If you have a 401K plan, an IRA, or other retirement plan, you have money you can't spend. It is probably invested in the volatile stock market or mutual funds, which is also the stock market. If you are lucky, maybe your account value will increase, but many times they do not. Just ask those from Enron, MCI, and many others whose accounts were totally wiped out.

There are other types of retirement plans also. If you have one of these more complex plans, call me for assistance to determine if they will roll over into a self directed IRA.

It is smart to roll your present retirement account into a self directed IRA, so you can hold California real estate in an IRA. History has shown that holding the right California real estate in a self directed IRA account will yield the results we are discussing here.

• Standard IRA
• 401K
• roth IRA
• self directed ira
• sep
• blah blah

A simple story will explain the BIG benefits of using a self directed IRA containing land

When I was 26 years old I could have bought a lot in the San Diego Country Estates, which was a new residential development of streets and lots way out in the sticks of Ramona, CA. If I remember correctly, the price for this lot was about $3,000. in 1976. 4 years earlier I bought my house for $23,500., so you can see in comparison that $3K was a lot of money back then. Today the lot is worth about $200,000. or the price is 66.66 times the purchase price.

If I bought the lot for $3K, the tax would be about $35/year, so:
Cost = $3,000.
tax for 30 years  = $1,050.
maint.=$950.
total cost= $5,000.00

profit = $195,000. ($200,000.-$5,000.)
capital gains tax you need to pay (approx. 26%) = $50,700.
actual net gain = $144,300.00 = gross monthly income at 4% interest = $481.00

The self directed ira did not exist in 1975, but it does today. Using the same calculations on a couple acres of pre-developed land today., but with the investment in a self directed IRA:

cost = $33,000.
tax for 30 years = $11,250.
maint. = $2,750.
total cost = $47,000.

anticipated gross profit = $2,200,000. ($47K times 66.66)
net profit after sale less cost = $2,153,000. in your self directed IRA
capital gains tax paid = $0 because you did not take it out of your IRA
actual net gain = $2,153,000.
gross monthly income at 4% interest = $7,177.
guestimated income tax @ 15% per month is $1,077.
net monthly income = $6,000.