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How to Fund the Roth IRA on Roids

Now that I have described to you, shared with you, how you can contribute to a Roth IRA on Roids with a guaranteed return on your contributions (read my post Roth IRA on Roids Improve Your IRA & Retirement Plan Investing). Your money never goes backwards. You’ll be able to take your money out tax free, there is a guaranteed return. I’m going to discuss with you how you are going to fund your Roth IRA on Roids using other people’s money.

I’m going to bring up Roccy DeFrancesco’s book – “Home Equity Management”. The book is very well written. Roccy is a very meticulous guy, I have a lot of respect for him. He wrote this book on how you can reposition your home equity. Let us look at your home equity for a moment. If you are in your home with a 95% mortgage, does your mortgage diminish the value’s home? Of course not, if your home is fully mortgaged it would not diminish the value. But, if you live in an area like California, with mud slides, or Florida with hurricanes and tornadoes and you own 100% of your home (i.e. not mortgaged) then whose problem would it be if your house slides down the hill or it goes under water? It would be your problem. On the other hand, if it’s heavily mortgaged, then it would not be your problem. It’d be an insurance problem and it’d be a mortgage company problem.

So what is the relation of your home equity with your Roth IRA on Roids? If you leverage your home equity and reposition it to fund your Roth IRA on Roids then essentially your money is sitting in your Roth IRA on Roids account and in investment opportunities and it’s safe. Real estate is the only leverageable asset class. Everybody understands that you buy real estate with 5% down, 10% down, depending on how well financed you are. It’s the only leverage that is recommended, people accept, people understand, the banks do it. So by repositioning your home equity in order for you to fund the Roth IRA on Roids, financially you are using other people’s money. And this could also be accomplished with commercial real estate. If you have equity in commercial real estate, refinancing it in order for you to reposition your assets definitely makes a lot of sense. At the end of the day, you still have the same assets. If you have equity in your home or commercial estate, that’s an asset. If you have equity in Roth on Roids, or other investment opportunities, together they are the same number. You’re just repositioning. You are relocating your assets. That’s all you’ve done.

So method number one from Roccy DeFransesco’s book, “Home Equity Management,” describes how to reposition your home equity for tax-free retirement. You can buy the book. I’m not trying to sell it, but it is an extraordinarily, well-documented book.

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