"Brain Pick a Pro" Interview with Financial Planner Doug DeShields


Larry: Welcome to the Wednesday Night 9:01 p.m. Brain Pick a Pro Teleconference we are coming live from Lake Wylie, South Carolina and from Charlotte, North Carolina. Tonight’s special guest is a good friend of mine, Doug Deshields, Capstone Financial Planning. Doug tell us a little bit about yourself and about your Company and what you do.

Doug: Okay, well I have lived in Charlotte basically all of my life, or in the Charlotte community. Went to school here and have just been here all my life and worked here. I am actually retired, I retired five years ago from a major corporation as a Middle Level Staff Manager.

Larry: Is that right? I didn’t know that.

Doug: Yes, because my first love has always been with things financial. I have kind of kept my fingers in the pie for years and years. So when I had an opportunity to retire and go into Financial Services, the Financial Advisor, I really jumped at the opportunity, Larry. Because it was something I really feel committed to; because there are a lot of people out there that really need help, but are not getting help because the Financial Services Industry kind of tries to chase the affluent Investor. I take it from a little different perspective and look to help the middle American, the average guy; because the average guy really does not have the margin of error.

Larry: Right. Ah Man, that is a strong way to put it! You cannot make a mistake and buy some penny stocks and hope they hit the roof, right?

Doug: No you cannot, you really need to plan. When you think about everything that occurs in our lives, I mean, we have health issues, we have family, we have kids going to college, you know. We want to buy them cars, everything revolves around how we spend money.

Larry: That is absolutely true. You know what, there is a lot of times we just set and talk about and promote buying houses, finding deals, analyzing deals, subject tos, hard money, all that stuff; but tell us why should we be concerned with planning for our financial future and how to put that together.

Doug: Well, number one, Larry is we don’t know what the future is going to bring us. You know and as we have seen over the last several years, things are really not as rosy as they were in 1998 and 1999. A lot of us were envisioning rosy retirements and retiring early, at the age of 50, you know. That scenario has changed for a lot of people now. It is probably a good thing; because it is probably bringing us back more to reality. As I have said before, the average guy does not have margin of error. I mean if he makes a $10,000 mistake at age thirty; and he does not have a lot of wealth, that can be well into $150,000 or $200,000 by the time he retires. You know, he has lost the opportunity there of what those funds could do for him.

Larry: The future earning power or buying power.

Doug: Exactly, the opportunity costs of those dollars. So it is just good stewardship. It is just good stewardship on our part to be on top of our money; and not happen what I call leaks in our personal economy where money just kind of sifts out the door. We don’t even realize that it is leaking out. Too many times we wake up in our forties and fifties and decide it is time to financially plan. If we had started that a lot earlier we would be in a lot better shape, and it would not cost us near as much.

Larry: The power of compounding is just unbelievable, when you talk about over a period of years.

Doug: Absolutely, it is. The earlier you start, you know, it is just phenomenal. The longer that money has to cook, the less risk you can take with it. You don’t have to take extraordinary risks.

Larry: You have more time to let time make up the difference.

Doug: Exactly. A lot of us are trying to figure out how we are going to put our kids through college. How are we going to retire. Those are all financial planning issues; because that is where we need to figure out where we are going to spend our money. Where is it going to come from.

Larry: That is true.

Doug: I think the government is going to be less and less able and willing to take care of us in the future.

Larry: Yes, that is a good point, that is obvious, you know. They talk about Social Security but some people call it Social Insecurity don’t they.

Doug: Yes. Let me spend a minute if you would allow me Larry and talk about how we get into a financial mess.

Larry: Okay. The biggest problem.

Doug: Well, we will get to that, but here is what happens typically in our financial lives. When we first start out in our early twenties, we start developing relationships with financial institutions and financial people. It can be the Property and Casualty Agent that insures our car, insures our first home. It may be the Mortgage Banker that we get our loan from. It may be the Tax Advisor that we have or maybe the government in the form of taxes. We are always dealing with somebody in the Financial Services sector. We typically establish these relationships individually. Now if you think of yourself, as you look at yourself kind of as the earth in the center of the page; and put a bunch of moons around and label those moons, you know Attorneys, P&C Agent, Life Insurance Agent, CPA, Banker, we develop those relationships individually. What happens is, when we go to talk to the Attorney, he really does not ask us a lot of questions about how much have you got your cars insured for? How much do you have your house insured for?, is it properly insured? Your Banker does not care about that, unless he has a loan on that. So the problem, is really nobody has an overall picture of what you are doing. You may be paying for some of the same financial services, maybe paying twice. You may be able to cut down in one area and pick it up in another. That is were financial planning comes into being; because a good financial advisor can step right in there with you, Larry and kind of be a Quarterback to help you with all these relationships that you have developed individually. You never really get all of those guys in the room at one time helping you.

Larry: That is a real good point. In fact, Matt had mentioned a little something about, in building your team a couple of weeks ago or last week on this Teleconference. Get your team together and show how they work together and how they have helped you become who you are and are taking you to the next level. That is a great point.

Doug: Exactly. You mentioned, talking about our greatest problem financially. The biggest thing I see out there is that we are under funding our retirement. We are really missing the boat on how much it is really going to take. Part of that has to do with the fact that we really do not factor in inflation very well. Take for instance, if we retire today and we have a retirement income through all of our sources, you know, of $36,000 a year; and we are going to live another 25 years say. At a 3% rate of inflation, you know, we are going to have to be spending $75,000 in that 25th year to have the buying power of $36,000.

Larry: Right. The future value of money is a lot less.

Doug: Exactly. That is one of the calculations that people really do not understand. At times go by, what generally happens is we do not pay ourselves any more retirement, we retire and are making $36,000 a year and that is great this year, I can do that. I have my house paid for. Twenty-five years down the road, we are only getting $40,000 a year and things have gone up. Now we are Mom and Pop sitting on the front porch watching the world go by. From what I am seeing and the people I am meeting with, under funding of retirement is a real big issue. Health costs are looming large out there and it is going to take a big bite out of our retirement.

Larry: What do you think we need to do about that?

Doug: I think one of the things we need to do is we need to look at how we invest our money. One of the ways about that is simply Retirement Accounts, 401Ks, IRAs, that sort of thing. If you work for a big corporation, typically you are limited to a 401K, maybe you can do something with an IRA but it depends on how much income you have coming in.

Larry: Aren’t you limited to the amount you can put into an IRA based on your income?

Doug: Yes. That is exactly right if you have another qualified plan.

Larry: If you have another plan?

Doug: Exactly. If you don’t have another plan, then you can obviously, you can put the maximum in for the IRA.

