The First Million Is Always The Hardest
The First Million Is Always The Hardest podcast is your introduction to the mindset and mechanics behind success. In this podcast, host Bo Kemp breaks down why the first million —whether in dollars, impact, or purpose — is always the hardest milestone to achieve.
The First Million Is Always The Hardest
Ramez Fakhoury on Self-Directed IRAs, Real Estate & Buying Businesses
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Video Version: https://youtu.be/UC2UfHim0Qc
In this episode of The First Million is Always the Hardest, host Bo Kemp sits down with Ramez Farkhoury of the IRA Club for a practical conversation about how investors can use self-directed IRAs to build wealth beyond traditional stocks and mutual funds.
Ramez breaks down how self-directed retirement accounts can give investors more control over where their capital goes — including opportunities in real estate, private lending, and business acquisitions. Bo and Ramez explore how everyday investors can think differently about retirement savings, not just as money sitting in an account, but as capital that can be directed toward ownership.
The conversation focuses on two powerful uses of self-directed IRAs: investing in real estate and buying businesses. Ramez explains how investors can use these accounts to participate in rental properties, private deals, and acquisition opportunities while staying mindful of the rules, structure, and compliance requirements that come with retirement funds.
This episode is about expanding the definition of investing, using retirement capital more strategically, and understanding how ownership can become a path to long-term wealth.
Because the first million is always the hardest — and sometimes the capital to begin building it may already be sitting in your retirement account.
Hello, it's Bo Kemp inviting you to the Achieve Summit 2026, Chicagoland's number one business, entrepreneur, and real estate event. It's all happening June 4th through 6th at Win Creek Casino and Hotel. Join this three-day immersive event that will transform you from operator to owner. Whether you're looking to acquire a profitable business, develop a high-value real estate project, or scale an existing business, the Achieve Summit provides the live marketplace and technical tools to make it happen. And this year's keynote speaker is business leader and philanthropist Marcus Lamonas. For information into secure your tickets or sponsorship, visit at southlanddevelopment.org. See you there. What if some of the capital you need to invest in real estate or buy a business is already sitting in your retirement account? Today on the first million is always the hardest. I'm joined by Remez for Cori of the IRA Club to talk about self-directed IRAs and how they can be used to invest beyond the stock market. We discuss real estate, business acquisitions, private deals, and the importance of understanding the rules before you move. Because the first million may start with capital you already have. Welcome to the first million is always the hardest. My name is Bo Kemp. I'm really excited to have you here. And just for the listeners and viewers, uh tell us your name. Tell us a little bit about you and your organization.
SPEAKER_01My name is Ramos Fakori. I'm the VP and one of the managing partners of a company called IRA Club. Um a little bit about myself. Uh ha just welcomed, as we just talked about, the newest edition of the family. I have a daughter, Ava, my wife, Vanessa, and this is where the story will get a little bit funny about myself. I come from the hospitality world.
SPEAKER_03Okay.
SPEAKER_01Um real estate hospitality has always been my forte. Uh just think of the McDonald's model, right? Own the property first, uh, always uh always put a restaurant within the asset that I own, which is the property, and that would always sell it off to a restaurant group. And because we're here, obviously in Chicago, just think of Let Us Entertain You, Mia Francesca is the Boca group. So very well connected in that industry. Um, how I switched over to finance and over to the IRA club. Um you ever see the movie Goodwill Hunting?
SPEAKER_02Of course.
SPEAKER_01Okay.
SPEAKER_02How do you like the maple?
SPEAKER_01How do you like actually how do you like uh this slogan where he says at the very end, went to go see about a girl? Remember? So it's always when you make a decision like that, it's always uh uh geared around a woman who I was dating at the time. Uh where the story again gets funny is fast forward, um she worked at a company called IRA Club.
SPEAKER_02Is that right? Yeah.
SPEAKER_01So she was the first employee by our president and founder, Dennis Blitz. Uh and for those I was just telling you who don't know who he is, he's very big deal in our industry. I call him Mr. Compliance. Sometimes I walk around the office and call him Master Yoda. Um but he's the man who wrote the text and the test for your series license, like a series 367, 65, 66, and so on. But um, yeah, again, very big deal in our industry. But he um hired uh Vanessa at the time, and I used to just travel with her because even today we're on the road, probably about 120 to 130 days out of the year, team of seven that travel all over the country, uh educating people on this specific strategy, which we're gonna jump into in a split second. But um fast forward, she used to invite me to these events, the same events that I actually teach and educate.
SPEAKER_02She was slowly getting you in. So jumping you in the middle of the year.
SPEAKER_01She was just pull pulling me when I thought I was out, they pull you back in. But um I never left. So I she invited me to Vegas. I I went to this event and I just never left. I just sat there and listened to all of these individuals, such as yourself, right, teach people these different types of strategies, right? And this just so happened to be one called self-directing. But fast forward, got married. She is still at the company until today. Um work with your wife. So, yes, yes. Let me let me tell you something.
SPEAKER_02I fast forwarded a little bit.
