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Bryan Ellis

Bryan Ellis is host of Self-Directed Investor Talk and CEO of the Self Directed Investor Society, a private association of affluent investors. He is also the investment manager of a real estate-focused private equity fund and is known as an expert in the use of self directed IRA and self-directed 401(k) accounts.
Recent episodes featuring Bryan Ellis
Can RENTAL PROPERTY OWNERS Use A Self-Directed 401(k)?  |
Episode of
Self Directed Investor Talk: Alternative Asset Investing through Self-Directed IRA's & Solo 401k's
Have rental properties and want to set up a company and an associated self-directed 401(k)? Good idea… but the IRS might stand in your way. I’m Bryan Ellis. I’ll tell you all about it RIGHT NOW in Episode #315 of Self-Directed Investor Talk---Hello, Self-Directed Investors, all across the fruited plane. Welcome to another action-packed, edge-of-your-seat thrill ride into the fantastic world of tax-free alternative asset investing. This is Self-Directed Investor Talk, the SHOW OF RECORD for savvy self-directed investors like you, and today we have an excellent show for youThis is Episode #315, so to get the transcript and other resources for today’s show, visit, that’s for all of those resources, provided to you with our compliments.So…I regularly hear from rental property investors who want to use a self-directed 401(k). The idea is that they want to form a company connected to their rental properties since one must have a business in order to establish a self-directed 401(k). On the face of it, this isn’t a bad idea.My regular listeners will, of course, know that I am a huge proponent of self-directed 401(k)’s as being the absolute crème-de-la-crème of self-directed retirement accounts versus any type of IRA in Every Single Way……Except one.“Well Bryan, what is that one exception?” I can practically hear you asking right now? It is this:Far fewer people actually QUALIFY to set up a self-directed 401(k) in the first place. The qualifications aren’t complicated – really, all you have to have is a business that you own which has no full time employees other than you and maybe also your spouse, and your business has to have earned income. That’s really about the size of it.But therein, there’s a pretty big GOTCHYA for rental property owners who want a self-directed 401(k). What is it? Well, it’s that caveat of having EARNED INCOME.Earned income, as you may know, is the type of income that results whenever an employer gives you a paycheck or, if we’re talking about a business rather than a person, it’s the type of income that results whenever a business is paid for the purchase of a product or a service. It’s income that’s earned on the basis of active effort.You’ll note that that definition doesn’t directly apply to rental income. Rental income is, under the tax code, what’s known as UNEARNED income. Not unearned in the sense that you’re unworthy of receiving the income, but unearned in the sense that rent is payment for the use of an asset rather than for the purchase of a product or service. From a tax perspective, there’s no active effort involved in receiving rental income.So that’s a problem. If the only income you are receiving comes from rental income, then all you’re receiving is UNEARNED income rather than EARNED income. And it really doesn’t matter whether those rents are being paid to you personally or to a company you form to own the properties. Either way, the nature of the income itself is still UNEARNED.And if that’s the only kind of income you’re receiving, that’s not sufficient basis to establish a self-directed 401(k), I am sorry to say.But NEVER FEAR, my friends. As always, I have a solution, which Self-Directed Investor Society clients have been using quite productively for years now, and it is this:While RENTAL INCOME won’t qualify you to set up a self-directed 401(k), what COULD qualify you to do so is to establish a PROPERTY MANAGEMENT company which serves your rental properties. In other words, let’s imagine you have one or ten or a thousand rental properties… you could very realistically and legitimately establish a company that provides property management services to your rental properties, for which it receives payment, usually in the form of a percentage of rents collected.And in your quest to set up a self-directed 401(k), that will go along way. Because while RENTAL income is UNEARNED and doesn’t qualify you to establish a self-directed 401(k), PROPERTY MANAGEMENT income is distinctly of the EARNED variety… and thus is a legitimate qualifier for the “earned income” requirement to set up a self-directed 401(k).Capiche? The idea is simply to segment a small portion of your income and do something to convert it, in a legal and legitimate sense, to the form of income that will allow you to qualify to establish a self-directed 401(k).But even this solution has a rather serious drawback. Two of them, actually. Did your investing guru – who isn’t an expert in self-directed retirement accounts – mention these drawbacks to you? I didn’t think so. But I, your exceptionally well-informed, highly opinionated, always lovable and deadly accurate host won’t hold back the goods from you.But you’re going to have to listen in tomorrow to get THE GOODS because I’m out of time for today.And that reminds me… if you haven’t SUBSCRIBED to Self-Directed Investor Talk, please do that now so you get a notice when we publish new episodes! As I suspect you can tell, this isn’t information you can afford to miss, and it’s not information you’ll get anywhere else.And second… if you like this show… and hey… YOU KNOW YOU DO! Hehehehe. Seriously, if you like this show, please consider giving us a nice 5-star rating and review in Apple Podcasts… that really, really helps to get the word out and brings in more listeners, which motivates me to make this show better and better with each passing day.That’s all I’ve got for you today my friends, except for this one parting thought:Invest wisely today, and live well forever!
