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How to Get Rich and Never Pay Taxes Again (Legal Roth IRA Tax Free Loopholes)

This is how to get rich and legally NEVER pay taxes on any of it by using a Roth IRA.

The rich get richer by utilizing tax loopholes.

Every year, I draw a line on a piece of paper and tell my tax guy “if this line represents where we go to jail…. I want to be right here”…. then I put a dot right up next to the line on the not go to jail side!

Paying taxes sucks.

I don’t want to give any more money to Uncle Sam than he’s entitled to.

That’s why one of my favorite vehicles for building wealth is the Roth IRA.

Today, I’m going to show you how you can make millions without paying taxes, but more importantly…

if you read this to the end, you will have a solid foundation for retiring even if you don’t have a large nest egg or if you got started a little late in life.

Before I get going though… you should consider everything I say as suspect.

I mean… at the end of the day I’m just a random guy with a website.

Taking advice from me without consulting with your financial advisor and/or attorney is NOT being wise.

So don’t trust me or anybody else online… or if you do… trust but verify.

Always verify information through trusted advisors and your own research before taking any action.

What is a Roth IRA?

Okay, so what is a Roth IRA?

The short version is that it’s an Individual Retirement Account (I.R.A…. get it?) that is 100% tax free.

As long as you follow the rules, you can make as much as you want and never… ever pay any taxes on your earnings.

Peter Theil, cofounder of Paypal has reportedly grown his Roth from $2,000 to over 5 billion!

Sure, there are some rules and regulations you have to follow.

I’m not going to dive into them all in this post, but if you want to learn more about a Roth, I’ll post an article or two below:

Related Articles about Self-Directed Roth IRA’s:

Anyway, a traditional Roth IRA is setup through a brokerage like any other investment account… companies like TDAmeritrade, E*TRADE, Schwab, Vanguard, etc.

This post is not about how to use a traditional ROTH IRA though.

Instead, we’re going to take a look at the self-directed ROTH as a way to make boatloads of tax free money.

What is a Self-Directed Roth IRA?

Unlike a traditional Roth IRA, a self-directed Roth is more versatile and is… you guessed it… self-directed.

This allows you to invest in things that you are an expert at or have extensive knowledge about… or just other things that are harder to invest in with a traditional Roth.

To give you an idea, here’s a quick list of things you can invest in with a self-directed Roth:

  • Gold and silver or other precious metals
  • Businesses
  • Real Estate… including land!
  • Tax liens
  • Debt
  • Bitcoin and other digital currencies

There are also some things you are not allowed to invest in such as your primary residence or any real estate for personal use, life insurance, most coins or other collectibles, antiques, or anything that falls under the umbrella of self dealing… i.e.. buying and selling stuff to yourself.

But hey, there are still plenty of things you can invest in.

Pick what you’re interested in and start researching the legality behind it.

How to Open a Self-Directed Roth IRA

Let’s talk about how to open a self-directed Roth IRA.

Then we can look at what I believe are the 2 best ways to grow your Roth until you have millions of dollars of tax free mullah!

You can start a self-directed Roth from scratch or you can rollover your current ROTH IRA into a self-directed IRA.

To get it up and running, you will need to find a custodian or trustee for the account.

Even though a self-directed IRA is self-directed… it’s not self-done.

You should focus on the word directed…

You are “directing” your Roth IRA investment decisions through your custodian which helps protect you.

You tell your custodian or trustee the investment you want to make (and later sell), but they pull the trigger on it and make sure it’s done right.

All IRA’s need a custodian.

It can be a bank, federally insured credit union, a trust company, or other entity approved for this by the IRS.

Make sure you do your research before you move your funds to a custodian.

Understand the company and how your self-directed Roth IRA is going to work, including any fees for transactions.

There are fees associated with these custodial entities, so be sure to check them out and make sure you understand them.

Sometimes fees are different for different transactions.

For example, if you know you’re going to be buying and selling real estate, then you’ll want to know how much those transactions will cost you.

Also, and this is the golden nugget for this post, do some research and find out IF they offer checkbook control.

What is Checkbook Control and How does Checkbook Control Work?

Checkbook control basically means that you, as the owner, have even more control because you’re actually doing more than just self-directing… it’s more like you’re actively managing your Roth because you’re able to write checks and make things happen.

Of course, you have to be careful you’re not writing checks for anything that isn’t covered and that you don’t get yourself into hot water by breaking rules.

If that sounds good to you, then what you want is a “self-directed Roth IRA with checkbook control”.

I’m not a financial planner or analyst, so again, I remind you I’m just some guy with an online website who happens to like entrepreneurship and finance.

