How To Use Retirement Funds To Start Your Business | Greg Herlean
Today I chat with Greg Herlean, a close friend and financial wizard, who sheds light on the potential of self-directed IRAs for entrepreneurs. Greg walks us through how these retirement accounts can be creatively utilized for investments far beyond the stock market, including in real estate, cryptocurrencies, and even unique assets like cutting horses, offering significant tax benefits and the possibility of substantial returns. He shares his journey of founding Horizon Trust to demystify and facilitate the process for investors, urging listeners to explore self-directed IRAs as a strategic tool for financial growth and tax savings, ultimately encouraging entrepreneurs to broaden their investment horizons and seize control of their financial futures.
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Justin: What is up? Entrepreneur, DNA family, I am back with another episode with an incredible guest. This guest has taught me a ton about money, the financial systems, how to use it, how to find it, how to buy jets, how to buy cars, how to buy watches, how to buy cattle, how to buy crypto, all with not using my money, saving taxes. My close friend Greg Herlean, is here. What is happening? Bro?
Greg: Mr. Colby, thanks for having me, man, thanks for having me.
Justin: Yeah, dude, I’m excited you’re here. For all those who don’t know who Greg is? He has an extensive background in business the last 20 years. I would encourage all of you immediately to go start following his Instagram. “gregherlean”. He just delivers great content all the time. So, first and foremost, make sure you follow him there. But if you are a small business owner and you want to know how to do more with the money you have? If you want to know where to find more money? Or maybe you have retirement accounts like 401Ks, IRAs, or know people who do this is an episode you absolutely must listen to, because you can either buy a jet, you can finance your business, you can buy cryptocurrency, you can do all these things, and you could do it with none of your own money in your checking account. And so this is gonna be a fun episode, dude. I’m excited to have you.
Greg: Thanks for having me. Man, yeah, it’s, this is a, this is a subject that I never thought that when I started in the real estate world 23 years ago that I now be spending most of my energy on teaching people strategies of how to find money and leverage other people’s money and or avoid paying taxes like that was that all sounds kind of boring. I think actually, until you, like, actually get it. But like, that’s what I do now. And it is so fun. It is so fun. So, yeah.
Justin: And you taught me a while ago. I think I brought it up. I was like, it’s not the most sexy conversation. He’s like, Justin, this is the most sexy conversation you’ll possibly have. How to keep more money in your pocket and make even more of it. Like there’s no and I’m like, oh, yeah, you’re actually right about that. So listen, you have been able to, you know, you have. You’re a big lender in the space of real estate. You run an incredible company called “Horizon Trust”, and we’ll talk more about that. But what I’m kind of curious to know. What the people want to know is, what have you seen at all these years be the most unique, craziest, off the wall investment that you’ve seen someone make out of a retirement account?
Greg: Well Justin. I mean, I can answer that question, but I feel like I should first say, like what we focus on is teaching people how to, yes, avoid taxes, but how to use their retirement funds the way they want. So, I’ll take a step back before that question, because that’s a fun question. But before it’s just so people know are talking about, if you have, like, a retirement account and you think that you can only invest in the stock market, you’re wrong. First of all, since the 70s, some things come out, and the IRS has allowed us to invest and use our monies the way we want to, and it can be in the strangest, interesting or exciting ways that maybe you’ve never heard of which I’m going to answer your question. But first I want to say, if you’re one of those people that have an old 401k with a previous employer that is not performing that you don’t like, you can actually get access to those funds and invest it in what you like. On top of that, if you’re listening and you have an IRA or an old 401k or a Roth, a simple Sep, whatever you too, can do what we’re talking about today. Now it doesn’t mean you’re gonna do the thing that I’m gonna share with you right now, the strangest thing that I think I’ve ever seen, which is, I don’t know if it’s the strangest thing, but I think it’s one of the most unique things. Justin, do you know what a cutting horse is?
Justin: A cutting horse. I have no idea what a cutting horse is.
Greg: So, neither did I. A cutting horse and please don’t hold me to this if you’re listening like I’m explaining it incorrectly. But it is a a horse that is trained to help herd animals to where they need to go, typically, like, you know, it could be horses, it could be cattle, one of the cases, but they are trained professional horses, right? Well, this individual, excuse me, with their self directed IRA, with retirement money, bought a cutting horse, okay. A $70,000 cutting horse. Okay, yeah, they do. So, their IRA owns this cutting horse. Now, I know this sounds strange, right? We’re talking about money here and I’m talking about horses. The sexy part of that is their IRA bought the horse and that horse gets rent to. I don’t know if rented or chartered out. I don’t know the right words, how. It’s leased out.