Self-Directed IRA vs Self-Directed 401(k), Part 2  |
Episode of
Self Directed Investor Talk: Alternative Asset Investing through Self-Directed IRA's & Solo 401k's
Which is better for you: A self-directed IRA or a self-directed 401(k)? Today, you learn the first big distinction to help you answer that question in the best possible way for you. I am Bryan Ellis. This is episode #314 of Self-Directed Investor Talk.----Hello, self-directed investors, all across the fruited plane! Welcome to Episode #314 of Self-Directed Investor Talk, the SHOW OF RECORD for savvy self-directed investors like YOU where each day, I help you to find, understand and PROFIT from exceptional alternative investment opportunities and strategies.I, of course, am your sometimes opinionated, always accurate and consistently lovable host, Bryan Ellis. This episode – for which you can find all of the links and resources at – is the second installment of our “Choosing the Right Tool” series, where we’re looking at whether an IRA or a 401(k) is the right answer for you as a self-directed investor.Now in the last episode I did share with you some circumstances under which you need not have EITHER type of self-directed account. I won’t rehash those other than to say that you MUST have one or both of earned income from a job/employer and/or you’ve got to have money in an existing IRA or 401(k) to transfer into the account. In other words, you’ve got to have an allowable way to get money into the account. The details are in installment #1 of this series, to which I’ve linked on today’s show page at you’ve been a long time listener of SDI Talk, first of all – THANK YOU for being a long time listener! – but if that describes you, you probably already know that I have a very, very, very strong preference for using a 401(k) over an IRA whenever possible.To be clear, both tools have their place. But to my way of thinking, and for some reasons I’ll share with you now, if you’re investing in non-Wall Street assets, you should have a bias towards using a 401(k) rather than an IRA if that’s an option for you.Now way back in the beginning of this show, Episode #3 – literally five years ago – I did a whole show that showcases rather clearly 7 big reasons that a properly structured 401(k) is vastly superior to a self-directed IRA. You’d do well to check that out, and I’ve linked to it from today’s show page at a quick recap of just SOME of the reasons – there are far more than just 7 – that you should use a 401(k) if you can are as follows:1.     You can contribute FAR MORE MONEY to a 401(k) than to an IRA2.     You and your spouse can contribute money to the same plan, thus POOLING your capital and making it easier to do bigger deals.3.     401ks’ offer SUBSTANTIALLY better protection against creditors and lawsuits than IRA’s4.     Checkbook-like control of your investment capital is built into properly structured 401(k)’s. For IRA’s, on the other hand, that level of control is expensive, tedious and risky to establish.5.     If you’re using an IRA and you break the IRS rules about handling your account, you’re out of luck. It’s going to be very painful and there’s nothing you can do to fix it. Not so with 401k’s, that provide a clear path to correcting errors.6.     You can’t BORROW money from your own IRA, but you can from your own 401k!7.     A 401k includes BOTH Traditional and Roth subaccounts… you get both types in one 401k plan, which creates astounding flexibility not available in an IRA.Again, there are MANY more reasons that I firmly endorse the use of a 401(k) over an IRA for any self-directed investor who qualifies for both. Issue #5 – the one about committing prohibited transactions – if that was the only difference, that would be more than enough. But the reasons are far more extensive than that.But that caveat I mentioned: That you should use a 401(k) over an IRA if you qualify for both… it’s the question of qualification that’s our first determining factor, and that leads to the one, and I believe only, way in which IRA’s are superior to 401k’s.That way is that nearly anybody who has a job or an existing retirement account can qualify to set up a self-directed IRA. There’s just not a lot required beyond having a source of earned income.Not so with 401(k)’s. The requirements aren’t huge, but they’re notable. Here they are:First, you have to be owner or partial owner of a business.Second, that business have to make real income. It doesn’t have to be a lot of income, and it doesn’t even have to be profitable, but it does have to earn income.Third, if your business has any full-time employees other than you, your partners and your spouses, then you’ll need to use a normal self-directed 401(k). But