AIPIS 103 - Jeff Barnes on Self-Directed Investing & Retirement Planning

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Welcome to the AIPIS show for accredited income property investment specialists and those who desire to be. This is your host, Jason Hartman where we talk about increasing your income, your productivity and just generally having a better life while serving your clients better with America's most historically proven asset class income property. We have a great interview for you today and we will be back with that in less than 60 seconds.

It's my pleasure to welcome Jeff Barnes to the show. He is the author of the Ultimate Guide to Self Directed Investing and Retirement Planning. Control your financial future, self direct your investments, create a tax free bulletproof wealth plan and live the life you want. Jeff, welcome. How are you?

I'm doing great, Jason. Thank you very much for having me today.

Good to have you on. Give our listeners a sense of geography and tell us where you're located.

Yeah, I'm up in the Seattle, Washington region.

Ah, good, good stuff. Beautiful place when it's not raining.

Absolutely. Even better when the Seahawks are winning too.

There you go. Okay, well, hey, so you know, as I mentioned to you before when we were just doing our little pre show pre brief, we've had many people on the shows before that talk about self directed IRA investing. Maybe a little bit just a touch on self directed 401ks or solo ks in these different plans. Can you give us like first the high level view, you know how many types of, I guess I should call them retirement plans or tax deferred savings plans are there?

Oh sure, Jason, yeah, that's a great question. There are actually several different ones. I mean these range everywhere from your traditional IRAs, your Roth IRAs, which I'm sure everybody's familiar with, your 401ks, you have your 403bs, which are generally for large government style pension plans. You have your 457 plans, you know, a wide array of these as well as your defined benefit plans which are your pension plans. So there is a number of different types of qualified plans, what the IRS refers to them, the big two of course being the 401 and the IRA, that's what most people use. Most people know about self employed individuals have the SEP IRA available to them. So the list goes on and on. But from a. For ease of discussion, I guess for today's call, IRAs and 401s are really my main wheelhouse. Even though we could talk about all the other ones if you really wanted to.

Okay, so let's talk about your specialty. So again, rename your specialty self directed IRAs and 401ks.

Yeah, so we really focus on self directed 401k solo ks as what a lot of people call them. The IRS has a term for them. They call them one participant 401k plans. So you can actually go to the IRS's website and look that up and they'll talk all about that.

Most people think that if you're going to have a 401k, you know, they associate that with a, you know, working for a large company. Do you need to work for a large company or is this for entrepreneurs who have their own businesses or can anybody do it?

Yeah, that's a great question, Jason. Let me back up for just a second and we'll think about the IRS in general and the tax codes. And you and your listeners all realize that there are really two tax codes out there, right? There's the business owner tax code and then there's the employee tax code. Of course we have investors as well which fit in a little bit differently. But from the tax code perspective, the IRS is much more lenient towards businesses. Right? I mean I think we can all agree on that. There are a lot of deductions and write offs there. The consumer tax code, you know, for earned income is the highest tax rate you could possibly be at. No one really wants to be there. You want to minimize your tax obligation as much as you possibly can. That's where the 401k plans come in. These are business style qualified retirement plans. The IRA is a consumer driven retirement plan and it was brought about because consumers, individuals wanted additional ways to save money. Well, if we look at the top level of these plans, you notice the contribution limits. For example, IRAs are tapped out at $6,500 a year. 401 plans can be 10 times that much. So when you're thinking about it, yes, they are designed for businesses and business owners and especially the corporate America because that's who really lobbied for this and who really wanted it. But when it comes down to it, the IRS has a specific page and section on their website that talks about a one participant 401k plan, meaning that as an individual, if you want to go out there and start up your own business and be a solo entrepreneur, when you're getting going, you can have a 401k plan. So no, it's not just a Fortune 500 thing or a big company thing. Anybody can actually have one. But of course, when you have the business income, that's where you can funnel that money into a retirement plan, shelter it from taxes, and then of course, use that for various investment opportunities.

Okay, so is the only advantage the fact that you can contribute more to that plan and grow it faster and have more tax deferred income in there?

