On this episode of The Passive Income Attorney, Seth talks to Jason Debono of NuView IRA. Seth and Jason discuss the many benefits of a self-directed IRA, as well as giving many useful tips on how to get started.

 

“Passive income is the only way to build wealth. If you don’t have it, then you’re always trading labor hours for dollars, and you only have so many labor hours to trade.”

 

HIGHLIGHTS:

0:00 – Intro and background on Jason and his company
2:45 – Seth asks what a self-directed IRA is and how it differs from a traditional IRA
4:54 – Jason explains why he thinks self-directed IRAs are becoming more popular
7:42 – The idea that tight syndication deals are small groups of wealthy people is going away with the help of the Job’s Act
11:14 – Seth asks what type of investments Jason’s clients are investing in
14:09 – Jason goes into detail on some of the tax benefits of self-directed IRA’s
18:44 – You don’t have all of the same tax advantages in self-directed IRA’s compared to direct cash investing
22:15 – There is not a one-size-fits-all approach
23:28 – Seth asks what the process looks like when Jason brings on a new client
29:52 – Many advisors do the right thing as Jason offers his own personal experience
33:05 – Jason talks about what some of his investments look like
36:41 – People think passive investing and real estate are different
38:15 – It’s time for the Freedom 4 – In an alternative universe without SDIRA’s or real estate, what would you be doing?
38:44 – What’s the best thing you do to keep your mind and body healthy?
39:45 – Where were you 5 years ago, and where will you be in 5 years?
41:46 – How has passive investing made your life better?

 

FIND | JASON DEBONO:

NuView Trust Company: nuviewtrust.com
LinkedIn: Jason Debono

 

FULL TRANSCRIPTION:

Seth: Welcome law nation. It’s another beautiful day here in sunny, San Diego, California. And I hope it’s just as beautiful where you’re at today. Many of you are gainfully employed, highly compensated, and highly successful in your career. It’s likely that because of that, you have a large chunk of change stashed away in your 401k or IRA. Have you ever wondered if you can invest that money in real estate or in an alternative asset instead of just continuing on the never-ending stock market rollercoaster ride? I know that I jumped off of that ride a long time ago, and today you’ll learn about how you can to. Our guest Jason DeBono has over 15 years in a self-directed IRA business. His company, Nu View IRA is an SDIRA custodian with over $1.4 billion in assets under custody. He’s one of the top experts in the industry and is an educated investor at events and conferences across the US about how they can use their traditional retirement funds to invest in alternative high yield assets. Here we go.

Seth: Jason. Great to have you on the show today.

Jason: Hey Seth, how you doing man?

Seth: Doing great Man. Doing great. Let’s just jump right in. Tell us a little bit about your company, Nu View IRA, and a little bit about your background and what you do.

Jason: Yeah, so Nu View, we have really two companies, a Nu View IRA, Nu View trust company. They both kind of funnel into the same place, our trust company as a South Dakota, publicly chartered trust company and Nu View IRA is the administrative arm that does the day-to-day processing and client interactions. And that’s based here where I’m located right now in just outside of Orlando in Florida. But our business is to give individuals the ability to use their retirement money, to buy investments that are not publicly traded. So, we serve a very similar role to a Charles Schwab or Fidelity from a custodial standpoint. But we’re going to let you buy assets that go beyond just publicly traded stocks and bonds, which is really where most traditional custodians draw the line. And for us, that’s where we pick up in terms of what we do as a custodian.

Seth: Gotcha. Yeah, that makes sense, man. So, what exactly is a self-directed IRA and how does that, how is it different than just a traditional IRA or a Roth IRA that most of our listeners have heard about or even have retirement funds in?

Jason: Well, you know, self-directed IRA is kind of a moniker and a term that’s been used in, in my opinion, it really sends the wrong message because it’s not a new IRA. A traditional and Roth, a simple, an IRA with us is the same as an IRA at Schwab, you know, moving your account to us, isn’t changing the principles of your IRA. What it’s doing is changing the principles of what you’re able to invest in. And that’s really the self and self-direction is self-direction, you know, self-directed IRA means you can take your IRA, maintain all the same tax benefits, but invest into assets that are not publicly traded. So if you want to buy a piece of property or you want to issue a loan or invest into a private company, all of those are permissible, but most traditional custodians, the Schwab’s and fidelities of the world they don’t want to custody those types of assets and it doesn’t make them bad businesses. It’s just not their business model.

Seth: Gotcha. So, it’s more about the custodian that has your IRA and what they will allow you to invest in.

Jason: Yeah. Think of it like a, you know, it’s easy to analogize to food, right? Or fast food. When you go to McDonald’s, they’re going to sell you a burger. If you ask them for a taco, they’re not going to tell you to go to taco bell. They’re just going to say we don’t have that, but we all know that if you want the taco, you go to taco bell. Well, it’s no different in the publicly traded world. We’re all so used to the brokerage houses, housing, all the money. And so, when we asked them, if I can buy real estate in this IRA, they’re going to say, no, not because they can’t do it. Just like McDonald’s, doesn’t say no, because they can’t sell you a taco. They just simply don’t. So, it’s the same idea, right? It’s just a different menu of investment choices, but your IRA is your IRA. Whether we hold it, whether fidelity holds it, the rules of your IRA are the same. It’s the custodian that determines if you can invest beyond publicly traded securities.