SPEAKER_01Away from here, I actually tell people, you know, I I uh uh uh why, why that transition, you know, from and I was doing very well to be honest with you in the hospitality world, but why? Um sitting on a beach in Mexico, uh the president of our company's wife, Gail, asked, So what's the next move, Rams? And I said, What do you mean, Gail? I'm gonna sell off all my restaurants and buy a piece of the IRA club. I said it as a joke. Turned out about three weeks later, they showed up at my wine bar, the last wine bar I opened up called Angelo's wine bar, still there in Ravenswood Manor area, and uh and uh shot up. And um uh I literally called my restaurant broker up. I said, sell all my restaurants. And that's how I got started in the industry. That's awesome. But fast forward to IRA Club, um, Dennis started an investors club, and this club just kept getting bigger and bigger and bigger. And the next thing you know, he's like, you know, he's teaching this self-directed strategy, which we're about to talk about, to real estate investors, right? And hence IRA Club was born in 2008. You know, fast forward, we're here. We have open and funded just over, I think, 23,000 plus accounts, uh, manage a little under, I think, 1.6, 1.7 billion under administration, or assets uh yeah, assets under administration, please forgive me. And um and the best analogy when talking about IRA Club, when I think about it. Help people understand exactly what that is, is is just many of us that are are gonna be listening to this have accounts that say at Fidelity Vanguard or Schwab, right? We refer to these three companies as the titans of our industry. They pretty much control it all. And when you say control it all, you're talking about $45 trillion, right? And and they control just under 70% of this. And what most people don't know is um when you have a 401k, in particular an employer's 401k or an IRA, you're you're you're you're you're tied into the traditional sense of stocks, bonds, mutual funds.
SPEAKER_02It must be a security.
SPEAKER_01Yes, must be a security, sometimes a publicly traded REIT, right? Um, and and that's what you're limited to within a retirement account. And what most people just don't realize, 97% of Americans leave their money in three places, which is a scary thought. Banks, right? Right, and their product is the CD. And CDs, let's say, weren't doing too bad. You know, after the pandemic, you could get 5% just sitting there doing nothing. You know, annuities were number two, right? Insurance companies selling annuities in particular, fixed income annuities were heavily targeted the last three, four years. And then lastly, the majority of that, I would say 92% is sitting within the stock market. Now, um, again, what most people don't understand when the analogy better yet that I like giving is when you think of IRA Club, I want you to think of Fidelity, Vanguard, and Schwab in the same manner, right? They're a custodian, trust company, TPA administrator, IRA Club, think of us in that exact same manner. The only differences between us is I'm going to let you pick and choose your own investments. The term actually self-direction means control. And I'm taking the control away from them and giving it to who? You. Because who's going to care more about your money than you do, right? At the end of the day. So that is the story of IRA Club, how we uh uh initially started. And uh fast forward to today, where you know, we we we launched uh a new branch of our company. We actually are officially a broker dealer. We are the first in our industry to also launch an AI trading platform where the AI is buying, selling, and holding on behalf of the retirement account. And this isn't like, by the way, this isn't like you're throwing it in ChatGPT or Claude. This is an actual algorithm, machine learning where the algorithms are being managed by the AI, right? The beauty of this is it helps protect and preserve something you can't touch until you're 59 and a half, anyways. So that has been a new feature of the IRA club in the last four years. And then as of recently, in the last uh year and a half, we launched IRA Club SBS, which stands for Small Business Solutions. And imagine, and you and I talked about this a little bit uh previously, you know, our message was always tailored to the individuals, right? You know, if you're the sole proprietor of your own company or if you had an IRA account and you wanted to self-direct into alternative assets, where now I could also offer this to a business owner that has W-2 employees. So picture that. I mean, the next evolution of self-directing into alternatives is now given to an actual company. And I think that's just for me is the icing on the cake.
SPEAKER_02Well, we're really excited to actually have you all as sponsors of the Achieve Summit that's coming up June 4th through 6th here at the Wind Creek Casino. And this is gonna be an opportunity for us to really start to educate those folks who are both aspiring and are already in this space. I'm one of those people. I've had an account, a self-directed account, separate from my IRA and regular 401ks at the Schwabs of the World, where I can make direct investments in real estate and operating companies, you can buy crypto, you can do all these things directly in a way that you cannot with a traditional IRA. And for me, uh it's been important because mostly I've wanted to make direct investments in the company. You know, I come from a venture capital and private equity background where I um and I've raised venture capital and private equity myself, so I've been on kind of both sides of that. And I've wanted to be able to use my 401k, which is one of the large sources of cash, actually, that I could never access. So for me, what was exciting is oh, there's this money that I couldn't use for anything else other than buying and selling essentially stock and you know uh indices. Now I can actually make a $25,000, $50,000, $100,000 investment in a company that I see a future. The next, you know, uh Netflix, the next Tesla, the next, you know, Google. Um, and that is really exciting.
SPEAKER_01So think of Peter Teal. I mean, just exactly what you're describing. He did the exact same thing.
SPEAKER_02$5,000 into $5 billion or something.
SPEAKER_01Yeah, yeah, yeah. He actually uh invested, I think it was like uh originally $2,800 from his Roth IRA account into PayPal, right? Uh a and I think that just catapulted him to I think he's just under $5.2 billion tax-free growth. So I think it's always just a great analogy of what you were just trying to describe. Um and it's so funny. And for those that are going to be joining us at the Achieve Summit, uh just like yourself, that are possibly even maybe raising capital, right? You're a private equity firm or you know, you're just somebody that you know is looking to raise capital. This is just another source or avenue that you should be tapping into at the end of the day. And what IRA Club helps do is believe it or not, but we have over, I think, 1,200, 1,300 sponsors, you know, capital raisers, um, you know, uh precious metals companies, just like you said, uh firms that that we help their investor students um educate them through this process of opening funding and investing. Yeah. It's and it's not difficult, right? It's just you got to start off with a very simple question is um, yes, I'm very much interested in investing in this deal, great opportunity, like what you just described. Did you ever consider using your retirement dollars? Right. Right? You can't touch it anyways till you're 59 and a half. It's like, why not take a portion and diversify the and you and I don't have a problem with the stock market. In fact, we offer, we we offer the stock market.