Justin: Leased out or something like that.
Greg: And the rodeos use these horses to help them at every rodeo, right? For in. I’m Sorry I’m not a horse guy. They get every weekend anywhere from $1,000 to $2,000 for that horse. Now start doing the math on that investment. A $70,000 horse bought by the IRA every single weekend, even though it’s say, let’s say it’s half the weekends, right? It’s 20 to 30 weekends a year. One to $2,000 is paid back to the IRA because the IRA purchased the horse, not the LLC, not Justin Coby, not me. Because we wouldn’t know what we’re doing, but the IRA, on behalf of that individual bought it. All that money goes back into their IRA, they don’t pay any taxes on the money, potentially forever, if that account is a Roth self fretted IRA. Now, if it’s a traditional someday, they’ll pay taxes. But you asked me, this the craziest thing. I feel like that just could be it.
Justin: That I think that is insane. But because I think the way I think brilliant, I think brilliant is when I hear that, I say, that’s brilliant, right? And so, I don’t want to take, you know? Our episode and try to describe all the different, you know? Retirement accounts. But why I want all the listeners to understand is the power of what a retirement account can mean to you, right? And so when you and I were just talking offline here before the camera started rolling, I talked about an example of like, if someone wants to start a bakery, right? Or donut shop, or something that, like isn’t real estate, since we both come from real estate, like there’s so much money out there that either they themselves could so let me ask you a direct question. If I wanted to go start a bakery and I had a retirement account, could I start a bakery and the owner of that bakery is my retirement account?
Greg: The quick answer is yes, absolutely. The longer (Interesting) details about how you can pay yourself or what you’re actually doing at the baker, but the the quick answer is absolutely. And that’s what’s that’s what’s so unique about a self directed IRA like this subject is so sexy and exciting to I think me because I’m able to teach people how they can invest their boring retirement money that they can’t touch, per se until they’re 59 and a half, into things that they know, like and understand. And I know I remember when you and I first started, you were like, I got this IRA I’m gonna buy bitcoin. And I was like, Oh my gosh, this is a lot easier. And you did, and you can, and if that’s your cup of tea and I know that was just a little part of your money and you’re a guy, but I think that’s another example. Can you buy a bakery? Absolutely? Do I recommend restaurants and bakeries? Probably Not. But it’s also not my cup of tea. If it’s something you know and understand absolutely invest in it. There’s just a few little rules and that’s what we do at our companies. We actually help you make sure you don’t break any of the prohibited transactions. And like you said, we’re not going to dive into the details, but our job at Horizon is to help individuals. I feel like have their dreams come alive. Because, believe it or not, like when I first started at 23 years old in real estate I had no money. I Had no IRA. I really didn’t have banks that were lending me money. I was new, and I learned this subject at 23 and I know Justin, what you were doing at 23 and what I was doing at 23 was totally different (Totally different). I was listening and learning about what you could do with an IRA at 23 and even though I didn’t have one, I went and taught someone educated them that had an IRA that they could be my partner in my first deal, my first real estate deal. My first real estate deal, they lent me 100% of the equity that I needed from their IRA and partnered with me on my first flip.
Justin: Yeah. In most people who do listen to me, the listeners that are, you know, pretty loyal. They know I come for the real estate space. So the real estate space, regardless of what you’re doing in in your business, since we’re talking to just general entrepreneurs, regardless of the vertical. If you are trying to build wealth through real estate on any level, I highly encourage you to get a hold of Greg’s team. Horizon Trust is my trusted source where my money is at. But also, the reason why it was so important for him to be on this podcast is because there’s a lot of people out there that want to make more money, they want to not pay the IRS, but they also want to accumulate wealth. And so what I want to do now right this moment is actually tell people you will likely come up with a bunch of questions that we’re not going to answer because we have a limited amount of time on the episode, but I want you to go to https://horizontrust.com/justin/. And I want you to get a hold of Greg’s team, because we’re going to have a good time on the episode, and we’ll give you some great content. But you might want to understand better on how to raise more money and capital for your own. You know? Interest in business, you might want to understand if you already have one, what can I be doing with this? Where does it go? What’s a good investment? How can I utilize it better? Can I lend it? Can I not lend it? Can I buy my own personal house? Can I not buy my like there’s gonna be a lot of questions as a listener you’re probably gonna think about so I just really want you guys to know now we probably will answer all of them here. Go to https://horizontrust.com/justin/. So, with that said, you know, one of the things I think you know is appealing to a lot of the general public is why or how the wealthy are able to have certain write offs, like private jets, really fancy $300,000 cars. Let’s talk a little bit about that. I know that’s a trigger II click baity subject that I think a lot of people judge, you know, they judge the people like the Donald Trumps of the world. Like, how does he not pay taxes? They judge the people like Grant cardones, how does he have two jets and two helicopters? And there are rules that are written that allow for this to happen, but also they know what Greg knows. And, and let’s just talk about that, right? And how you can use your own retirement account for these type of investments.