Seth: Gotcha. Gotcha. And I hear more and more about them lately. It seems like they’re just kind of picking up a momentum, even though, you know, like you said, it really comes down to the custodian, but these custodians such as yourself that will allow people to invest in these alternative investments. Why have they become so popular? Seems like more lately.

Jason: Well, you know, I don’t know all the reasons. I can tell you; I’ve been in this business 15 years. So, you know, I like to say, I was working in self-directed IRAs before self-directed IRAs were cool. You know, I used to get up in front of audiences you know, 15 years ago and say, you know, how many people have heard of a self-directed IRA and like one or two people raised their hand and you know, today, half the room, three quarters of the room raises their hand, even if they’re not sure they still know. I think it’s a couple parts that I think the first one is we’re in an information age. I mean, let’s face it 15 years ago I didn’t have an iPhone that had all the information I wanted at my fingertips. So I think from that perspective, you know, while social media and other kind of in your face type things, they have their drawbacks, they have lots of benefits and you can now as a, you know, an influencer on social media go in, and even if you’re not an influencer, just, you know, if you were to go on there and say, I just bought a property in my IRA, this was so cool. You just advertise for my business, which, you know, 15 years ago never existed. So, I think that’s one. The second thing is I think people are demanding choice. You know, they’re starting to ask the questions and as the questions asked more often, the answer becomes more common. And I think that’s kind of a big piece of that. And then the last piece of it, I think is you have a lot more because of some regulatory changes you have, there was a, the jobs act was a big catalyst in making it a lot easier for people to raise money and for what I would consider a mom and pops level investor to go out and actually syndicate a couple million or $10 million deal, which is so cool. I mean, it was great legislation and I’m so glad that it got bipartisan support and pass. Because it is, it’s really fantastic. And it doesn’t mean it comes without risk, but it’s still a lot of times, you know, I may not know what a self-directed IRA is, but I may come in contact with an investment opportunity into some sort of, you know, crowdfunding like a syndication type deal. And they may introduce me to self-directed IRAs as a means to investing into that deal. So, kind of a three-headed monster, I’m sure there’s other reasons and rationale, but those are the ones that seem to make the most sense. And that we’ve seen kind of play out over 15 years.

Seth: Yeah. I agree with all that. I mean, it seems like, you know, back in the day and back in the day, as, in like 10 years ago, not even that long ago, these types of syndication deals were hush hush, and you kind of had to know somebody know somebody to invest in one, and now they’re just a little bit more prevalent and people can get involved a little bit easier because they’re just a little bit better well-known. And that’s awesome. It’s an awesome opportunity for investors to diversify outside of stocks and bonds and mutual funds.

Jason: Yeah. I couldn’t agree more. I think the idea that a lot of these really tight syndication deals were, you know, small groups of wealthy people and I’m not here to vilify the wealthy, you know I believe in capitalism you know, certainly to a point, but so from that perspective, yeah, I mean, they’ve done great, but there’s a lot of these that are very good quality investments that I shouldn’t have to have a certain income or network to be eligible to invest in. And that’s really what the jobs act allowed is it started to say, Hey, you know, we’re going to allow people to invest into syndication deals that aren’t accredited investors, that don’t have a $200,000 or $300,000 of annual income or a million dollars of net worth excluding your primary residence. I mean, those thresholds really meant only about one half of 1% of people could participate. Well, that stinks. I mean, these people were making 15, 20% on these great, you know, well secure deals. Why can’t I put $25,000 into that? And so, the jobs act has created that. So, you’re absolutely right. These syndications are a driving force because people are realizing that you don’t have to be an active full-time real estate investor to invest in the real estate market.

Seth: Gotcha. And who’s eligible to kind of utilize one of these, I mean, to roll over into one, you can’t roll just any retirement fund over, correct?

Jason: Yeah. So, there’s a few ways to look at eligibility. The first way is I’ll start by saying technically everybody’s eligible. So as long as you can have an IRA, which is, you just have to have an income. You are eligible to have an account with me or with Schwab, it doesn’t matter. So really, it’s not the account that is going to be your sticking point. It’s going to be, what are you going to go do with the money? And when we say who’s eligible again, there’s no eligibility, but if you’ve got a $100 in an IRA, you’re probably not going to go buy a property. The stock market is designed for accounts like that. You can buy a couple shares of, you know, a $50 stock and buy a new one every week. You know, when you make a little money into your account. Our typical client here from an eligibility standpoint, again that term loosely, you know, is someone that has enough money in their account to do whatever deal they want. And it doesn’t mean they have to have a lot. We have lots of clients with $20,000, $30,000, $40,000, lots of deals. So, there’s lots of opportunity there. And then they have to typically be able to move the money. So, if it’s in an IRA today, then it is portable, right. They’re eligible to move it. If it’s in a 401k and that’s their current employer, they may not be eligible to move it. There’s some eligibility restrictions while you’re actively employed by the company in which you have your 401k. We always recommend call the plan admin for that you know, for the company and then ask them, what does it take for me to roll out? If you’re no longer employed or it’s a past 401k, then you’re automatically eligible as well.