That being said, here’s how checkbook control works… based on my limited knowledge.

First, you will get a self-directed IRA LLC set up.

Since it is an LLC (a business entity), it is able to have a checking account.

This LLC’s checking account is funded with your Roth IRA assets.

You need to set this up with somebody you trust (and who is approved to do this) because I’m sure there are lots of weird rules.

But basically, your IRA is the investor in your LLC (instead of you personally).

It sounds a little complicated because it kinda is.

Make sure you use somebody you trust and who has experience doing this so you get set up correctly.

Now let’s get back to how you make boatloads of money doing this and never pay taxes on it.

You’ve set up your self-directed Roth IRA.

You’ve used your self-directed Roth IRA to fund your IRA LLC and you have checkbook control.

You know that any profits you make are tax free, as long as you wait until age 59 ½ to withdraw and it’s been at least 5 years since you contributed.

The only thing left now is to start making money.

Let me explain what I’m doing and you can see if it makes sense to you.

First, let’s start with the HOW.

If you’ve watched or read any of my content on flipping land, you know that I’m a firm believer in using this as a wealth building tool.

The ROI (Return on Investment) is ridiculous and you can often by land for cash in all price ranges.

I’ve bought land for less than $1,000 and I’ve bought land for tens of thousands of dollars.

If you have a larger bankroll, you can certainly find land in the hundreds of thousand and million dollar price points.

It’s the perfect type of real estate for flipping cash.

The problem with land investing (when it comes to a self-directed Roth IRA) is that the best deals are found by sending letters to property owners using public record databases.

You can learn to do that by going to my how to flip money blog post and scroll down to #5 or #6 where I go over how to do this step-by-step.

The best and most profitable deals are off market properties that you can pick up below market value.

Usually significantly below market value.

Why is that a problem for your self-directed Roth?

The high profit margin isn’t the problem.

The problem is, you can’t use the money or profits from your Roth to fund marketing…. at least not if you don’t want to make a withdraw and pay a penalty (if you’re not old enough to withdraw it).

You’re probably wondering… So what does that mean and why does it matter?

It’s means things get complicated and hard to scale fairly quickly.

Let’s suppose you have $3,000.

In a normal land deal that’s not inside your ROTH IRA, you may spend $1,000 in marketing in order to find a piece of land for $2,000…. but it’s worth $10,000.

So you buy it for $2,000, using up all of your money (because you spent $1,000 in marketing to find it).

Then you sell it for $10,000 and you’re back in the game.

You have your original $3,000 back and also $7,000 in profit.

Maybe you spend $2,500 next month in marketing and find 3 deals you can buy for $2,500 each but can flip for $10,000 each… turning your $10,000… into $30,000.

Then you just keep doing it and start stacking your cash.

Of course, you’ve got to make sure you’re taking out the capital gains and income taxes and setting them the off to the side to pay good ole Uncle Sam.

Now, you would would think you can just stack up tax free cash by doing this inside your self-directed IRA but… well… you can and you can’t.

Limits of a Self-Directed IRA

You can’t spend money on marketing and that’s the hitch.

Let’s use the same example as above.

If you start with $3,000 and everything happens the same except you buy and sell the land deal inside your IRA….

Then after your first deal you will have $10,000 sitting in your self-directed Roth.

However, since you can’t take any of it out to spend on marketing, you’ll be at a standstill because you have $0 dollars in your bank account for marketing.

I hope you’re following this.

Now, IF (and this is a big if)… If you can pay for marketing out of your pocket every single month or find a way to do that, then you can certainly keep flipping land inside your self-directed IRA and let it stack up over and over.

Unfortunately though, the more cash that piles up, the more marketing money you’re going to need in order to find more deals.

Otherwise you’ll start to slow down because you won’t be able to have all your money working for you at once.

Plus, all that money piling up can’t be touched tax free unless you wait to withdraw it until you’re 59 ½.

If you’re like me, the plan immediately falls apart because of 2 things…

1) I don’t have thousands of dollars of extra cash to spend every month AND if I did have that kind of cash… I wouldn’t want to spend it on marketing.

#2) I don’t want to be spending all my money growing something that I can’t touch until retirement… at least not if there is another way.

So what is a soul to do?
This is a dilemma.

Solutions to the Self-Directed IRA Rules

One option would be to do just a few deals inside of your self-directed Roth and do some deals outside of it.

That way you can generate some cash to help with marketing and give yourself some financial margin while you’re still building up your retirement fund.

I personally don’t want to juggle between the two different accounts though.

I’m afraid I’ll make mistakes if I’m switching back and forth.

Mistakes that the IRS wouldn’t be forgiving about.

