Retirement Investments Memphis TN
Berry Financial Services, Inc.
Ongoing Investment Management, Helping Clients Identify & Achieve Goals, Estate & Generational Planning Issues, Financial Issues Between Generations, Advising Medical Professionals
NAPFA Registered Financial Advisor, CFP®, CPA, MBA
Waddell & Associates Inc
Capital Financial Advisors
Financial Strategy Group PLC
Brandon Financial Planning Inc
Foster Accountancy Inc
Waddell and Associates, Inc.
First Tennessee Bank
Capital Financial Group, LLC
Areas of Specialization
Asset Allocation, Comprehensive Financial Planning, Education Planning, Estate Planning, Insurance Planning, Investment Management, Investment Planning
Average Net Worth: $1,000,001 - $5,000,000
Average Income: $250,001 - $500,000
Profession: Medical/Dental Professionals
Waddell & Associates, Inc.
Investing Retirement Funds in a Business or Franchise
Growing numbers of small business and franchise entrepreneurs are discovering that their retirement assets can be diversified into investments outside of the stock market. They’re finding that, through a vehicle commonly referred to as Rollover as Business Start-ups (ROBS), they are allowed to legally invest 401(k) money in their own small business without taking a taxable distribution or getting a loan. It’s estimated that in 2010, more than 4,000 individuals will become entrepreneurs by investing their existing retirement assets into a business – and in turn – will create more than 25,000 jobs.
Entrepreneurs who work with expert companies to correctly complete a private investment in their own company often cite this “investment in oneself” as especially attractive since they wholeheartedly believe in their ability to open, operate and successfully lead a business. Another reason this type of transaction is attractive to an entrepreneur is because they can invest in their business without getting a loan. This means that the new business can reinvest the initial cash flow into the business instead of sending it off to a bank in the form of interest payments. It is reasonable to assume that a business that is not servicing high interest loans has a shorter “runway” to reach profitability. Guidant Financial reports that its clients are 63% more likely to succeed than other traditional business owners.
ROBS transactions generally involve four or five steps which, although complex, can potentially be completed in less than three weeks. The process generally includes the following steps:
There are many reasons that an entrepreneur would choose to invest in their own business. Reasons may include, but are not limited to:
The legal requirements for establishing and operating 401(k) plans were created under the Employee and Retirement Income Security Act (ERISA), which identifies the guidelines for 401(k) plan investments. These 401(k) plans, also called pension plans, are carefully protected by the IRS and DOL, so all transactions involving them need to ultimately benefit of the plan.