Well, you know, that's one of the biggest advantages, that you could put away a lot more money. And of course, if you are a real estate investor and you're successful at it, then you want to put away more money because you want to save more. And especially when you're a real estate investor, you want to grow that money tax deferred. So of course, if you can put more in, then you can buy bigger investments, grow that money faster, tax deferred, which is great. The Beauty of the 401 plan is that you can also do employer contributions. So for example, if I am an employer and I am a single entrepreneur, I'm a solo entrepreneur, solopreneur, whatever you want to call me, and I'm making money in my business, then I can contribute at the employee level and the employer level. And on top of that I can take up to 25% of my net profits for a total contribution of right now it's $53,000. Unless you're over 50, then it's $58,000. And then if you couple that with, if you have a spouse, you can double that amount. Okay. So you start thinking about the contribution limits. It's massive compared to the ira. Because the ira, you can't have an employer contribution. It's just the individual. Plus IRAs have a cap. You know, if you start making too much money, you can't put anything in there. Right. If you're. So that's a big advantage that. The other side of it is if you set it up the right way, you know, the way we try and train people to do, you have a self directed portion of that, which means you can invest in anything. You're not limited to what Wall street gives you.

What is the limit for the 401k or the solo K or whatever we want to call it?

Sure. Well, like I mentioned, it's $53,000. If you set it up as the business owner and the employee and you're profitable. Now if you're just an employee, then it's $18,000 if you're 49 and under, or it's $24,000 if you're 50 and older. We call those catch up contributions. So as an employee, if that's all you are, you can still contribute three to four times as much as you can with an ira.

What sort of income do you have to make to make that big contribution though? That's related to the amount of income, isn't it?

Yeah, it does relate to the income. It's all about the business. Right. So if you have $100,000 in income for your business and you don't need any of that to really live on, if you don't have mortgages or personal expenses, which we know people don't, they generally have those things, then you can contribute a lot more. So you can take the employer contribution, which will be the $18,000, I'm sorry, the employee, which is $18,000, and then the employer can match that dollar for dollar. So you have another $18,000. And then if you have profits because you have minimal expenses in your business, then you can take up to 25% of that. And the cap is of course, like I said, the $53,000 or if you're over 50, then it's 58,000.

Okay, good. So do you want to talk any more about the contribution methodologies or limits or anything like that, or do you want to now move the conversation to talk about how best to self direct the money in your account?

Oh, no, I think the contributions are pretty self explanatory and pretty simple. I mean, I think that a lot of the folks listening to this will be pretty intelligent, can figure out that they can just talk to a CPA or an advisor at some point and figure out how much money to put in. But I mean, the real power comes in, Jason, as you're well aware, when you can diversify your portfolio and choose the investments that you like.

Okay, so let's talk about that a little bit. You know, what's allowed, what's not allowed, you know, any special tricks and tactics. Like I said to you at the beginning, I really wanted this to be a more advanced conversation than the generic, you know, entrust talking to us about this, which they've done before on the show, which is, which is fine. I just think that, you know, many of my listeners, they've heard about it. It's not a secret to my Listeners, it may well be to the general public that's being hypnotized, bamboozled and ripped off by the vast Wall street conspiracy. But I don't, I think my listeners are more savvy than that.

So, yeah, your listeners are probably not going to be prone to the next big market collapse that we are all pretty sure is coming because the Fed's just been pumping money into the economy. Right.

So, yeah, it sure, sure looks like it's coming.

Oh boy, I tell you, you know that that's a whole other topic for either later or another day. But yeah, that's a big issue out there. So we want to diversify and most of the people listen on this call probably diversify using real estate. Is that a fair assessment, Jason?

Oh, yeah. Income. Property is the most historically proven asset class in the world and that's what my listeners like.

