This Nurse is Leaving Legacies Like the Rockefeller’s- Ep. 13
How to Boost Your Retirement Savings with Self-Directed Accounts
Did you know that you can use your retirement dollars to invest in private or alternative assets? That's right, you can use your retirement funds to open a Self-Directed Individual Retirement Account with Rocket Dollar. You can use a Self-Directed IRA to invest in real estate, crypto startups, and other exciting opportunities.
In episode 13, I chat with Dan Kryzanowski, the Executive Vice President of Rocket Dollar. Dan breaks down alternative ways to invest and save for retirement. Listen to the episode for the full breakdown, but here I highlight the key concepts. So listen to the podcast, take notes from this article, and when you are ready to invest more, implement this strategy if it’s right for you.
What is a Self-Directed IRA or Self-Directed Solo 401(k)?
A Self-Directed IRA (SDIRA) and Self-Directed Solo 401(k) are both retirement savings accounts. With both accounts, you get all the benefits of a typical retirement account. However, with these accounts, you can invest in more than stocks and mutual funds.
You can invest in real estate, businesses, peer-to-peer lending, cryptocurrency, or whatever you want, with a few exceptions. In the self-directed world, you cannot invest in life insurance, collectibles (think collectible cars, Air Jordans), or anything that directly benefits you or your linear family members. This means you cannot invest in your own company or buy an apartment that you or your kids plan to use on the weekend. Your siblings and in-laws, however, are not considered linear family.
The SDIRA is for anyone currently employed, whereas, you are only eligible for a Self-Directed Solo 401(k) if you are self-employed (think 1099 recipient). In a Self-Directed Solo 401k, you can contribute up to $56,000 a year. Any income you make from side hustles--driving Uber, consulting, or working as a freelancer, is qualified income for a Solo 401(k). The best perk is, you can borrow up to $50,000 from a Solo 401(k), without tax penalties, as long as you pay it back within five years.
How to use a Self-Directed Retirement Account
Imagine you’re at your first corporate job where you get a regular salary and invest in your employer’s 401(k). After ten years, you decide it’s time to leave. Don’t keep your retirement funds at your old job. Instead, transfer them to a self-directed IRA.
Let’s assume you saved $200,000. With this money in your SDIRA, you can invest in real estate, a friend’s startup, whatever you want. Since there haven’t been any federal rulings on cannabis, Dan recommends you don’t invest in cannabis right now.
Say you decide to invest in real estate. One option is to lend money to an investor at a 10% interest rate. The money comes from your SDIRA and when the real estate investor sells the house, they pay you the loan amount plus 10% interest.
Another option would be to ask the real estate investor for equity or a percentage of ownership in the house. Then when the investor sells you get a percentage of the profit based on your equity agreement.
Since you cannot use the property for yourself or your family, hire a property manager. The personal interest rule is a strict one. You cannot stay in the property, change light bulbs, physically touch the property, or use your personal funds on the house. It’s important you do not commingle your personal checking account with your retirement funds for this property.
The good news is your old 401(k) was earning a 2% return. But now that you are invested in real estate if your local market is booming, you now earn a 10% return on your real estate investment. You can access the money in your SDIRA for yourself once you’re 59 and a half.
Why Choose Rocket Dollar?
Rocket Dollar helps you manage and invest your retirement assets for just $15 a month. They offer this low fee regardless of the number of assets you have or the number of transactions you do after you pay a one-time setup fee of $360. If you use my referral code in NOF 19, you get $50 off when you sign up.
One unique feature of Rocket Dollar is their checkbook control feature, which differs from a lot of the industry. With this feature, you save time and have direct access to your money. Making investing as simple as writing a check, swiping a debit card, or wiring the money.
Rocket Dollar is empowering folks, whether you have a $1 million, $100,000, or $10,000. An account with Rocket Dollar can help boost your retirement savings and better diversify your assets.
Signing up takes five minutes. You insert your personal information, add a credit card for your $15 a month fee, and upload your driver's license. The credit card is used so they don’t have to take the fee from your retirement savings. Then, you electronically sign a few forms, fill out the forms to transfer your money from your current account, and voila you are a Rocket Dollar customer. You can start investing the money in your SDIRA or Solo 401(k) however you like as long as it’s within the investment rules.
Start Investing in Alternative & Private Assets Today
Rocket Dollar is awesome for broadening our investment options. Finally, we have access to something that was once only available to elite investors. This company has not only made these types of investments accessible to us, but they have also put it online and streamlined the process. So it's easy to understand, and it's totally actionable.