Greg: Yeah, look it the Yeah. I mean, you nailed that. The rich keep getting richer because they know the rules. That’s it, but those rules are there for you and I and others as well. And so when I say the rich, you’re talking about the mega rich, the billionaires, the Mitt Romneys, that I mean the government, right? These people that are creating the rules are using the rules to the highest ability, right? And there’s no reason why we can’t and shouldn’t as well. And that that’s why, again, I keep saying it, why self directing is so sexy. It this is a way in which it’s an approved vehicle that allows an individual to make massive gains every single year and avoid or defer paying taxes, and so, I mean, there’s the Peter Thiel example. So, he was one of the original, you can Google original partners in Paypal, right? So, he started PayPal with others. He put in his capital contribution. He put in his Roth, his Roth, self directed. Ira was the owner in this new business. So it might not be PayPal for you. It could be some other new company. Could be the bakery you talked about. Could be a horse, whatever, right? But his $5,000 self directed IRA was an equity contributor to PayPal when it first began. Was just an idea when probably everyone else is like, f off. This is a terrible idea. He’s like, I’ll put 5000 my Roth in there. Well, we all know what happened at PayPal. He ended up selling his position for hundreds of millions of dollars. So when it was sold, his hundreds of millions of dollars on that deal went back into his Roth. Did he pay taxes on that? Zero, how much will he play later? Zero. He then used those monies to go into his next couple ventures. His Roth IRA today is worth, I don’t know, you can Google it, but I think it’s over a billion dollars. Let me I don’t know if it’s a billion Google it. It’s a lot. What? Yeah, the what the government came out with, though, thanks to him, is they came out with this rule. It says you can no longer make that much money in your Rot, IRA.Now can only make ten million a year. They put a cap. I still feel like that’s totally fair game. Making 10 million a year inside of your Roth and not paying taxes ever is powerful. So look, this subject of self directing is really, it’s not just a rich game. A lot of people listening probably don’t realize that you have this old, $15,000 old 401k from this job that you hated or worked out for a few years. You don’t even know what it’s worth today. It’s going like this, up and down, up and down, you don’t even know. And that’s okay, because that’s what, like the other 90 million Americans have as well on their accounts. So if you’re one of those people, don’t just let it sit there. Invest in something that you are more passionate about, something that you have maybe more control over. And so that being said, if you have $15,000 you could wholesale a deal. Imagine if you wholesaled one real estate deal every single year, just one (Yeah) with your retirement account. So you moved your $10,000 out that you think is worth nothing. And it’s just been doing this comes over us at Horizon Trust. You have a self-directed account. And you wholesale it once a year. Your 10 turns into what’s a fair wholesale fee, five or 10,000 a year on a one deal. (10,000) you doubled it 100% rate of return on one deal every single year. And if you do it inside of a self directed Roth no taxes. Now that’s what gets me excited. Now you’re growing and you’re compounding, which is a whole nother segment like talk about sexy you start talking about compounding interest? Like compounding interest, making profits on profits, and again, avoiding or deferring taxes, depending on what kind of account you have. That gets very, very powerful, very powerful.