SPEAKER_02You can use that same account and buy stocks.
SPEAKER_01Yes, but still buy securities. Yes, with the IRA club, we give you the best of both worlds. Yeah. It's just again, I'm not gonna choose that stock for you. I'm not gonna choose that private equity deal or that house on 123 Green Street. My job as the, not me per se, but IRA club's job, right, is to make sure that we're crossing the T's, dotting the I's, making sure that you don't cause a prohibited transaction because most Americans that do use the retirement dollars think it's they're investing with their own personal money. It is not your money, it is your retirement accounts, right? It's the IRA or the 401k that's invested.
SPEAKER_02The custodian actually is in control of that money. Correct.
SPEAKER_01Correct, correct.
SPEAKER_02Um I I you know, so I I'm excited about this, and I think there's a process that we're all gonna have to figure out of education. And the education I think comes twofold. It's one, not only how to use the account, but how do I think about what to invest. And that's a harder uh conversation. We have uh with some of the things that we've worked on uh with the South Line Development Authority, the not-for-profit that actually sponsors the G Summit and the podcast and the work that we do, we've been helping people work through how to think about like uh do I buy a company, do I buy a piece of real estate, do I start a side hustle? You know, how do I think about that? And in my mind, one of the benefits of this uh self-directed IRA is it gives you a chance sometimes to make a small investment into a space that helps you learn tremendously. You know, you are in the hospitality business in restaurants, restaurants are a notoriously difficult investment. Don't do it. Yeah, notoriously difficult investments, but they also need to raise capital a lot of times. You know, imagine if you had had this access and you could have got you know ten guys together, ten gals that put thirty thousand dollars up, so you got three hundred thousand dollars of cash to be able to launch your business. That would have been a completely different conversation than probably what you had to do in order to start your wine bars and everything else. But once people can see that path, man, there's a whole world that opens up to them.
SPEAKER_01And Bo, I that's exactly what I did was I actually purchased the real estate asset, raised the capital, right, for the restaurants, paid back my investors, and then would sell it off and keep the asset. Like I said earlier, that McDonald's model, but can you imagine if I would have done that within a retirement account?
SPEAKER_02Oh my god. And it's all tax-free. All tax free. So you're compounding the tax-free. And this is, you know, we were talking offline, and one of the things we're going to talk about at the summit is the difference between a tax preparer, a tax account accountant, um, and a tax strategist. And one of the aspects that is tremendously different is that the tax strategist is trying to help you figure out how to both minimize the taxes that you legally have to pay, and then maximize the compounding benefit of the money that you get to keep. Right? And what the IRA Club is providing in this particular product is something that does both at the same time, um, naturally, without actually having to add a tax strategist in and of itself to get there.
SPEAKER_01Bo, you want to laugh? A lot of CPAs call us because they've never heard of the strategy. Yeah. It is kind of it's I don't want to say it's embarrassing because you just don't know what you don't know, and it's not something you were taught growing up, right? This is not something you learned in school or sat at the dinner table and talking to my dad. My dad, I told my dad, you know, about 10 years ago, oh, I just, you know, I just bought, I just bought a parking spot, right? And in my Raw Fire A. He's like, you did what? And I how can you do it again? It's not just something you were, it's not even something at an advanced strategy class, even in in college. So the the and and I actually do want to take it uh uh twofolds back to what you said, which was I thought you hit the nail right on the head, is a lot of I hate to say this, Americans, and I mean this respectfully when I say this, they're not savvy investors, right? It's always it's always the same four reasons why, right, that they don't self-direct. It's it's number one, lack of education. I'm gonna start I'm gonna start off with that, right? And it's funny, is when they do learn it, um, and I I talk to so many people that are in their like you know, early 50s, maybe early 60s, they're like, it's too late for me. No, it's just too late. I'm like, I when are when is it ever too late to tell Uncle Sam to go kick rocks? Yeah. So like and the average American actually lives until almost 80, right? 79 years old. So again, this knock on wood. But the the strategy is to again get them to use a portion of their retirement dollars. It's never too late. And then it follows up with what you hear, right? And and the president of our company, Dennis Blitz, says this all the time to me. You know, I I talk to my I talk to my financial advisor. I went to my broker dealer, and what do you think, both are saying to them?
SPEAKER_02Yeah, they're telling them to invest in this uh index fund.
SPEAKER_01Yeah, this particular index fund. Yeah, or like let's just say we're at the Achieve Summit, right? And and um you learn this strategy and I wanted to invest them. Let's just say this house on 123 Green Street. If you were to walk up to your financial advisor or broker, no, you no, no, no, you can't do that. You can't do that. No, uh, that's a prohibited transaction. It's just they don't know either. So it's more so they'll try to, and this is where Dennis comes in and says, they kind of create something called artificial restrictions, right? You can't do that, but you can invest in this REIT. They'll try to like talk them into their products at the end of the day.
SPEAKER_02The alternative to the alternative.
SPEAKER_01The exactly. And and you and I both know when you talk about publicly traded REITs, the average is gonna be somewhere between two to four percent. And and just please tell me you could do better than two to four percent, please, if you're listening. Um and that's the goal, right? But then it really also um comes to identifying the investment opportunity, right?