For more examples of how to make a Self-Directed Individual Retirement Account or Solo 401(k) work for you check out the full episode.
Subscribe & Review
Love this episode? Please subscribe and leave a review on your favorite podcast platform.
Did you know you can use your retirement dollars to invest in private/alternative assets? You can use your retirement funds to open a Self-Directed IRA (SDIRA) account with Rocket Dollar to invest in real estate, funds, startups, etc. On this episode, I have the pleasure of chatting with Dan, the Executive Vice President of RocketDollar.
Rocket Dollar makes it quick and easy to signup online, backed by the simple and transparent price of $15 per month (regardless of the amount of assets or number of transactions) and a one-time set-up of $360. Don't forget to enter referral code NOF19 to take advantage of $100 off.
You will maintain all benefits of a typical retirement account, and if you are self-employed you may qualify for the Self-Directed Solo 401(k), which offers tax-deferred contributions up to $56,000/year. Want to learn more? Visit Rocket Dollar's Knowledge Base, schedule a call or signup online today!
Links mentioned:
Reach out to Dan: email dan@rocketdollar.com
Affiliates:
Blooom
TRANSCRIPT:
Naseema McElroy: 04:31 All right. So I would like to welcome Dan - and I'm not going to try to read your last name - on The Nurses On Fire Podcast. So Dan is an awesome, awesome guy who likes to wear purple t-shirts that I met at FinCon and he has some extraordinary resources for people who are looking at some alternative ways to invest. So Dan, go ahead and introduce yourself.
Dan Kryzanowski: 05:01 Hi Naseema. Hi friends. It's Dan Kryzanowski. And don't worry, my wife and I, we just had our 10 year anniversary and she goes by Vanessa K. And you know...
Naseema McElroy: 05:12 I love it.
Dan Kryzanowski: 05:14 I think our poor son cringes at what his Gmail is gonna be. He's only three so he doesn't have to spell too much. But yeah, I think it's about 40 or 50 characters, so...
Naseema McElroy: 05:21 Oh my goodness.
Dan Kryzanowski: 05:22 Yes. So anyways, that's why I type and I guess handwriting's out of style these days. But I'm originally from the northeast. So I grew up, I guess, not to be political, but I guess my two claims to fame. I played little league on Joe Biden's field and then I wrote for On The Flip Side with Trump's son on my first year in college. So that is as much as I'll be political, head to toe. Sure. Anybody on both sides of the aisle here. But yeah, I mean my upbringing, Naseema, is great to me because my family, it's pretty simple. I mean, I was probably a lot of middle aged folks who grew up in the 20th century. My Dad's side are, I'd say most males in my family were in education. So teacher, coach, principal, and then my mom's side are I say females are also nurse, social
worker, self-employed, sort of home health business, you name it. You know, we touched them all from the hospital to going in the house. So it really, I think resonates. First of all, I think nurses are really the best. I'm not just saying it because I'm on here.
Naseema McElroy: 06:22 Okay. You know, a little biased.
Dan Kryzanowski: 06:24 Yeah. And I'll tell my doctor friends, too. I know my nurses have literally saved lives, you know...
Naseema McElroy: 06:28 That's right.
Dan Kryzanowski: 06:28 And the doctors were clueless, so I'm sure everybody knows that. I just want to reiterate that for the crowd.
Naseema McElroy: 06:32 Yes. Nurses run the show, just so you know.
Dan Kryzanowski: 06:35 Yes ma'am. Yes. I mean after grad, I keep them at the easy. I graduated in 2000 and you know, I'd say like many folks have are, you know, I'll call it generation. We took a corporate job. I was very fortunate. I half-joked, if I did what I did on the debt side versus equity, I would have caused the financial crisis. But I'd be on my island now. So, you know, I lose the pocketbook, keep my soul. And you know, after that experience, I decided not to double down on Wall Street, got a master's at Thunderbird. So I was able to split time actually between the bay area, which was always a dream of mine. I lived on the Rockridge Bart, played basketball in college. I've worked in Orinda you name it. Had the best friend that lived in Union and Taylor in San Francisco. Fantastic experience with likewise, you know, Mexico. Met my wife and then seen where the world was going. General Electric is still, say, a very reputable company, especially at that time I joined them on a bunch of sales and marketing endeavors. So I would say I was pretty cruising and I love your blog and your videos. And of course, I have a chuckle when, you know Tesla's included in debt. So I'll just , say, little brag. A California stereotype. But I look out the window here in Austin, Texas and every other things, either a big truck or a Tesla. Nothing in the middle for my poor little Honda.
