By: Daniel Ortega, Head of Retail Sales

Currently, stock market investors aren’t too thrilled about the volatility they are experiencing in their portfolios. The Federal Reserve has signaled its continued plan to raise interest rates, which has many Americans looming with concerns of higher and higher inflation. I’ve spoken with some market experts who are predicting a significant market correction is on the horizon. With an unstable job market, employee wages out of control, and a booming national housing market, there seems to be a sense that there isn’t a safe place to park or make money right now. However, I disagree. Savvy investors don’t waste their time simply discussing the market conditions, instead, they identify ways to turn instability into opportunity. There always are and always will be political, social, and market conditions that affect our investment outlook along with opinions on what actions could be taken to achieve our desired financial objectives. Therefore, it is important to remain curious as an investor and ask ourselves “what effect can the current political, social, and financial conditions of today have on my retirement situation in the future? And what actions should I evaluate taking to ensure a successful outcome is realized?” The reality is that not everything that is happening right now has the same effect on each of our investment portfolios. 

For example, let’s take a negative message like “inflation is raising costs and causing prices to go up everywhere.” You may go to the gas pump or local restaurant and get a feeling this is true – that it’s negatively impacting your monthly budgetary expenditures. On the flip side, however, you may also own a couple of rental properties in which you have the opportunity to take action by raising the rent on your tenant’s lease agreements, leading to a higher return on your investment income. Therefore, what can seem like a bad thing on one end, can be a positive on another. 

What other negative market realities can be turned into positive outcomes? 

It is this type of opportunistic inquiry that separates successful investors from less successful ones.

Let’s take another example, like the job market. We keep hearing how horrible the job market is right now. Millions of small, medium, and large businesses are not only understaffed but are also finding it very difficult to attract and keep talent. We’ve all heard about “The Great Resignation” and “Great Reshuffle.” The pandemic caused many employees to reconsider their professional and personal priorities, which led many to quit, move jobs or use it as an opportunity to venture out on their own as entrepreneurs. On the bright side, however, this employee movement has positively impacted the number of accessible retirement funds available to investors. Before the pandemic, Baby Boomers leaving the workforce was already creating a forecast of over $2 Trillion expected to be rolled over from employer-based plans, such as 401(K)s, into IRAs. Post pandemic, however, it’s not just the Baby Boomer demographic driving rollover activity. The mass exodus of employees of all ages is causing more money than ever before to be moved from employer plans into IRAs. 

So how can a horrible job market be turned into a positive? 

Enter the Self-Directed IRA. If you or someone you know is part of the ever-increasing number of Americans changing their employment status, you have the opportunity to regain greater control of your retirement savings and redirect your nest egg into real estate-based strategies you feel can better serve your long-term financial objectives. 

With a Self-Directed IRA, you can use these newly rolled over funds to lend money to third parties on your terms, making between 8-12% on your money, using a variety of lending strategies: short term bridge loans to fix and flippers, hard money loans, commercial and residential real estate loans, etc. Self-Directed IRAs can also be a great alternative funding source for buyers seeking capital, given that traditional banks are increasingly tightening their underwriting requirements. If you prefer to be on the equity side of real estate instead of the credit side, you can just as easily choose to direct your Self-Directed IRA monies into direct property investments. The choice is yours. Additionally, if you’re an investor looking to buy real estate and are unable to secure traditional financing, it’s time to begin thinking outside the box, by looking inside your circle. By sharing this knowledge with your friends, family, and colleagues that may be a part of the employee reshuffle, you may also be helping yourself increase the access to more capital you may need to structure your next deal.

If you’re interested in learning more about how your retirement savings can be utilized to invest in real estate-based strategies, I would encourage you to click here to register for Vantage’s “Set Your IRA Free” Workshop. This may be the next step you can take to turn a negative into a positive.

Happy Investing!