Yeah, and it's, it's great because it is, like you said, it's one of the oldest assets around. Been around since before the tablets, probably the carved in stone tablets, not the iPad. And people have been using real tangible assets for as long as we've had currency, as long as we've had money, as long as we've had anything other than a barter system and probably even before. So why not use that as a retirement vehicle or at least a way to diversify your portfolio. And of course, we can invest in real estate in a number of different ways. Of course, you just have your typical fix and flips, your rehabs, things like that. You can do that, you can participate in wholesales, you know, buying it and selling it to another investor quickly and easily and getting a little bit of profit in between so many different ways. And in addition to commercial properties, apartment homes, triple net leases, a wide variety, basically anything under the sun you can think of as it relates to real estate, you can do inside your retirement plan. That's, that's the big picture. The don't do's the things that you're not allowed to do. Don't buy art, don't buy collectibles. That's really the big thing that a lot of people say, well, I want to buy gold. And you can, you can absolutely do that, but you have to have the right kind. You can't just go out and buy an Indian Head penny and say, well, it's a great collector's item, so I'm going to put it in my retirement plan. That stuff's not allowed. But almost anything other than that, you can.

Well, I'm no fan of Gold. I'm definitely not a gold bug, you know, although I talk about gold a lot because is an interesting measuring stick and it's interesting to talk about. Just touch on that for a moment, if you would. I know that a lot of people are, they're out there breaking the law and what they're doing is they're creating an LLC inside of their plan and then they'll just use that llc, since they have checkbook control, to go buy gold or coins or whatever and have possession of them. And that makes it not an arm's length transaction. Is that how that works?

Yeah, that's exactly right. You know, the, we like to say that the IRS is part of a big dumb bureaucracy that's never going to figure it out.

Yeah, they're not, they're not that dumb.

That's what people think. They think that, oh well, they'll never find me if, if, because I'm just one investor. And they'll never figure it out because I, I file my taxes and I pay my taxes. Right. That's what so many people think.

But the reality is this does not sound like a good strategy. Yes, go ahead.

The reality is, you know, as they're hiring more IRS agents out there, people that can do audits, they're going to start digging into these things. And if they find that there are these shady transactions, things that are happening out there don't really make sense, they're going to dig into it. And if one of those transactions is my IRA, my 401k bought an LLC, everybody seems to think that's where the line of the sand stops. Right. Everybody says, oh well, I purchased membership units in LLC or I purchased stock in a corporation. That's all the IRS are going to care about. As long as I show that on my return, I file that with my 5,500. The truth of the matter is they're allowed to audit the LLC too. So they're going to go in, they're going to look at the LLC and they say, okay, show us your book. Show us, prove to us that these are arm's length transactions, that you are doing things on the up and up and you're not buying illegal investments. And you didn't just create an LLC for the sake of buying and trying to hide assets from the government. You know, they've gotten pretty smart about that. They can figure out how to spot shady investments and people that are trying to just hide from the government in various senses. And they're going to go after those people. And as soon as they find you, trust me, they're not going to stop with the first penalty they find. They're going to keep digging and digging and digging. And if you're going out there and forming an LLC simply for the purpose of purchasing assets that you like but are not qualified, the IRS is gonna go after that, they're gonna fine you, they're gonna penalize you, they're gonna tax you accordingly, and basically you lose the entire qualified status of your retirement plan, which no one really wants to do that.

Yeah, absolutely. There's enough tax benefits out there. You just learn how to work the system and do it legally. And that's a much better strategy. So totally agree with you. Okay, so talk to us about some good strategies. You know what, what are some of the best ways to self direct, you know, any little tips and tricks that maybe the, the typical self directed investor doesn't know?

Yeah, well, I will tell you there, there are two real broad categories when it comes to using retirement plans. And a lot of people, when they're thinking especially about real estate, they think of being an active investor. And that's the first big no, no, you don't do that. If you are an active investor, it means that you are taking money from your plan, you are using it for your purposes. You are going out there and actively doing the work on the property. That's not allowed. Okay, we don't want to do that. So that's a big no, no, the other way, the right way is being a passive investor. And that's really the whole point of retirement plans in the first place. They're giving us this incentive to put money away for our future so that the government doesn't have to support us. And we know that's not exactly the way it's working out for everyone.