Dan Kryzanowski: 07:50 You know, with that though, as I said, everything and then I had a little crystal ball where the world was moving. I rarely go against my gut feel, but I did move back to Connecticut. You know, of course, made it through the financial crisis and that's more of a story over drinks, kind of. Just some of the things that went through from that time. But I think as I was approaching, you know, call for 2010 this decade, you know, going to work nine to five, putting on Khaki pants and maxing out my 401k and assuming everything's going to be all right. I had a feeling the world was not moving in that way and I feel the past 10 years has really, really, really showed that. So, you know, high level while keeping busy during the day, I've been in a variety of Fintech in real estate tech companies. And then on the side, I basically backed my way into learning of these self-directed accounts and doing crowd funding even before The Ransack. So you know, that brings me here today, you know, here in Austin, Texas. My wife's got her citizenship last month. My little guy just started school. So head to toe, life is good.
Naseema McElroy: 08:46 Yes. Awesome. And you worked for Rocket Dollar. Right now let's talk about what Rocket Dollar is.
Dan Kryzanowski: 08:57 Absolutely. So what Rocket Dollar, you know, the one second is no taxes or more money faster. And I'm sure we'll talk a lot here on both sides of that coin, but let me just take a little step back and kind of the advent of rocket dollars. So as I alluded to before, I invested in bars, restaurants, I'm sure many folks here either gave a loan to a friend or invested some small dollars. And then likewise, I had a buddy, I was called best man in a wedding party with him and he flips houses and you know, we're sitting there trying to get all pretty before the wedding. And he says, "Hey, you know, do you want to throw in some money?" I say, "Sure." And he said, "do you know you can use your retirement dollars?" And I was mentally, you know, my left brain was blown away.
Dan Kryzanowski: 09:36 Wow, I can do this. So I started down the route of self-directed accounts and then kind of seen, as I said, doing the equivalent of crowdfunding before crowd funding became a platform of doing smaller dollars in bars, restaurants in such in Austin, Texas. So, you know, funny enough, two years ago, myself, Henry Yoshida, our CEO who for references, last company, Goldman Sachs bought 18 months after they launched. So...
Naseema McElroy: 09:57 Wow.
Dan Kryzanowski: 09:58 We're about 17 months now, wink, wink, Goldman Sachs. And you know, and I think you know, over this time, obviously you can tell I'm not inverted and I always have something to sell. And I said, "Henry, self-storage.". You know, it's fabulous. And Henry's also a realtor and you look at the economics. So you know, I'm just doing my moonlighting, which is, you know, I'd say my self-employment, raising money for self storage facilities.
Dan Kryzanowski: 10:20 And I shot Henry an email and I said, you know, if you're interested and you want, you can actually, we'll use your retirement, just fill out all this paperwork. And I think in his mind and he met with other folks. I think, kind of this big magical light bulb. Not just one off, but it's a true firework show. You know, at least back to me, my little part, he said, well, you know, imagine if you can just click a button. And we think, you know, it really shouldn't be that hard. These, you know, we are in the 21st century and we're used to opening accounts online. And you know, I'd say that's kind of part of my, you know, contribution. So that got me hooked as an investor and advisor in the company before we start it. And then, you know, for my marketing friends out here that heard of the terms, TAM and SAM, so the total available market, which is kind of the big world.
Dan Kryzanowski: 11:00 And then the serviceable, the SAM, both of these numbers were astronomically large. So let me just talk on the IRA, which you know, I say lay person's terms is your old 401k from your job in your 20s and your 30s etcetera. With this alone, there's 10 trillion with the "t" that's already been rolled over. Probably sits in one of the big name players in some mutual fund. But only a tiny slice, about a hundred billion of that is in use in these accounts. So for me I said, wow, this potential is huge. And once again, this doesn't even include and if we want to quote, you know, anywhere from the 25 to 80 million self-employed folks that are eligible for the solo 401k. So for me this seemed like such a great opportunity and it's also been a mission of mine personally, you know, of course, realizing we come from different walks of life. We're born with different assets, but at least from an education point of view that everybody at least is made aware. So you know, that's the, I think the admin and the mission behind Rocket Dollar.
