Service Financial

SDIRA Introduction

  Have you ever wondered how you are ever going to retire? Have you been

frustrated by the small returns in your stocks, bonds, and mutual funds? Have

you been one of the many thousands of people watch your retirement nest egg get

slashed in the market over the last three years?

  Imagine being able to take back control of your investments where you can earn

strong returns that don’t track with the markets – markets that have not

produced in over 10 years.

  What it would be like to be part of the less than 2% who use a little-known

safe investment tool that is backed by the U.S. Government to get better

returns, in safer investments than stocks and mutual funds.

  What if you could dodge the impending market crashes that are happening and

will be happening for years to come?

Today’s Environment – Driving Trends

  Here are some startling facts. The current socio-economic environment in the

U.S. is coming at us like a freight train. You can ignore it but you cannot

avoid it. As Benjamin Franklin said, “The only thing more expensive than

education is ignorance.” Hopefully after learning from what we present here, you

will make the necessary changes in your retirement portfolio so that you don’t

end up wondering why you can never retire and if you do, you won’t be able to

retire in the lifestyle you have imagined about your whole life.

  Good or bad, the Baby Boomer population is living longer and the cost of

health care is rising dramatically. The sad truth is the vast majority of Baby

Boomers have not adequately saved for retirement. For many of them, their home

equity was destroyed by the recent financial crisis and worse yet, their 401k’s

were devastated when the stock market tanked.

  According to End Of The American Dream website, here’s what they have to say

in their article titled, “In 2011 The Baby Boomers Start To Turn 65: 16

Statistics About The Coming Retirement Crisis That Will Drop Your Jaw”. The U.S.

Census Bureau defines a Baby Boomer as those born between January 1st 1946 and

December 31st 1964. If you add 65 years to January 1st 1946, you get January

1st, 2011.

Here are 13 Statistics from End Of The American Dream website about the coming

retirement crisis that will make your jaw drop:

#1 Beginning January 1st, 2011 every single day more than 10,000 Baby Boomers

will reach the age of 65. That is going to keep happening every single day for

the next 19 years.

#2 According to one recent survey, 36 percent of Americans say they don't

contribute anything at all to retirement savings.

#3 Most Baby Boomers do not have a traditional pension plan because they have

been going out of style over the past 30 years. Just consider the following

quote from Time Magazine: The traditional pension plan is disappearing. In 1980,

some 39 percent of private-sector workers had a pension that guaranteed a steady

payout during retirement. Today that number stands closer to 15 percent,

according to the Employee Benefit Research Institute in Washington, D.C.

#4 Over 30 percent of U.S. investors currently in their sixties have more than

80 percent of their 401k invested in equities. So what happens if the stock

market crashes again?

#5 35% of Americans already over the age of 65 rely almost entirely on Social

Security payments alone.

#6 According to another recent survey, 24% of U.S. workers admits that they have

postponed their planned retirement age at least once during the past year.

#7 Approximately 3 out of 4 Americans start claiming Social Security benefits

the moment they are eligible at age 62. Most are doing this out of necessity.

However, by claiming Social Security early they get locked in at a much lower

amount than if they would have waited.

#8 Robert Novy-Marx of the University of Chicago and Joshua D. Rauh of

Northwestern's Kellogg School of Management recently calculated the combined

pension liability for all 50 U.S. states. What they found was that the 50 states

are collectively facing $5.17 trillion in pension obligations, but they only

have $1.94 trillion set aside in state pension funds. That is a difference of

3.2 trillion dollars. So where in the world is all of that extra money going to

come from? Most of the states are already completely broke and on the verge of


#9 According to the Congressional Budget Office, the Social Security system will

pay out more in benefits than it receives in payroll taxes in 2010. That was not

supposed to happen until at least 2016. Sadly, in the years ahead these "Social

Security deficits" are scheduled to become absolutely horrific as hordes of Baby

Boomers start to retire.

#10 In 1950, each retiree's Social Security benefit was paid for by 16 U.S.

workers. In 2010, each retiree's Social Security benefit is paid for by

approximately 3.3 U.S. workers. By 2025, it is projected that there will be

approximately two U.S. workers for each retiree. How in the world can the system

possibly continue to function properly with numbers like that?

