[davelj]

La Jolla Renter,

I used Trust Administration Services Corp. (www.trustlynk.com) for several years as custodians for my self-directed IRAs and they SUCKED. Horrible customer service and their systems were worse. They made several large recordkeeping errors that were a pain in the ass to correct. I actually know the president of the bank that owns TASC and when I told him about my experience he apologized and said, “Yes, we have some problems to fix there.”

I recently switched to Polycomp (www.polycomp.net) and they are awesome. Very responsive. Tight recordkeeping. Fantastic.

As to the fees, asragov, the ones you posted aren’t eggregious. If you don’t plan on making sufficient returns to justify the fees then a self-directed IRA is not the proper vehicle to use. And if you’re investing in illiquid investments – like real estate – then you should be getting compensated for the illiquidity or you’re doing something wrong.

I am a huge fan of self-directed IRAs despite my horrible customer service experience with TASC. But if you don’t plan on earning at least 15% annually on an investment you probably shouldn’t put it in a self-directed IRA because the fees are higher than other standard IRA alternatives.

[davelj]

La Jolla Renter,

I used Trust Administration Services Corp. (www.trustlynk.com) for several years as custodians for my self-directed IRAs and they SUCKED. Horrible customer service and their systems were worse. They made several large recordkeeping errors that were a pain in the ass to correct. I actually know the president of the bank that owns TASC and when I told him about my experience he apologized and said, “Yes, we have some problems to fix there.”

I recently switched to Polycomp (www.polycomp.net) and they are awesome. Very responsive. Tight recordkeeping. Fantastic.

As to the fees, asragov, the ones you posted aren’t eggregious. If you don’t plan on making sufficient returns to justify the fees then a self-directed IRA is not the proper vehicle to use. And if you’re investing in illiquid investments – like real estate – then you should be getting compensated for the illiquidity or you’re doing something wrong.

I am a huge fan of self-directed IRAs despite my horrible customer service experience with TASC. But if you don’t plan on earning at least 15% annually on an investment you probably shouldn’t put it in a self-directed IRA because the fees are higher than other standard IRA alternatives.

[davelj]

La Jolla Renter,

I used Trust Administration Services Corp. (www.trustlynk.com) for several years as custodians for my self-directed IRAs and they SUCKED. Horrible customer service and their systems were worse. They made several large recordkeeping errors that were a pain in the ass to correct. I actually know the president of the bank that owns TASC and when I told him about my experience he apologized and said, “Yes, we have some problems to fix there.”

I recently switched to Polycomp (www.polycomp.net) and they are awesome. Very responsive. Tight recordkeeping. Fantastic.

As to the fees, asragov, the ones you posted aren’t eggregious. If you don’t plan on making sufficient returns to justify the fees then a self-directed IRA is not the proper vehicle to use. And if you’re investing in illiquid investments – like real estate – then you should be getting compensated for the illiquidity or you’re doing something wrong.

I am a huge fan of self-directed IRAs despite my horrible customer service experience with TASC. But if you don’t plan on earning at least 15% annually on an investment you probably shouldn’t put it in a self-directed IRA because the fees are higher than other standard IRA alternatives.

[davelj]

La Jolla Renter,

I used Trust Administration Services Corp. (www.trustlynk.com) for several years as custodians for my self-directed IRAs and they SUCKED. Horrible customer service and their systems were worse. They made several large recordkeeping errors that were a pain in the ass to correct. I actually know the president of the bank that owns TASC and when I told him about my experience he apologized and said, “Yes, we have some problems to fix there.”

I recently switched to Polycomp (www.polycomp.net) and they are awesome. Very responsive. Tight recordkeeping. Fantastic.

As to the fees, asragov, the ones you posted aren’t eggregious. If you don’t plan on making sufficient returns to justify the fees then a self-directed IRA is not the proper vehicle to use. And if you’re investing in illiquid investments – like real estate – then you should be getting compensated for the illiquidity or you’re doing something wrong.

I am a huge fan of self-directed IRAs despite my horrible customer service experience with TASC. But if you don’t plan on earning at least 15% annually on an investment you probably shouldn’t put it in a self-directed IRA because the fees are higher than other standard IRA alternatives.

[davelj]

Happens all the time in this stage of the cyle – that is, the foreclosure stage of the cycle. Mortgage industry pros call this “falling in love with the plumbing” because the defaulting tenants often rip out the plumbing and fixtures (in order to sell) as well.

Banks don’t want to be in the business of home ownership, much less the business of home improvement. That’s why they generally don’t bother fixing up properties.