Naseema McElroy: 11:55 So Dan, you're pretty fancy and you use a lot of words that some nurses might not understand right away. So you guys, you'll have an opportunity to re-listen to this episode. I'll have a lot of resources in the show notes. But if anything goes over your head, make sure you reach out to me and we can discuss it further in a DM in Instagram or Facebook live. But these are things that I want to expose you to because I want you to know what investment opportunities are out there for you. So let's break down some scenarios that we can apply to everyday nurses and how they can use their retirement funds to invest in alternative investments. And let's use a couple of scenarios, Dan. So we already talked about a nurse that has retirement funds sitting in maybe a previous employers' 401k or 403B or a previous employers' retirement account. What can they do with those funds?
Dan Kryzanowski: 13:03 You'll love the center. Basically anything they want. Now I'll caveat with that you or your linear family cannot benefit, but basically everything else is in play. So let me start with an analogy. I know a lot of health folks, so I assume a lot of folks on the car, at least familiar with the health savings account and HSA. So if you have one personally think about it, you have a checkbook, a debit, it's probably backed by some credit union in the middle of nowhere. And you know, if you're sick, you use it and that's great. Whereas the IRS makes it clear, if we go out for a manicure or pedicure, oops, we're a little bored and we're going to have to pay, you know, pay some penalty. Very, very similar in this space. What these self-directed accounts are, you have your money, what we offer at Rocket Dollar to checkbook control.
Dan Kryzanowski: 13:48 Now this differs from a lot of the industry, but it will save you literally hours by having a checkbook control. Meaning, you always have access to your money. Once again, on your retirement dollars. And you can invest in whatever you want with the exception. So once again, the IRS, like in the HSA says what the exceptions are. The exceptions in the self-directed world are no life insurance, no collectibles, like collectible cars, Air Jordans, etcetera. And the big thing is not yourself or your linear family, meaning you cannot invest in your own company or say, buy a flat. You know, we'll pick on Orinda today. Buy An apartment in Orinda and you know, have one of your kids or your parents stay there on the weekend, but everything else is in place. So you know with that...
Naseema McElroy: 14:30 Oh wait, I'm going to stop you there, Dan. So a lot of people look at, or I know I would look at using these funds for like say my daughter was going to college and I wanted to buy a house for her. I could not use these funds for her because she's my immediate family. Right?
Dan Kryzanowski: 14:47 Exactly. She's in your linear family. I would say one thing, oddly enough, brothers and sisters are not considered linear, but be careful you're not giving them a sweetheart deal. And I'd say, the collective chuckle, even from the regulators is in-laws are not considered parts. So you know, probably, your mother-in-law's not going to give you a good deal.
Naseema McElroy: 15:03 Actually, I have a good in-laws actually.
Dan Kryzanowski: 15:10 Yes. Well, congratulations. That means good. You can invest in their company. That's great.
Naseema McElroy: 15:15 Okay, so we can invest. Those are the things that we can invest in. But okay, go ahead with your story. I'm sorry for the interruption.
Dan Kryzanowski: 15:22 So I mean, let's just say somebody before getting into nursing work, you know, just, just corporateer. So, let's say, if somebody from Seattle was at Boeing before comes down 10 years 401k, I know the bay area is expensive. So I'll give kind of a real example here. So let's say, you know, she has a quarter of a million. Let's just say $200,000. So, right off the bat, what you can do is you could, you know, from a high level category, you can go into real estate, crypto, a friend's startup, peer-to-peer loan, a female entrepreneur. I would say cannabis is still out of touch in this space, meaning there hasn't been a federal ruling. So I would advise against it at the moment. I'm sure that'll change in time. And then let's just take real estate. So you know, very simple as you do a hard money loan to somebody, meaning that you lend money and you get paid back, let's say 10%, that's relatively simple.
Dan Kryzanowski: 16:14 The second would be an equity where I think of almost a mini-funder on a property and somebody says, likewise. You know, I'll either pay you a percentage or you get a piece of the house when I sell, or the piece of the property. So these are true passive arms length investments for folks that do want to own a physical property. You can purchase a property outright. So let's go way, way, way east of the bay area and say there was a piece of land for $100,000. The rule of thumb is that as long as you have 110% of the value, you can buy it outright. And then otherwise, let's get a little closer and just, just say, you know, we'll call it, you know, a 40 foot studio in Berkeley has half a million. You know, in our example here, you put your $200,000 down and you do a non-recourse loan. And what a non-recourse loan means if stuff hits the fan, the bank can only go after this particular, particular property, not your personal assets, not your retirement assets.
