- Clark Howard released a video that casts a very negative impression of Self-Directed IRA’s
- Howard’s appears to equate the use of Self-Directed IRA’s with fraudulent deals that are clearly scams
- Howard’s basis for this appears to be an SEC warning about fraud through Self-Directed IRA’s. But he conveniently ignores the clear statement in the report which contradicts him and says that Self-Directed IRA’s can be safe for retirement investments
- Is Howard’s advice based on fundamental ignorance, or does he benefit from the sale of conventional investment assets, which is what he clearly endorses?
He’s one of America’s best-known financial advocates for individuals like you and me… he’s a best-selling author, host of a wildly successful radio show… and is widely respected among rational, reasonable people like you and me. And where self-directed IRA’s are concerned, he’s giving toxically bad advice. I’m Bryan Ellis. I’ll tell you who he is, what he’s saying… and what I hope he actually means RIGHT NOW in episode #4 of Self-Directed Investor Talk.
Hello, Self-Directed Investor Nation! Welcome to the broadcast of record for savvy self-directed investors like you, where in each and every episode, I help you to find, understand and profit from the finest in alternative investment opportunities.
This is Episode #4 of Self-Directed Investor Talk. That means, of course, that you can get all of the links, resources and transcripts of todays show by visiting SelfDirected.org/4.
Let’s jump right in, shall we?
Clark Howard is a name that many American consumers associate with “trustworthy”. He’s one of those guys who does radio and TV and has authored several books around the idea of helping people to make better decisions with their money.
And I’ve got to admit… I’m a bit of a fan of his. He’s given advice that’s quite good most of the time.
But this time, Clark, you stunk it up… and you did so in a manner that appears to be willfully deceptive.
Now before I comment, I’ll tell you this: This video is several years old, and so maybe Clark Howard’s opinions have changed. But I can’t find the evidence of that if that’s the case. So since he’s left this out there for all the world to see, I feel it’s my obligation to comment on it, since somehow it just came up in a news feed.
Ok, here’s the deal: this guy is very directly associating self-directed IRA’s … and those of us who promote them … with fraud and scams. He does so with leading comments of profound intellectual dishonesty such as:
“I’ve received a number of calls recently from people who are considering doing a form of self-directed IRA where your money instead of going into stocks, bonds, mutual funds goes into ‘alternative investments’ where somebody’s convinced you they have an incredible way to take your IRA money and make it without risk grow into MASSIVE amounts of dough.”
Now, of course… if somebody is promising you to make huge returns with zero risk… there’s a problem… but that’s a problem ANYWHERE, not just for self-directed IRA’s… but of course, Clark Howard chooses to imply that this risk is unique to those of us in the alternative asset world.
Hey Clark… ever heard of Bernie Madoff? He theoretically had all of his clients in conventional stocks… and yet he managed to create an estimated $64 BILLION in losses.
Or maybe, Clark, you’ve heard of Enron… that totally “conventional” company that was purchased by MILLIONS of Americans… that slaughtered the financial dreams of millions of Americans when they entered into the biggest bankruptcy in history – over $60 BILLION – all because of FRAUD… in a company that was PRAISED by every major financial publication in America before that point?
But Clark… Enron’s record bankruptcy didn’t stand long… because the following year, none other than WorldCom – a huge telecommunications company – filed for bankruptcy for the whopping amount of $107 BILLION… also due to fraud.
And hey, Clark… I hate to kick you when you’re down, but ANY ONE of those losses – and those are FAR from the only ones – but ANY ONE OF THEM from EITHER Bernie Maddoff OR Enron OR Worldcom… ANY ONE of them created arguably more financial loss than ALL losses ever incurred in ALL self-directed IRA alternative investments put together.
So, Clarky boy, stop painting with such a broad brush. It’s a lie, and you know it.
“While self-directed IRAs can be a safe way to invest retirement funds, investors should be mindful of potential fraudulent schemes when considering a self-directed IRA.”
Well OF COURSE they should be mindful of the risk of fraud. OF COURSE! I’ll bet that Madoff’s clients thought that they WERE being mindful of the risk of fraud… and yet, they still got slaughtered. But here’s the thing: The report from the SEC says to be true the exact opposite of what you’ve implied: That Self-Directed IRA’s can be a safe way to invest retirement funds.” Clark, your own evidence is contradicting you.
SDI Nation, this one kind of chapped my hide a bit because I’ve always had a reasonably high opinion of Clark Howard. But to see him – or anybody – paint with such a broad brush and very heavy-handedly imply that the problem isn’t with bad decision making but with the use of self-directed IRA’s, well, that just tells me one thing, Clark:
Either you don’t know what you’re talking about… or you’re benefiting from the sale of conventional financial assets. Maybe there’s another explanation, Clark? I’d love to hear it! Set me straight if I’m wrong… you’re breaking my heart here, man!
My friends… Clark ended that little video clip with these words: “Be careful out there, conventional stuff sometimes works just fine.”
Yep. That’s true. Sometimes, they do. But here’s better advice: Be careful out there! Wise investments nearly always work out just fine… whether you’re buying them from Wall Street or anywhere else.
My friends… You don’t want to miss the next episode – episode #5 – of Self-Directed Investor Talk, which, for your convenience, is ALREADY available for download. In episode #5, I’m going to teach you about one of the things you need to keep in mind if you want to make sure your self-directed IRA or solo 401(k) stays safe from punishing taxes, penalties and interest levied by the IRS. That’s right, my friends… we’re going to dive a little deeper into PROHIBITED TRANSACTIONS. You can dive in RIGHT NOW, actually, because the link to episode #5 is on today’s show page, which you can reach at SelfDirected.org/4.
Thanks for joining me today, and before you go: Answer this question for me: How do you feel about warnings like those given by Clark Howard against self-directed IRA’s? Does it give you pause? Why or why not? Sound off in the discussion area on today’s show page at SelfDirected.org/4.
And remember this: Invest wisely today, and live well forever!
Links & Resources
- Episode #4 of Self-Directed Investor Talk: Clark Howard gives toxically bad advice on Self-Directed IRA’s
- Read Bryan’s article about this topic in Forbes
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