Table of Contents

• Invest For Your Future Self

• Here are the Top 9 alternative assets to consider …

• Actionable Steps for Integrating Alternative Inves …

Hi there. Welcome to another edition of Noyack Wealth Weekly in the middle of Financial Literacy Month.  

This newsletter is Part 2 in our Retirement Planning Series for high earning professionals. Previously follows up on our previous discussion of the powerful tools of Self-Directed IRA’s (SDIRA’s) like Solo 401k, SEP IRA and the legend, Roth IRA.

You heard the story about Peter Thiel, right? He turned his Roth IRA into a whopping $5 billion tax-free! More on that below. 

Well I’m no Peter Thiel by any stretch but I followed his lead and when I invested millions into Noyack Logistics Income REIT (NREIT) , I contributed all of my shares into my ROTH IRA after I  converted from a traditional IRA. If (and when) NREIT goes public, the windfall will chrome to me or my sons (ROTH IRA’s can be passed down) will come out TAX FREE.

Invest For Your Future Self

You may not need your retirement plans now but the future you will. So let’s talk about how to to pay your future self handsomely by using your SDIRA’s to in invest in Alternative Investments.

But, there are a few rules to keep in mind. While the government is pretty chill about what you can put in your IRA (you're not allowed to include life insurance or collectibles), the real limits often come from the companies managing your IRA. So look around and test drive a few plan administrators like: Inspira or AltoIRA or Equity Institutional. I chose Inspira Financial.

Everything is changing in retirement planning; The Great Wealth Transfer is making sure of that because Millennials love ‘alts’, 3x more than my Gen X. They just need frictionless access and boom 🧨…they will invest through their IRA’s and significantly.

Investing through a self-directed IRA lets you improve your chances of success by increasing the investment returns you keep after taxes, which is always most important.

All retirement plans are ideal for the following alternative investments however some of the plans - SEP IRA & Solo 401K - are better suited for income-producing alts like real estate, bond funds and private credit; while a ROTH IRA is ideal for high growth options like venture capital or private equity. This is where Thiel scored big.

Here are the Top 9 alternative assets to consider for your self-directed IRA:

1. Real Estate: I did A favored choice for many, real estate investments can include rental properties, commercial spaces, or even real estate through crowdfunding platforms. Depending on your IRA type, the income generated can be tax-deferred or tax-free. I invested $10 million into our REIT investing in last-mile logistics - NREIT.

2. Private Equity: This involves investing in privately held companies, ranging from startups and small businesses to larger private corporations. While risky, private equity can yield high returns with the right investment choices.

3. Precious Metals: Gold, silver, and platinum are sought-after by investors looking to hedge against inflation and economic uncertainty. You can invest in physical metals or opt for exchange-traded funds (ETFs) that track these metals' prices.

4. Cryptocurrencies: Digital currencies like Bitcoin and Ethereum are gaining traction. They're known for their volatility, but they can also offer significant returns. Many custodians now support cryptocurrency investments in IRAs.

5. Private Debt: This asset class includes investments in private loans, notes, or bonds. Private debt can offer regular income streams and potentially higher returns than traditional bonds.

6. Timberland: Investing in timberland can yield income through timber sales and capital appreciation as the land's value grows over time.

7. Farmland: Like timberland, farmland can provide regular income from agricultural operations and the potential for land value appreciation. Direct investments and farmland REITs are both options.

8. Energy: Assets in oil and gas, renewable energy projects, or energy infrastructure can offer regular income and capital growth, serving as an inflation hedge as well.

9. Intellectual Property: Patents, trademarks, and copyrights represent a unique asset class. Investments here can generate regular licensing income and appreciate in value, offering a distinctive alternative to traditional investment options.

Actionable Steps for Integrating Alternative Investments

1. Know Where You Are & Be Honest: Put a budget together, see how much income you can spare each month to put into your existing or new retirement plans, including Solo 401k and Roth IRA, estimate how many years you can do this. Remember withdrawing without tax penalty is approximately your late fifties. I’mIm close to that…ouch.  Last question to answer is the hardest: are you comfortable with risk or not? Knowing one’s risk tolerance, to me, the THE MOST IMPORTANT ELEMENT of successful wealth building.

2. Teach Thyself: Commit to understanding the nuances of various alternative investment options. Knowledge about what these investments entail, their risks, and potential benefits will guide informed decision-making.

3. Gradual Integration: Start with a modest allocation towards alternative investments to test the waters, say 10%. Then each year add maybe another 5% of your portfolio as lou learn more and get comfortable with the risk. 

4. Regular Review and Adjustment: Monitor the performance of your investments and adjust your strategy as needed in response to performance feedback and changing economic indicators. I wish someone would build a tracking dashboard similar to our Merrill or TD Ameritrade stock accounts but for alternative Investments. who knows, maybe Noyack will. 

So here’s the the lesson of Peter Thiel and his $5 billion Roth IRA

Peter Thiel, the renowned venture capitalist, has leveraged a Roth IRA to amass what ProPublica describes as a "$5 Billion Tax-Free Piggy Bank." Originally designed to promote retirement savings among the middle class, Roth IRAs offer tax-free growth on investments, a benefit that Thiel has maximized beyond ordinary expectations.

Starting with less than $2,000 in PayPal shares in his Roth IRA, Thiel's account burgeoned to an astonishing $5 billion, thanks to strategic investments in companies like Facebook. While perfectly legal, this use of Roth IRAs by someone of Thiel’s financial stature raises questions about the fairness of the tax system that ostensibly subsidizes such supercharged investment vehicles for the ultra-wealthy, while being funded by average American taxpayers.

As we explore democratized alternative investments in this series, Thiel's story serves as a potent example of how powerful financial tools can be engineered to serve both individual ambitions and broader investment strategies. Stay tuned as we unpack more about these mechanisms and their implications for your financial planning.

Curated For You

• The $5B Lord of the Roths

• Top 9 Alternative Investments To Make With a Self-Directed IRA

• High Inflation May Require Re-evaluation of Personal Wealth Strategy