Yeah, don't go with that business plan. That's not going to work.

Right, but unfortunately, you know, when people are putting their money away, they're thinking, okay, well now I want to be in control of it, I want to do something with it. And that's not really what the intent was. The intent was for you to put it away so you don't have access to it so that you can't screw up your retirement. I mean, because let's be honest, the vast majority of civilians, consumers, individuals out there just never got that financial education. They don't know how to invest. And as a result, they've lost a lot of money over the years. The securities Commission came out in 1933 and 34 after the great Depression. And as a result of people losing all their money. So that whole process, that's a long tail, but the whole intent there is to hand your money over to somebody else who is supposedly, and I put that in air quotes there, qualified to invest your money for you. Alright, so that's the intent. The loophole is the self directed aspect of it, which allows you to direct your investments, but you are still not supposed to be putting that money into your own personal bank account. Alright? So in the broadest sense, we want to be passive. Now as far as strategies go, I mean as many as you can possibly think of where it's still an arm's length transaction and you are a passive investor. So one really good example is an individual that understands the real estate world wants to be involved in it, has done deals on their own outside of their retirement plan, but they really don't want to actively manage their qualified money because they're not allowed to. And so they find somebody else who's also really good at investing and they become equity partners. You can lend out your money, you know, become a debt partner and just lend it out for a fixed rate of return. Or if you want to take an equity stake by investing into somebody else's llc, fund syndication, corporation, whatever the case might be, as long as you are still a passive investor in that capacity and you're getting a return, that's a great way to do it.

So the only problem is you're violating commandment number three, which is thou shalt maintain control. So you, you're relinquishing control to somebody else, which you know is. I like being a direct investor, but, but you know, some people do this stuff. So I get it.

Well, and that's my point. You want to, you want to go with somebody that, you know, somebody that you know can do the business and you know is going to do the investment the right way. So for example, in my business we do real estate investments and we do developments as well. So we actually raise money from people who are self directed. If you want to stay, and we tell this to all of our clients to stay self directed, to have it set up the right way. Just to your point, you want to have control. When you invest in Wall street, you have no control whatsoever. When you invest in a private company or a private deal, then you get a promissory note, you get a mortgage, sometimes you get preferred rates of return, stocks, things like that. And you have a lot more rights when you are a private investor in a private deal than you do in any public Entity.

Yeah, that's, that's a great point. I agree with you there.

And so I think that's, that's one of the ways you can be very hands off as long as you trust the individuals that you're working with. And, you know, I mean, the, the investors that invested in Facebook before it went public, they were all private investors. Anybody can do that too. But me personally, I, I would have to know Mark Zuckerberg in order to invest in him before he ever made a single dime in Facebook. Right. So that is one strategy. But of course, you know, it all depends on the individual. If you are a Marc Andreessen and know a lot about the tech world, then sure, investing in a private company, that's pre revenue, go for it. But that's not my wheelhouse.

Yeah, highly risky though. A lot of those don't make it. Exactly, exactly. Right. We hear about the ones that do. We never hear about the ones that don't.

Yeah, the 99 percenters that don't make it.

Exactly, exactly, exactly. Okay, good. So what's the strategy there? I'm not sure we made that really clear to the last listeners. We got a little bit diverted there. So go back to the strategy. Like, what was the point of saying that?

Sure. So. Well, the strategy is that you want to maintain control, like you said, Jason. And how do you do that? Well, you can write a check. You can have a checkbook, control, retirement plan, 401k, IRA, however you want to set it up and you write that check for the investment. But when you write that check, you don't just want some sort of stock certificate, you want some sort of ownership that's going to give you a voice in the company or the deal. You're not allowed to be the active manager of said company. But let's say, for example, there is a syndication, a commercial property that's going to be a couple million dollars and there's five of you going in on it. One person is going to manage it. That person cannot be a retirement plan investor in that deal, but the other people are putting their money in. They have a promissory note which gives them ownership in, or they get that rate of return plus they have a mortgage, which means that if that person ever goes into default, then they get that property back as well, just like a bank. So you're using the same strategies as a bank, but on a much lower, more local scale where you have control.