Dan Kryzanowski: 17:07 So, you know, summing up on the real estate side, it's either passive or where you are running a property. And you know, once again, you still cannot stay in the property. You cannot be the one changing light bulbs and physically touching the property. A lot of folks do have a property manager for that, but it's a dynamic investment, especially when if you assume, you know, previously in this example, you know, your old 401k was earning 2% in some bond fund and you're going to earn 10% in real estate, then you know, you know, 10 is greater than two as far as I can tell. And you know, you still cannot touch this money until you're 59 and a half without an early withdrawal penalty. So as I tell folks, I mean, somewhat, you have to think as a separate pocket from your piggybank checking account for that reason. And then just to final points as we may shift gears, what you cannot do, once again, you yourself are prohibited, disqualified person to your IRA, to your self-directed account. So you cannot co-mingle your personal piggy bank checking account with your retirement on the same property. So just kind of one qualifier for that.
Naseema McElroy: 18:10 Okay. So let me just re-phrase this in my simple terminology so I can understand it. Okay. So I have $200,000 sitting in a old 401k from a job that I left. I want to buy a property as an investment. It cannot be an owner occupied property, but I want to do buy and hold investing. So I want to buy a property for what, $90,000 in the Midwest somewhere. I can buy that property outright because, I don't know, I'm not doing quick math right now, but you know that's less than what is it, the 110%, right? Okay. So that I have, 'cause I had $200,000 so I buy this as an investment property. I'm not using my own money, my personal money to put anything into the property and I'm not self managing it. I'm having a property manager manage it and that's all legit under this self... Okay. So what is this called? This is the self-directed...?
Dan Kryzanowski: 19:11 It could be the self-directed IRA and the acronym is SDIRA, which is kind of the Gatorade term 'cause the SDIRA has been around the 70s both the traditional and if you see the term traditional SDIRA, traditional just means pre-tax. So in our example here, I'd say 99% of folks have a traditional pre-tax old 401k. It might be termed as a rollover IRA now. That goes into a traditional SDIRA.
Naseema McElroy: 19:42 So instead of rolling over your old, your rollover IRA from your old jobs, instead of rolling that 401k, I'm sorry, funds into your individual traditional IRA, you will be rolling that into your self-directed IRA. Correct? Okay?
Dan Kryzanowski: 20:00 That's correct. Yes.
Naseema McElroy: 20:01 Okay. All right. That clarifies that up. And I think, you know, I'll have to rephrase things for my simple mind. Well, maybe it'll help other people. Let's talk about the solo 401k. What kind of nurses could benefit from that and how does that differ from the self-directed IRA?
Dan Kryzanowski: 20:22 Sure. So first of all, I'm super, super excited about the solo 401k also known as the individual 401k or EQRP. There's fancy acronyms out there. But I think it's great for nurses because you know, a lot of folks take advantage of, you know, working outside of just say your nine to five, out of your main job. Either one, it's a great way to earn money. Secondly, it could just be a passion or maybe you're learning a specialty and you have to go somewhere else outside of your nine to five or you know, when I think back when my father retired, he just drove, you know, before the days of Uber, you know, maybe you just want a moonlight, be away from the kids a little bit. Just you know, click on your app, drive some folks around, make a few hundred dollars here or there. So a lot at sea. Anything else that's more considered gig economy or you know, once again going back, maybe your previous career, say if you know who knows what you're for coding, lawyer, etcetera, something from a past life, you're still taking advantage of those skills. So with that said, as long as you are getting paid, you can actually use that income and not only contribute say $6,000 as you could in an IRA world, but up to $56,000 in a calendar year.
Naseema McElroy: 21:34 Right? So that's for, if you guys are having, like we have on there, a lot of nurse entrepreneurs here. People who are earning income separate from their employment income.
Dan Kryzanowski: 21:47 Exactly. So you know in a great way also is, you know, even if you do max out your 401k at work, call it your day job. You still, what's great about the solo 401k, 20% of those net earnings could be a contribution. So let's just use a simple example here and say one of your listeners here, she works for a great hospital. They have a 401k plan, and on the side she moonlights to make $100,000 for right here. And once again, so the $19,000 is in the bank from her day job. You know, once again, they're the corporate hospital. Let's say his 401k plan completely separate. She would have a solo 401k on the side and 20% of the hundred thousand gets you $20,000 and now let me share a very similar second example, but let's say the second example, you are at a hospital or maybe a small practice that does not offer us the 401k. So you know your day job does not, your W2 job does not offer 401k. On the side, you make $100,000. So right off the bat, just like your W2 buddies, you can do the $19,000. So even if you only made $20,000 in this calendar year, on the side right off the bat, in this second scenario, you can salary defer $19,000 and then based off of this equation, as I shared before, also 20% of your net earnings, you can get to the amount of $56,000 contribution and $62,000 if you're over the age of 50.