#11 According to a recent U.S. government report, soaring interest costs on the

U.S. national debt plus rapidly escalating spending on entitlement programs such

as Social Security and Medicare will absorb approximately 92 cents of every

single dollar of federal revenue by the year 2019. That is before a single

dollar is spent on anything else.

#12 After analyzing Congressional Budget Office data, Boston University

economics professor Laurence J. Kotlikoff concluded that the U.S. government is

facing a "fiscal gap" of $202 trillion dollars. A big chunk of that is made up

of future obligations to Social Security and Medicare recipients.

#13 According to a recent AARP survey of Baby Boomers, 40 percent of them plans

to work "until they drop".

  As you can see the Baby Boomer population is what we call a Socio-Economic

Wave. Back in 1982, when the first Baby Boomers were turning 36 years old and

were entering their peak earning years, a book came out entitled “Megatrends” by

John Naisbitt. In this groundbreaking work, Naisbitt outlines upcoming major

shifts to the whole world…he called these “Wave Trends”. A wave trend is

something driven by such a powerful social, economic, or technology trend that

it is almost unstoppable. The Baby Boomer population in the U.S. is such a wave

and we can either be crushed by the wave or ride inside the wave and benefit

from the magnitude of opportunity it has to offer.

  In order for the Federal Government to pay the Baby Boomers what they are owed

in Social Security, the government may indeed have to go into even more debt and

have the Federal Reserve print more money to cover the Social Security

shortfall. So while Baby Boomers, if they are lucky may get what they are owed

in social security, but it may be in radically devalued dollars. And already we

are watching incomes being devastated by the rising cost of gas, food, and


The Set-Up

  Now let’s turn our attention from the current socio-economic “Wave Trend” to

your retirement dollars and investing. There are five gigantic financial trends

that have had and will have dramatic effects on your retirement dollar:

1. Inflation
2. The devaluation of the U.S. dollar
3. Your earning power
4. No positive gains in the stock market
5. Investment fees that are eating up your portfolio

Let’s take a look at all five…

Even though we have been in deflationary trend for the last 30 years, it does

not tell the whole story of the buying power of the U.S. dollar and what effect

it has on you and other Baby Boomers in being able to use retirement dollars to

purchase items. Since the first Baby Boomers were born in 1946, inflation has

gone up a staggering 310%+!

  What this means is your dollar buys approximately 2/3 of what it did if you

are 65 than from when you were born. And for those Boomers Born at the tail end

of the boom in 1964 you are now 47, inflation rose almost 250% and your dollar

buys approximately ¾ of what it did since you were born.

Now let’s look at the most important investment purchase, the average American

makes besides saving for retirement….their home.


Since 1970, according to and National Association of Realtors,

the graph below shows the nominal prices of homes increasing 10x in a 40 year

period! From this factor alone your dollar is buying 1/10 of what it did 40

years ago for a home purchase.

2. The Devaluation of the U.S. Dollar

  Now let’s take a look at the devaluation of the U.S. Dollar. The dollar is

tracked historically by the U.S. Dollar Index. The US Dollar Index is a leading

benchmark for the international value of the US dollar measuring the performance

of the greenback against a basket of currencies which includes: EUR, JPY, GBP,

CAD, CHF and SEK. The index started in 1973 with a base of 100 and is relative

to this base. So, for example, a value of 120 (as shown in the graph below for

the year 1973), would suggest that the U.S. dollar experienced a 20% increase in

value of the time period.

Unfortunately, you can see that the U.S. Dollar has been de-valued significantly

since 1984. In fact it has dropped from a 65% increase in 1984 to a 25% decrease

in value currently. In fact, the only time the dollar was more devalued was in


3. Your Earning Power

  According to an article written by Joseph Pisani for CNBC, people earning six

figures a year or more are now finding it hard to make ends meet let alone save

or put money away in their retirement accounts. Richard Castellini, Chief

Marketing Officer at states “Many more people are living

paycheck to paycheck compared to last year. What you’re seeing is that the

problem is moving into higher income levels.”

  Thirty percent of workers with salaries of $100,000 or more said they are

living paycheck to paycheck, up from 21 percent last year (2009), according to

the survey of 4,400 workers nationwide. Overall, 61 percent said they always or

usually live paycheck to paycheck, up from 49 percent in 2008 and 43 percent in

2007. “Companies have reduced salaries, and people are used to creating a

lifestyle with what they were making a year ago or so," says Castellini.