Larry: Which is how much per year?

Doug: It is $3,000 a year and there is a $500 a year catch up provision right now.

Larry: Which means if you are older, you can put $3,500 in, right?

Doug: Right. If you are over 50 years of age, you can put $3,500 in.

Larry: Well, that is still strong, I mean that helps.

Doug: Yes, absolutely. You know, here is the thing, what a lot of people do not understand is this getting started early business. You know, if we were to take and I have a little calculator here in front of me that I am working with, while I am doing this. If we were to make an annual payment to our IRA, let’s say we are 25 years old and we start putting $3,000 a year into an IRA. Thirty years later, we are 55, if we can get an 8% return on our money, you know is almost $340,000.

Larry: Wow! That is strong!

Doug: That is strong and that is not even counting the fact that this thing will probably indexed and you know, we really should be increasing that amount.

Larry: Oh yes, the amounts will, I am sure over time, be increased.

Doug: Yes. They are not going to be able to take care of us. They are sending a clear signal to us, that we need to look out for ourselves in this sort of thing. Now, when it comes to IRAs, there are all different types. There is the Traditional IRA, there is the Roth IRA and the great thing about the Roth IRA, Larry, is that the earnings and the principal come out, both, tax free at the end.

Larry: Right.

Doug: You are not going to pay taxes on it. Now you don’t get the tax deduction that you get on the IRA.

Larry: In other words, during this tax year, if I put $3,000 in a Roth IRA, I cannot deduct that $3,000 from my income to show less income and lower my taxes? But when I take it, it grows tax free both in what I put in there and in the gains, right?

Doug: Yes, let’s take a for instances. Let’s say you are forty years old this year, Larry. You are going to put $3,000 into that Roth IRA and you are going to retire at age 60, which is twenty years down the road, okay? With just an 8% return on that money, that is almost $14,000 that $3,000 has grown to. So you are giving up the chance to have a tax deduction that will pay you basically maybe $800 or $900 today, in order not to have to pay taxes on $10,000 in the future. So that is a powerful thing,

Larry: There was a time when, and I guess it is over now; but you could convert your Traditional IRA to a Roth and then defer the taxes due, spread that over a few years. But that is gone isn’t it?

Doug: No it is not gone entirely. You can still do that; but it may be something that you really need to work out with a financial planner and tax advisor; because it really may not pay you to do that. Depending on your age and that sort of thing. It is one of these things that depends on what your income level is, because if your income level is over a certain amount, it will not even let you convert it.

Larry: Is that right?

Doug: Yes.

Larry: I remember when they first started that, I did that. I converted all my Traditionals, I had three or four, and converted them to Roth.

Doug: Went ahead and paid the taxes on them and converted to Roth. Well, I think you probably was a young enough man that it was a good decision for you.

Larry: From your mouth to God’s ears. Hopefully.

Doug: I don’t see why it wouldn’t. A Roth IRA has a couple of advantages over Traditional IRAs, other than just the tax free distribution at the end. Another one is, you can always withdraw all your principal.

Larry: With no penalty!

Doug: With no penalty! Exactly. So you can use that Roth IRA kind of as a Savings Account to, for that amount of money. You can put the money in and then, as you have something come up down the road, you can withdraw that principal if you need to.

Larry: And keep the gain in there.

Doug: In the plan, yes.

Larry: Keep it accruing and compounding.

Doug: Exactly. So that is one of the advantages of Roth. You know, that is also powerful; because when you do that with a Traditional IRA you not only have to pay the taxes, but in some instances you have to pay a 10% penalty, as well.

Larry: Right.

Doug: There are a couple of other types of IRAs, those are the two that most individuals deal with. Individuals IRAs and the Roth IRA. There are a couple of others that we get to in a little bit. Let’s talk about a Self Directed IRA.

Larry: Right. I want to get to that one, that is what we are waiting to hear about, how we can use Real Estate.

Doug: Exactly. A Self Directed IRA is a totally different animal in that there are only a few custodians in the country, about 12 or 13, that will even allow you to set up a truly Self Directed IRA. We talked about some of those Equity Trust, Sterling Trust Guidance, Lincoln Trust is one; but what they allow you to do is they allow you to hold non-standard assets in those accounts. If you go to your bank or to your Investment guy/your broker dealer, your Merrill Lynch or whatever and you say, “Hey, I want to buy some Real Estate with my IRA, they are going to laugh at you. Because they are not set up to do that. They might even tell you that you cannot do that; because this is not really widely disseminated information, as you might image.

Larry: They want you to keep that money in their product.

Doug: Exactly. A Self Directed IRA is exactly that. You are on your own, you know. But it also allows you to invest in some things that you might get a better return then you might get normally. Or at least some things that you might feel more comfortable with.

Larry: Or at least you have more control over.

Doug: Exactly. You will have some control; but it still something that you have to really plan about. It is not something that you can go into on a lark. You can actually, some of the things that you can actually purchase out of your Self Directed IRA; and it can be a Traditional Self Directed, a Roth Self Directed and even a SEPP. We have not talked about SEPP (Simplified Employee Pension Plan) yet. The SEPP IRA can also be Self Directed. You can buy cold, hard Real Estate that you can go up and kick. Apartment buildings, land, mobile homes, single family homes, duplexes that is something that you can buy with your IRA. That is probably the more complex of all the things that your are going to buy.

Larry: What about, where is the catch?

Doug: Well, the catch, Larry, is that you have got to realize that you and your IRA are two different entities. The transactions between the IRA and the Real Estate have to be at arms length from you. You cannot purchase Real Estate that you presently own. You cannot purchase Real Estate that is owned by a family member or a linear descendant. The IRS puts out a list of disqualified persons and that is you, your spouse, children, parents, grandparents, and any of their spouses. Grandchildren even, so you really have to make sure that you follow the letter of the law, or they can declare that part of IRA taxable.

Larry: You lose all the tax benefits.

Doug: Exactly, but you can buy say a single family home; if we were to buy a single family home out of our IRA, you know obviously got to set it up. We also have to fund it properly. All the profits, all the rental income has to go back to the IRA. In fact, the tenant would write the check out to Sterling Trust for the benefit of Larry Goins IRA.

Larry: Right, so it would right into that account.

Doug: You cannot touch it, absolutely. If you had repairs that you had to make on the property, they would have to be made from the IRA.

Larry: Yes, you cannot co-mingle funds in other words.

Doug: You cannot co-mingle funds, so you have to – if you have $50,000 in an IRA, you don’t want to spend all $50,000 on a piece of Real Estate. You want to leave you some reserves in there to handle it.