Justin: Did you know that you can unlock retirement account and old 401Ks and invest them into whatever you want? Today’s episode is brought to you by the retirement innovators at Horizon Trust Company, if you’re looking to break free from the limitations of traditional retirement plans and dive into a world of endless investment possibilities. Horizon trust is your key to unlocking financial freedom. With a self directed IRA from Verizon trust you’re not just saving for retirement, you’re actively shaping it. Whether you’re passionate about real estate, intrigued by the potential of cryptocurrency, or interested in diversifying with precious metals, Horizon trust empowers you to invest in what you know and love. Founded by industry Titan Greg Carleen, Horizon Trust has over 1 billion in assets. Horizon trust brings unparalleled expertise to retirement strategy. Their commitment to excellence is why they are a five star rated, self directed IRA custodian, trusted by savvy investors nationwide. Experience the future of retirement planning with horizon trusts, Cutting Edge account portal from detailed investment reporting to real time alerts and dedicated client support, they provide all the tools you need to invest with confidence and speed. Join the community of forward thinking investors who have made Horizon Trust America’s top choice for self directed custodianship. Schedule a consultation with the IRA specialist today by visiting https://horizontrust.com/justin/ and discover how to amplify your retirement savings with the power of alternative investments. Don’t just plan for retirement. Pave the way to a wealthy future with Horizon Trust. Yeah, so let’s, let’s do that. If the vast majority of the people out there likely have somewhere from 10 to 20, maybe $30,000, sitting in their Roth, what can they do? What should they do? And again, maybe this episode isn’t where you want to give the advice. Maybe that’s where they should probably get a hold of your team. But like, what are options? You know, because I know some things that I immediately, I go real estate of course even when you say crypto, yeah, I went, took a portion of my IRA and I put it into crypto. And trust me it served me very well, even though you made fun of me at the time, but you can do those things I bring up like Greg comes to me and says, Justin, I’m starting this company. You want to invest in it? Okay? Well, why can’t one my Roth invest in it? So when Greg pays me back my 20% return, well, it’s all tax free, right? And especially those, what goes through my head is, if you are an income earner, if you’re making a salary 100 grand a year, if you’re if you’re paying your bills already, then this is your retirement account. You are building your retirement by making investments in other things, such as other businesses, real estate, you know, private jets, that you give off to a charter, charter company, right? Like, that’s a business. And let’s just say that private jet makes you. What would a private jet Greg make you? Maybe a year, potential earnings a year.
Greg: Oh man, oh man. That’s like saying, what would a Kia Uber make? And what would Uber with the Rolls Royce make? It depends on what kind of plane you got what kind of.
Justin: Well I just think it’s fun talk, but, but you get my point. I mean, you can make that investment.
Greg: It’s we’re talking about, we charter a jet. You’re making hundreds of thousands or you’re making tens of thousands, depending upon, you know, if it’s a two-seater or a 12 seater, you know.
Justin: What is the person with 15,000 20,000 what are they? What are the options there? What should they be looking at? What should they be doing?
Greg: Well look, everyone’s get start somewhere. And even if someone’s got $5,000 it depends upon really your education and or what you’re interested in. For me, and like, I have a son right now. You know my son, Carson. He’s 21 years old, and he’s got a Roth and he has started investing in real estate. He also started investing in these truck leads. He bought a truck, a truck with his his IRA, and it’s a truck that it’s a container kind of truck. Again, I’m not Trucking is like cutting horses for me. I’m not an expert in the space, but you know, it’s a buy and sell and leased out to a trucker for a time. And then you anyways, he started that with he lent on that, I think with seven or $10,000 in his Roth account with us. And he’s getting these checks because he’s leasing out the truck, and so that’s what he’s doing, right? He’s doing, he’s doing some bitcoin. I’ve see a lot of individuals do wholesaling. I see people buy right now today, which is actually did a podcast in this couple weeks ago, a couple weeks ago, is precious metals. You know metals with the crazy, you know, with inflation and the dollar, you know, a hard metallic. Your IRA can buy hard precious metals, gold and silvers that are approved. And so that’s a place you can start with $1,000 outside of you know, typical buying this huge real estate deal. I didn’t buy my first real estate deal with my IRA. I started lending or syndicating. And so if you have $15,000 you and your two buddies that each have $15,000 could come together and lend to somebody or or buy your first flip, you know, and right there’s areas where you can buy a $50,000 feel like you just bought one last you talked about it last week. $50,000 purchase. Rehab it. You’re into it 70, and you sell it for 90 to 100 or rent it out. There’s so it’s unlimited. And so you know, on that subject, as far as what you can do, and who’s doing, what I’m saying, there’s, there’s over 100 million IRAs in the United States, just over 100 million IRAs, which is over $4.7 trillion only 4% of Americans, self direct, only 4% are doing what we’re talking about right now.
Justin: What is 4% of.. I mean, that’s crazy, yeah. I mean, that’s crazy.
The two reasons, the two main reasons why the only 4% do this is the first reason, is people just don’t know. They don’t know it’s enough. (Right). And why don’t they know? Why do you think your financial advisor is going to tell you that you can move your money from him or her and put it into a company like ours or someone else’s and invest it in something else? That’s not, that’s not their pitch. That’s, that’s one of the top reasons.
