Self Directed IRAs and Supporting Local Investment

Excited for retirement? The golden years mean relaxation, travel, and no 9-5 schedule. But everyone knows they need to save to guarantee their desired retirement. Even as a child, I was told to start saving early – as in the moment I got a job I needed to start putting money away. It’s a smart idea, as studies have verified that saving a few years earlier could mean tens of thousands more for retirement as shown in this image from Business Insider illustrating the power of compounded interest:

 

 

compound interest

 

Now the only question is: how do I save? There’s the traditional 401K model, but there’s also a lesser known model called a self-directed IRA.

A self-directed IRA allows investments in previously unavailable markets such as real estate or tax lien certificates along with the benefits of the traditional IRA, namely tax-free investment. A self directed IRA shares most of the same qualities of a 401k including the same rules to cash out. But you will be in charge of your own investments and have the freedom to invest in businesses or people you know and personally believe in. Take for example, Meghan Williamson’s self-directed IRA. She helped local business owner Karen Lawrence by investing her savings in Karen’s business to help her get out of debt. Essentially, Meghan loaned some of her savings from her self-directed IRA to Karen as an investment. It was a mutually beneficial experience because Karen repaid her debts and Meghan earned interest on her investment.  

 

Using a self-directed IRA allows you to invest tax free in businesses you trust to better save for that long awaited retirement. Through investing locally, you help your community thrive while watching compounded interest transform your savings into a hefty sum. With self-directed IRAs the world is your investment oyster, so to speak.

Additional Reading:

http://www.businessinsider.com/compound-interest-retirement-funds-2014-3

http://invest-local.org/small-business-credit-card-debt-finds-relief-through-local-investing/

https://www.trustetc.com/self-directed-ira/faqs

 

A conversation with the Rutts: Smart local investing, re-purposing, and revitalization

1484415_1052340968126190_7084642744377046456_nThe goal of local investing is to encourage new business growth, help your fellow neighbors succeed, and see your community thrive. For Celia and Jim Rutt, that is exactly what they set out to do when they began their local investing endeavors. Self described as a teacher and former entrepreneur respectively; the Rutts have invested multiple times in the community hoping “to see more activity economically for [the Augusta County area].”

Metal Craft Brewing Company was just what they were looking for. Slated to open in 2015, the new brewery will be located in the old Virginia Metalcrafters building in downtown Waynesboro. It will be the first brewery in Waynesboro but also adding to the slew of breweries and wineries dotting the area.

The Rutts knew about the Staunton Creative Community Fund programs and heard about an equity investment opportunity with Metal Craft Brewing Company. They liked the idea of “repurposing an underused resource” and were also intrigued in bringing a new food business to Waynesboro.

While the brewery is not yet open, the Rutts are satisfied with their investment thus far. They say there have been little to no problems other than the back and forth of contracts and dealing with investor language. The owners of Metal Craft Brewing have been good with giving updates to the Rutts and keeping them in the loop, which is important with local investments.

Because of their success with past investments and commitment to building a better community, the Rutts say they would invest again in a local business if they saw a good plan and were interested in their mission. They advise anyone who is interested in local investing to really do their homework. Know the business, know the plan. It is imperative to understand the risks and be proactive in keeping updated with how the business is operating. Jim wisely advises never to invest more than you can afford to lose.

Hopefully others will soon follow in the Rutts’ footsteps and invest in their beloved community. This area has a lot to offer and everyone can do his or her part to bring more businesses launch and grow.

For more information on SCCF’s Invest Local initiative, contact courtney@stauntonfund.com. Take a minute to explore the Invest Local Toolkit and other resources here on Invest-Local.org

Local investing eases small business credit card debt

Editor’s Note:  This story is part of an ongoing series of essays written by the participants of Invest Local projects.  By presenting their stories in their own voices, we hope to build a better understanding of the importance of local investing through the lenses of the entrepreneurs, lenders, and supporters that make it possible.  

Karen Lawrence, owner of KLCreative Media, at the Staunton Earth Day celelbration.

Karen Lawrence, owner of KLCreative Media, at Staunton Earth Day.

By Karen Lawrence 

I don’t think my business start-up story is unusual.

I was under-financed and overly optimistic in my ability to turn a profit quickly. And even though I was aware that my personal situation coming out from under several years of upheavals, relocation to Virginia, and a new career direction was going to make financing a new business problematic, I took a leap of faith anyway. I felt I could beat the odds.

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Success Stories: The Urban Farm Company grows from local investments

Slow Money loan recipient Bryant Mason starts seeds to help grow community gardens.

Slow Money loan recipient Bryant Mason starts seeds to help grow community gardens.

While looking for example success stories of small businesses benefiting from local investing, we were lucky enough to get the chance to talk with Bryant Mason, the founder of the Urban Farm Company of Colorado. The Urban Farm Company of Colorado does some amazing work, which in their own words “is focused on increasing the number of gardens in communities and decreasing the time, knowledge, and confidence barriers preventing people from growing their own food. Our entire service is designed to make gardening easier, less time consuming, and more fruitful for the average person.”
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Toolkit for the New Economy

Community Investing Toolkit Cover squareEntrepreneurs, investors, and local communities all around the country are changing the “How We Invest” paradigm. Our hot off the presses “Invest Local” toolkit draws on the work of BALLE, the Slow Money movement, Local Investment Opportunities Networks, and many others to share their stories and serve as local inspiration and guidance for a Shenandoah Valley Invest Local movement.

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