Naseema McElroy: 23:14 So the Max for the solo 401k is $56,000 right? So you have so much more tax deferment potential there.
Dan Kryzanowski: 23:22 It is and it's great. And also, you know, in layman's terms, so in IRA land, and I'm sure folks have heard of a Roth IRA, the Roth IRA has to be separate from the traditional. So the pre-tax and post-tax for legal reasons, we would have to consider these two accounts. So two unique structures, two unique fees you'd have to incur. Whereas in solo 401k land, as I say in a in lay person's terms, you can even have a pre-tax checking account and a post-tax account. So I won't go too deep down that rabbit hole, but it's pretty sophisticated all under the same account. You know, a single account, you know, single fee you'd have to pay. And then a final thing that I think is the gem, particularly for folks with an entrepreneurial spirit that I'd imagine a lot of folks on the call have, you can borrow up to $50,000 from the solo 401k just as long as you pay it off within five years.
Naseema McElroy: 24:16 And so that's similar to borrowing against your 401k or 403B where you're paying yourself back. Right? With interest.
Dan Kryzanowski: 24:23 It is similar. Yes. But you know, especially with the corporate plan where you're at, you're probably going to have to show a hardship. Whereas here, yes, it's the lesser of the value. Half the value of the plan are $50,000 and what a lot of folks do is they use, you know, some folks that, hey, I want to go on vacation. Great. Other folks use it for tuition, frankly. Other folks might say, you know, I'm going to have this side gig. I can almost use it as a line of credit without going to a bank, you know, if things work well, great. You know, I'll get zero sale to the public yada yada. Or more likely I'll probably just say, you know, it was a nice shot, let me just, you know, pay it back for my W2 turns over time. So it's very convenient to have that luxury at all times.
Naseema McElroy: 25:03 And you don't have to demonstrate any kind of hardship or that you're purchasing a home like you do in your 401k or 403B. Okay.
Dan Kryzanowski: 25:12 That's correct.
Naseema McElroy: 25:12 So these are some really, really good examples. I want to drill down on some terms that we talked about. And it's funny, I'm glad, you mentioned crypto because that was like one of my big questions. Can you use this to invest in crypto? I had a nurse on a few weeks ago, JC Marie, who actually started her own over the counter cryptocurrency cafe in Inglewood, California. And so I know a lot of people are interested in investing in crypto. And yes, you can use your retirement funds to do that. So you know that's a great opportunity. So thank you for mentioning that. Another thing I want to have you to just explain a little bit more is hard money lending because I know that that might be a new concept for people, but an excellent opportunity and then I can give you some resources if that's something that you want to do with your investment. But can you explained that Dan?
Dan Kryzanowski: 26:05 Sure. So hard money loan is when you give somebody a loan. So basically, let me take a step. Most, the term hard money loan is generally in the spirit of real estate. So I'll give a very real example, and this is actually how I got into the self-directed world. My buddy, he flips houses in North Carolina. So a house, let's say cost $100,000, he can either go to the bank, take out a typical mortgage or he can go to friends and family and say, "Hey folks, I'll pay you 10% on your money." So he borrows the full hundred thousand and then let's say the money is in play for a full year. Say I gave him the full loan on the hundred, I would get back my principal and then 10%. So ideally, on his end, he's selling the house for you know, 120, 130, 140. So this is better and quicker and simpler and he's not dealing with the bank.
Dan Kryzanowski: 26:55 So now, there's different types of loans and this can be a whole episode. But you know, in short, I would just caveat to say you want to be a first lien and there are other technicalities that vary by state. But that basically means, you know, once again, if stuff hits the fan, you want to make sure you're first in line for access to the property. So like anything, do your diligence and know who the person is on the other end. And you know, if you do have cushion meeting that you know, let's say if you weren't sure with somebody, I would almost suggest that they put $30,000 of their money down first. And you lend for somebody and then if stuff hits the fan and the house has to fire yourself for 70, you at least make your money back. That's it. I think there are a fair number of folks with a very, you know, public and multi-decade long track record out here that you could feel somewhat comfortable lending to.