Basically, that's being a debt investor, a lender, a hard money lender, basically.

Yeah, right. Yeah. Yeah, you can be, you can be a lender in that case. Absolutely. You know, other, you know, if you want to be a more, a little bit more hands on, you can still do fix and flips or buy and hold strategies. The only thing to remember there is that you cannot take a salary from doing that. So if you are a fix and flip style investor, you can't actually be picking up the hammer and nails and going out there and doing the work and then paying yourself. And even if you think, oh well, I'm not paying myself, I'll do the work for free. If the IRS ever audits you, they look at that and say, well, no one else would ever do this work for free. So you basically did this work for a salary even though you didn't take a paycheck. And as a result, we're going to call that a disqualified transaction, a prohibited transaction. And as a result, we're going to take away the qualified status of your plan, tax you and penalize you.

Yeah, yeah. See our investment strategy is really perfect for that because you, you know, our clients, they're never going to have a problem violating that rule because they don't pick up hammers. You know, they do armchair investing. Okay. And so that's perfect for that. Exactly. Okay, good. So their investments are in diversified areas all over the country. So makes a lot more sense. Makes a lot more sense. They're not going to have a problem with those rules. Okay. So you know, any other tips that you want to share, strategies people can use? And I want to talk to you a little bit about Wall street in your former life next. So just to close up on the self directed portion.

Yeah, you know, I'd say if you're going to have a retirement plan, then you want to have the best possible chance of succeeding in whatever investment that is. And you have to maintain a certain amount of control in order to do that. Most people just hand over control to somebody else and they hope and pray that they're going to get the right type of return. And if you're a savvy investor and you know what you're doing, there's absolutely no reason to do that. You, you can have a hands on type of approach to your retirement as long as you take a backseat, like you said, armchair type of investment opportunity, then the sky's the limit.

Yeah, good. Okay, good stuff. So I, I'm curious, I'd like you to share your story for the listeners, if you would, about how you got into this. I mean, you were a financial advisor, a Financial planner before, right?

Yeah, that's right. I started out in financial planning in 2003. I actually bought my first property when I was 21 years old and started out in financial planning the same year, ironically. And what I realized was that I liked real estate investing a lot more because here I am, I was in the Navy at the time, bought a property, no money down, used a VA loan, and then had my buddies paying my mortgage. So it was perfect. In the process, I went out and I got my financial planning education, became a life insurance guy, started helping people, underwriting mortgages and working on my security stuff. And I just realized that it didn't really make sense. Here I am sitting in a house that's basically paying me to live there. And I'm also trying to help other people invest their money. But my strategy is working out way better than the stock market is because we had the dot com crash and just watching 40, 50% of people's wealth evaporated. So I tried it out for a while. I thought, okay, well, maybe if I learn more about finances and financial planning, I'll understand financial education better. I can teach people, so on and so forth. Then we get into the housing bubble. Real estate's going great. All of a sudden the carpet gets pulled out from underneath me and everybody else in the area. I was living in the Bay Area at the time, still doing my financial planning thing. So I'm thinking, okay, well, this really stinks because now the housing market's down and the financial market's down. What happened? And no one really knew at the time. It was. There were very few people that actually knew what happened. So I poured myself into learning as much as I possibly could about the Wall street machine, you know, what was going on behind the scenes. And I just got so disenfranchised with the company that I worked for. You know, your listeners may have heard of it. It's this little company called aig. And somehow they.

I think they've heard of that. Yeah, right.

Yeah. They're at the heart of this whole mess. And I'm just thinking, what in the world am I doing? This is just not right. I never really felt good about it because, you know, I think I've told you this, Jason, but when I went to become a financial planner, do you know how much education I actually got in valuating, evaluating and valuing companies? Absolutely nothing. You know, I never learned anything about evaluating a company, looking at balance sheets, looking at income statements, determining cash flow, anything like that.

What did you learn? I mean, was it just about the regulations and the laws. It's probably all it was about, right?