Seth: Gotcha. Yeah. And nothing’s going to stop you from, even if you have a lot of funds already in a 401k that you may not be able to roll over to just starting your own SDIRA and start contributing funds to it, right?

Jason: Yeah. You can certainly do that. You know, we have a lot of clients that start their accounts with us. You know, that is, it depends on how you earn your money, how much money you make as to how much you can put into the account. But yeah, there’s a lot of accounts that allow you to sock away $20,000 $30,000 up to almost $60,000 a year. So, you don’t have to, I have been doing this for 25 years to be able to go out and really have some impact.

Seth: Gotcha. And what are some of the types of investments you see your clients investing in once they’ve got that SDI IRA set up?

Jason: So, it’s really three asset classes. There’s lots of investments inside of it, but we kind of boil it down to three asset classes. The first one is real estate, real property. This range is the gamut. I mean, obviously single family, multifamily you know, projects, commercial, residential, industrial we have clients that own burial plots, boat slips. I mean, if you name it, if it’s deeded real estate, it would fall into this category as real property. The second category is, would be considered private debt. This would be the loans, some sort of a promissory note, mortgage note. We see this a lot in the form of like private mortgage loans, especially on distressed real estate stuff that traditional banks don’t want to lend to right. Refer to sometimes as hard money or private money. We see a lot of personal loans. I’ve done this myself a couple of times, you know, people I know. They have good jobs, they’re you know, they’re gainfully employed. They’re very good with money. But maybe over the last 10 years, they’ve racked up some credit cards and they now finally have a job and, you know, they don’t want to pay 18% interest on them and, you know, they can pay me 9%. I’m doing great and they’re doing great. And they’re cutting their debt service, you know, down and they can pay it off in two years instead of five years. So, you know, personal loans, business loans, we see a lot of that as well, bridge financing. You know, I could get way more types of financing they never knew existed, but really it’s loan, some sort of you know, we tend to kind of easily sum this up as if there’s an interest, predetermined interest rate and a maturity date, generally it falls into a loan category of some type. And then the third category is private equity. This would be investing into any sort of private business or enterprise; syndications actually fall under private equity because you’re not buying real estate. You’re buying an entity that owns the real estate. So technically for us we hold that as a private equity investment, but you can do true private equity. So, you can invest into a startup company. You know, it’s easy to use the example of Uber. You know, before Uber was public, they’ve raised billions of dollars, a of that came from companies, but there were a good handful of people that use their IRAs to invest into Uber. They’re certainly doing very well right now, but anything that’s privately traded, if it’s, every stock that’s public was once private. And so, there’s lots and lots of private companies you can invest into. And then syndications would fall under private equity that’s by far the biggest category in private equity is a lot of multifamily, but a lot of just overall commercial real estate type deals that are packaged up and sold to investors.

Seth: Awesome. Awesome summary, man. Really appreciate that. So, a lot of our listeners are high income earning individuals and taxes, you know are big issue for them. What are some of the tax advantages to investing with a self-directed IRA?

Jason: Well, I’m going to, I’m going to, if it’s okay. I’m going to give a little bit of a longer answer because I want to illustrate just in general how IRAs work, because most people don’t realize this. And even people that are listening that are, you know, consider themselves very financially savvy, probably don’t quite get it to this disagree, but I’m going to kind of paint a picture here. So, you know, there’s a big saying, you know, and I love using it. Do you want to make money, or do you want to build wealth? Because they’re two completely different things and they’re two different thought processes, right? You know, making money is one thing, building wealth, right? One is happening as it happens. And the other one is done little by little, over a long period of time. Most people want to be wealthy, but they treat it like they just want to make money, right? And the people that want to be wealthy, make conscious choices beyond what they invest into. And they structure investments in ways that make more tax savings and they make longer term and they defer profits and all these things that slowly add up and add up and add up to that wealth building machine that they’re looking for. But I want to illustrate how IRAs work because IRAs are a tax advantage vehicle and tax advantage investing is the best way to go. So Seth, if you took a dollar, right, and I gave you an investment that would double every year for 20 years, right and I offered you that deal today, and you made that investment with, just gave me a dollar out of your wallet. That’s personal money, right? Therefore, it’s taxed on any of your profits are taxed annually. So, let’s assume you’re in the 25% tax bracket. 20 years from now, you get to tell all your friends how you gave this guy that showed up on your show, you know, 20 years ago a dollar. And today you’ve got about $75,000, 20 years later. That’s a pretty sweet deal. You turn a buck into $75,000. Now what happened little by little, you were paying Uncle Sam 25% of your profits year over year, because you did it out of your wallet. If I joined this show an hour after we have this discussion, and you realize that tax advantage investing is how you build wealth. Then you stop thinking about making money and building wealth, that same dollar right and I offered you the same investment 20 years doubling every year. You would still give me, well, first of all, you’d probably give me as many dollars as you could get your hands on. But if you could only give me one, you would not give me the dollar out of your wallet. You would take the dollar in your wallet. You’d put it into an IRA at Nu View. And then you would make that same investment through your IRA as the second step. And by doing that, your IRA is not subject to tax annually. So that 25% that Seth paid individually on an annual basis is on that last example, it turned a dollar into $75,000. If you put the dollar into a Roth IRA first, you have no taxation annually, it compounds. At the end of 20 years, you get to tell your friends or your listeners, how you turn a dollar into just over a million dollars.