SPEAKER_02Well, that's one of the things that I wanted to spend a little time with you on. That's not the job of the IRA club, but one of the difficulties is you have to source these deals and opportunities. You know, part of the reason I ended up getting my account was because I do get deal flow. I'm being um pitched opportunities to invest. And so I started to have to think, well, all right, I've got some cash, but I don't have nearly as much cash as I would need to directly invest in some of these opportunities. I needed to find another way to actually take advantage of the deal flow that I have. But most people they struggle with deal flow. And I'm just curious, based on your experience that, and I know you're not giving any investment advice here. Yeah, but you know, um, when you've had people that have worked with IRA Club, what have been some of the smarter strategies for them to actually develop deal flow?
SPEAKER_01Can I tell you something, Bo? Everything's got a pattern. And then and and the IRA club members that we help manage their retirement dollars, right? They kind of dictate the flow of the investment. Let me give you an example about what I'm talking about. Just a couple years ago, you know, crypto was huge, right? Especially when Trump went, everybody was investing a portion of the retirement dollars in crypto. Previous to that, it was like multifamily, right? And then everybody was investing in multifamily.
SPEAKER_02Which is still actually something I'm interested in.
SPEAKER_01It's still no, I'm just saying, I'm saying the peaks of the types of investment, the asset class. Right now, what do you think it is? Because of the war, it's oil and gas. Oil and gas, right? I so like one out of five deals that we're doing is something related to mineral rights, oil and gas. But it's kind of funny because uh it just all depends on economic climates, what's going around around us currently, within the world, a million different factors, right? Who knows what Trump's gonna tweet will determine the next big deal, yeah, next thing.
SPEAKER_02I'll tell you what it should be. It should be all of the intrinsic uh materials that are necessary to build the uh supply chain here in the United States for everything related to energy and or data processing. Because everyone's gonna need to actually rebuild their supply chains, every nation, so that they have some insulation from global risk. Um and you have to rebuild those industries. They're billions of dollars of cost um and they're not gonna be easy to do. But every time you invest in a battery company or a company that's supplying battery companies or a company that's doing something related to data distribution, you're gonna be in a space where we have to be. We don't have a choice. It's a national security and supply chain issue.
SPEAKER_01Well, you heard it here first from both. All right. I never I it no recommendations, both. But but to your point, you are in the space, you live, eat, and breathe it, you understand it, you could identify it, deals are coming to you left and right. Unfortunately, Americans don't have the type of access that you have. So the only kind of real advice, bull that I always give to somebody that is very much interested is stick to what you know and understand. I always start off with that first because again, you and I did talk about this. It is your nest egg. It is important to perform some sort of due diligence on the uh investment that you're about to do. Absolutely. Right? I'm a firm believer of that.
SPEAKER_02The goal is not to lose your money. Even though you won't feel the direct impact if you lost it until you retire, the goal isn't to lose your money. So you want to make calculated investment opportunity uh deals, not reckless ones.
SPEAKER_01Educated, right? Listen, at the end of the day, you got to take risk. We all got to take risks when it comes to investing. But you just said it. Educated, calculated risks are what you're looking for. And if you know and understand real estate, maybe you start off in that asset class, right? And and something that I always tell somebody is think sometimes, you know, hard tangible assets, right? Because your IRA owns that asset outright. That's a possibility. Um, but at the end of the day, i you know, it's it's number one educating yourself, identifying the investment opportunity, performing some sort of due diligence, and then don't worry, don't worry about opening and funding the account, right? That's the easy part. And and what IRA Club offers is is A resource, right? You don't know the answer to the question. You think you're causing a prohibited transaction. Call. You don't want form to fill out. Call. You know, I think I'm doing something. Call. It doesn't matter. Like our job is we're not a call center. You're gonna call, you're gonna get somebody on the phone, is gonna help walk you through this process because I know you don't understand it. But what I want you to do is do it once, do it twice, right? We we say this out loud, you know, give a man a fish for the day, but teach him to fish. That that that then you could pass that knowledge off to your heirs, your spouse, your children, your grandchildren. And for me, that's that's kind of why I'm on the road.
SPEAKER_02Do you get that knot in your stomach every Sunday night? You've checked all the boxes, career, title, income. But if you're honest, this is not the life you imagine. What if the problem isn't you? It's the design of your life. I'm Bo. I help high performers redesign their lives for freedom, purpose, and real wealth. Join my master class and I'll walk you through the exact framework. Go to lifedesign.com. That's L-I-F-E-D-E-S-Y-N.com. Your new chapter doesn't start someday, it starts now.
SPEAKER_00Your listening to the first million is always the hardest. We are now returning to the show.
SPEAKER_02So part of what you know we are hoping to help people do is to develop a path that they can become smarter than the average person about an area and start to see some deal flow. Um because otherwise it becomes difficult to find opportunity. Um and the reason we're so driven is not just this doesn't pertain just to the southland um of Chicago, but frankly the whole country, right? You've got the silver tsunami, you've got a bunch of baby boomers who are retiring. Um just on my way back here, because I had just come back, as I mentioned, uh from New York, I was in the car with an Uber driver who's retired, but he's driving Uber four days a week just to supplement his income.
SPEAKER_01Of course.