Naseema McElroy: 27:46 Yeah, I think that's a great option if you want to learn more about harmony lending and people who do that, Bigger Pockets is an excellent resource and they have forums in there with that just specifically talk about this and they have a great podcasts. So if that's something that you're interested in or just real estate in general, Bigger Pockets is an awesome resource.
Dan Kryzanowski: 28:09 Yeah, I agree. And I follow and respect a lot of the authors on there. And I don't know when we'll be publishing here, but Bigger Pockets, for the first time in seven years, has their conference in Nashville in early October. So, you know, check it out.
Naseema McElroy: 28:21 Yes, yes. I'm looking forward to that conference. I'm trying to attend. Can you explain also what peer-to-peer lending is?
Dan Kryzanowski: 28:30 Sure. So peer-to-peer, it is friend-to-friend, and I've had tremendous success particularly to female entrepreneurs. Doing peer-to-peer loans. My one friend, she I think is a great story for the community. She cured herself of type two diabetes from a change of diet. She's Mexican-American, of course, speaks both languages and is launching, you know, a site with some of the world's top doctors to chime in about this. I can't share more about it at the moment, but obviously, I mean, she's a peer, I fully support anything she does. And so I'm just riding alone so much like, you know, how you could do a check from your piggy bank checking account or you know, from maybe some folks on the call, your parents gave you a loan. It's very similar. It's just coming out of, you know, in this scenario comes out of your retirement dollars, but just as easy, you can come out of your piggy bank checking.
Naseema McElroy: 29:18 Yeah. So you can't access these funds right away. So don't look at it like, oh, you're making this extra money and now you have access to it. This is part of your retirement portfolio. This is for long term investing. So look at it like that.
Dan Kryzanowski: 29:33 Yeah. And I think that's a great point. You do have to look at it in two buckets. And the biggest takeaway for me, I mean I've been very fortunate, like you Naseema, to be able to travel the country, talk to great folks and the miles, super huge light bulb moment was sitting at one of these family office high net worth shows or even in front of open doors, not behind closed doors and they say, "You know, we have less than 10% of our stuff in stocks, bonds, mutual funds." And I was like, "Whoa." So you know, real estate, private lending, other tax advantage strategies. And I think, you know, that's why, you know, your high net worth or ultra high net worth or you know, a legacy family office and what we're doing at Rocket Dollar is empowering folks. You know, whether you have a million, a $100K or frankly even 10,000 on the side, you know, to have this type of account to boost up your retirement and you don't possibly, if you want it to achieve what we call 21st century diversification. So to have maybe that one passive real estate, the one hard money loan, maybe you're in a crypto fund and you know, and of course you could still be in the more traditional assets also. But you really get this as, I had to say, a much prettier pie chart than the kind of, you know, the slow gray stock bonds, 60-40 split.
Naseema McElroy: 30:47 Yes. And can you speak to what level of investor do you have to be in order to get involved with Rocket Dollar?
Dan Kryzanowski: 30:53 Yeah, so we, you do not have to be accredited. I know it's a common misconception. Ultimately though, what you invest in, you know, certain entities may say a reg D or accredited only. But as I said, I mean our range goes from, you know, folks still in college to ,I think, the gentleman was, you know, late eighties, early nineties for one of these accounts. You know, typical it is, I'd say somebody in mid career, but you know, it's a huge range. I mean, the folks that we have that come through and I said there's a variety. Some folks will want to play around and diversify and be intent crowd funding. Other folks just have a simple, you know, I'm investing in a friend's startup. And like, my one buddy, for more and I think he did 19 transactions last year, you know, maybe across half a million dollars. And for folks that might have some insight into the space, the benefit of the checkbook control is he's writing a check or ACH wiring money just as easy as he is from his checking account.
Dan Kryzanowski: 31:49 Whereas with, and here's another term, other custodians out there with the non-checkbook control model, you would be on the phone, you probably legitimately have to find a scanner, you know, or a fax machine to even get your money from A to B. So we've completely eliminated that friction and you know, stated a little bit differently. We talk on hard money loans. Let's just say you're the recipient of the loans and you have 10 of your friends writing new 10 checks. Well, the last thing you want to do is be on the phone for an hour. You know, just filling out. So almost feel like you're at the DMV, filling out random paperwork here. You just want to get that check. So as we see also, you know, we are taglined in our pretty purple t-shirts is no taxes, but I feel the back of the shirt and what's even more powerful for some is more money faster that you know, much like if we digest this call into a quick soundbite or paragraph, which of course we can share for anybody raising money. You know, say the person in our example here that's, you know, needs the 10 hard money loans, initially she goes to her audience and says, hey friends, you know, did you know you can also use your retirement dollars to, you know, invest in this deal or lend me money. And that's where the true power comes from from a checkbook control account.
