Self-Directed IRA & Small Business Financing Blog

Like every other financial institution in the country, we have received many, many phone calls over the last few days from concerned clients about the current economic meltdown and what they should do next. This is a very unique period in the history of the global economy and many, if not most, investors aren’t quite sure exactly what to do.

Case and point: Our concierge department has been bombarded by calls from existing and in-process clients who are concerned about the banking institutions that currently hold their funds. Conversely, our sales team was busily answering urgent phone calls from stock-market investors who want to get their money OUT.

While no one knows with 100% certainty what is going to happen with the financial markets, we want to assure our clients and prospective clients that a self-directed IRA with Guidant is a great option during this tumultuous time.

Our self-directed IRA offers a level of flexibility that no other retirement account can provide. Because of the LLC structure, Guidant clients have the ability to choose what banking institution they want to keep their money with. Additionally, since the funds are held in a business checking account, the LLC (just like any other business) can move its funds to another bank at a moment’s notice.

In addition, Guidant’s real estate IRA clients have the ability to open accounts with multiple banks, so they can keep less than $100,000 in each bank account. This means that, if there were a run on the banks and if they needed to take advantage of FDIC insurance (up to $100,000), they wouldn’t have more than the maximum insured amount in any one account.

The likelihood that a bank should collapse and a person’s funds could be diminished substantially is fairly low. And even if a bank should face the worst, the current trend predicts that most of these institutions will be bought out before they actually go bust – like Washington Mutual. Since JPMorgan Chase has bought out the failing institution, it has also assumed the liability of insuring the remaining balance of any Washington Mutual account over the $100,000 insurance limit.

Furthermore, since the purpose of having a self-directed IRA is to be able to make self-directed investments, most Guidant clients will have their cash in real estate, private loans, tax liens and much more - not in a bank account.

We understand that this is a difficult time, so we encourage everyone to be extra cautious when making their investment decisions. However, with a self-directed account come self-directed investments – meaning you get to decide the amount of risk you choose to take.