SPEAKER_02Um, and and that's gonna be the the path for a lot of folks. But he was in manufacturing and his manufacturing company was sold, and when he sold, he was able to retire, but a lot of the other people lost their jobs. We very selfishly are trying to identify people who want to buy businesses because we want to help them buy those businesses in our market and keep those businesses alive. You know, when a business shuts down, it it doesn't just impact the owner, but all the people who are there lose their jobs. They stop paying municipal taxes to the location where they are. They are a critical part of a supply chain that often will go away and not be kind of you know uh uh swooped up by uh others, it leaves a gap often in us, and we don't want those things to happen. We think there's an opportunity to help people to educate them about the opportunity to buy this. And we think that the self-directed IRAs is a way to help support their effort to do so. So 7A uh loans from the SBA allow you to buy a company up to five million dollars, but you have to have 20% of the money down. In many cases, you can get a half a million dollars of the million that you may have to put up in seller financing, so now you gotta raise five hundred thousand dollars. Well, you might be able to put up a hundred thousand dollars out of your uh your cash because you won't be able to use your self-directed 401k if you're managing the business, but you could raise $400,000 right from 10 friends, and each will put in $40,000 right to run this business. So we're trying to walk people through and give them a vision of how do I go from A to the end game. And I'm just curious if you've got any stories about people who've become clients of IRA that can talk about what they've been able to achieve in terms of investment opportunities.
SPEAKER_01So it it when it comes to businesses as a whole, I I like that you said that by the way, a lot of individuals do try to use a portion of their retirement dollars to open up their own businesses. And you and you can't do that. It's prohibitive, right? It's a prohibitive transaction. So your strategy was, and we see this firsthand at IRA club all the time. People will invest up to, as long as they don't own 49.5% of that company, as long as they're not a managing partner, that is probably one of our biggest um types of investment opportunities that we see people using a portion of their retirement dollars. It's just um they um a lot of people try to do something on the backside where they'll try to set up something called a checkbook IRA LLC, right? To get I don't know what that is actually. So, okay, a checkbook IRA LLC is another level of control where we open up an LLC on behalf of that individual's IRA account. So you open up an IRA, we open up an LLC at the same time, we open up a bank account for them with our bank, and then we move the money from the IRA account to basically the LLC, give you full control of your own money within the LLC. The problem is these 88% of the time, this is where people start to do prohibited transactions. Gotcha. So this is the this is the things that we're always afraid of because I can't control what you're doing behind you know the IRA club's back. And we see that firsthand. And the question I get quite often is like, well, how's the IRS ever going to know about this? Well problem is that once they do, yeah.
SPEAKER_02If they never find out, that's one thing, but when they do know, when they do.
SPEAKER_01And and the uh the analogy that I was like giving is how many times have you and I both rolled a stop sign or kind of blew a red? Well, just never never, right? And me who has a big smile across your face. Just because the officer isn't there in the corner to catch you, does that make it right? But if they were to catch you, that I mean you're talking about a significant ticket. You're talking about potentially tens of thousands of dollars of taxes that you're gonna have to forfeit, plus a 10% penalty. So just be careful on the way that you are utilizing these retirement dollars.
SPEAKER_02Take that checkbook idea. What are the smartest ways that people have used a checkbook LLC in a way that is compliant?
SPEAKER_01Three reasons. Three reasons why I tell people about a checkbook IRA LC. Number one, you are at an auction, right, trying to buy a house where you need access to the money quickly. Or you're uh trying to jump on a tax lien, right? Uh Kakani Assessor's office, boom, boom, boom, boom, I need I need access to the money right away, right? Or you are doing fix and flips where you constantly need to be managing that money instead of getting a hold of the IRA club. I need $10,000 to do, you know, this hardwood flooring. That's an example of three reasons. But outside of those three three reasons, I tell people just don't bother, let us do the work for you. And the funny thing is, it costs you more money to actually set up these accounts versus us administrating these accounts.
SPEAKER_03Yeah.
SPEAKER_01And it's just not worth it, right? It comes down to do you want to be the bookkeeper or do you want somebody who's a professional to be the bookkeeper? Yeah.
SPEAKER_02And I want you to be the bookkeeper. Of course. You know, so I've I've used my account for um different things. I've made direct investments in um uh actually I've made loans to businesses, convertible uh loans into businesses. I've made equity um investments into businesses. I've actually invested in uh trust or or venture capital funds. Um I um I have not, but I'm looking at private lending. Um I list these as just examples to get a sense of how I might be able to use the IRA club for any one of these.
SPEAKER_01Bo, real simple. The only three things that you could not use your retirement dollars to invest in, only three, whether it's IRA Club, Fidelity, Vanguard, Schwab, or one of the other 10,000 brokerage firms, it is your own life insurance policy.
SPEAKER_03Okay.
SPEAKER_01You could not invest in an escort for obvious reasons, you're already getting the tax benefits. And three, collectibles, right? So think think of an antique car or antique uh bottle of wine, right? My limited edition, Michael Jordan.
SPEAKER_02Yes, small cars, I can't buy it.
SPEAKER_01Or or my daughter stick figure that I want to buy for a half a million dollars with my Roth. Or art. Which is unfortunate. Well, here's the thing is there are loopholes where you could invest in a 506C, so you can invest in the fund, and the fund will buy the art. Okay. So there are loopholes, like right, cannabis is another big one. Because uh an IRA or 401k, for example, is a federal product. Cannabis is a state product, which means they can't coincide with each other, right? But there are loopholes. Well, what's a loophole? You can invest in the infrastructure that grows the cannabis, right? That is a loophole that we see a lot of IRA club members doing, right? So it's everything else, bro, it's fair game. The only thing I can't do is point at it for you. Yeah, yeah.