Larry: I think it is important to mention that you also, you cannot go out and buy a piece of property with your IRA and mortgage it unless it is with non-recourse financing, isn’t that correct?

Doug: Exactly.

Larry: Explain that a little bit.

Doug: Well, a non-recourse loan really means that if something was to go bad, the Lender cannot to back to the Custodian of the IRA and extract more funds or hold them responsible in any manner. So basically, all they get is the property. They don’t even get, I don’t even know if they get the property. I have not been involved in a situation like that, but they cannot get more than the property.

Larry: Right. In other words, it is a loan that you cannot sign personally on, or that you don’t sign personally on.

Doug: Not only can you not sign personally on it, but the property is not even collateral for it. They don’t have any recourse if something goes, if it is not paid. It is a tough deal.

Larry: Yes, it is. I don’t think there are very many Lenders out there that will do that actually.

Doug: No, and I wouldn’t either. I wouldn’t do that if I was loaning money. The other thing too, if you do get financing on a property through your IRA, it just complicates matters. You may have some unrelated business taxes with that. So you can do it, you can buy cold, hard Real Estate with your IRA, but is probably not the best opportunity that you have with your IRA to be involved in the Real Estate Market. There are a couple of other ways that you can be involved in Real Estate through your IRA, Larry. It probably makes a little more sense for most people.

Larry: How is that?

Doug: One of the ways is that you can invest in an LLC that owns property.

Larry: Okay.

Doug: You have a proportionate undivided share of the LLC and the LLC owns the Real Estate. So your IRA basically, if you want to make a $25,000 or $50,000 investment into an LLC that is buying property and secures the property than you can do. They can buy land, they can buy a building or whatever, but you are investing in the LLC and your money will go into the LLC. Now if the LLC requires any more money, it will have to come out of that IRA, if there are any expenses associated with the property.

Larry: Can that LLC by my LLC or like you say it has to arm’s length, right?

Doug: It has to be arm’s length. Technically you are an owner or a member of the LLC when you invest in it; but you have an undivided proportionate share. I think that if you were the 100% owner of an LLC, you know you might be stretching it there and that is not the way to go. There are plenty of opportunities out there; because there are plenty of people investing in Real Estate. Remember this is your IRA; and you do not want to mess it up tax wise.

Larry: That is true, you don’t want to play.

Doug: No, you don’t want to do that. An LLC that is buying land, and there are several deals like that around Charlotte, where people are buying land and apartment buildings and that sort of thing and you can become an Investor in the property. You can get into returns without having to be involved in the other aspects of it. In fact, just to back up for a minute, if you buy a piece of Real Estate like a single family home, you cannot even manage it Larry. You have to get a third party Manager.

Larry: Oh, do you really? I didn’t realize that.

Doug: Yes, you have got to get a third party Manager and you cannot even pay yourself or a company you own to do repairs on the property. So even you can do it, it is one of these things that maybe it is not the best way to invest in Real Estate. You can also buy undeveloped land through your IRA, commercial property. If all of this is properly structured and you are not the owner, the IRA has to be the owner, they cannot buy it from you or any of those disqualified persons. Probably one of the things that excites me the most is that you can also put Promissory Notes in your IRA. One of the ways to do that is to invest your money with a hard money Lender that is going to give you a return.

Larry: We actually have several Investors that have Self Directed IRAs at like Equity Trust, which is where I have mine, and several other ones. We are pretty familiar with their paperwork and documentation so we have Investors that have anywhere from $50,000 to I think around $300,000 in those accounts and we will invest that money for them in a 15% return.

Doug: Yes, and even though people are asking how can I get 15%, well you can get that. Real Estate gives you an opportunity to get uncommon returns, because Real Estate does something a little bit differently. Real Estate allows money to be generated in three different ways. The asset an actually appreciate, it can actually produce income and it offers tax benefits. So when you invest your money with a hard money Lender or into Real Estate or in an LLC that is buying property, even though you are not getting a tax loss possibly on your thing. You are benefiting from the return that is generated by all of those three aspects of Real Estate.

Larry: Plus it is a tax deferred return.

Doug: Exactly.

Larry: If it is a Roth it is a true tax free return, right?

Doug: Exactly, and I think if I had a choice between a Roth IRA and a Traditional IRA, I would pick the Roth IRA; if I was going to do Real Estate. Here is why, in an Traditional IRA you are going to lose the ability when you distribute the money at the end, in your retirement years, you are going to lose the ability to take capital gains. You are going to have to take ordinary income and right now that could be as much as a 20% difference for some people.

Larry: Because you have to start taking it out at 70 and ½, right/

Doug: Exactly, but you don’t have to start taking out a Roth at any particular age. Plus the Roth is coming out tax free.

Larry: You are not paying any tax on it.

Doug: Yes and you are not paying capital gain. So you eliminate the capital gain and the ordinary income tax. It becomes a more powerful tool. If I had my choice between money out of pocket and a Traditional IRA, if I had money out of pocket that is non-qualified, non-retirement dollars, that is where I would invest Real Estate, just because capital gains right now is significant lower than the tax rate. Because you lose that in a Traditional IRA. Now if the tax laws change, and capital gains go back up to 70% which is where they were when Reagan came into office in 1980, then that is a whole different ballgame. Right now capital gains have been a lot less for a lot longer time.

Larry: Let’s take a minute and look at, not everybody may have $50,000 or whatever to buy a piece of Real Estate or to go out and buy a Note or a hard money loan or something. What are some other ways you can use your IRA money, say if you just put $3,000 in to do Real Estate. Are there some way you can do that?

Doug: Absolutely. One of the ways you can do is a REIT (Real Estate Investment Trust), it is similar to buying a Mutual Fund. You can do that probably for a minimum of $1,000. These things will actually pay your IRA back on a monthly basis. I have got some clients now in some REITs that are 5 to 7 year REITs and they are going to probably generate a return of about 10% between the income and the capital gain. Which is pretty good in this market. Pretty good. Let me tell you why you want to be in Real Estate or at least have some of your portfolio in Real Estate.
I found this rather interesting when I saw it the other day. Let’s say you have $10,000 back in 1972 and you invested it in just Stocks and Bonds and got the return of 10.9% between 1972 and 2003. That would have given you about $289,000. If you would have 20%of that, if you would have taken 10% of the Stock mix and 10% of the Bond mix, that was basically a 50/40/10 split, there was C Bills being 10%, 50% being in Stocks. If you put 20% in REIT and I am only using REIT because that is what I had the thing for, but cold hard Real Estate does even better. If you had 20% REIT in there and lowered your Bond participation by 10% and your Stocks by 10% your returns would be 11.5. Well, that is only 6/10 of 1% difference in returns, but it is actually when you take the percentage difference that is 5.5%. That generates $347,000 over that same period of time. You pick up almost $60,000 more on that $10,000 investment by having a Real Estate component in there.