Justin: they don’t make any money on that advice.
Greg: They make no money on that advice. The second reason it is not for everybody, which is why advisors are good people. Because most of America should not be self directed. Most of America are not entrepreneurs. Most of America isn’t hustling and working 70 hour weeks like even me today. I don’t have to, but I want to. I love it. I’m building. I’m scaling. I’m growing. I’ve got relationships. I’ve got kids five. I gotta work and so and you too, now that you got another one this last couple weeks ago. So it’s a message that the world or the country, I should say needs to understand and they themselves need to choose if they should do it or not. And most entrepreneurs that I meet are the right kind of people that should be self-directing. They’re the ones that need access to more money. They need to either borrow more funds from somebody else or put more money into a new business. This unlocks a whole area of funding that you are probably not aware of.
Justin: Yeah. Now let me ask you a question. Let’s say there’s a company that has is having some financial challenges right now, and could use some, you know, more money, right? Could use a little financial I’m blanking on the word. But could a business owner lend or borrow from the owner of the businesses? Ira? So, I’ll make the example so it’s a little bit more clear. I run the bakery. The bakery sales are dropping. I could use a little stimulus package, if you will. I need about 10 grand. Could I have my IRA lend 10 grand to my bakery?
Greg: The quick answer is no. The long answer is potentially. It’s probably the most complicated, complicated example that you’re giving me. So, thank you. The reason why it’s complicated is you’re potentially co-mingling your personal IRA and non-IRA qualified monies together, and you also, most likely are taking distributions as a bakery owner, (Yeah) from the bakery owner a so that’s why it’s like, it’s a complicated example.
Justin: Yeah, that might have been.
Greg: Let me use your example a little bit differently. Let’s say you’re the bakery owner. That needs a little cash influx and and instead of using your IRA, you could come to me and be like, hey, look, I just need an extra 25, 50, $100,000 you know, to get through COVID or whatever the case is, right? Whatever you want to use it for. You come to me and say, I’m willing to pay your IRA Greg if you want to lend to my bakery, my LLC, you’re willing to give me either you could sell me equity or you could pay me an interest rate. That’s for us to decide. I’ll decide if I want to do it on behalf of my IRA with you and you’ll decide for your business what the term should be. And that I think is the best example, because that happens all the time with current actor, active entrepreneurs that might need capital today. For other entrepreneurs and you’re a good example of this in real life, where you will start, you know, every couple years Justin you might start a new business, but you don’t want the income from that business because you have your solid foundational business. So, if you start a new business and you’ve got someone that’s managing it and running it, you can start that new business with your IRA, like Peter Thiel with PayPal, right? And your Roth IRA or your IRA can own a percentage of or all of that new business and that is a way to defer that income or avoid that income and taxes. And so those are two different examples but those are realistic good examples that I think most people are seeing today.
Justin: Yeah, I think for you and I coming from a real estate background, it’s easier for us to understand that. So, I want to make sure we talk to that point, but I also want to make sure maybe more of the traditional. I don’t know if traditional is the right word, but all businesses understand the power of this right? Whether it is borrowing other people’s money to buy an apartment complex which I’ve done three times in the last two months and having come from IRAs or to your point borrowing money to start a business. You don’t even have to use your own IRA, right? I could go to you and say, Greg, I’m going to go start this business, X, Y and Z. I need some startup capital you want to give me a loan? And you your IRA could lend my company or if I even put my IRA as the owner, right? All that’s a very easy transaction, that you’re the lender from your IRA, I’m the borrower or my IRA could be the borrower if it owns the company right and is so I just want everyone to realize this isn’t only for real estate. Does it work really well in real estate? Absolutely. But all verticals have this same opportunity to find other people’s money to use for growth and where I want to maybe start taking the conversation Greg is the tax benefits here, right? I think there’s a lot of people out there just like myself, just like yourself. End of the year comes around and you get those calls from your accountants and like oh man, you got to find a way to get some more write offs could cook? And like, let’s talk about that. How can how come me, you all these listeners, utilize retirement accounts to the benefit of either tax deferment or you know? Getting rid of taxes altogether.
