The human condition is one of constantly merging what we want with what we perceive — with what is in fact, reality. It sounds vanilla simple as ya read it, but we all know what a dangerous outlook human perception can be if it’s not aligned with the world’s merciless empirical truth.
I remember with a wincing smile the day I arrived at a friendly broker’s office to drop of an offer. It was way back in another life. I hadn’t seen this husband/wife team in over a year, so was lookin’ forward to the visit. When I arrived the wife happily remarked, “We were wondering who the chubby blond guy was.”
Ouch! Not exactly how I perceived myself. 
That was the inauspicious beginning of my marathon career, another post altogether. Suffice to say, the next year or so saw a loss of 40-something pounds and over 7 inches on the waistline. Ultimately it was the consequence of merging reality with perception. The whole ‘perception is reality’ concept is true enough, but the so-called reality is often nothin’ but a mirage, as was my laughable ‘lean and mean’ self image.
Warning: Hard, brakeless segue.
The average loss suffered my the vast majority of IRAs and 401Ks has been over 40%. Yet from what I’ve seen first hand, read, and heard second hand, most folks still perceive themselves as having a diversified portfolio, even though 100% of their Qualified Plans are still hogtied to Wall Street.
Furthermore, they perceive a rocky road to the full recovery of their losses, while often not knowing what options they have to get that accomplished. The frustration is almost palpable.
The most effective adversary to long term capital growth is a loss. Duh. Yer smilin’, but let me finish. The consequences of a loss aren’t limited to the present. The bottom line effect is how many years your Plan is essentially on ‘pause’ while it makes up the losses. Only when you’ve regained the losses do you resume your journey on the growth highway. Meanwhile you stubbornly keep havin’ birthdays.
And there’s the rub.
Fact: Your 401K/IRA has suffered a discouraging loss. It’s time to focus on a strategy to get back to where you were, and resume growing.
First — recognize that you’ve not been ‘diversified’ regardless of what you’ve been told. Wall Street’s idea of diversification is akin to puttin’ a governor on a Ferrari, ensuring it can’t exceed 60 mph. Why would you do that on purpose? Don’t get me wrong, I’m not anti-stock market. I offer Max Whitmore as prima facie evidence.
Fact: Once you’ve sustained a significant loss, time is no longer your friend. You keep havin’ birthdays while the losses remain an ongoing reality.
Tick tock.
One option is to take the bull by the horns as it relates to your IRA or 401K. How? First, you must find out if you’re eligible to roll your current plan into a Self Directed IRA — not everyone has that on their menu.
For now, if you have a 401K from a former employer, you can probably roll it to a Self Directed IRA. Many over 59½ can also. More on that later.
The bottom line is, with an IRA whose funds are directly controlled by you — the funds can be invested — leveraged or not — into real estate. It’s not for everyone, but over the long run, your plan’s cash flow and capital growth will improve if a generous portion of your plan’s capital is directed towards real estate. For every 1% of real estate appreciation (leveraged — 1/3 down) your capital grows roughly 3% — which means if your plan’s real estate has a year of 3.5% appreciation, the stocks in your plan will hafta exceed 10% just to stay even.
That doesn’t account for the real estate investment’s cash flow, which will almost universally far outpace any dividends thrown off by stocks. Frankly, it’s an unfair contest from the start. But if you’re gonna begin making measurable headway in the race to regain your lost capital, ‘start’ is what you might wanna strongly consider.
I can show you how, and recommend highly experienced pros to guide you in every step of the process. Don’t risk your perception further clouding reality. The one thing none of us can do is put time on pause. Again — tick tock.
Call me, and we’ll figure out what’s possible for you and your circumstances. 619 889-7100 — Have a good one.
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