Monday, December 5, 2011

Reducing Counter-Party Risk in Your IRA

Terry Coxon recently did a great article on owning gold in your IRA for Casey Research.  I highly recommend that you read the article in its entirety.  He covers a variety of issues related to having gold in your IRA extremely well.

The one that I found most interesting, though, is a technique for eliminating counter-party risk while holding gold in your IRA.  Now it's not particularly difficult to hold gold in your IRA.  And for those who only require "gold like" performance, there are, of course, the gold ETF's.

Here's the thing.  Many of us hold gold as a form of crisis insurance.  I can't speak for you, but in a crisis, I don't want to count on anyone to hold my most precious assets.  And Terry Coxon just may have the answer.
"There is a third alternative, which I've dubbed the Open Opportunity IRA, that starts with a simple idea but opens many doors for you. It's an IRA that directly holds just one thing – a limited liability company that you manage. The IRA custodian is the legal owner of the LLC, but you deal with the custodian only during the setup process. During that process, assets are rolled over from your old IRA to the new custodian and then into the LLC. After that, you as Manager of the LLC have your hands on the steering wheel and can invest and reinvest in just about anything with any broker, dealer or other party, and you can do so without waiting for the custodian to approve anything and without paying the custodian for storage or for handling transactions."
I have to say that after the last few years I am more than intrigued at the thought of securing my retirement assets far from Wall Street.  It seems very clear to me that while Wall Street manages to treat Wall Street.  Well, it treats the rest of us poorly on a fairly regular basis.  Wouldn't it be nice to put at least a portion of your retirement savings out of reach of Wall Street?
"In the case of gold and silver, since the metal will be owned by the LLC and not by the IRA custodian, you will be limited to American Eagles and Buffaloes. But you are free to buy them from any source that is not related to you, and you can store them in whatever way you think is best – in a safe deposit box, under the floorboards at home, or in the back of your refrigerator. And they don't need to stay or even be purchased in the US."
I have to say this seems almost too good to be true.  So as always, please be sure to investigate this idea to your own satisfaction.

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