Larry: That is strong.

Doug: Well, it is strong; because Real Estate typically does not go down. It may not go up, but it does not typically go down. Unless you are in a particular market.

Larry: Let me ask you about some ways that we have looked at doing this, and I have heard some other Investors do it. I have not personally done it myself. You have to be careful in your Retirement Accounts because you cannot let the IRS determine that you are operating a business in your Pension Plan or Retirement Account, so you have to be careful. But can’t you also go buy Real Estate options in your IRA?

Doug: You can, Real Estate contracts. Yes, an option contract, you can do that.

Larry: In other words, you could go out and option a piece of property, say this is your first year and you have $3,000 in your IRA. You could go out and you could put up $3,000 as option money on a piece of property that you get and you end up selling your option for $10,000 or for $5,000. Well, you get your $3,000 back and then you get your $5,000 and now your have $8,000 in your IRA. Then you go do it again and you do it again and you do it again and that is way I have heard some people funding their IRA when they just start out or maybe start out a little later in life.

Doug: That is one way to do it. What happens, Larry, is everybody has to be, they have to be comfortable with their Real Estate knowledge and their Real Estate ability. Everybody is not comfortable with doing options, you know.

Larry: That is true. Not a lot of people do it. We have done a few but for the most part your do contracts. Now if you are not familiar with options can you do this? Can’t you go out and get a property under contract put up, even if you had only $3,000 in your IRA, you could keep three contracts at a time going. Put up a $1,000 deposit on this property and then assign your contract to somebody else for $5,000, get your $1,000 back, plus your assignment fee. You do that three times and you have $15,000 plus your original $3,000. That is $18.000 you have.

Doug: Exactly. Now the thing about that is, keep in mind, it is your own transaction and you are going to be on the phone, you are going to know that person, that Service Rep at Equity Trust very well. Because, they have to actually send the paperwork. They have to do that, you just instruct them what to do after you have made the deal. They actually make the deal, so the fees in those accounts are a little heavy compared to a normal IRA, but you have the opportunity to get that uncommon return.

Larry: Absolutely, when you can that that $3,000 and parlay it I guess into $15,000 or $18,000 pretty quick. The neat thing is, we buy most of our property through Realtors so you just write up your contract, Equity Trust Company FBO Larry H. Goins, which is for the benefit of and/or assigned. Then I send that to Equity Trust, have them cut a check. Send it to the Realtor and the Realtor puts that in their Trust Account and then I sign that contract and at closing I get my $1,000 back plus my $5,000 assignment fee. It is made out to Equity Trust Company FBO Larry Goins, it goes directly to them and have just increased the money in my IRA to be able to use for something else.

Doug: Exactly. Exactly Larry, that is how you would do that. That is a good strategy.

Larry: But like I said you have to very careful not to operate a business in your Pension Plan. You know, it is okay to do one every once in a while.

Doug: Yes. Some people may be out there on the line right now, Larry, and they might be saying, “you know I really don’t have that much money in my IRA.” I work for a Corporation, I have a lot of money in my 401K, but I am not ready to leave my job. So what do I do? How do I participate? Well your 401K has very limited choices compared to the IRA World and the Self Directed IRA World.

Larry: Because your company determines the Trustee, I guess, or the Administrator of it.

Doug: Yes and they control the choices, and they don’t give you a lot of choices. The most I have ever seen in a plant is about 12 to 15 Mutual Funds plus the company stock, you know. But some of the major Corporations, if you get down, you know they say the Devil is in the details leg. Some 401K plans when you can get to that document and read all the fine print, they allow in-service transfers. In-service direct roll outs. If your 401K does that you can roll out part of your 401K, not all of it, but part of it into an IRA, while you are still employed. Not every 401K plan, every one of them are different because each company has a Custodian that writes them up differently. But a lot of them do have an in-service transfer. If they do have an in-service transfer and you have maybe half a million dollars sitting in a 401K, you may be able to roll out $200,000 to an IRA or to a Self Directed IRA and participate in Real Estate. while you are still employed, you know, in your Corporate job. That is one way that people can get money into that IRA World and have a little more flexibility.

Larry: That is strong.

Doug: A lot of people do not know about that.

Larry: Tell us a little bit about the Simple IRA and SEPP.

Doug: Well, the Simple IRA and the SEPP. The simple is an IRA that is really kind of non-discriminatory. It is set up for companies that have 100 or less employees and it allows the employees to, I believe this year, put aside up to $9,000.

Larry: You are talking about he Simple now, right?

Doug: The simple IRA, right. There is also a catch up provision at age 50 or over of $1,500.

Larry: So a 105

Doug: 105 which is pretty strong, that employees can put aside. The employer can match that on a percentage basis.

Larry: That is actually what we have here at our Company.

Doug: Is it, the Simple?

Larry: The Simple and that is acronym for Savings Incentive Match Plan for Employees, isn’t it?

Doug: Right. Yes and the reason they do it, it is very similar to a 401K, but it doesn’t have all the rules and regulations.

Larry: It is a lot less to administer.

Doug: Exactly, it is cheaper to administer, it is not as cumbersome and a small employer can do it without having to have a full time administrator on it and that sort of thing.

Larry: Exactly.

Doug: A SEPP Plan (Simplified Employee Pension Plan) that is a Plan that is really a good plan. Let me tell why it is a good Plan.

Larry: Yes, tell us about that.

Doug: Well, you can put up to 25% of an employee’s pay into a SEPP Plan. Now SEPP is an employer’s contribution; but if you have an employee that is making $160,000, you can put $41,000 of money as a silent compensation into his plan for him. In a Company that is making a lot of money that is some serious dollars. So you have the ability to go above the 401K there. Once that money has been in there two years the employee can invest it. He can put it in a Self Directed IRA and put some of it in Real Estate.

Larry: So they become fully vested in two years.

Doug: Exactly. There are some rules, you know. Actually what happens is, the Company determines the percentage that they are going to contribute each year. If they contribute 2%, well then you make $160,000 you are only going to get $3,200 in there, but if they decide to contribute 10%, they have to contribute 10% for each employee whether they make $10,000 or up to $160,000.

Larry: To each and every employee.

Doug: Exactly, now for the business owner, you know the way it works out, the business owner might get the whole 25% savings on his, because there is formula they have to go through. He basically can put away about 20%. Which is still strong.