Seth: Wow. A little bit of a difference there.

Jason: Same return, same amount of time. So, what most people that want to make money is they focus on time and return time and return time in return. If you add the third element, which is tax benefit, right to this, you no longer are trying to make money. You’re now trying to build wealth. So where do you want to be 20 years from now? Do you want to have $75,000 or do you want to have a little over a million bucks for the same amount of work, same amount of savings, same investment, same risk, but you simply put it into a Roth IRA first. So, I’m sorry to kind of elongate that a tad bit, but when you ask about tax benefits, it’s so critical for me to share that because I don’t think most people really understand that. And if they did, they’d do way more deals than their IRA.

Seth: Yeah. That’s incredible. I mean, just to see what taxes kind of do to those returns, and if you can figure out a way to grow them, tax-free like in one of these SDIRAs man, that’s crazy. The difference is incredible.

Jason: Yeah. It’s staggering. And the beauty is, this isn’t some very complex tax scheme that, you know, you’ve got a team of 20 advisors that are having to look at to figure it all out. You know, this is run of the mill every single day readily available tax code that every single taxpayer has the luxury of enjoying, you know, we’re not trying to do anything special.

Seth: Yeah. Yeah. So, I’ll play a little bit of devil’s advocate here. So, I’ve heard that with an SDRA though, you don’t necessarily have all the same tax advantages when you invest in real estate through it, rather than investing, let’s say just directly with let’s say cash.

Jason: Yeah. And that’s absolutely true, right? Where the world, the self-directed IRA world is not full of roses and daisies. I mean, there are some things you have to be aware of. Now you may consider them a drawback. For me, they’re not a drawback. It’s just understanding how they work. From a standpoint of pros and cons. And the reason I say that is because tax benefits outside an IRA are discounts against tax. In an IRA, you don’t get any discounts against tax because you don’t have any tax. So, it’s like saying you want the coupon for 20% off or do you just not want to pay for the shirt. So, it’s not a drawback at all. But it may not be as advantageous. And so, the real success, I mean, and this is where I go back to people that want to make money, just think investment, investment, investment. What’s my return? You know, so tell me about the deal. How much can I make? How much can I make? And I get it right. We’re all wired to be that way, right? The more I make, the more I can go buy, the more I can post on social media how awesome I’m doing and the better I feel about myself, right? That’s kind of the new universal approach that we live in. But the people that really build wealth, they don’t care about their return. It’s important to them, but they’re focused on what’s the best, most efficient way to own. If this is a good investment, what’s the most efficient way to own it. So, for me, my most successful clients are not the ones that do all their deals in their IRA. In fact, they’re the ones that probably do less deals than clients that have to do a ton. But what they do is they look at each deal independently. So, you know, Seth if you approached me and said, Hey, this is a deal I’ve got, right. I’ve got a, I don’t use an example. If we’re going to go buy an office building and we’re going to use accelerated depreciation, and we’re going to use cost stag, and we’re going to see this huge tax benefit to buy it. And it’s still going to make 8% to 10%, but we’re going to see like a hundred percent tax write off year one. Well then if the minute you told me all that, all I heard is not good for my IRA because I am going to give up that benefit. So, I’m better off saying, yeah, let me make that investment with my personal money. And then let me take what I am not going to do with that personal money. And let me look at putting that in an IRA. So, what are those deals? So the perfect place to be from a wealth-building strategy is, whatever investment that you’re reviewing, you’re reviewing it from a tax standpoint after you’ve determined it’s a good deal as to whether or not it fits in your IRA or outside. On that same token, if you came to me and said, Hey, Jason, we’re going to go buy this property. It’s incomplete disrepair. We’re going to fix it up. And we’re going to flip it in eight months and make a hundred grand. There’s no tax benefit outside the IRA that could ever compare to 100% tax-free capital gain. Because even if you’ve got tax write-offs, they don’t benefit you in the short term, those tend to benefit in the long-term. So that would be a deal I wouldn’t think twice. I’d say, love the deal. I’m going to get hammered if I do it in my personal name with taxes. Cause it’s short term. But if I do it in my Roth IRA, it’s a 100% tax free. Yeah, let me do the bonus depreciation deal in my personal name. And let me do that quick flip in my IRA.

