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Over the next 15 years, "baby boomers" will be looking for places to invest about $46 trillion from a combination of inheritance and their own qualified retirement plans, such as a 401k from a former employer. Every major brokerage house and bank in America is well aware of the potential to earn enormous incomes from fees and commissions "helping" to place this money in secure investments. But, individuals who understand the power of utilizing Self Directed IRAs are in the best position to take advantage of this incredible transference of wealth. Many "boomers" are looking at starting their own business and need investment capital to make their dreams come true. Actually, they need to look no further than their own retirement accounts. They can tap into these funds to buy a franchise, start a business, or simply provide an existing business with working capital. What about investing in the stock of a private company? Yes, there's no problem with doing that, even if it's outside the United States. And, other options, both mundane and exotic, abound. Then, there's real estate. Most people think the boom is over, but they may be mistaken. According to a report from The Brookings Institute and an article in Business 2.O Magazine (November 2005), more than $25 trillion will be spent in real estate development between now and the year 2030. To accommodate another 70 million people being added to the population base in the next two decades, 127 billion square feet of new or replacement structures will be added to the existing base of 300 billion square feet. The executive summary of The Brookings report entitled "Toward A New Metropolis: The Opportunity To Rebuild America" written by Arthur C. Nelson, states the following: - In 2030, about half the buildings in which Americans live, work, and shop will have been built after 2000. - Most of the space built between 2000 and 2030 will be residential space. The largest component of this space will be homes. Over 100 billion square feet of new residential space will be needed by 2030. - Overall, most new growth will occur in the South and West. In the West, 87 percent of the space existing in 2030 will have been built since 2000. This report was primarily written for urban, city, regional and state planners so they would understand how to prepare for infrastructure needs to support the increased population base. The need for new water treatment facilities, roads, bridges, schools and general land use planning will be of great concern to everyone, but especially to these planners. The Business 2.0 article entitled "The $25 Trillion Land Grab" took the mostly statistical information from the Brookings report and restated it so that it was more readable and understandable. Bottom Line: The development will represent "the biggest business opportunity since the end of World War II". That's good news for investors. Anyone with a Self Directed IRA can tap directly into this opportunity, whether through equipment leasing, real estate lending or direct investment into a myriad of real estate projects. It all starts with education. We recommend that clients pick one area of investment opportunity and become experts. Then when conferring with investment advisors and tax consultants, good decisions can be made that will result in building wealth that is potentially much greater than can be realized by only investing in the securities markets. As we like to say to our clients, it's as simple as 1-2-3: Learn, Setup and Invest.
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