Oh, that's exactly it. Yeah. You learn all about the securities act, you learn all about the life insurance regulations in each state and the insurance authorities and all that. I mean, you learn how to take a test, pass the exam because of what the laws are. You learn very little about how to evaluate companies when you're becoming a light a financial planner. Now I do need to make a distinction here. I was a financial planner, which meant that I was getting my Series 663 licenses. I was allowed to sell mutual funds, but I was not a stockbroker. I was not what I call a fight or the industry calls a financial advisor. And the distinction there is that a financial advisor is a fee only kind of person where they will educate you and help you understand the process. They have different securities licenses they can sell not only the stocks, bonds, mutual funds, all of that stuff, but they can also advise you in other areas too. So.

But do they have any other, any, any education as to how to value companies, as you say? I mean, see, you know, all this stuff is done under the guise of consumer protection, which is BS if you ask me. Okay, really what it is, is make sure you don't create liability. If you wanted to protect consumers, you would help them evaluate stocks or the deal or the investment. I mean, that's the protection they should have is, you know, but that's not what they teach you. They don't teach you how to really help the consumer, right?

No, I always learn how to be a great salesperson, but that's about it. No, I will tell you that if you have listeners that are really confused about finances and investing, then they should go seek out a certified financial planner because they do have to get a certificate, certain amount of education before they can even get that designation. And that education does consist about evaluating companies. Now it's not.

Okay, so, so let me, let me interrupt you there. Okay? So one of my friends a few years back, and I think I mentioned this on the show before, he was getting his CFP designation, okay, Certified financial planner. And you know, he had a bunch of securities licenses, 7 63, whatever, I don't know what he had. And so he had those. And then he was going for a cfp and I said, hey, can I see all the books and stuff that you're studying? And he brought them into my office and I borrowed some of them and I just spent some time looking at those books and there was like nothing about real estate. I Mean, they did talk a little bit about like estate planning and taxation of it, but it was amazing to me that the most historically proven asset class in the world, World income, property. Income property is the most historically proven asset class in the world. It's the elephant in the room that they're not talking about. It's just mind boggling to me that they can get away with that, you know.

Oh, it is, absolutely. And I'll give you a little corollary to that. I was actually going to get my CFP and so I had to go back to school and take master's level courses on this. And we got through one section which had a brief, I think one, maybe two chapters about real estate. And I started bringing up this point because I've been investing in real estate for a dozen years now. And I brought that point up about exactly like you said, this is such an old and proven asset class. Why are we really helping people understand this? And the comments I got back was because the majority of investable assets or investible dollars are in Wall Street. That was the last quarter I was in that program. So, you know, I agree with you 100%. And really what it comes down to, Jason, is that the Wall street marketing machine controls the money out there and the securities and Exchange Commission controls investing in that Wall street marketing machine. So there's really no governing body that controls investing in real estate per se. So as a result, there's no money to be made by the government.

Yeah, it's done at the state level. And each state has its own, you know, Bureau of Real Estate or Department of Real Estate or Real Estate Commissioner. But there's just somehow, I don't know how it happened, but somehow Wall street just got all the money and all the attention. And real estate is considered this alternative investment. You know, like if you hear them talk on CNBC or any the of these commercials, you see about, you know, various financial companies, they're all about, well, if you're going to be an investor, an investor. And what about being a real estate investor? It's, you know, somehow that's not an investor. I don't get it yet. That's where everybody makes all the money. You know, it's, it's just mind boggling. It's, it's unbelievable.