Seth: Yeah. That’s some awesome perspective, man. I didn’t even think about it in the way that you just, the way that you just put that man. And especially also, you can, you know, think about the deal. If it’s a good deal, where do I put it? Do I want to use my SDIRA or do I want to try to do it outside of the SDIRA? But it’s not based on the, you know, the tax benefits and what the deal looks like.

Jason: And every deal is different. You know, there’s no one size fits all approach. I mean, we can generalize it to some degree, but you know, the other thing is it’s personal to you. I mean, you know, here would be another point of interest is, do I want it, am I willing to let that money stay in my IRA for the next 20 years? Or do I need it today? I mean, if you offered me that deal, you know, for that flip in eight months, if I need that money, that $20,000, $30,000, that’s going to pay Junior’s college bill, or I need to pay some debt off or whatever. Then if that supersedes the tax benefits, then I’m not going to use my IRA anyways, because I have to be willing to tuck the money back into my IRA if I want that tax-free growth. So, you know, there’s a lot of situations, it’s not just the investment that should be considered. It’s where, what personal piece of it from your seat, you know, is important to you. And that’s the part where money is personal. It’s unique to everybody. There is no one size fits all answer to that.

Seth: Yeah. Yeah. Well, let’s switch gears a little bit and kind of rewind back to, you know, it sounds like it could be a complicated process or at least, you know, to our listeners that might, who have never, you know, rolled their funds over or started one of these. I mean, what does the, what does the process look like just to get started?

Jason: Yeah, great question. And you’re absolutely right. I mean, it’s not the same. And you know, if you come to Nu View from, let’s say a Charles Schwab and you’re expecting this to be, you know, go online, scroll through the ticker symbols, pick one, put in your number of shares, the world of private investments just doesn’t work that way. So, you know, I want to help set expectations now. Depending on the asset class you buy will depend on the work and effort involved for you as an individual. Private equity and loan deals tend to be the easiest ones, because there’s a lot less moving parts. Like private equity deal with syndication, I mean, that stuff is very easy. You know, you’ll need to open up an account. We’ll need to move money from wherever it’s currently sitting. That takes about 5 to 10 days. Because we’ve got to go ask for the money and then wait for it. So sometimes it happens in a day or two, but we always like to set that expectation, give it 5 to 10 days. And 99% of the time, the money will be there within that window. Once the money’s here, then you’ve got to let us know what you want to buy. So, if you want to buy a, you know, $50,000 into a multifamily, you know, syndication deal then we’re going to need the subscription agreement. So, you’ll have to fill those out. You know, yeah, maybe you can use digital signatures, but at the end of the day, there’s going to be some questionnaire that you’ve got to address and then we need an authorization form and you can do that right online at our client portal. You can also do it in paper. If you want to kind of go old school a little bit. But either way, once we have that, we now have the authorization and instructions, and we’ll go send the money in 24 to 48 hours. So, it moves pretty quickly once the money’s here. But yeah, be aware that you are going to have to fill out a few forms. We do as much online and as much digital you know, as we can, but ultimately because these are private investments, there’s lots of other things that have to be signed and documented for other parties in order for these to go through. So real estate is the one that’s a tad bit more work just because you got to title companies and you’ve got realtors, then you’ve got brokerages and everyone’s moving paperwork around. But it’s still not a difficult process as long as you’re engaged. What we find is for a lot of people you know, they kind of view, once they tell us over the phone what they want to do, they’re done. And they’re kind of disappointed to know that there’s some steps involved in, you know, that’s just the nature of buying private investments. You’d have to fill out the same paperwork if you bought it outside the IRA. And the only thing that you’re doing that unique for us is adding one authorization form, the rest of it isn’t even our paperwork.

Seth: Cool. Yeah. So there are some extra steps, but all in all, I mean, it’s a fairly uncomplicated process and you guys can answer any questions and kind of walk us through, you know, whatever the steps are depending on the type of investment that it is.

Jason: Absolutely.

Seth: So, let’s talk about a little bit about public versus private markets and investing in those types of things. And one thing that really bothers me and it’s bothered me for a long time, it’s just about the misalignment of interests between, you know, your traditional financial planner and mutual fund managers that, you know, have you invest in, you know, traditional stocks and bonds and mutual funds and things like that. You know, they tend to make their money off of, you know, the, basically the assets under management or how much money they get you to invest rather than based on performance. And, you know, that’s kind of what drew me into the public or the private markets to invest in, you know, real estate and real estate syndications and other types of alternative assets. I was just wondering if you had a kind of an opinion or thoughts on this.

