Archives for March, 2014

28 Mar 2014

Funding a business with an individual 401k

If you have been thinking about starting your own business or investing in a business start up, then chances are that you have considered business funding. Many people think that the only way to get money to start a business is to walk into the bank and request a business start up loan. Getting a loan from the bank is an option, but is it really the route you want to go down? You would have to pay back the loan on a timeline determined by the bank, pay an interest rate determined by the bank, and may have to structure your business differently due to the bank’s requirements. The deeper you dive into getting traditional startup financing, the less control you actually have over the business. This is enough to make many individuals hesitate before quitting their day job, but before throwing your arms up in the air let’s discuss another option; one that gives you much more control over your business and how to fund it.

The individual 401k – customized business funding


The individual 401k is structured in a way that gives you complete control over your business, your own salary, and how you choose to fund your business. This is because the individual 401k is really made up of 3 parts:

  • The business owner
  • The actual individual 401k account
  • The corporation

The business owner is you, and you can decide to take a salary from the business or to just have the profits feed right into your retirement account.

The individual 401k account is your retirement. It is also the source of funding for your business. You can choose to invest directly into the business or to take out a loan to fund your company. Profits from the business will go back into your account and/or pay off the loan with interest to yourself.

The corporation is your actual company. Its structure is somewhat dependent on how you decide to pay yourself (or not) and whether or not you want to take a loan out from your retirement.

It is also fairly simple to roll over existing accounts into a new individual 401k. Therefore is it very possible for you to start your business or invest in a new business with money that you already have. You don’t have to pay a bank. You don’t have to forfeit control. You don’t have to wait!

We recommend viewing our pages on the individual 401k for more information. If you are considering opening a new indi-k then we do also recommend talking to a licensed custodian with legal staff on hand. You definitely want to make sure that your corporation and account are set up properly. We can help you find a custodian that is right for you!

Contact us!


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7 Mar 2014

Benefits of a Roth IRA

What are the key benefits of a Roth IRA?


The Roth IRA is quickly becoming one of the most popular investment vehicle choices made by Americans and it is no surprise why.  A Roth account can save you from shelling out a ton of money in taxes when it comes time to retire. If you set up a self directed Roth IRA then you can double down on the benefits of less taxes and a wide range of high earning investment choices. We put together this article to help shed light on some of the key benefits of a Roth IRA.


The most profound benefit delivered by a Roth IRA is the ability to take tax-free contributions. A person can contribute after-tax income into the account up to a specified amount each year. Then, the earnings inside that account are grown tax-free. For example, if you started a Roth IRA with $50,000 and it grew to $100,000 then you would not pay taxes on the $100,000 when you took withdrawals. This is a huge advantage because the money you start the account with is usually less than what the account grows to and therefore you pay significantly less in taxes.


With a Roth IRA, time is on your side. The earnings inside of a Roth account are tax free and that means that it benefits you the most to start the IRA as early as possible. Ever heard of the power of compounding interest? Well, imagine compounding interest inside of an account for 20 years and never paying taxes on those earnings.


Now, it is also possible to set up a self directed Roth IRA. Self directing the account opens up a whole new world of investment options like rental homes, trust deeds, tax liens, and much more. These investment options can result in high earnings in many cases. Combine that with the tax advantage of a Roth IRA and now you have one powerhouse of an investment vehicle.


Want to learn more about other benefits of a Roth IRA or different account types? Please head over to our Knowledge Base section of for more insight.


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