SPEAKER_03I can't tell you where to go.
SPEAKER_01Yep, I can't talk about companies. I cannot talk about the investment opportunities, I can't give recommendations. My job is to make sure that you are doing your job correctly. And again, I just always fall back to please, please perform some sort of due diligence on the company. It is your again, nested, protect yourself. The only other thing, honestly, that I do want to just a little bit focus on that most people are just really oblivious to is fees.
unknownYeah.
SPEAKER_01Fee That's important. Oh, by by far and away. And and again, if you do have an if if you are listening in, and if you do have an employer's sponsored 401k plan, 403B, 457, any one of these, right?
unknownYeah.
SPEAKER_01Most 88% of those types of retirement accounts are invested within a mutual fund.
SPEAKER_03Yeah.
SPEAKER_01Because that is their definition of diversification, which is large, mid, small, international.
SPEAKER_02It is technically diversification.
SPEAKER_01It is, it is, but not in not in the the the sense of what me and you talk about.
SPEAKER_02It's not asset class diversification generally, it's security diversification.
SPEAKER_01Correct. The point is if you look this up, go Google these numbers yourself. But the national average is about 2.27%.
SPEAKER_02Okay.
SPEAKER_01And we stare at these statements quite often. Yes, correct. The fees within the 401k plans. And and we don't believe in a percentage-based model at the IRA club. We believe in flat fees. Right. And and for us, let's just think about this out loud. If you had $100,000 inside a 401k plan, right, with your employer. And um and uh you for per $100,000, there the national, like I said, the national average is $2,200 per $100,000. Right. Think about that. The only time they can get a lot of money. And the only money is a lot of the only time you get very quickly. And the only time you get paid is when? If the market's up. If the market is flat or down, are they still taking their cut? Absolutely. Of course they are. So the IRA club, we charge $195.
unknownYeah.
SPEAKER_01Right? And we don't care if you have $10,000, $100,000, a million, or $10 million. What's the most that we could take from you? It's $195. The follow-up question is well, how does IRA Club make any money at $195? And the answer is we want you to invest in multiple assets. And per asset, we charge an additional $195. Gotcha. Which is substantial.
SPEAKER_02The more investments that you make, the more revenue you make. Correct. And that's because there's more cost for you to make sure you maintain the compliance for each investment.
SPEAKER_01Correct. And it's the paperwork doesn't change for us. And the only other thing is, and as much as I love my industry, and I'll never badmouth my industry, is many uh uh self-direct RA companies are now switching over to this percentage-based model as of recently, which is kind of bothering me because and I get it, you know, the cost of everything has gone up, inflation and whatnot, you know. Um, but at the end of the day, you know, it's it's it's important to understand fee structures. Again, 68% of Americans don't even know what these fees are, how to find them, how to associate them. Um, and and they can be very minute, right? We call them hidden fees. I refer to them as termites nitpicking at your retirement account. But you got to be aware of them at the end of the day, and I think it's very important that you understand it will cost you um tens of thousands of dollars throughout the longevity of the retirement account.
SPEAKER_02So talk a little bit about the role, if any, um, of what happens when someone exits one of the investments that they've made within the IRA club itself. So I've made a self-directed investment. Um the company was bought. Um I ended up getting a return on my investment. You know, how do you facilitate helping a person who's got an account with you think about what to do next? I mean, you're not obviously still giving any advice. Club, great question. I don't know because I have not had an exit yet. Yeah, yeah, yeah.
SPEAKER_01But well, what's the next step? Yeah, yeah. Great, great, great question. So again, in and I'm so happy you actually bought this up because four years ago, five years ago, I I sat down with the principal partners of IRA Club, right? And and and we only offered alternative assets. And one of the things that I wanted to do, because the markets around the you know the time of COVID were very volatile. Right now they're very volatile, right? So a lot of uh individuals that, and and to your point, you know, had an exit, right? Or let's just use the analogy that everybody could understand. Let's just say you had a house on 123 Green Street, and your IRA owns that asset, and the rental income, let's say, right, you have a tenant in there, the rental income is not going back to you, right? It's going back into the IRA or 401k account, tax-free or tax-deferred, depending on the type of retirement account you have, traditional Roth. And also understanding that all um expenses must come out of that retirement account, right? Investment uh, investment fees, whatever the case may be, must come out of there, right? Um, or something that you need to fix within the house. Um But for years, right, for almost 15 years, we never had a solution for what you just described, right? The the you had an exit, the money came back to the IRA account, you had rental income coming back to the IRA account. So, what do I do with the money that's just sitting there? Well, for over 15 years, Bo, they were just shifting that money right back over to Fidelity, Vanguard, and Schwab to invest back in the market. So when I reached out to the principal partners, including Dennis, said, Why aren't we doing the same thing? This is where we officially launched the broker dealer. Gotcha. And we partnered with our uh a company called uh iFlip, right? They were they own a piece of the same broker dealer. And like I said, they're the tech company behind the AI-driven solution. We call them AI smartfolios. But once that money comes back into the IRA, we educate our IRA club members to shift that over into the market. Let the AI buy, sell, and hold on behalf of your retirement account, depending on your risk tolerance. You could also go into certain sectors like tech, energy, oil, you know, the SP, you could pick your own stocks, whatever the case may be. But you want that money always working for you. We never want money sitting doing idly nothing, right, at the end of the day. But it is a solution to our clients. Not to mention, IRA Club does have a um uh a platform called Investors Row. And you'll appreciate this, Bo. IRA Club, as I told you, used to be right next door to where we're actually sitting down for over a decade. And we actually moved um in between uh uh Michigan Avenue and um Wallbash, right? So, what is Wallbash known as in Chicago?