Greg: Well, look we all would love to be able to buy a jet every year, right? We all like that idea. But you (I love it) still have money down for a jet. So, you know, you buy a 10 million jet, you put down two, you borrow eight, you get a 10 million tax credit which is cool. Not everyone can do that. And so this subject as far as tax, you know, either credits or tax to, you know, deferral or avoidance altogether is real first of all. And so the first step I would say or first thing I would say is if you currently have an LLC, yeah and or don’t have an LLC but you currently are investing your personal money in different asset classes. Let’s say you’re a lender. Let’s say you have $100,000 in or outside of your LLC and you lend, you love the land, and you get interest, it comes back to your entity, whatever, and you keep great all we’re saying is the way you’re investing now, you should have a portion of it inside of a self directed IRA and be investing the same in the same kind of asset class. Well (yeah) at Horizon trust, we I don’t tell you where to invest. You can’t. You don’t call us up and say, Hey, Greg, that I heard all what you and Justin talked about, I want to self direct, put me in that truck deal, put I want that horse, that horse you’re talking about. We don’t have this menu of it. You know, you choose. (You’re not financial advisors). We’re not advisors. Our job at Horizon is to help you get your account set up structured correctly and then we make sure that you don’t do anything wrong and we do con and we and we then talk to the IRS on all our account on behalf of our account holders about contributions and distributions, just keeping the law, right? That’s our job. Your job as the account holder is to get your account set up with us. But then you you self, direct you self, choose your investments. So you will then direct us the Trust Company and tell us where to invest it. So the long answer to your question Justin, is if you are wholesaling or whatever you’re doing right now outside of your IRA, you should do some portion of it inside of a self-directed IRA. So first step is, if you are an entrepreneur and you have an LLC or not, you should create an LLC and then we can help you open up a 401K a self-directed 401K. Now you know it’s got you. You always, what’s that saying? You say like, put your big boy pants on. I mean, that’s something you always say (Yeah). And so, like if you have a business, you should have a 401K. This is a retirement plan for you. And guess who the employee employer are you? So you, (You )as the employee employer of your of your business, then can create a 401K with us. And in that 401K, it is a self-directed 401K, which means now you put money into it as an employee, your employer which is you can fund it as well. And so now you can start getting 20, 30, 50, $60,000 depending upon how much money you make inside of your personal self directed 401K. Once it’s there that 50 or $60,000 you can every year do a contribution of 50 to 60. So now all of a sudden, you’re making your contributions which are tax credits, By the way, if you’re doing a traditional 401K self-directed, not a Roth. So, you get a tax benefit today. And now that money that you’ve put into your account and you start doing the same thing you were doing at that same money that was outside of your retirement account, you’re now doing it in your retirement account. So now you’re investing it, you’re doubling down, you’re making your profits all in this account where it’s churning and compounding. That’s what you should be doing. So, I’m not here to say, do anything different. Just do it in a way that the government has approved.
Justin: Yeah, you know? Listen, I think you say it all the time. If you have a job, so you’re not worried about the income component, then I would tell everyone, everyone loves these house flipping shows. Get into real estate. Flip four houses a year, one house a year out of your self directed IRA. Take your 10, 20, 30, 40 grand that you make, put it back in your IRA. Do it again next year, rinse and repeat. Go buy a rental and own it with your IRA. All that revenue and income that’s coming in every month goes back into your IRA tax free, because you already have a job, right? So you’re not worried or your main concern is an income. You’re what you’re trying to do is create wealth. You’re trying to have a retirement plan. You’re trying to build up your war trust, right? I think, obviously, I come from real estate, so I’m, you know? Very passionate about it. But, you know? These TV shows are so popular for a reason. Everyone wants to be in real estate. Well, this can be someone’s opportunity to understand, how do I get in? Oh, this is how I get in. You can be a lender. Greg, how much in your time in business, in 20 years. Have you lent a couple bucks over those 20 years?
I’ve been part of a lot of lending. I’ve been part of over almost $1.3 billion in lending. And I would say most of the people that were involved in lending did it with their IRAs and they never knew they can do it with their IRAs. And so they’re they deferred their taxes on their interest. And that’s the other thing, when you’re lending, you’re getting a monthly check. That’s not like capital gains taxes on that, right? I mean, you’re, you’re paying taxes on that. Well, if it goes back in your IRA, you’re paying nothing. And so that’s, I feel like, I’m like the turtle, you know against the rabbit, is it the rabbit? Right? The turtle and the rabbit, like (The hare which is a rabbit) Yeah, (And so this in the hare) Thank you. Thank you for that cutting horse. I don’t know. Anyways, I’ve been investing similar to people that started my age and they mostly made bigger returns than me, maybe taking bigger risks than me, but I made more consistent returns, lesser returns but avoided paying or deferred my taxes. So at the end of the day, if I’m making 12% or even 8% per year and they’re making 12, 13, 14 three or four or 5% more than me. I’m still ahead of the game because they’re paying taxes every year in all their gains. And so and look, there’s so many other examples we can give that you know, should all your deals be inside of a self directed? No. Should you know, are there other tax advantages buying real estate outside of an IRA? Absolutely Justin. I mean, we know what you’re getting your cost seg and your tax write off and depreciation that’s meant for outside IRA investing. And so, there’s a time and a place for it. Look at what we do at horizon. And you know, I’m not a hard pitch at all. I we help hundreds of people every month set these account up. This is not new for us. We’ve been open for almost 14 years now. We help people understand the process, get their account set up so they’re ready to take action and use their IRA or their old 401K the way they want to. And I just feel like that’s what’s missing in this country is people just need that least know the tools, have the tools and education and then make their own decision.