Naseema McElroy: 33:00 Yes, I love it. I love it. So all that in saying that you don't have to be a super duper sophisticated investor, even if this is like your first access to investing, it's a pretty simple platform to use. They have great resources on their platform. If you want to learn more, but you can get started investing in this through your retirement funds now without having an extra-ordinary level of investment knowledge. So that's why I wanted to bring Dan on. Because I want you to know what options are available to you. And can you do like an overview of how somebody would interface with Rocket Dollar and talk about the fee structure, like from the point like we have this for this roll-over 401k step-by-step. How would that look in getting that onto Rocket Dollar's platform and then, how long would it take to start investing and then, what will it cost people?
Dan Kryzanowski: 33:55 Sure. So it's easy. Just connect with us at RocketDollar.com/nursesonfire. That's one way to get to our site, our product pages, our FAQ, which we'll answer in much deep detail, everything. You know, in lieu of trying to spell my last name, we'll be here for 20 minutes.
Dan Kryzanowski: 34:14 Dan@rocketdollar.com. So you know, those are the easiest to. You know, high level, we've made the flow very simple to sign up. It's all a five minutes. So it's your personal information, credit card, and upload your driver's license. So we do the credit card 'cause we do not want to eat into your balance. You know, the last thing you'd want to do is know that you have $20,000 to roll-over. And next thing you know, you see it's $19,980 and the minimum is 20. So we don't, you know, that's feedback we've heard from our audience. So that's the process and then from here, "Congratulations! You're a Rocket Dollar customer." You'll need to sign a few forms that you think all the HSAs we were talking before, you'll fill out, you'll be signing one or two things. And we'll have this API probably in the next month or so where you have the checkbook portion. And then from here you go back to your, you know, Fidelity, Vanguard, fill out their transfer or rollover form. And then walla, the money is in your account to do what you want, when you want. And as we talked about before, I mean almost the limitless opportunities. So as long as you're not self-dealing for yourself or your family.
Naseema McElroy: 35:18 Right. So it's just like you have another checking account and you can invest in things as long as it's under those IRS regulated things. So not crypto right now. I mean not cannabis right now. But you can basically ACH wire the money as a hard money loan or peer-to-peer lend, however you want to do that. But it lives under your retirement funds so it's pretty straight forward. So yeah, I think that this is a great option and I'm excited to introduce this to my community. Anything else you want to share?
Dan Kryzanowski: 35:51 So much, but we'll save that for the next episode. No, but what I would, and I really appreciate everybody here and I do, I just said myself, my team, we're happy to engage. I touched on it a little bit, but folks that do want to, you know, even a side gig on or an idea, you know, as I said, you could raise money. Our marketing, it's complimentary, co-branded if on the sides you are raising or you know, somebody that you know, whether it's for their startup or real estate play, we have copy-paste marketing, it doesn't cost, we'll call it the deal sponsor or the entrepreneur, anything at all. It's in the natural flow of their marketing. And as we see playing out dozens and dozens of time over, you know, we say six figures in six minutes, you send out one email, you're probably gonna get some responses. Folks sign up with Rocket Dollar, you get a few checks in the mail, or probably actually wired ACH to get us up in modern times. And that's it. And so that's the other side of the coin. And you know, finally, just as a courtesy for folks on the call, once again to learn more, rocketdollar.com/nursesonfire. My email, Dan, dan@rocketdollar.com and as a huge thank you and courtesy, you can enter code NOF19 for $50 off your account.
Naseema McElroy: 37:01 Awesome. Thank you so much Dan. I'll have all these links in the show notes. If you're driving or can't write that down right now, it's just a clickable link to bring us up to modern times, but it'll all be there for you. So I appreciate you for taking your time out of your day, Dan. This is some extraordinary information. Thank you for sharing what Nurses On Fire and I appreciate you.
Hey there I’m Naseema
My dream is for everyone to know that financial independence is attainable with a little intentionality. Learn how I can help you finally break the cycle of living paycheck to paycheck.
Join the Facebook Community
Join the Financially Intentional community and get access to resources to guide you on the path to Financial Freedom.
Watch these Videos To Learn How to…
Keep Listening
Here are some more episodes you may enjoy…
Student loans can feel overwhelming, but they don't have to hold you back.