if the only full-time employees of your business are the owners and their spouses, then you can use the solo 401(k), which is the same thing but intended for smaller businesses.So that’s it. You’ve got to own a business that makes money, even if it isn’t profitable. That’s basically what it takes to qualify to set up a self-directed 401(k) plan.Again, my strongest advice to you is this: If you qualify to use a self-directed 401(k) plan, you almost certainly should do that rather than using a self-directed IRA plan. Again, check out Episode #3 of this show – which is linked on today’s show page at – for more information that compares 401k’s to IRA’s.Here’s the good news and the bad news about 401k’s:  They can be relatively simple and inexpensive to set up, but they are NOT all the same… and sometimes, the differences are REALLY severe. I’ll do an episode sometime in the future to help you see how stark those differences can be. But in the mean time, if you’d like to set up a self-directed 401k and want a referral to someone who can do that for you and do it exactly right the first time, just drop an email to me at and I’ll be happy to get you connected.Now, having clarified the general superiority of 401k’s over IRA’s, that still leaves us with a big question: If you only qualify for an IRA and not a 401k, which TYPE of IRA should you use? Because it turns out there are a LOT of variation with HUGE differences! We’ll dig into that question in the NEXT episode of our Making The Right Choice series here on SDI Talk, so stay tuned!My friends… invest wisely today, and live well forever!
Mark Cuban said WHAT?  |
Episode of
Self Directed Investor Talk: Alternative Asset Investing through Self-Directed IRA's & Solo 401k's
Mark Cuban said WHAT? Political correctness rears its ugly, stupid head again. Today, we take a brief break from our “Choosing the Right Tool” series to address some utterly foolish comments made by a normally reasonable and thoughtful person. I’m Bryan Ellis. This is episode #313 of Self-Directed Investor Talk.---Hello, Self-Directed Investors, all across the fruited plane! Welcome to Episode #313 of Self-Directed Investor Talk, the SHOW OF RECORD for savvy self-directed investors like you, where each day, I help you to find, understand and profit from exceptional investments and strategies.Today’s show notes, transcript and resources are available to you, at no cost and with my complements, over at we began to focus on the question of determining which type of self-directed account is better for you: the self-directed IRA or solo 401(k). We’re going to return to that tomorrow and likely for a couple of additional episodes as well, but something came up today in my news feed that I thought I’d address with you.Mark Cuban – the businessman who famously became a billionaire when he sold to Yahoo in 1999 – is someone to whom I pay attention and whose words are generally surprisingly grounded given that he is, after all, a billionaire. I respect that.Furthermore, I know a lot of you respect him and his work, too. And you and I as self-directed investors are obligated to pay attention to smart people since we make our own investment decisions. Unfortunately, it looks like Mark Cuban’s thinking may now be muddled and more politically-oriented than business-oriented.Case in point: A new article on Yahoo Finance called “Mark Cuban describes the best way to reduce wealth inequality”. I’ve linked to it today from, be sure to check it out.Now right away, whenever you see the words “wealth inequality”, you know someone is speaking to a political audience and not an investor- or business-oriented audience, because wealth inequality is a totally contrived problem.On the surface, the words “wealth inequality” seem to mean that some people have more wealth than some other people. Yep, that’s true. And thank God for it. Those who do better than I do provide great inspiration, motivation and examples for me to up my game. Hopefully I provide a good example for those not at my level. That’s what “wealth inequality” really is: The scorecard of capitalism and the financial representation of dogged determination.That’s capitalism at the core, and capitalism is a good thing. My model of wealth building and your model of wealth building – self-directed investing – depend on capitalism. Always remember that.Now “wealth inequality” might represent an actual real problem, rather than a totally contrived one, but only if our economy was a zero-sum game. If, in other words, it was the case that every dollar I make means that you can’t make that dollar… well, in that case, the scarce supply of wealth might change the game. But that’s not reality. When another oil well