Justin: Yeah. Listen, I know you’re not gonna hard sell but you know you’re one of my best friends in the world now. So, everyone listen if you’re watching this. You need to go to https://horizontrust.com/justin/, I have my money there. And so if you have been listening to me, watching me, following me, then if it’s good enough for my money it’s damn sure good enough for your money. And here’s the key for everyone to understand, part of the benefit of Horizon Trust is they think like us. The entire company thinks like Greg thinks, right? That is the culture he’s developed to that company. So when I or you the client of his calls in and maybe asks a question about, can I invest in this thing? They’ll have answers for you and what the benefits would be if you do or if you don’t or how to structure it. They’re not financial advisors but they understand and think like investors, right? Because Greg, the owner, the founder, is an investor himself, right? So, for me there’s no better place, because I can call and say, hey you know? Chelsea or Greg or Alex or who, like I’m thinking about putting my investment in my IRA into this deal that I was about to do. Is that a good idea? Not a good idea, upside, downside, right? You know?
Greg: So I got into this, into the trust company business. I mean, we’re talking to entrepreneurs, right? You’re listening because you are an entrepreneur, you’re a business owner. And I got into this business and probably a lot of you can resonate with me on this by default. This was not the business like I started out with what I wanted to get into. I was a real estate guy through and through and I was introducing this subject to so many people about, you know? Friends and acquaintances, people that wanted to partner with me. And I would then refer them to a trust company and say, cool, you can partner with me in my next deal. Get your account set up. So I’d send them to several different trust companies and when they’d call or email those trust companies, they’d say, fill out this application and we’ll help you with the process so you can invest with whoever in whatever you want to do. Sounds simple. Not? So, they’d get over there, they get confused, right? They get this application that’s 15 pages long and watch boxes to check and then all of a sudden, this guy wanted to partner with me in this next deal, it never happened, because they got overwhelmed with the process. So, I created the Trust Company purely because I thought the process sucked. That’s the word I’ll use. (You solved the problem) Yeah. And so, I created the Trust Company for that. And so that is today, to this day I know that is our difference from another Trust Company. We are faster and we help you with the whole process from A to Z. So it’s a very seamless and why is that important? Speed is money. The faster deal closes in the beginning, the faster it closes at the end. Days matter. Every day matters on your interest clock. So, if you want to get into a deal and you start a week earlier, that’s a week extra of interest. Most trust companies wouldn’t care. Oh well, your money will be here in three or four weeks or five weeks. That’s two or three weeks of interest you could have made. And so the speed kills but it also thrives. And so that’s what I try to focus on our Trust Company is helping the client get the account set up, get your account set up and then make sure it is in a fast way and we do what you want.
Justin: Well, I think what people have to understand while listening or watching this is, is even if you have five grand, I know, you know? We didn’t go into the different, you know, retirement accounts and there are different accounts and different limits to some of these and maybe you want to take some time now and maybe talk about a handful. But like the person that has five grand or 10 grand, they’re probably thinking to themselves frankly, what’s the point? I can just keep it in my savings account or keep it in my checking account, if I want to invest, I can, right? But what we’re saying as a whole is, if that money is just going to sit there, then let it make some money and then, since you probably don’t need the income, why not make it tax deferred and let that thing grow, because then you can lend more money and make even more and then you start to would do the compounding part and that is where it gets crazy. But to answer the question for those out there 5 grand, 10 grand, something like that, what are a couple options that they would want to look at?