SPEAKER_03Yeah, Princess Row.
SPEAKER_01No, actually, that's Jewelers Row. Wallbash, Jewelers Row. So I gave it the name Investors Row for that reason. That's a little story behind it. But investors Row is an educational platform to discover different types of investment opportunities. And they vary, and we work with a lot of different broker dealers. We have about 25 other broker dealers that we work with, and these broker dealers could also have Reg A or Reg C F offerings for as little as $2,500 to $5,000. So even if you're getting rental income back or to your point, a dividend, royalties, whatever it is, back to the IRA account, there are other solutions that we could get you involved in. I'm still not gonna choose the investment for you or the company, but we do educational webinars, we teach you about these different asset classes before you jump into them to have you, because at the end of the day, we want to network, talk to each other, educate each other. And the goal is just to open up doors and opportunities.
SPEAKER_02So two things I want to talk about just before we finish. One is a little bit more about the AI trading opportunity and how that actually works, right? So explain how you leverage I've got money in my account through the IRA Club account. I want to take $25,000, I'm making up a number, and I want to uh work with your AI trading service, and I want to specifically target infrastructure, AI infrastructure related businesses. Let's just say that's what I want.
SPEAKER_01Awesome.
SPEAKER_02How how how could you guys work with me to help me do that?
SPEAKER_01So the first thing we would do is number one, I'm not gonna presume I know much about AI, right? I'm not I'm tech savvy to some degree. So to be clear, the AI uh think of this. Um, let's start with the movement of money, all right? So remember, because we're a broker dealer, right, and we work with iFlip, right? It all we did was create literally a funding link. You would click on the link because it's still a self-directed retirement account. You will have to move a portion of your money over to your brokerage account.
SPEAKER_03Gotcha, right?
SPEAKER_01You click on the link, you're gonna put your first name, last name, your IRA account number, and the amount that you want to roll over. Submit. It will move from IRA Club, your IRA account, to our clearing broker, which is APAX Clearing, right? And then you can now pick and choose one of the AI smartfolios, or in your case, you could customize an AI smart folio. So you would click on the custom button and you could pick those stocks of your choosing and buy and let the AI basically buy, sell, and hold. And the best way to describe the AI is think of this. Think of um thousands of algorithms, right? Um attached to multiple companies, just like each company, let's say, has an AI. Um, and an AI, I'm so sorry, an algorithm. And for those that don't know what an algorithm is, it's a mathematical equation, right? A lot of people recognize it in the traditional sense as a roboadvisor. This is not a roboadvisor, right? The AI is managing the algorithms on when to buy, sell, and hold. And when does it buy, sell, and hold? There's a lot of different variations, right?
SPEAKER_02I can actually customize that a little bit. I could say, hey, if you know this sort of thing happens, I want you to think more about holding versus selling.
SPEAKER_01Yep.
SPEAKER_02You know, if this sort of thing happens, this is when I want you to buy. Yep. I can customize that.
SPEAKER_01Yep. So within my actual account, I have six different accounts. I have a traditional, I have a Roth, I have a simple IRA through our company, IRA Club. I have my cash account, and then I have my kids underneath me, right? Elias and Ava. And the AI, depending on my kids, I have them all an aggressive. Me, I'm aggressive by nature. Right. Maybe by the way, I'm talking, you can probably figure that out by now. But everything I have is pretty much aggressive, and then the AI will literally, you're not touching it, will buy, sell, and hold on behalf of the retirement.
SPEAKER_02And so can you also tailor that to be day trading by sell and hold? Or not by sell and hold, but or or is it always kind of long-term perspective?
SPEAKER_01It's a long-term perspective because again, it's a retirement account. The job of the AI is to protect and preserve something you can't touch from the market drops. So, for example, I'll give you just I'm using me as the example. Um, my Roth IRA account, which is a demo account, I started it back in 2021. But in 2022, which is like the peak of you know, COVID, trillions of dollars went into the economy. You saw you saw a spike right in the market, everybody was loving life. And then in 2022, what happened? A 401k, especially an employer's 401k or IRA, according to Fidelity, these are stats you could go look up yourself, lost about 20%. Yeah, versus the AI um protected my Roth IRA IRA account and only lost 3.7%. Gotcha. So I tell people, would you rather lose 20%? Or would you rather lose 3.5%? Yeah. And that's a and that's what most people don't understand is when you think of those big market drops, like 2008, for example, many of us remember that, right?
SPEAKER_02Unfortunately, yes. Yes.
SPEAKER_01And and that's what most people, again, don't understand. The greatest asset in my eyes is time.
SPEAKER_03Yeah.
SPEAKER_01And when you lose half, like think about this. You're about to retire, you're almost 60 years old. You had a $600,000 enough for and you lost half. Well, guess what? You ain't retiring anymore. That's right. Now you got to work four and a half years to get to that break-even point before you even consider, you know, thinking about retirement. And that's what the AI does, is it protects you.
