I was talking to an old friend the other day, he works at a management company that handles Self Directed IRAs. Anyway we were discussing the sad fact that 96% of Americans allow banks, Insurance companies and stock brokers to rip them off, by putting everyones IRA money into the respective companies own financial instruments, like mutual funds and stock. And then to add insult to injury paying the average IRA account holder a miserly 8% and keeping all the profits for themselves.

My friend was saying, when you aren't limited to investing in whatever your custodial company offers, you can invest your IRA in some very interesting ways. He went on to tell me that more and more people over 50yrs old were converting their 401(Ks) and the normal IRAs into a Self Directed IRA. You don't pay taxes or penalties to convert over to them, They (the over fifties) need a company that handles a self directed IRA, a company that allows people to run their own investment portfolio, and does what you say, when you tell them. But one that will still give you a helping hand and guide you through all the rules and regulations. You will make more with a self directed IRA investing your money in real estate than you will with your money sitting in a bank at 8% per annum.

In 1974 Congress brought into being The Individual Retirement Account or IRA a trust fund that is accepted by the IRS. You get a tax rebate for every dollar that you put into your account, for example you get to deduct it from your income this year and you pay no tax on it until you take it out. The Federal Government created The Self Directed IRA so you can put away savings and earn money for when you retire without having the interest eaten away by taxes.

My friend went on and said that when his clients turned over four houses or more a year, he encouraged them to convert over to a Self Directed Roth IRA to maximize their compound interest. I will explain what a self directed Roth IRA is. The essential part of the Roth IRA is the fact that the money you put into it is not tax deductible, while the money you withdraw when you retire is not taxed. It does not become eligible for tax again.

I told a story the other day about a friend of mine who liked a self directed IRA so much he taught his son and daughter to invest in them too. But you don't have to be young to have a self directed IRA, plenty of my generation ie the baby boomer generation are changing over to them too. Your ROI is based on your knowledge of real estate not on the yo yo effect of the stock market.

I have had people come up to me and say that they know nothing about real estate and they thought that people who deal in real estate were losing money. I told most of these people to read my articles and then go to my website and they would see the real story about real estate and where it is going, they will also find there a TURNKEY approach to real estate investing that many hundreds of people are applauding.

The Social Security administration's recent report stated that Social Security will begin to have a minus cash flow by the year 2017 and by the year 2040 will not be able to pay a full benefit. With this crisis looming, all of us should take whatever steps we need to ensure we are covered in our retirement. We need to get our families into saving for their retirement too. I told my friend that maybe someone would rollover their 401(K) into a self directed IRA after reading about my talk with him. He actually seemed bashful about me wanting to write about talking to him.