is found, new wealth is discovered. When a new software program is developed that has commercial appeal, new wealth is created. Wealth in a capitalist economy like ours is not a zero-sum issue, but is simply a representation of the value of resources and ideas. There are zero circumstances under which it can be said that the fabulous wealth of Bill Gates or Warren Buffett or Jeff Bezos or Mark Cuban has hurt my ability or your ability to become wealthy in any way. In fact, it’s likely that every one of them have IMPROVED your odds in some way.That’s why Cuban’s promotion of this issue is disappointing to me, and also quite illogical. In the Yahoo Finance interview, he’s suggesting, for example, that to really change the wealth inequality situation, that people on the lower end need to begin accumulating assets. I totally agree with this, by the way. But then he goes on to suggest that one of the provisions of the new Federal Tax law – the provision whereby a cap is placed on the amount of federal income tax deductions one can take for the STATE and LOCAL taxes they’ve already paid – Cuban suggests that this provision makes it harder for lower-income people to actually buy houses or other assets in order to get themselves above the lower-end of the financial spectrum.That sounds good to people of a certain political persuasion, but here’s the problem: It’s wrong. Low-income people are, almost by definition, unaffected by the tax code provision he cites. As in, an effect of zero, zilch, nada. It just doesn’t make any sense what Cuban is saying here.Of course, some of the other things in the interview he says DO make rational sense, so I’m not saying that this guy is a fool or is absolutely misleading. What I am saying to you is this:Mark Cuban is now definitely endorsing some ideas that only make sense in a political world, not in the real world. Not all of them, but definitely some of his ideas can be described that way. So if you’re like me, you’re a self-directed investor and you’ve taken Mark Cuban’s advice to be the kind of advice which is inherently always worth considering seriously, well… maybe it’s time we rethink the degree to which we take his opinions seriously.Because at the end of the day, folks, this is true: When it comes time to pay for your retirement, you’re not a Republican and you’re not a Democrat. You’ve got expenses to cover and bills to pay… and nothing said by a politician or aspiring politician will help you with that.My friends, invest wisely today and live well forever.
What's Best For You:  Self-Directed IRA or Solo 401(k)?  |
Episode of
Self Directed Investor Talk: Alternative Asset Investing through Self-Directed IRA's & Solo 401k's
What’s better for you: A self-directed IRA or a solo 401(k)? This is a critical and distinctly untrivial decision… particularly if you’re investing in real estate, syndications or any type of complex transactions. I’m Bryan Ellis. I’ll tell you how to make the right choice for you right now in episode #312.----Hello, self-directed investors, all across the fruited plane! Welcome to Self-Directed Investor Talk, the SHOW OF RECORD for savvy self-directed investors like YOU where each day, I help you to find, understand and PROFIT from exceptional alternative investment opportunities and strategies.I, of course, am your kind, lovable host, Bryan Ellis. Today we venture into the start of a new series that I call the “Choosing The Right Tool” Series wherein you’ll see rather clearly how to choose which type of account is right for you, because the answer is truly not the same for everyone.This, my friends, is episode #312. To hear the episode again or to read the transcript or enjoy the resources I mention on today’s show, feel free to visit and you’ll find it all there, available for you to freely enjoy with my complements.Before we jump in today, I have a quick announcement that’s very exciting! Next month, July of 2019, will see the publication of Issue #1 of a brand new magazine that’s being published by yours truly. It’s called Self-Directed Investor Magazine and if you enjoy this show – and come on… come on… you know you do! – hehehe if you enjoy the Self-Directed Investor Talk podcast, you’re going to LOVE Self-Directed Investor Magazine.Furthermore, it will be under the editorial control of my wife, Carole Ellis, so it will be GREAT. She didn’t get that job because we’re married. She’s got that job because she is the best there is for this task. She has VAST editorial experience, having been editor-in-chief for the well-respected journal called Research (published by the University of Georgia). She was also the editor in chief of Think Realty Magazine, a niche publication for individual real estate investors.   