  Some 21 percent of all respondents said they have reduced their 401(k)

contributions or personal savings in the last six months in order to get by,

while 23 percent of the $100,000-and-over group said they had done so. While

some Americans have cut back on what they set aside, others have stopped saving

all together. Thirty-six percent said they don't contribute anything to

retirement savings, like a 401(k) or an IRA. As for short-term savings, 33

percent of those surveyed reported that they don’t put any money aside each

month, up from 25 percent in 2008.

  Let’s take a look at what has been happening to the Median Household Income

from 1975 to present day. As you can see from the graph by,

median household income is on the decline and has broken the 30 year trend line,

so while inflation has increased, the dollar is devalued, your income is


4. No Positive Gains, Just Volatility

  Relevant Market Data For You To Dream About or Be Scared About – The Dow

Jones, adjusted for inflation returns have been zero over the last 10 years. The

Dow Jones Industrial Average has not advanced in the last 10 years.

10 Year Dow Jones Performance

The 10 Year Performance of the Dow has been stagnant.

  Daily stock market volatility has also increased as a trend over the years and

crashes are becoming all too common as baby boomers are taking mandatory

distributions and a reduced value on their retirement accounts. But that’s only

if you stay in the wall street game. Yet millions of baby boomers don’t know how

to escape this impending doom and NO it’s not an illegal investment and NO this

is not risky, out of your control, or tracked to stocks, bond, mutual funds, or

the commodities markets!

5. Investment Fees Are Eating Up Your Portfolio

  Congress reported, in the fall of 2010 that up to 28% of your retirement nest

egg is going to ongoing fees and commissions. Investment advisors think there is

no other way than Wall Street and charging fees even while investors, like you,

are losing money. There is a better way, a safer way, and you don’t have to be a

super-sophisticated investor to cash in and revitalize your dying retirement


Now that I have your attention, the big question that is probably rolling

through your mind is, “How do I escape this disaster so that I can build my

retirement nest egg and retire to a lifestyle I have imagined?”

  I know you will agree with me when I say that you, and other hard working

Americans, with retirement accounts are so sick of paying broker fees,

transactions fees and not getting the returns that you had hoped to get in your

retirement account.

  Would you also agree with me that “wall street” has become the most untrusted

and hated place to put your money across the United States because most brokers

and financial investments firms suck your hard-earned retirement investment

dollars out of your pocket by overpromising and under delivering.

  So now that I have your attention, let’s move to the next module of our course

and find out the answer to The Trillion Dollar Secret!

  To learn more about Self-Directed IRA’s, financial products and services that

we provide, please contact a Service Financial Advisor for a No Obligation,

Educational Consultation.

The step-by-step process

1.  Your retirement account is moved to a self-directed custodian.
2.  A legal and accounting team creates a customized LLC and submits to the

3.  You open a business checking account for the Self-Directed IRA
4.  You submit an authorization form to the custodian instructing them to fund

your new bank account.

Step 1:  A Self-Directed IRA account is established with an IRS approved and

FDIC backed passive custodian.

Step 2:  Retirement funds are transferred to the new Self-Directed IRA account


Step 3:  A Limited Liability Company (LLC) is formed with the IRA account owner

designated as Manager and the IRA as owner (member) of
              the LLC.
Step 4:  At the direction of the IRA owner, the passive custodian invests the

IRA funds into the newly formed IRA LLC. One or more IRAs can
              be used to fund the IRA, including Traditional, Roth, and SEP

Step 5:  The Manager of the new IRA LLC (the IRA owner) directs all, or a

portion, of the IRA funds held in the new LLC bank account for
Step 6:  The LLC makes an investment using IRA funds and all income and gains

generally flow back to the LLC tax-free!
              Once this is done you will have absolute control over your new

self directed and you can direct your investing efforts. This could be
              in the form of business seed capital, real estate investing, tax

lien certificates, and the traditional stocks, bonds, and mutual funds.
              A Service Financial Financial Advisor will assist you in

transferring your retirement funds tax-free from your current custodian
              to a new FDIC backed/IRS approved Passive Custodian and then to

your new IRA LLC bank account tax-free!          

Get Started with your “Checkbook Control” Self-Directed IRA LLC today!