Larry: Yes, it is.

Doug: For a Company that is making money, and values it employees very highly; that is certainly a good way to have a retirement plan that will keep your employees around and all.

Larry: That is true. I like the Simple for a couple of reason. Dependant on when, we have anywhere from five to ten employees. The thing I like about the Simple, the Savings Incentive Match Plan, is they put some of their own money in it and then we match it. You have to elect each year whether you are going to elect 1%, 2% or 3% of their income.
If we elect to do 3% and you have an employee that makes $100,000, we can contribute $3,000, they can contribute the other $6,000 for a total of up to $9,000 for the year. That way, I like to help people that want to help themselves in other words.

Doug: Well it is very similar to the 401K, in the amounts of money that you can put aside. You cannot put aside quite as much in a 401K, but it still is a lot better than a regular IRA.

Larry: That is true. But the SEPP of course, you could contribute a lot more.

Doug: Absolutely. It is a little bit, you have the ability to put in a SEPP into a Self Directed IRA which you do not have the ability for the Simple IRA. But that is a great thing. It is absolutely a great thing. While we are at it, let’s talk about the Education IRA. A lot of people ask about that, you know they talk about savings for College. You just got a new baby, what are going to do, Larry?

Larry: I am going to be up all night, that is what I am going to do.

Doug: Well, what used to be called the Education Savings IRA is now called the Coverdale Savings Account, I believe.

Larry: The Coverdale Accout, yes.

Doug: It is really not an IRA. You can put up to $2,000 per Beneficiary in the account, you do not get a tax deduction. What you do get is the ability to take the earnings and spend the earnings and the principal that you put in there. Obviously, the principal you do not pay taxes on. But the earnings if it is a qualified tuition expense or school expense then you do not have to pay any taxes on those earnings when you pay them out. And you can do it on primary, secondary and college education expenses. You do not have to wait until they go to college, like in a 529 Plan, you can do it in a private high school or something.

Larry: Yes, they are pretty flexible on that. It is almost kind of like a Cafeteria Plan in that, well I should not say that. They are pretty flexible what you get to spend the money on, aren’t they?

Doug: Yes. You know as long as it is a qualified tuition payment, they really don’t care.

Larry: I wonder if I could get my Boot Camp qualified for that?

Doug: I don’t think so. If a child is disable, there is not a lot of limit on that. You have to spend the money by age 30 though. You cannot leave it in there for ever. But if they don’t spend it by age 30, if the kid does not go to college, you can assign another Beneficiary.

Larry: Yes, you can roll it to the next child in line, right? That is the way I understand it.

Doug: Exactly. If you don’t have a child, you can roll it to a Grandchild or a Cousin or whatever.

Larry: Oh that is neat, you can change Beneficiaries?

Doug: Yes you can do that. Now and if something happens and you really need to take the money back, you just pay the taxes and all on that. It is a way to encourage savings. My whole thing, Larry, from a standpoint of educating your kids, is really think about building your wealth first, instead of putting money aside for your kids education. If you are growing little bitty pots everywhere; you got a pot over here for education, you have another pot for this kid, that money is not working. You might be better served in maxing out your IRA and then putting some of that money, if you have it, just into a non-qualified basis in Real Estate or some other investment and grow your wealth.

Larry: Exactly. In other words it compounds better having it together instead of spread out.

Doug: Well, not that it compounds better; but you can get what if call velocity out of it. If it is in a pot, it is not doing anything. Let me give you an example. There is something else that you can do that we have not talked about when it to IRAs and the way to get money out of an IRA. It is called a 72T Distribution.

Larry: Tell me about that.

Doug: Well, it is about substantial equal periodic payments and what it amount to is, and you really should not do this until you are at least 50-51 years old, somewhere around there. You can decide to go ahead and pay yourself a retirement early. Typically they are set up with an Annuity Company or somebody who can administer or custodian that can administer. Let’s say for instance that you have $500,000 in your IRA; and that you are 50 years old and you are not real comfortable in just taking it and putting the money in Real Estate, you would like to work part-time or something. What you can do, is you can elect to take a 72T Distribution, without getting into all the ways you can calculate it, you can basically take about 4%, 6% or 8%. If you took 8% per year, that would be $40,000 on half a million. Obviously you are going to pay that out and you may still be working at another job or something and you have $40,000 coming to you Larry. You will have to pay taxes on that, it will be added on there. You will not have to pay the penalty, but you have to agree to take that amount for five years or until age 59 ½ whichever comes last. Once you start it, you cannot stop it.

Larry: Now this is a traditional IRA, right?

Doug: Yes.

Larry: With a Roth it does not matter, right?

Doug: No, that is exactly right. You can withdraw principal on a Roth; but on a traditional IRA, no you can take that money let’s say and invest in Real Estate property. Okay, because you are taking the money out of your IRA, you are going to pay taxes on it. But you can buy a piece of property that has a mortgage on it. You put a mortgage on that property and if you get a thirty year mortgage, the interest is going to be; you match it up with the amount of money you have coming out; or several pieces of property. You have $40,000 income, say. But you have $40,000 worth of interest and deduction on property that you buy. So you watch that on your tax form and now you have turned your IRA into a piece of real estate without all the encumbrances of trying to buy inside your IRA.

Larry: Exactly.

Doug: You can take that money and you could invest it; but that money will come out and pay the mortgage. If you dedicate that money to the mortgage of the property you buy, and you rent that property then you can take that rental income and invest it back with a hard money Lender or do something else with it.

Larry: Wow! That is strong. I had heard about that; but I did not really know exactly how it worked.

Doug: You can take the money and spend it if you want to. You can also take the money and invest it.

Larry: That is the wise thing to do.

Doug: Yes, you can take the money and invest it and it is a way to access your account without a penalty.

Larry: Early, yes.

Doug: Early. Super way to do it.

Larry: Tell us a little bit about, I am sure there are a lot of Investors that are out here in the Corporate world; and they have a retirement plan or 401K somewhere. Then they have to change jobs or leave their jobs. What should they do with 401K?

Doug: My advice about 99% of the time, Larry, is they need to roll that into an IRA. A lot of people when they leave that firm they still have a lot of loyalty. I was in telecommunications for many years and had a lot of friends that retired from Lucent and they used to tell me, “I still have my 401K at Lucent, it is in that Lucent stock.” They are not too proud of that anymore. A lot of them are back to work and they lost their shirt, being in company stock. I don’t care how much you love your company, don’t love their stock as much as you love the company; because it goes up and it goes down. You have limited choices in the 401K. I would roll it out to an IRA, I would not roll it into a new plan. When you get a new job, the first thing they are going to say is, “you can roll your old 401K over here.” A lot of people jump right on that; because they think, I am not paying fees. You are paying fee, you are just not seeing them on the type of statements you get.