Jason: You know, there’s so much I can say on this and certainly it’s opinionated. You know, I look at kind of financial advisors or like a good mechanic. If you kind of think about the way the world of mechanics work is, you pull your car into the shop, you want it to run at peak performance. The person that you know, is under the hood knows way more about it than you do. So, there’s only so much you can even respond to. So, there’s such an element of trust that you have to have, and when everything works great, we don’t, we think we have a great mechanic. When everything goes bad, we automatically assume we got a bad mechanic. And I think it’s true in financial services. And just like, there’s lots of bad mechanics, right? They’ll fix stuff they don’t need to; they’ll add on they don’t need to, there’s lots of bad financial advisors make no mistake about it. They’re only there to serve their self-interest and that’s it. But when you find a good mechanic, it is about trust. And to me, that’s the most important part. I’m with you on the way that they’re compensated. I have no problem with people making money and getting paid. I think that’s absolutely important in the process, but yeah, to how you get paid and how our goals aligned sometimes you know, the way that they’re paid can create that misalignment. So, I do think advisers can serve a good purpose. I think as you get wealthier and you have more assets, financial advisors start to make a lot more sense because there’s a lot of benefits beyond just finding good investments that they can offer from a tax savings planning, estate planning, candidly early on, I mean, I’m not a fan of people without, you know, decent amount of assets having an advisor. There’s too many platforms, robo-advisors, free platforms. And if you go and you look across the board at what robo-advisors, which are basically algorithmic advisors have done, you know, have done from a return standpoint, as they rebalance portfolios versus traditional financial planners, the numbers are almost identical, right? All boats rise in a rising tide and fall in a sinking tide. So, you know, I think until you have enough assets to where you’re going to get value from a tax standpoint, from a planning standpoint beyond just here’s money, go invest it for me. You know, I think the advisory world is a difficult one to navigate.

Seth: Yeah. And I am seeing more and more, you know, I’ve got a couple of friends that are financial advisors and, you know, they’re open even though they may not get paid on it. They’re more open to discussing investing in real estate and diversifying into those sorts of assets rather than just staying in something that they may personally benefit from. And I think that’s something that you should look out for, if you’re a financial advisor was very open about it and like, Hey, well maybe you should look at some real estate. Maybe you should look at some certifications. Maybe you should look at some different types of things. You know, that might be a good sign that, you know, they have your best interests in mind too.

Jason: Yeah, you’re so right about that, Seth. I mean, so many advisors do all the right things and they really are interested in their clients and, you know, listen, I’ll just tell you my own personal experience. And I do almost everything I do is all alternative investments that I have the luxury of, you know, having, you know, over 10,000 customers that I get to live vicariously through an I do I get to see lots of deals and it doesn’t make me a better investment investor. It’s just gives me a larger buffet if you will to eat from, but here’s where an advisor would have been worth their weight in gold. You know, is they help you on the emotional side. I am not a stock investor. I don’t like stocks. I prefer to be in alternatives. I like to know what I’m investing into. I like to know my time horizons. I like to know exit strategies. Stocks have no entrance and exit strategy at all. You buy them when you think the time is right. And you sell them when you think the time is right. Yet every advisor tells you never try to time the market. So, it’s almost like, it’s almost like a catch 22. But honest to God’s truth, I sold Amazon, Apple and Netflix on March 19th, March 16th was the lowest the market had been. And I sold them all on March 19th. And, you know, they’ve all since doubled and then some, so I lost, I didn’t lose money because I actually made money when I sold them. And this is the people have to understand. I made money when I sold them. I was up because I had owned them for quite a while. And I did very well. I lost the opportunity to almost double that or triple that because of what happened afterwards. Now I’m not a fan of being a Monday morning quarterback, right. I want to learn from what I did. But if I had a dollar for every investment, I sold that could have, I could have waited six months and made more money, you know, we’d never sell anything. And then we’d forget about it when we lost money and held it too long. But where a financial advisor likely would have come in handy there is, they would have stripped the emotional side out of it. They would have really, and I look back now and realize, yeah, why did I sell it then? I thought the market was going to keep dropping and maybe it would have, but you know, if I’d really thought through from a, so at this point you’re going to take, you just took a 30% haircut. You’re going to sell it to protect another 20% haircut for what benefit? You know, these are three great stocks, they’re going to come back. Nobody expected them to V-shape their way into success overnight. But you know, it could have been a couple of years and I could have done well. So, I don’t know. I may be the dumbest investor, the smartest investor who the heck knows. I do know that I’m glad I don’t own any stocks because the Seesaw of the stock market for me is just too much. And I’ve made, if I look at the, you know, five worst investments I’ve made, three or four of them have been stock-based. And if I look at the five best investments, none of them have been stock-based.

Seth: Yeah, I agree. I mean, I’ve sold off all my stocks and bonds. I mean, I think there is a place for it, especially if you have a ton of money to invest, you need to diversify as much as possible, but for me, I’m totally out of it. And in your boat with alternative investments, man. So, let’s jump into, since it’s a pretty good transition here. What do some of your passive investments look like? What have you invested in?