And she also had full control of my own real estate newsletter, the Bryan Ellis Investing Letter, and it’s subscribership of over 600,000 investors worldwide. Point is: Carole is a highly-regarded professional in the sphere of magazine editorial work and there’s literally no one I’d hire instead of her. I’m genuinely honored she’s decided to do this, and I know you’re going to enjoy the fruit of her effort too.And oh… by the way… would you like a free subscription to Self-Directed Investor Magazine? I mean… totally free? Well, I’ll tell you how to do that momentarily. But first:So which is right for you: A self-directed IRA or solo 401(k)? That’s a great and very important question, as you’ll begin to truly understand forthwith.First, let’s define exactly what I mean. When I say “self-directed IRA” or “solo 401(k)” or even the more generic “self-directed retirement account”, I’m referring generically – unless I say otherwise – to a retirement account that has nearly no limits on the types of investments you can make. This is in contrast to the term I coined for the other type of IRA which is the “captive” retirement account. Captive accounts are the ones provided by your bank or your company’s 401(k) plan or your stock brokerage company.  It’s not necessarily easy to know, just based on the name of the account, whether you’re using a “captive” account or a “self-directed” account because a lot of the companies that provide captive accounts still called them “self-directed” or something similar to that. So if you need to know which type you’re currently using, here’s a simple and very decisive test: Call up your retirement account provider and ask them this question: Can I use the money in my retirement account to purchase a herd of dairy cattle? If the answer is “yes”, you’ve got a self-directed account. If the answer is “no”, then you have a captive account. Easy-peasy.With that foundational question out of the way, we’ll return to the question of whether a “self-directed IRA” or a “solo 401(k)” is the better tool for you. Now, you might notice the bias from which I’m working, that being that you should definitely be using one or the other of those types of self-directed accounts.I’d like to disabuse you of such thinking right now. In fact, not everyone needs a self-directed account. They really don’t. And if they don’t actually need these accounts, they shouldn’t use them.Who might NOT need a self-directed IRA or solo 401(k)?Well, if you are deeply and exclusively committed to investing only in the assets that are available to you from your current IRA or 401(k) provider, then there’s no real need for you to have a self-directed IRA or solo 401(k) at all. You’re not going to get better investment results by investing in publicly-traded stocks or mutual funds simply by performing those investments inside of a self-directed retirement account.Also, you really need not have a self-directed account unless you have a way to get some money into that account. In general, there are two ways to get money into a retirement account.  The first one is that you set aside some money from the income you earn from your job or business. So in tax parlance, this means you must have what is called “earned income” in order to qualify to make contributions to any kind of retirement account.The other way to get money into a retirement account is by way of TRANSFER. So let’s just imagine you have a 401(k) from a previous job or maybe an IRA that you began building years ago. If you wanted to have a self-directed retirement account, it’s quite likely you could simply transfer the money in your existing accounts – which are probably with “captive” account institutions like your bank or stock brokerage – over to a “self-directed” account so you have the ability to invest that money any way you want.So what we have so far is: If you don’t plan to invest outside the realm of publicly-traded securities, then you don’t need a self-directed account at all. And if you want to have a self-directed account, you must have one or both of some sort of earned income and/or an existing account in order to fund your new self-directed account.Now, unfortunately we’re out of time for today, so when we resume tomorrow, having this well-established foundation, we’ll dig deep into the question of which type of self-directed account – IRA or 401(k) – is the superior choice for YOU and YOUR needs.Hey my friends if you have any questions you’d like for me to address, be sure to send them to and also – about getting a free subscription to the magazine – join me for tomorrow’s episode #313 and I’ll tell you how to do that then.In the mean time: Invest wisely today and live well forever!