Larry: They want that money under their management too.

Doug: Exactly. An IRA is always more flexible than a 401K. It will allow you to get to the money earlier. If your roll that money back into a 401K, you are not going to get a match on it. They are only going to match new contributions. So you are just rolling in there and putting it under the rules of the new 401K. Then you have to wait until you leave that company possibly, you cannot do an in-service transfer.

Larry: Yes, because it may be a while before you can get it out without a penalty. Or without paying a back-in load or whatever, right?

Doug: They don’t really charge you that on the 401K side. That is where the fees really come out, not on your savings on a 401K, they really come out as part of the earnings you don’t get.

Larry: As part of the earnings you don’t get, I like the way you put that. Now when you roll a 401K into an IRA, is that going to be a traditional or a Roth?

Doug: It is going to be a traditional unless you are willing to suck up and pay the taxes. For most people, it is probably just to roll it into a traditional IRA, especially if it is a substantial amount of money. It depends on your age a lot, you that is where a Financial Advisor comes into play and a Tax Attorney, or a CPA, to set there and help you calculate that move before you make it. I don’t know how many times I get calls and they say, “here is what I have done, can you help me?” If you had just made that call before hand, you would get a lot more help that way.

Larry: Exactly. It would make a big difference, wouldn’t it?

Doug: Exactly. Most professionals out there that you engage, you are going to find out that they don’t cost you anything, you get a return on the money you invest.

Larry: I want to ask you this. Let’s talk about Estate planning a little bit.

Doug: Okay.

Larry: From what I understand, in about six years there is an Estate Tax that is going to be repealed? Is that right?

Doug: That is correct.

Larry: Now how does that work and what can we do to set ourselves up for that?

Doug: Well, I would say, “Really don’t get too excited about it.”

Larry: Exactly, what is it?

Doug: What we have right now is there is some scheduled Estate taxes changes that are taking place; because of tax law changes a couple of years ago. Each year the Estate Tax exemption has been going up. It was One Million in 2003, it is 1.5 this year and it is going to go up to 3.5 million in 2009. Basically what that means is, if you entire Estate including Life Insurance, all the property and money you owe is under 3.5 million you will not have to pay any Estate Tax on it.

Larry: Your spouse won’t, is that what you mean?

Doug: The spouse does not have to pay Estate taxes.

Larry: At all?

Doug: No, there is a 100% spousal martial deduction, okay? So the spouse does not, but when it goes from the spouse to the next Beneficiary, that is when Estate laws really hit. That is when it hits. But in 2009, we are schedule to have no Estate Taxes whatsoever, on the Federal level. If nothing happens then, if Congress doesn’t act, in the year 2011 they are going to re-set it back to One million dollars and the tax rate will be 55% on the top Estate Tax Rate. Unless you are planning to die in 2010, don’t get too excited about it; because since the Estate Tax was instituted in the last Century it has come and gone eight times. It has been wiped off the books and put back. The way that we are spending money now, the cost of the war in Iraq and other things, I don’t know how in good conscience they are going to be able to repeal this and leave it repealed. We have a lot of burdens ahead of us as a Society. Pay Day is coming up one of these days. On a lot of things, so I would not get too excited about that, unless you are going to die in 2010, you know.

Larry: That year!

Doug: Exactly. I would not put off making trips to the Attorney and having my Wills and my Trusts and everything updated. One of the things that is happening, kind of under the radar now, as the Estate Tax goes up, as exemption goes up each year; the State’s usually had been give you full credit for your Federal. They are not doing that anymore. The states are needing some money, so they are holding the line a like $650,000 or One Million. So even though you may have an exemption on the Federal level, if you go over the State is going to be there to collect their share all the sudden on Estate Tax.

Larry: Even though it would probably be a less percentage, it still can add up.

Doug: Yes, it all adds up. Think about it, you know. If you can save yourself 2% in taxes, you can do a tremendous amount of good out there over a long period of time for your financial. So taxes are not something to think that the government is going to let you off the hook on. You have to actively know what you are doing in the way you set up your financial world and your Estate plan and the way you do business and everything else. It is a big drag, it is like having a parachute behind you. Like slowing down those dragsters, you know.

Larry: Exactly. It is all a part of your building your team and who is on your team, it is part of it.

Doug: A lot of people say, “well I don’t have enough money, to worry about Estate.” It is not all about money and taxes. Some of it may very well be that you need an Estate plan because you need to direct what money you have to the proper places. To just leave it to your children and say, “I will just them all divide it up.” That may not be the thing to do.

Larry: No, especially if there is a substantial amount.

Doug: Exactly. That is a good point. I think the Estate Tax is going to be here to stay. I think that a lot of excitement was generated but I wouldn’t get too excited about it going away.

Larry: Well good. Let me ask you this and I know we have not talked about this; but tell me a little bit about it. My Daughter has one of these that her Grandfather did for her, it is a Uniform Gift to Minors Account. Tell us a little bit about this. How this works.

Doug: That is a Uniform transfer to Minor’s Act (UTMA); and basically what that amounts to is her Grandfather is probably the Custodian of that and he puts money into her account. He can put in as much as he wants, keeping in mind that he is still under the Gift Tax Provision of I believe it is maybe $1,200 this year $1,100 or $1,200. He still has to worry about the Gift Tax part. He can money into her account and invest it in Mutual Funds, Stocks, that sort of thing. She will pay the taxes on it (or you will pay the taxes on it), you know she is a Minor until she if fourteen and then the Kiddie Tax thing does not happen anymore.

Larry: What can they make, $600 or $650 a year or something like that a year?

Doug: Something like that; but the real crux of the matter is in most states at either 18 or 21 your daughter becomes owner of that account. I think I like the UTMA for the fact that you can put more money in there than you can in a Coverdale IRA. You can invest it in Mutual Funds. You cannot Self Direct it. You cannot do Real Estate in that.

Larry: There is a scary down side though, isn’t there?

Doug: The scary down side is it becomes the child’s.

Larry: She can go buy a Porsche.

Doug: She can do whatever she wants to.

Larry: And forget College, right?

Doug: Exactly. Yes that is the scary down side. Now the way that some of my client’s who have those, the way they are approaching that is, they are not even telling the kid there is such an account. You can spend the money, the Custodian can spend the money on the child before age 18. If they contribute to the account and then they take money out, they had better document it. It is technically the child’s and it needs to be spent on the child’s behalf or the child can come back and say, “where is the money?”