Jason: So, I’ve done a variety of things. I started out doing mostly private notes. I love private notes because it allowed me to put smaller pieces of money alongside other people. I have a 401k here at Nu View. I’ve got money in a Roth account. I’ve got some money in an HSA which is super cool. If you’ve got high deductible health insurance, you can self-direct your health savings account. And then for our nine-year-old, we have an educational savings account. And so, I would do deals mixed in between those accounts. So, I do a $50,000 deal you know, 30,000 out of one account and five out of the other and 10 out of the other. And so, it’s allowed me to build up some relatively small accounts to, you know, decent size accounts because I could partner them off. So, I’ve always enjoyed lending. You know, to me, I like knowing how long I’m in the investment. I like knowing I got collateral. And I like knowing that there’s a predetermined rate of return. So that was what I did probably the first 10 years of investing. I bought and sold some real estate along the way. You know, some that didn’t perform great and some that performed really well, but I guess the nature of investing. I’ve invested passively as a partner, joint venture partner on a handful of rehab projects. I like that market. If you’re working with someone that knows what they’re doing in the marketplace. I’ve got some money in a community bank here in town that recently formed that, you know, I think it’s just a way to play the other side of the coin. I’ve invested into an oil and gas asset investment. So, it’s not drilling, they buy up the assets from defunct, you know, refineries or places that maybe they’ve drilled everything that’s there and it’s very expensive to move it. So, they don’t, or they sell it for pennies. And so that fund has done good. And then I’ve invested into a good handful. I’m invested into about 500 doors in multifamily in Texas and then I’m invested into, it’s going to end up being about 800 to 1,000 doors. But it’s a low-income housing tax credit type fund that buys and sells. And it’s not just, they’ve done assisted living. They’ve done a whole neighborhood that was all section eight, and they go in and revitalize it. It’s something that I’m incredibly passionate about because I see people think low-income housing and think bad. And, you know, I see a group that goes in and gives dignity to these people and, you know, and says, Hey, just because you pay less than other people doesn’t mean you can’t live in a nice place. And they have made a killing and been incredibly successful by increasing the livelihood of a lot of people that the previous owners of these assets just didn’t care about. And that’s something that you know, I made that investment probably equally as much impact as I did it at the hopes of generating return. So, you know, again, I see a lot of these deals because I’m in the investment landscape and I get to touch you know, we’ve done over 25,000 unique assets over the years. So, we get to see a little bit of everything.

Seth: Yeah, man, that’s wildly diverse. That’s great, man. I mean, the more diverse you can be the better. And like you said, you get to see a lot of these deals, which is great. I mean, a lot of it is more about, you know, what’s put in front of you? Where do you get these opportunities? And, you know, you need to network and just try to see as many of these different types of alternative assets as you can, so you can get started. Go ahead.

Jason: The thing that I’ll add to that, you know, Seth, because I love what you do and every time I chat with you, I get more and more impressed because people think passive investing and real estate are different. You know, we think of passive and what I love is all those deals that I just talked to you about, 98% of them, I was a 100% passive investor. So, you know, I’m not a smart investor. I just find smart people, you know, that can figure out how to make money in these deals. And I invest alongside them. And so, I love the passive investor model because it’s something that so many people view a self-directed account as one that’s like, this is an active account. And I got to go out and pound the pavement and knock on doors and figure out what to buy. And it’s like, wait a minute. In fact, no, probably 60%, 70% of our customers are passive. They let other people, you know, that they know and trust that are smart, do the day-to-day stuff. And they sit back and if they make good sound investments and they make sure they’re very well protected and they do their due diligence it doesn’t guarantee them success, but it gives them a much higher likelihood.

Seth: Yeah. Rely on the experts. If they’re an expert in multifamily or they’re an expert in oil and gas or whatever it might be, or developing a community bank or a, you know, a certain special kind of fund, I mean, rely on the experts, you know, vet the sponsors, make sure they have a track record and they know what they’re doing. But at the end of the day, you as a passive investor, rely on their expertise and you can be passive and you don’t have to worry about, you know, doing the day to day operations and you know, just all the stuff that comes along with that, especially when you’re working a full-time job.

Jason: Yup. Absolutely.

Seth: Well, let’s jump into the freedom four. In an alternative universe where you weren’t involved in SDIRAs and real estates, what would you be doing?

Jason: Oh boy. I’m assuming I can answer whatever I want here.

Seth: Be creative.

Jason: … professionally.

Seth: Oh, there you go. I’m surprised I haven’t heard that one yet. Yeah, well, yeah in the alternative universe, you’re on the tour. What’s the best thing you do to keep your mind and body healthy?

Jason: Well, I mean, exercise is the easy answer there, but I also think it’s, you know, I listen to a lot of podcasts. You know, I think sometimes the exercise people think is for physical you know benefit, but exercise has been more in my life, especially in the last 10 or 15 years has served me better mentally probably than it has physically. And especially as they get older you know, I’m a lot more achy and painful after working out, but it is it’s that clear head. And I think coupling that with find people that are really smart, we live in an information age where people are willing to share great nuggets of info, go find it. You know, I learn a little bit every time I turn a podcast on or turn on some sort of, you know, self-help type you know, book or you know, audible book, they certainly help.