Well, I think that's it. I think it's, it's a commoditized asset class. Right. So we think about it and you think about how you can actually purchase assets. It started back with the securities and Exchange act in 1933, 1934, where they established the securities Exchange Commission. And they basically said, look, you can only buy stocks and companies if they are licensed and they're registered to be a public company and if you go through a licensed broker. So of course, that regulation came in and people said, well, I want to be a Wall street broker and I want to actually sell stocks because I can make a commission for every stock I sell and sell. Of course, the companies that want to go public, they're reaching out to investment bankers who are going to raise a lot of money through these brokers. And, you know, it goes on and on and on. But in the real estate world, you know, Joe Black down the street can say, hey, you know what? I see this crap property over there. I'm going to go ahead and fix it and flip it up and turn around, sell it. There's no commission. There's nobody out there stopping him from doing it. And as a result, there's very little money in that, aside from maybe the agents or the contractors that are working on that. So no one's really clamoring to be in that industry, aside from those crazy people like you and I that do see the opportunity there. You know, no one's really marketing it out there as a great investment, except for the educators, the gurus, the people that actually want to do it.

So, yeah, and a lot of those gurus are scam artists, too. So, you know, I don't know what's worse, Wall street or, you know, the real estate guru that's a scam artist at the same time. You know, another interesting thing is that even though there are these real estate shows on tv, like, you know, Million Dollar Listing and, I don't know, HGTV and House Flippers and, you know, whatever, right? There's all these shows out there. You know, Wall street has a couple of channels, right? They have Fox Business, they have cnbc, they have Bloomberg, and they have countless publications and magazines and newspapers, whether it be ibd, Investors Business Daily, the Wall Street Journal, Money Magazine, you know, there's just a Forbes, there's a zillion magazines. My God, that are all pitching Wall street stuff. And look at who their advertisers are. They're all these Wall street firms. You turn the pages, you see who's got the ads in there. You don't see any real estate companies in there. So, you know, what do you think's gonna happen? Right? I mean, of course. Yeah, exactly. It's all about Wall street, right?

You just gotta follow the money. I mean, that's right. Really all it comes down to, as long as you follow the money, you'll figure out where it's all coming from and why it's the way it is.

And this, unfortunately, this is why the media is not critical of Wall street type investments. There are zillions of scandals, lots of investors getting ripped off all the time. Okay, but the media isn't that critical of these companies because look at who their advertisers are. You know, they can't, they just can't do it or they're, it's a suicide pact, right?

Oh yeah. And you know, there are some really scary statistics and I wish I had these right in front of me, but did you know that 30%, 30% of corporate profits in America come from the financial services industry?

Whoa.

Alright, so that means out of all the companies out there in the United States, the companies that sell life insurance, sell all sorts of insurances and sell stocks and bonds, they make up a third of the profits. So imagine how much money they have to be transacting every single year to make up a third of the profits. I mean we're the home of the largest companies in the world, the ExxonMobil, the Walmart, the Amazons, the Microsoft's. Yet for some reason the financial services market is making up a third of our profits. So that kind of gives you an idea as to why the media and everybody else is not going to bash on Wall street too much. They lobby more than almost any other industry out there and big pharma is another one of those. And as a result, you know, you and I get beat over the head with advertising and marketing from Wall street firms because they can afford to do it.

That's the way it goes. It's really amazing. It really is good stuff. Give out your website, tell people where they can get the book.

Yeah, it's self directed.com book. You can go, go ahead and sign up there, get a free copy of the book. I'll rush that out to you. And I really do appreciate Jason. I love talking with people about real estate and investing and using self directed retirement plans is just one little quill, one little feather in the hat if you will, of creating wealth. And it's just one of those things that I think so many more people need to know about.

Good stuff. Well, hey, happy investing to you and Jeff Barnes, thanks for joining us.

Thanks Jason, I appreciate it.

You know, sometimes I think of Jason Hartman as a walking encyclopedia on the subject of creating wealth.

Well, you're probably not far off from the truth Penny because Jason actually has a three book set on creating wealth that comes with 60 digital download audios.

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That's right. And to get your Creating Wealth Encyclopedia series complete with over 60 hours of audio and three books, just go to jasonhartman.com store if you want to be.

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This show is produced by the Hartman Media Company. All rights Reserved. For distribution or publication rights and media interviews, please visit www.hartmanmedia.com or email media hartmanmedia. Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax, legal, real estate or business professional for individualized advice. Opinions of guests are their own and the host is acting on behalf of Platinum Properties Investor Network, Inc. Exclusively.