[davelj]

Happens all the time in this stage of the cyle – that is, the foreclosure stage of the cycle. Mortgage industry pros call this “falling in love with the plumbing” because the defaulting tenants often rip out the plumbing and fixtures (in order to sell) as well.

Banks don’t want to be in the business of home ownership, much less the business of home improvement. That’s why they generally don’t bother fixing up properties.

[davelj]

Happens all the time in this stage of the cyle – that is, the foreclosure stage of the cycle. Mortgage industry pros call this “falling in love with the plumbing” because the defaulting tenants often rip out the plumbing and fixtures (in order to sell) as well.

Banks don’t want to be in the business of home ownership, much less the business of home improvement. That’s why they generally don’t bother fixing up properties.

[davelj]

Happens all the time in this stage of the cyle – that is, the foreclosure stage of the cycle. Mortgage industry pros call this “falling in love with the plumbing” because the defaulting tenants often rip out the plumbing and fixtures (in order to sell) as well.

Banks don’t want to be in the business of home ownership, much less the business of home improvement. That’s why they generally don’t bother fixing up properties.

[davelj]

Happens all the time in this stage of the cyle – that is, the foreclosure stage of the cycle. Mortgage industry pros call this “falling in love with the plumbing” because the defaulting tenants often rip out the plumbing and fixtures (in order to sell) as well.

Banks don’t want to be in the business of home ownership, much less the business of home improvement. That’s why they generally don’t bother fixing up properties.

[davelj]

Let’s flash forward and assume you’re 65 today just to make things simple. You could retire and live pretty comfortably if you had $750K in savings, and your house and car are paid off. You could invest $400K in high-yield fixed income at 8% and get $32K/year pre-tax, plus you’d get about $18K/year in social security. (You’d invest the other $350K for growth to keep up with inflation, which your fixed income won’t do.) So, you should have about $50K/year pre-tax, or about $3K/month after tax and you’d be on Medicare. You should be able to lead a reasonably comfortable life on that and keep up with inflation until you keel over. (Yeah, the math is rough, but it’s not too far off.)

So, you’ve got 23 years to get there. Adjusting for inflation – assuming 3%/year – you’ll need about $1.5 million in 2031 dollars plus you’ll need to buy and pay off a house in the meantime. You’re starting with nothing. Forgetting about the house, and using raw division (this is imperfect analysis, I know), you’ll need to save/achieve-through-investing an average of $65K/year for the next 23 years. Again, that doesn’t include the house you’ll want paid off.

Given the taxes and cost of living here in CA, slogging it out at a $100K/year job and saving a little bit each year isn’t going to get you even close. No, you need a plan of action.

My suggestions: (a) Marry someone wealthy, (b) Marry and divorce someone REALLY wealthy (no pre nup), (c) Inherit money, (d) Win the lottery, or (e) Pray harder for one of a-d.

[davelj]

Let’s flash forward and assume you’re 65 today just to make things simple. You could retire and live pretty comfortably if you had $750K in savings, and your house and car are paid off. You could invest $400K in high-yield fixed income at 8% and get $32K/year pre-tax, plus you’d get about $18K/year in social security. (You’d invest the other $350K for growth to keep up with inflation, which your fixed income won’t do.) So, you should have about $50K/year pre-tax, or about $3K/month after tax and you’d be on Medicare. You should be able to lead a reasonably comfortable life on that and keep up with inflation until you keel over. (Yeah, the math is rough, but it’s not too far off.)

So, you’ve got 23 years to get there. Adjusting for inflation – assuming 3%/year – you’ll need about $1.5 million in 2031 dollars plus you’ll need to buy and pay off a house in the meantime. You’re starting with nothing. Forgetting about the house, and using raw division (this is imperfect analysis, I know), you’ll need to save/achieve-through-investing an average of $65K/year for the next 23 years. Again, that doesn’t include the house you’ll want paid off.

Given the taxes and cost of living here in CA, slogging it out at a $100K/year job and saving a little bit each year isn’t going to get you even close. No, you need a plan of action.

My suggestions: (a) Marry someone wealthy, (b) Marry and divorce someone REALLY wealthy (no pre nup), (c) Inherit money, (d) Win the lottery, or (e) Pray harder for one of a-d.

[davelj]

Let’s flash forward and assume you’re 65 today just to make things simple. You could retire and live pretty comfortably if you had $750K in savings, and your house and car are paid off. You could invest $400K in high-yield fixed income at 8% and get $32K/year pre-tax, plus you’d get about $18K/year in social security. (You’d invest the other $350K for growth to keep up with inflation, which your fixed income won’t do.) So, you should have about $50K/year pre-tax, or about $3K/month after tax and you’d be on Medicare. You should be able to lead a reasonably comfortable life on that and keep up with inflation until you keel over. (Yeah, the math is rough, but it’s not too far off.)