Greg: The quick options. Again, what I see more than anything on that. You can do almost anything but I would say precious metals is a great one. Bitcoin can be one wholesaling and real estate lending and syndications, those are the things that come to mind. Syndication allows you to get your $5,000 potentially, next to someone who’s got 50 or 100,000 if they’re willing to do it. Like, I know Justin, that’s a good example, like my son, he probably would not. I mean, with his $5,000 would be able to do much, but because he has certain relationships, they’ll allow him to come in with someone who might have $100,000 so they have, you know, one guy with 100,001 with 95 and one with five. Now, all of a sudden, my son with $5,000 isn’t a deal. You know that that’s performing and churning So, but that’s a deal that his $5,000 could have never got into. So, but those are five examples…
Justin: More specifically, what type of retirement account would you suggest them get into?
Greg: So retirement account I would recommend if you’re starting from scratch is a Roth, if you know there’s rules and again, if you do set an appointment with us, do a call with us. We’ll kind of teach you what, really quickly in five or 10 minutes tell you what with the right kind of account for you, it’s different for everybody. But I would say if you’re starting from scratch, a Roth is the best. A Roth the reason why it’s after tax dollars. So, you’ve already paid taxes on it. There’s no tax benefit today, but everything you invest in grows is tax deferred and comes out tax free. And that’s what’s powerful. You can turn your Peter Thiel account in from $5,000 to hundreds of millions of dollars over time and that is what I would recommend after start from scratch (And a Roth can be self directed, right?). Yeah, every kind of retirement account can be self directed. So if you’re looking for tax write offs today, you could set up more like a traditional retirement account or a simple or SEP, and we can help you those accounts as well. Most of you, I don’t know what percent is, but there’s a probably good chance that 20 or 30% of you listening have an old 401K. This old 401K or 403B or I mean, I don’t know there’s a there’s a list of these. You know, different government plans, city plans, retirement accounts. Those accounts, if you used to work there, they qualify for self directing. So you can transfer it over into a self directed account. It become a self-directed IRA. You can convert it as well to a Roth. We can talk about that later if you wanted to, but you convert it to a traditional IRA and then you can start investing it in these alternative assets.
Justin: I love it, guys, you got to go to https://horizontrust.com/justin/, ask the questions you want to ask. They’re incredible. The entire team there is incredible. Greg’s incredible. They will make sure you’re, you’re getting what you need out of it. And again, if you’re, you know, listening to this or watching this, you have to have a retirement account. And by the way, last question, I think for me, just out of your own curiosity, would someone want to have multiple retirement accounts, like would there be a benefit to something like that?
Greg: It’s the answer the law. It’s a harder question as well. Yes, you could have a couple. There’s only one amount that you can typically contribute to retirement plan. So, if you max out, uh, one account, you might be able to do a second account, which we can help you with. But it really comes down depending upon what you currently have. So this question is probably best for me to to bunt off to another for a phone call. Because if you might have, you might have a 401k with your current employer. So that will then change what options you have, because you already are contributing to your 401K, she might only be able to contribute to a Roth as well. So, the answer is kind of that just depends, uh, depends on that. (Yeah) Yeah. And what you have so, so look…
Justin: And I’m glad there’s some vagueness, because the reality is people are going to ask questions that we just don’t have time to really dive into, right? And so this is why I want them to a go back and make sure you’re following Greg. He gives great advice on this all the time on Instagram. Greg Herlean on Instagram. Um, but go talk to their team. I mean, this is any entrepreneur needs to be working their money in a way that makes sense. Let their money make let your money make you money, right? Any, any parting words from you Greg?
Greg: Yeah. Look, I would say, look, if you if take action, if you’re an entrepreneur, you probably already are like but this is one of the easiest and best places that you can really scale your opportunity for preparing for retirement, like start now. Even test it out. You don’t have to roll your whole account over if you get $100,000 IRA with Charles Schwab, leave 50, move over 50 and dabble in a little bit. But look, follow me. I look, I respond to everything. If you go to if you DM me and say, hey look, tell me more about this. Here’s my situation, or I’ll get your email. I’ll get back to you. We’re very we are a boutique firm, although, and we are pretty large, we respond to everybody very quickly. It’s all about taking action from my side as well. So ask questions, DM me, follow us, set an appointment. If you go to Greg Herlean, I’m sorry https://horizontrust.com/justin/, you can set an appointment, but look, I appreciate you having me on today. And Justin, it’s been fun to see you and what you’ve been doing and scaling and your input, as well as an influence my son, which is very powerful. So, I appreciate you as well. So, thank you.
Man. Appreciate you having on. Everyone. Enjoy the episode. Re watch this. Get with his team. Go follow him on Instagram. We’ll see you on the next episode. Peace.
