REI Wealth Monthly Issue 13 | Page 21

INTERVIEW WITH DMITRIY FOMICHENKO LINDA PLIAGAS How has the Solo 401k revolutionized selfdirection? A Solo 401k (also known as Individual 401k or Owner-Only 401k) is a simplified version of the 401k Plan, and is designed for sole-proprietors or small business owners who don't employ full time workers. Most investors qualify for it, even if they Over the next several years, I realized that have a full time W2 job working for a company. All conventional investments such as the stock market that is needed is the presence of self-employment and mutual funds were very unpredictable. At the activity, which could include consulting, network same time, my real estate investment portfolio was marketing, a referral business, etc. growing rapidly. I made a number of mistakes and estate investors that manage their own properties lost money on some of my real estate deals, but use this activity to qualify. Many real overall, my returns were significantly better than that of the stock market. I wasn't comfortable The reason a Solo 401k is so attractive is because recommending conventional investments to my of its unique features and benefits, not found in a clients and started devoting more of my focus to self- directed IRA. Here are few: real estate. In 2004 I went to work full time for a real estate Loan Provisions Roth Sub-Account investment firm and started teaching my clients how to invest in real estate. I soon received offers to teach classes in real estate investing at several local community colleges. Over the years, I Exempt from UBIT mentored hundreds of investors and instructed Solo 401K over one hundred classes/seminars. One thing I heard from my clients was that while Checkbook Control High Contribution Limit their real estate portfolio was growing, their retirement account was losing its value in the stock Loan Provision: The Solo 401k Plan also contains market. I had heard that it was possible to invest a provision which allows the participant to borrow in real estate using an IRA or 401k, so over the from the account at any time and for any purpose. next year, I researched how to invest in self- A Solo 401k loan can be made for up to 50% of the directed IRAs and 401ks, and consulted with the account or $50,000, whichever is less. top experts in the field. loans can be used for any purpose. Financial was born. That is how Sense These