Larry: Where is the money, that I never knew I had?

Doug: Yes. Those can be good things. My brother-in-law has two of those for his two daughters. He is investing in several Stocks and they have done quite well. An uncle has funded those accounts and they are making money. The children are small, and by the time they are getting ready to go to college it will make a significant dent in their college.

Larry: Absolutely.

Doug: If not pay for it. It is a good thing, the down side, like you mentioned Larry, is that technically and legally when the child becomes 18 or 21, whatever the laws of that particular state are, they become the owner of that account.

Larry: Right.

Doug: Hopefully, we will train up our children in such a way that they will be responsible.

Larry: Exactly. From your mouth to God’s ear again, right?

Doug: Right.

Larry: Let me ask you this. We are going to open it for questions here in just a minute. Do you still have your Financial Calculator with you?

Doug: I do.

Larry: One thing that I think is neat when I teach my Mortgage that is used to teach quite a bit and show everybody how to use a Financial Calculator. The calculator is not only good for figuring Mortgage pay offs and payments and that sort of thing; but I always liked to show people what the future value of Twenty Bucks is. Can you, just while we are here on the phone and people are listening, take $20.00 for thirty years, compound that at 8% and what is twenty dollars going to be worth thirty years from now?

Doug: A one time investment of twenty dollars?

Larry: Just one time, twenty bucks. If I have a twenty dollar bill in my hand, I can either spend it on beer and pizza or I can sock it away.

Doug: At 8% that is $201.25.

Larry: Two hundred dollars.

Doug: Ten times, hey it is ten times.

Larry: What if you could 10% on that?

Doug: I don’t know why you couldn’t over a long period of time. That is almost $350.00.

Larry: $350.00, so I submit to you. Every time you pull a twenty dollar bill out of your wallet you think about this is $350.00 in my future. $350.00, it will make you look at a twenty dollar bill in a different light.

Doug: One of the things you can do. When we first started, I talked about leakages in your economy. Your personal economy. If you can find a way to cut your Auto Insurance bill by $20.00 when you are twenty-five years old. By $20.00 a year and you decided you are going to put that $20.00 into an account. That is $3,600 in thirty years at 10%, so that is just the power of capturing that $20.00 that you saved. Don’t put it in your pocket and spend it on beer and pizza; but invest that money.

Larry: Right, put it away.

Doug: Put it away and put it away every year.

Larry: As often as you can, every time you have an extra $20.00. Stick it away and then invest it in something. Put it in an account, doesn’t have to be a Retirement Account, do it in a cash account, margin account, put in a savings account; until you get enough to do an optional Real Estate or buy a note or whatever.

Doug: I think a lot of people have lost sight, Larry, on the fact that you hear on the radio and the television a lot, “put money in your IRA and your 401K, max it out.” That may not be the proper thing to do, especially if you are in debt, if you have Credit Card debt. You may need to get rid of that debt before you start saving for retirement. You have to remember, people was making money and accumulating large amounts of wealth, before there were IRA’s ad 401K plans. So let’s just don’t in a box. That is one of the great things about a Self Directed IRA, is that you can get out of that box inside of those things.

Larry: Doug, I have a question. Let’s take that $20.00 one step further. What is the future value of a $1.00 thirty years down the road at 10%?

Doug: $17.45.

Larry: So you have close to $20.00. Every one dollar you have, you can figure that is worth $20.00 thirty years down the road.

Doug: At 10%.

Larry: At 10% return and 10% is pretty realistic, right?

Doug: It is realistic with the proper allocations over a long period of time. You are going to have some ups and downs, but Stocks have, over the last 30 years, have turned about 10.9%. Stock and bonds portfolios have done that well, so you really cannot get into a Market thing, but you can get that over a long period of time.

Larry: Doug, if you will, tell us a little about how you might be able to help some people out there that may be listening to this tonight or in the future and how they might contact you.

Doug: One of the things that we do, is we do comprehensive financial planning and investment managing. We look at the whole financial person, if you will. Look at their insurance’s, car insurance, home owner’s, liability insurance, protection at death, disability, life insurance, Wills, Trusts cause all of that is very important. It is not only making money, but you have to protect your money.

Larry: Right.

Doug: Once you start accumulating wealth, you cannot be entirely 100% focused on accumulation. You have to have some protection components there. So I don’t know how many times, probably 50% of the time, the first recommendation I make to a client, is let’s go our Wills updated. Go back to your Attorney and you need to update that Will. That is the first thing. Also we can look at their Savings Account, Money Market, make sure they have enough money aside for emergencies. Help them make decisions as to Individual IRAs, what can I do with my 401K, should I have a Roth. How should I invest that? What is the proper allocation for my age? What is out there? In the world of Stocks, Bonds, Mutual Funds, Self Directed IRAs, Real Estate, a properly allocated portfolio is the key to long term financial success. Studies have shown that 92% of the return you get depends on the allocations, only 8% is all other factors including jumping in and out of the Market at the right times. That is probably one of the riskiest things you can do is trying to time the Market. Be properly allocated for your risk tolerances and that sort of thing. Also, we look at Tax Shelters that they may have, Real Estate, trying to maximize their financial potential. Get the most bang for the buck out there for each individual. There are really only three places your money goes, it goes to the government (IRS) and the State Revenue Department in the form of taxes, it goes to the financial services people like myself, insurance guy, the Attorney, the Mortgage Broker, or you get to keep some of it. If you get to keep a little more of it, it can improve your lifestyle and improve your future. That is what we do, we look at the whole person, Larry, and we help them to decide what their goals and objectives are and we really do a lot of listening. One of the things that I am excited about is that we do Retirement Income Projections. Where we have some software to allow us to set there with a client and actually make changes. What about if I contribute another $1,000 to my IRA what kind of change will that make? How much longer will I be able to have money in Retirement? One of the biggest questions people have, one of the biggest concerns they have is will I outlive my money.

Larry: Oh yes, I have heard that before.

Doug: That is one of the things that we try to address.

Larry: I heard a speaker a long time ago, I think if was Jim Roan, who said, “successful people save their money and spend what is left, failures spend their money and save what is left.”

Doug: That is a good saying.

Larry: You know, that is pretty strong. Doug, you could us your contact information and tell us how people might get in touch with you.

Doug: Right. My telephone number is: 704-708-5601, my e-mail address is dougdeshields@carolina.rr.com. I would be glad to talk to anybody that has a concern about their finances or would just like to look at maybe some validation. Maybe they are having success, but there may be some things down the road that may jump up and get them.