So here is what I’m doing.

First, I’m generating as much income and passive income as possible in my normal everyday life.

This will be taxed as normal income.

I currently have a job and I’m building online revenue streams such as affiliate marketing income, stacked affiliate marketing income, and YouTube AdSense income.

All that extra revenue and income it gives me financial options.

And financial options make life better.

I can pay off debt or use that income to make extra purchases, vacations, etcetera.

More importantly, I can also use it for land investing.

If you have a normal job and you’re living on a budget that is based on your job income… it doesn’t take much extra money to make life less financially stressful.

Think about it, if you do 1-2 land deals a year that produce $5,000 – $10,000 in profit from each deal, that gives gives you quite a bit of financial margin that you can use to make a life a little better.

But let’s get back to our ROTH IRA.

Let’s assume you do few side hustles as well and learn land investing too.

Let’s also assume you’re NOT starting early in life.

Most my viewers and blog readers are age 40+ and over.

So let’s assume you fall in that category and you’ve never even heard of a Roth IRA until today.

Maybe you’re trying to figure out how to retire but you’ve started a little late and you don’t have much money.

No worries.

We’ll look at two examples.

One for the younger folks and one for the more experienced in life (like myself).

Investing in a Roth IRA after Age 40+

Let’s start with the latter…. The older and more experienced person.

Let’s say you’re almost 50 and you just opened your Roth IRA with E-trade.

Unfortunately, you can’t afford the maximum yearly deposit.

You can only afford to put in $2,000 per year.

So you put in $2,000 per year until age 60.

You also do invest on the side and do 1 land deal per year, from age 50 until age 60.

So time passes and let’s jump ahead 10 years.

You’re now 60 years old.

For this example we’ll assume you haven’t made any money from investments inside of your Roth IRA but you haven’t lost any either.

You’ve deposited $2,000 per year for 10 years, so you have $20,000 inside your Roth IRA account.

You’ve already done 10 successful land deals outside of your Roth IRA… (remember 1 per year for the last 10 years).

So you know how to do deals.
You know how to find them, source them, buy them, and resell them.
You have the experience and the knowledge.

You also have $20,000 in cash inside your Roth IRA.

But NOW…. you are also over 59 ½ years old.

That means you can take money out without penalty and without paying taxes for the rest of your life.

The problem is… $20,000 won’t go very far if you start withdrawing it.

What to do?

Let’s suppose you find a custodian and convert your traditional Roth IRA into a self-directed Roth IRA with checkbook control.

Since you’re 59 ½ you could take money out for marketing without paying taxes, but lets just say at age 60, you’re able to scrounge together $2,500 for your first round of marketing.

With that, you are able to find 4 pieces of land that you can buy for $5,000 each.

They are each worth $12,000.

You buy and sell them all inside of your Roth IRA and now have $48,000 inside of your self-directed Roth.

Of course, the numbers will never work out that perfectly… but you see how a little money could create some massive income in your retirement years?

You can withdraw some or all of this $48,000 and spend it on whatever you want without paying taxes.

Let’s say you’re on a fixed income and budget and you don’t need to withdraw the money.

Now that you’re old enough to not be penalized, you could take out money every month for marketing, but still buy and sell all your land deals inside of your ROTH IRA.

So that massive ROI that usually comes with land deals and all the incredible profit would be tax free!

If you invested $40,000 every year and flipped it into $80,000…. You could then take out $40,000 to spend and do the same thing every year… essentially giving you $40,000 a year in income for doing a few land flips.

If you let the money stack up, you could buy rentals inside your self-directed Roth IRA and withdraw the rent every month, thus giving you tax-free passive income!

Or you could just do tons of flips and build up a huge nest egg that you can dip into anytime you want!

**Again, I am not a financial advisor so check with your tax consultant, advisor, and attorney before making any financial decisions.

Investing in a Roth IRA at a Young Age

If you’re younger, it’s just larger starting numbers…. which is SUPER-EXCITING!

If you start at age 30 and do a land deal a year and also deposit $2,000 per year into your Roth… you’ll have 30 deals under your belt and $60,000 in your account when you’re 60, so growing it to a millions will go even faster.

What if you maxed out your deposit every year instead of just depositing $2,000?

If you’re 18 and reading this… well, you’re going to be loaded IF you take action on this information!

I sincerely thank you for visiting the site.

Please check out one of the articles below to learn more about increasing your income online, building wealth, and living a life of abundance.

Related Posts: 

How to Profit during Hyperinflation and Inflation
Building Wealth on a Shoestring Budget
Bible Scriptures about Wealth and Prosperity

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God Bless,

Jason and Daniele

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