SPEAKER_02So that's really helpful to understand. Um, I'm also interested in how business owners might think strategically about incorporating the IRA club into what they're doing. And there's a couple of processes, right? So one of the things that we do with the South Island Development Authority is we identify people who within one to three years might want to sell their company. And the thought process is there's a whole series of preps that you can. There's a financial prep because in many cases people have been extracting so much money out of the business that it makes it hard for them when it comes to their valuation stage to demonstrate how much the company is worth. Because they've taken a lot of it off the table. So you need to put a strategy together about how do you demonstrate the value of this organization. There's a lot of prep that you need to do in terms of who your successor is going to actually be. Who's going to run this business? Is it going to be one of your people that works for you? Are you going to find someone from outside of the company to do this? But I imagine that there's a role for thinking around from the owner's perspective, their level of investment in the company, their prepping their employees by perhaps having the uh what's it called, the SBS system, the small business?
SPEAKER_01Yeah, oh so yeah, IRA Club SPS. Yep, that's for small business solutions.
SPEAKER_02So I'm I'm trying to I'm trying to kind of extract from you is there a role possibly in the succession planning of a company that the owner is going to sell of how they might be smart about leveraging both for themselves and for their employees of the IRA club.
SPEAKER_01So uh IRA Club SBS is just a separate division of the IRA Club, right? Which we just said with small business solutions. It's almost as if the new business owner doesn't, they don't have a choice, to be honest with you. And here's the reasons why I'm bringing that up. Um 17 states have now mandated, right, that you must offer some sort of retirement account for you and your employees. Illinois one of those, right?
SPEAKER_02We we we have to do that as a amount of profit.
SPEAKER_01Exactly as a amount for profit. So if you have five or more employees, we the if you don't have this in place, you're gonna be forced into what the state's gonna offer, right? And they're gonna require five percent, right? And then you are just going to offer this. And whether the employee, right, the participant wants to contribute or not is up to them. But you did your job, right? But a lot of small business owners have, unfortunately, I say this out loud, sometimes they can offer this, right? A 401k plan. This is another solution. And in our case, they don't like what the state is putting them in, right? But do they have to cover correct? So IRA Club launched a different alternative, and that different, and I should say strategy, is called a payroll deduction IRA, right? And the payroll deduction IRA, imagine this if you're giving the best of both worlds, you're going to give them the option to invest a portion of their paycheck into a leave up to them traditional raw, but then it'll go straight into the AI smart folio, right? Are you conservative? Are you want to be balanced? Do you want to be a little bit more aggressive? And now these accounts are gonna grow. And as they grow, imagine if you give them the flexibility to have new alternatives, which is a better solution than what the state is gonna offer, right? And it's not just Illinois. I met some guy in California. Literally, I just came back yesterday. One employee. Because I've never even heard of this CalSaber's plan, right? He's like, where did this just come from? And why do I have to do this? And I don't want to do this. So he opened up a school of 401k after educating him that there's a better alternative out there. So to your point, we have to do this as business owners. And again, it's because I hate to say this out loud, every single government program that we have that that supports retirement, right, from Social Security to Medicare to Medicaid is a complete scambles, right? They're scared that social security may not exist by 2030, or we're gonna get a smaller portion or they're thinking about extending the age, right?
SPEAKER_02Well, we have a it's a demographic issue. Demographic working in the opposite impact. And we've written the positive demographics for the last 50 years. We're just turning to a different place now where the growth of the population is not keeping up with the need for these programs to work in the same way. But having said that, IRA Club is providing a whole series of opportunities. And, you know, for those folks who are in their 50s now and they feel like it's late, it's not never, you know, there are opportunities to leverage the kind of tools that you're describing to build the kind of wealth that's necessary to one day retire.
SPEAKER_01And it's start it all starts with a conversation. Yeah, like just have a talk, like sit down, like here. I'm not gonna choose it for you, right? Like here, here's what this is what we're seeing. This is what other people are doing. You know, a lot of people talk to me about should I do traditional or should I do Roth, right? Maybe, maybe who knows, right? Depending on how much money you're making. Maybe you want to do instead of giving a portion of your money to the government, use that money to accelerate it. Or maybe you are in your early 20s and you're in the lowest tax bracket right out of college, right? And that's the time to do a Roth because you have time on your side, and you're never gonna be lower the more you're tax-wise. So again, it's just where are you in life? What are the goals? What are you trying to achieve? These are the things that we could offer, and then you know, just put a plan in place, is what I'm trying to ultimately say.
SPEAKER_02Is there anything else that we should know about what uh the organization does that might be helpful to people who are listening to this now before we kind of wrap up and get ready for this comment in a few weeks?
SPEAKER_01Yeah, at the end of the day, just think of us as a tool, right? We're part of your arsenal. We are a tax strategy to help you grow. Um, and and the goal is to again open up doors and opportunities outside of which you know that unfortunately hate saying is not working anymore, right? You've got to think double-digit returns, as we talked about a little bit earlier, or otherwise you're just gonna work for the rest of your life, especially if you're trying to catch up. Yeah, especially if you're trying to catch up. You've got to take some chances, right? Um, and we just talked about this educated calculator risks at the end of the day, and it all starts with a conversation, and we can't wait to have that with you at the upcoming uh achieve summit and um just kind of have a conversation, and we'll go from there.
SPEAKER_02Well, this was designed to be kind of an educational podcast for folks to introduce them to this idea. So you're gonna get a chance to go in much more depth. We are gonna be doing a few things with you as we go throughout the course of the year to also help educate people. So we're really excited about your participation and thank you so much for this.
SPEAKER_01Thank you. Well, pleasure. Thank you.