What do you do to protect your 401k when the stock market is in free fall, and your retirement savings are disappearing like ice under heat? I’m Bryan Ellis. I’ll tell you exactly how to PRESERVE, PROTECT and GROW your retirement savings RIGHT NOW in Episode #187.

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Hello, SDI Nation! Welcome to the podcast of record for savvy, self-directed investors like you! Get ready for another dose of predictably profitable thinking!

In the last 30 days, the Dow Jones Industrial Average – that’s the stock market – has been slashed by nearly 9%.

Let’s think about the gravity of that for a moment. One way to look at is this: If you’ve been working and saving for the past 30 years – and your money is in Dow-type stocks – it’s almost as if 9% of that time – that’s 2.7 YEARS – it’s almost as if 2.7 YEARS of your life has now been erased… just wiped away… as if you never put in the blood, the sweat, the tears of those years… as if they never happened at all… and now there’s a financial chasm that has to be filled… but no matter what you do, you can never, ever manufacture another 2.7 years, no matter how badly you’d like to do so.

What to do, what to do?

Well, my friends, here on SDI Radio, we don’t moan and groan, we take action… action that results in positive, impressive, even enviable results. So let’s discuss a plan right now to help YOU during the in-progress market route…

…and make no mistake: I expect it to continue. It could be ugly for a while.

Now to set the stage for you, I’ll be primarily addressing those of you who have 401k’s. But fret not, my loyal IRA-using listeners! Everything I share with you today applies almost exactly to you as well… only you automatically have more flexibility than the 401k users because most of you can, at any time, make almost any adjustment to your account that you like, but the same isn’t necessarily true of 401k users. So no matter whether you’re a 401k or IRA user, this show is for you.

My friends, conventional financial planners consistently say one thing: Don’t panic. They’ll tell you the market goes up, and the market goes down, and it’s all part of the natural cycle. And they’re right. It is part of the natural cycle. But allow me to ask you this simple question: When there’s a hurricane coming your way, inevitably, you can see the signs before it happens. And you know how horrible the damage can be. We all know about hurricane Katrina in 2005… over 1,200 people died, much of New Orleans was laid to ruins and was left under 20 feet of water. The recovery for that city still isn’t 100%... and residents there suffered MIGHTILY for many years following. But as bad as that one was, it’s nowhere near the worst of all times. That has to belong to the great hurricane in Galveston, Texas in 1900… that one KILLED over 8,000 people and utterly destroyed the area. It was destruction through and through… the raw power of nature on display for all to see… and which nobody could do anything to stop.

But it was NATURE. It was predictable. In fact, we could all see those storms coming before they came. And if you wanted to do it, you could get out of the way. That was an option. That way, your life, your family’s lives, and whatever you could take with you could be saved and gotten out of the way.

But that’s not what your financial advisor suggests that you do with your money. Not at all. Instead, he suggests that you just wait it out, that things will be better in the future, and that the future is always brighter than the past.

That’s very optimistic, isn’t it? But you, my friends, have doubtlessly mocked other people who used that logic in a different setting. Ready for the proof? How many times have you seen a person on the news during the lead-up to a horrible hurricane who says, very defiantly, “I’m not going anywhere. This is where I belong and I’m not leaving!”

That person is insane, in my humble but entirely accurate opinion. And that’s exactly the strategy you’re using with the stock market when you choose to follow your advisor’s suggestion to just “wait it out”. Insanity.

Remember Warren Buffett’s rule #1 of investing: Don’t lose money. Rule #2? Refer to rule #1. I’m not a Buffett fanboy like some, but I’m totally on board with those rules.

Bottom line: There’s a MUCH BETTER WAY that what conventional financial advisors recommend.

So let’s get on to strategy now, shall we?

You’ve got a 401k with your employer, and because of market turbulence, it’s bleeding red. Not good. And you agree that just sitting tight isn’t a good idea. What do you do?

The fundamental answer is always the same: Invest in assets that meet the S3 Criteria: Simple, Safe and Strong.

More specifically?

The simple answer… The simplest of answers… and not necessarily the best answer is this: Consider adjusting your portfolio allocation so that your capital is deployed into more conservative assets… maybe even cash assets, like a money market fund or conservative bond fund. But while those options are certainly simple and safe… they’re anything but strong. Money markets are hovering at or below 1% right now… but the long-term inflation rate is 3.2% per year, so that’s a guaranteed loser.

But what can you do? You’re locked into your employer’s 401k plan, and so the only choice you have is to invest in the relatively small basket of asset choices they make available to you… right?

Yes… but maybe not.

Some employer-sponsored 401k’s have a thing called an in-service distribution. This allows you to take some or all of the money you’ve saved in your 401k and transfer it to another type of account that will allow you greater investment flexibility… in other words… you’ll have access to assets that actually are simple AND safe AND strong.

Now a couple of things to consider about that. First, not all employer-sponsored plans offer in-service distributions. Many do not. But it’s definitely worth asking if yours does, because using that option would give you the ability to transfer at least a portion of your account into a self-directed IRA or, even better, a self-directed 401k.

Why does this matter? Consider this, my friends: What if, during the same time that the market was getting slaughtered… as is now happening… what if you could be reliably collecting 8-10% interest on your money year in and year out? Or maybe even more? And what if your money was wholly protected by COLLATERAL… so much collateral that your investment capital faces a level of risk that statistically near zero? And to boot… you’d be investing in an asset that’s so simple, even your financially unsavvy brother-in-law could understand it?

Well folks, that’s exactly what is TRULY possible using a self-directed IRA or 401k. The potential for growing your investment capital CONSISTENTLY – in good times and bad – that’s what’s available to you by having the right type of retirement account… the truly self-directed variety… and by investing that capital into assets that are SIMPLE and SAFE and STRONG.

Want a little taste of what I’m talking about? One of my clients not long ago purchased a little rental property in Birmingham, Alabama. No, not the most exciting place in the world. But he did it for a couple very simple reasons: The income is very substantial, and the income is SAFE… almost entirely insulated from the broader economic environment.

As for the numbers: He’s netting around 12% on an investment of about $50,000. Yep, you heard that right. And that’s just the cash flow. That doesn’t even include property appreciation or the vast tax benefits of owning real estate.

And do you know how much this investment will be affected by the stock market’s problems, the Chinese economy or even local economic stress? Not one little bit. It’s sold and reliable.

Is that what you’re after? Reliable financial results for your investments? Well, good news: I’ve got exactly 3 excellent rental properties in that same locale right now that match the description I just gave you. If you’d like to learn more about them, and if you’ve got at least $50,000 of liquid capital, just set up an appointment to chat with me at SDIRadio.com/consultation and I’ll be happy to tell you more.

Tomorrow, look for episode #3 of Self Directed Investor Success Stories. In that episode, I’ll give you even more details about the example I just shared with you… because my friends, there’s really something to be said for being able to count on consistent, substantial cash flow. And that’s what I’ll tell you about on tomorrow’s edition of SDI Success Stories.

In the mean time:

Invest wisely today, and live well forever!

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