Code section that deals with collectibles. Strangely enough, it’s not in section 4975 (which deals with prohibited transactions); it’s in 408 which deals with IRAs. Even more odd is the fact that one part of this section is applicable to self directed qualified plans (like a Solo 401k) with no reference to its applicability within the code sections for qualified plans. This is why tax attorneys have work to do.

In 408(m)(2), they prohibit investment into collectibles and further define collectibles to include any metals or coins. 408(m)(3) goes on to exclude certain coins and bullion from being defined as “collectibles” for the purposes of disallowed investments. It breaks these “certain coins and bullion” down into two categories. (A) is essentially American Eagle coins minted by the United States. (B) is bullion that that meets or exceeds the fineness required by regulated futures contracts if such bullion is in possession of a custodial account at a bank or trust company.

So when it comes to Self Directed IRAs and Solo 401(k)s, it appears that American Eagle coins are allowable for (more…)