YES!  a RISK-FREE $100,000+ Bump To Your Retirement Savings?  |
Episode of
Self Directed Investor Talk: Alternative Asset Investing through Self-Directed IRA's & Solo 401k's
This may be the most astoundingly brilliant and simple way to bring in a 6-digit bump to your retirement account balance practically overnight and without risk. I’m Bryan Ellis. Get ready to be blown away right now in Episode #311 of Self-Directed Investor Talk.---Hello, Self-Directed Investors all across the fruited plane! Welcome to Self-Directed Investor Talk, the SHOW OF RECORD for savvy self-directed investors like you.I, of course, am your host, Bryan Ellis. Today is Episode #311… so when you get the itch to hear this show again or to review any of the resources I refer to in today’s episode, remember that that’s available to you at no cost by visiting let’s do this.Ok, I’ve got to clearly disclose something to you… I’m still doing my research into what I’m about to share with you. I’ll have some excellent additional clarity on this within 2 weeks, and if you’d like to find out what I determine as a final matter, I’ll tell you how to get that info in just a minute.So the premise today is this: I’m going to tell you how to bring in a 6-digit bump to your retirement account balance in no time flat with no risk. Sounds too good to be true, doesn’t it? Maybe it is… I’ll know within 2 weeks… but I have great reason to think this is going to work out.So let’s set the stage here.One of the most interesting investment strategies I’ve ever heard of is called “viatical settlements”. The basic idea is this: An investor identifies a person who has a life insurance policy and who, for whatever reason, would rather have money right now rather than waiting for their beneficiaries to receive the money later.So maybe this person has a life insurance policy that will pay out $1,000,000. If you’re investing in viatical settlements, then the amount you’ll offer for that policy is based entirely on how soon you’ll receive the payout. So if the person is already in a hospice care facility and will likely pass on within a few weeks, then maybe you’ll have to pay $950,000 for the policy, because you won’t have to wait long for the payout.But if the person is 60 years old and in great health, then you might only pay $100,000 because it could still be 30 years before you receive a payout on that policy.So that’s what a viatical settlement is, and it’s always interested me as an asset class.But then recently I was having lunch with a dear friend of mine, whose name is also Bryon. Bryon has been a very good friend to me… he’s eclectic, he’s brilliant, and he’s definitely among the most generous people I’ve ever encountered. He’s also been rather successful financially, and also comes from a family who experienced great financial success, and he has the wonderful frame of reference that goes with such an upbringing.Bryon once told me something about his father that totally blew my mind and struck me as utterly brilliant: His father was seriously involved in viatical settlements… but as a seller, not a buyer!In other words, what he’d do is to establish a life insurance policy, and then promptly sell that policy to a viatical settlements investor. So maybe he would set up a $1,000,000 policy and then sell that policy to an investor for $100,000 to $200,000.Just think of where that put him… With no more effort than establishing a life insurance policy, he suddenly has $100,000 to $200,000 cash in his pocket that he can use for whatever he wants! This is astounding!!!And what if you need to establish or quickly grow the size of your retirement savings?Well, my friends… here’s where my research is still ongoing, so don’t take what I’m about to tell you as absolute gospel. Rather, I’m telling you about the research I’m doing. But here’s how the theory goes:If you happen to be wise enough to be using a self-directed 401(k) for your retirement investing, this could work for you. It won’t work for self-directed IRA’s because they can’t own life insurance.But if you use a self-directed 401(k), it is actually allowable under certain circumstances for your 401(k) to buy a life insurance policy on YOUR life… and then instead of YOU selling off your life insurance policy to a viatical settlement investor, your 401(k) would do it instead. And voila! Your 401(k) suddenly has a big chunk of income and has done so in a risk-free manner.Just think of that, folks… that could be HUGE… really huge.Now my friends, let me remind you: I’m still doing the research to confirm whether the fact is as good as the theory on this, including whatever tax ramifications may exist. I’ll know soon and will be happy to update you soon as I know. If you’d like for me to be sure to let you know when I get conclusive information on this, then do this:Drop an email to me at and just let me know you’d like for me to update you when I get the info and I’ll be happy to do it. Again, just drop an email to me at and I’ll update you within a couple weeks when I have final information.My friends, I hope you’ve enjoyed this excursion into some rather creative investment thinking and remember this: Invest wisely today, and live well forever.
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