So, you’ve got 23 years to get there. Adjusting for inflation – assuming 3%/year – you’ll need about $1.5 million in 2031 dollars plus you’ll need to buy and pay off a house in the meantime. You’re starting with nothing. Forgetting about the house, and using raw division (this is imperfect analysis, I know), you’ll need to save/achieve-through-investing an average of $65K/year for the next 23 years. Again, that doesn’t include the house you’ll want paid off.

Given the taxes and cost of living here in CA, slogging it out at a $100K/year job and saving a little bit each year isn’t going to get you even close. No, you need a plan of action.

My suggestions: (a) Marry someone wealthy, (b) Marry and divorce someone REALLY wealthy (no pre nup), (c) Inherit money, (d) Win the lottery, or (e) Pray harder for one of a-d.

[davelj]

Let’s flash forward and assume you’re 65 today just to make things simple. You could retire and live pretty comfortably if you had $750K in savings, and your house and car are paid off. You could invest $400K in high-yield fixed income at 8% and get $32K/year pre-tax, plus you’d get about $18K/year in social security. (You’d invest the other $350K for growth to keep up with inflation, which your fixed income won’t do.) So, you should have about $50K/year pre-tax, or about $3K/month after tax and you’d be on Medicare. You should be able to lead a reasonably comfortable life on that and keep up with inflation until you keel over. (Yeah, the math is rough, but it’s not too far off.)

So, you’ve got 23 years to get there. Adjusting for inflation – assuming 3%/year – you’ll need about $1.5 million in 2031 dollars plus you’ll need to buy and pay off a house in the meantime. You’re starting with nothing. Forgetting about the house, and using raw division (this is imperfect analysis, I know), you’ll need to save/achieve-through-investing an average of $65K/year for the next 23 years. Again, that doesn’t include the house you’ll want paid off.

Given the taxes and cost of living here in CA, slogging it out at a $100K/year job and saving a little bit each year isn’t going to get you even close. No, you need a plan of action.

My suggestions: (a) Marry someone wealthy, (b) Marry and divorce someone REALLY wealthy (no pre nup), (c) Inherit money, (d) Win the lottery, or (e) Pray harder for one of a-d.

[davelj]

Let’s flash forward and assume you’re 65 today just to make things simple. You could retire and live pretty comfortably if you had $750K in savings, and your house and car are paid off. You could invest $400K in high-yield fixed income at 8% and get $32K/year pre-tax, plus you’d get about $18K/year in social security. (You’d invest the other $350K for growth to keep up with inflation, which your fixed income won’t do.) So, you should have about $50K/year pre-tax, or about $3K/month after tax and you’d be on Medicare. You should be able to lead a reasonably comfortable life on that and keep up with inflation until you keel over. (Yeah, the math is rough, but it’s not too far off.)

So, you’ve got 23 years to get there. Adjusting for inflation – assuming 3%/year – you’ll need about $1.5 million in 2031 dollars plus you’ll need to buy and pay off a house in the meantime. You’re starting with nothing. Forgetting about the house, and using raw division (this is imperfect analysis, I know), you’ll need to save/achieve-through-investing an average of $65K/year for the next 23 years. Again, that doesn’t include the house you’ll want paid off.

Given the taxes and cost of living here in CA, slogging it out at a $100K/year job and saving a little bit each year isn’t going to get you even close. No, you need a plan of action.

My suggestions: (a) Marry someone wealthy, (b) Marry and divorce someone REALLY wealthy (no pre nup), (c) Inherit money, (d) Win the lottery, or (e) Pray harder for one of a-d.

[davelj]

yojimbo, yes, it’s the same thing as your Nike analogy, with the key being “albeit on a smaller monetary scale.” If you spend an extra $15 to buy that Nike shirt it’s no big deal for most people. In other words, the additional “perceived – but not real – luxury” is relatively inexpensive. However, if you spend an extra million dollars or two just to live somewhere with the proper address (with no material advantages) then… well… that’s an extra million or two. Now if you’ve got $25 million plus, no big deal – that’s not necessarily crazy to me; you’re talking about a rounding error. But if you’re the average person doing this, with, say, a $10 million net worth, then spending an additional 10%-20% of your net worth just for the address is… well… crazy. The degree of insanity is inversely proportional to the buyer’s net worth. In my opinion.

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