Seth: Yeah. Information’s out there nowadays. Where were you at five years ago? And where do you want to be five years from now?

Jason: Oh, man. Five years ago. You know, I was still trying to figure out what was important to me in life. You know, I hadn’t always made all the world’s best decisions outside of the workplace, but yeah, five years ago I was kind of figuring out what was important to me. Five years from now, you know, honestly, I want to stay on the same trajectory that I’m on. I mean, I don’t want to solve all the world’s problems overnight, nor do I intend to. You know, for me at this point in my life, it’s really about two things. It’s about building wealth, you know, and really understanding the principles that go into that and not well, so I can go, you know, buy nice things. I’m pretty you know, simplistic in that regard, but it’s being able to enjoy all that life has to offer, you know, my wife and I, we love to travel, we love to do stuff and it takes money to do that. So yeah, five years from now, I want to, I want to you know, to be in a wealthier position and then more importantly, I want to give back. The more and more that I’m in the, in the world. And especially now, I mean, as we’re in going into, you know, election day is tomorrow and all the craziness that’s going on in politics has become so polarizing, I think as a nation and as a group of individuals, we have simply forgotten that we all can go and make this world a better place. And it’s not from the backside of a keyboard. You know, and it’s not telling people how stupid they are on social media. You know, it’s rolling up your sleeves, finding a local organization, going out there and making a difference. And I think the opportunity is too grand and it’s too important and unfortunately not enough people are doing it. So for me, that’s critical and yeah, if I can find ways to build more wealth and, you know, find ways to ensure that I can give back time, energy and money, I’ll be elated if I can get to both of those, if not one of the two in five years.

Seth: I love that brother. That’s probably the best answer I’ve heard so far. How has passive income made your life better?

Jason: Well, it’s mailbox money, you know, it’s I think, I think it’s the way that we look at businesses, right? I mean, businesses, you know, prior to really the internet you know, explosion of the last 10 to 12 years, businesses had to rely on selling from 9:00 AM when they opened to 6:00 PM, when they close. Well, now, you know, everything runs 24 hours, right. And so, it’s something that we’re all able to do all the time and you don’t have to be working to make money. And that’s what passive income is, is it’s a way to ensure that I’m working right. And I’m working at two in the morning, even though I’m tucked away nicely in bed. But yeah, passive income is the only way to build wealth. If you don’t have it, then you’re always trading labor hours for dollars, and you only have so many labor hours to trade and your labor is only worth someone is willing to pay for it. And while that may be a high number today, whatever you do today, that makes you $500 an hour may make you 50 tomorrow. So, I could go on and on about passive income and what it’s done in my life. But I’ve seen it through the lens of my clients, and I’ve seen it play out and it’s the only way to really build your wealth.

Seth: Yeah. Yeah. You’ve got a really good view from where you’re sitting of seeing kind of how passive income can change people’s lives. You’ve seen all the different types of deals that people can invest in. And like I said, how people are able to change their lives and free up their time.  All right, Jason, I really appreciate it, man. It’s a great interview. Where can people find more out about you and contact you and find more about a Nu View trust?

Jason: Well, well, first of all, thank you for having me. I’ve loved all of our, you know, interactions along the way and certainly love the show. Easiest way to, you know, to find me and find the company is www.nuviewtrust.com. It’s N-U-V-I-E-W-trust.com. The reason I suggest starting there is, there’s all kinds of content kind of goes back to that passive income, right? If I give you my phone number, then I’m trading my labor hours for your education. And I’m just, you know, that’s something that doesn’t benefit me in the long run. So, start there, take a look. We’ve got lots of educational content. You can look at it at two in the morning when you can’t sleep, but it’s chock-full of information. I think we would all agree in today’s day and age. There’s zero excuse to not know something once you think you should, right. It’s okay to not know what you don’t know, but now that you’ve got a little of this to go, I probably should know more. Take a look at the website, go look at some of the videos, the content, webinars, it’s all there. If you want to get ahold of me, all the contact info is on the website. We’re a mid-sized company. We service about a billion and a half dollars. You’ve got about 10,000 customers. But we’re accessible, right? There’s 50 of us here in the office. If you call the office and ask for me, if I’m in the office, I’m happy to talk with you and walk you through whatever questions that you may have.

Seth: That’s great, man. Really appreciate it. I’ve been to that website, tons of free content on there. You guys need to go and check it out. All right, Jason. Really appreciate it. Thanks again for coming on.

Jason: Cool. Thanks Seth.

Seth:Oh man, so much value and so much knowledge in that episode. Jason is one of the nation’s leading experts in self-directed IRAs. I love how he also puts his money where his mouth is and invest passively in one of the most diverse, alternative investment portfolios I’ve actually ever come across. If you’d like to learn more about passive investing, go to www.passiveincomeattorney.com and download our free passive investing guide so that you can get started investing intelligently in alternative assets. Until next time guys, celebrate the journey.