Larry: Sure, and it would be okay if people called you to ask you some questions to see how you may be able to help them?

Doug: Absolutely.

Larry: Know, you have a website as well, right?

Doug: I do. It is www.capstonefinancialpalnning.com, it has a picture of my old ugly mug up there. It just basically gives some contact information.

Larry: Right, I was on it just a little bit ago, while we were talking.

Doug: We are trying to develop that. One of the things I might mention, one of the things that we do, is conduct Bible Based Money Management Seminars at churches.

Larry: Oh that is strong. Is that similar to the Crown Financial Ministries?

Doug: It is a little different than Crown. Crown is a Bible Study. It is a great Bible Study that takes you in depth into God’s word about the different aspects of money, debt, relationships with that. What we do is a Seminar and basically it is kind of like the next step, if you will, it gives you insight into what God’s word has to say about money. In the Bible there are some 2300 verses on money and some 500 on prayer, so Jesus understood that our relationship with money is the cornerstone of a lot of our relationships. We do that and it is really an opportunity to get insight from God’s word; but also particular information, similar to what we gave tonight. As far as how do Stocks work, how do Mutual Funds work, how does Insurance work, tell me about the different types of Life Insurance and how they work and that sort of thing. It is a comprehensive Seminar that really gives people the, when they are coming out of there, kind of feeling, of you know, I can at least talk to somebody and know what I am talking about. It can make them determine if I am being treated fairly.

Larry: Exactly. That is great, it sounds like a great Program. I would love to participate in that sometime.

Doug: Well, we will have to talk to you about that.

Larry: Well, Doug, I have really enjoyed having you on here. I have learned a tremendous amount tonight. It has really been a pleasure having you on here and talking about this. So often, we caught up in negotiating deals or where to find houses and all that, but this is the real meat and potatoes of how you keep what you work hard for.

Doug: It is. One of the things that I try to keep in mind and I am sure you do when you buy Real Estate is it is not only the purchasing of a piece of property or an investment, mutual funds. You also have to have an exit strategy. That is one of the things that you need with your Retirement Accounts, with the Real Estate that you buy; you need to know what your exit strategy is going in, if you can.

Larry: Yes. Exactly. You make your money in Real Estate when you buy; but you realize it when you ultimately sell.

Doug: Exactly.

Larry: You need that exit strategy whether it is now or in a year, or three years, or twenty or thirty years down the road. You still need that exit strategy.

Doug: That is right and you know the Tax laws continually change and there are different things that you can do. I have enjoyed this too, Larry. I have learned a little bit myself, you know.

Larry: Well good. Maybe we can get you to come to our Boot Camp. We are going to have a Boot Camp in October, I don’t know if you are aware of it or not.

Doug: I am. I am actually going to be in Massachusetts at a convention that week.

Larry: Oh, you are?

Doug: Yes.

Larry: Oh, okay. I was going to say, we are going to have to get you to come in and drop in and talk to us a little bit.

Doug: Well, I would love to, but I have a prior commitment.

Larry: Oh, okay. Some of the people already know that we are having this Boot Camp. It is October 22, 23 and 24th. We are going to have guest speakers there. In the three days, we are going to be negotiating live on the phone with Sellers and with Realtors to buy properties. Actually making offers, going out and visiting properties, we are going to take a bus tour on Saturday and go out and visit properties in different stages of rehab and look at estimating rehab costs. We are going to figure out how to analyze deals. It is just going to be a tremendous amount of information.

Doug: I saw the flyer and I wanted to be able to attend, but it is not going to be possible.

Larry: We are going to have probably one every three to four months or something like that. But if anybody on the call tonight has an interest in attending; I have worked out some special pricing for people that come on the teleconference. If you call me tomorrow, you can go on the website and visit it and get all the details about the Boot Camp; go to www.larrygoins.com and see all the details about the Boot Camp. Then just give me a call tomorrow at my office which is 803-831-0056, ext. 304; and I will work out some special pricing. We do still have some seats left. We are limiting it, because we want everybody to be able to get on the bus and take the bus tour. We don’t want to make it too crowded because we want to be able to give personal attention to everybody. If anybody does have an interest, please just give me a call tomorrow and we will go over that. Be glad to answer any questions. Doug, I really appreciate your coming on. I enjoyed it and learned a lot.

Doug: Thank you for asking me, I enjoyed it too Larry.

Larry: Well, I appreciate it. I know they are getting ready to cut us off of the call. They only give us an hour and a half. The time really flies doesn’t it Doug?

Doug: It does. When you are having fun, it does.

Larry: That is true and we like talking about money, don’t we?

Doug: Well, it is an important thing. We don’t want worship money, but it is something that makes a big difference in our lives how we handle it.

Larry: Absolutely. That is a good point. I say this, “A lot of people use people because they love money; but you need to look at it and use money to love people”. If everybody did that we would have a lot better place here on earth. Doug, I have enjoyed it and appreciate everybody calling in tonight. Next week we are going to have Scott Patterson, who is a good friend of mine and also on the Board at Metrolina REA. Young guy, just got married and his is going to be talking about how he buys and sells houses. This guy does a ton of business. Has a website where he generates leads for buying and selling houses and uses some private money and hard money and pays cash for some deals. He is just very successful and him and his wife are a team and we are going to have him on next week. So look forward to that. Thanks a lot everybody for calling in and we will see you next week at the same time. Thanks Doug! Have a good night.

Doug: Thanks Larry.

Hi, this is Larry Goins and I would like to thank you for listening to this audio program. I would also like to remind you to please visit our website at: www.larrygoins.com for other information as well as we have a link for freebies. We have articles that you can read and we also have Three Day Boot Camps as well as the Boot Camp in a Box, which contains the complete Three Day Boot Camp on audio CD as well as DVD Video. Please visit our website for the location and schedule of our One Day and Three Day Boot Camps coming up. We also offer personal coaching and mentoring, so whatever your needs may be please feel free to give us a call. If you are a Real Estate group, Investor Association, Mortgage Company owner or other organization and would like to have either myself or Wendy Sweet or Leon Humphrey speak at your group about Real Estate and Finance and Investing, please feel free to give us a call. Our direct Office number is 803-831-0056, I am at extension 304, Wendy Sweet is 310. I would also like to remind you that we also offer traditional financing as well as hard money and rehab loans for Investors. Please visit our website there at www.financialhelpservices.com. Thank you very much for your businesss, we sincerely appreciate it and please remember our mission is to put people and principles in front of profits. When we do that everybody profits. Thank you and have a Great Day!