Personal Experience: Be sure before you ReSure

[Jeff Terry]

Being newbies with no time to waste, we dove in off the deep end exploring our path to financial freedom. And while the regrets are few the mistakes are many. Thankfully, we haven't acted on most of those mistakes except one. And boy did we go big on that one mistake.

When I lost my job and we started to take a harder look at our finances with survivor eyes, we decided to never make ourselves entirely dependent on one W2 stream of income again. We examined our bank accounts, our debt, and our investments and began to build a strategy with those pieces. We found our way here and are thrilled for the way it has helped us shape the right mindset and form the foundation of our network for our third act.

Unfortunately it's also where we came into contact with Bernard Reisz. We wanted to pursue self-directed IRAs so we could regain control of thousands of dollars locked in a prison cell with a tax collector guard and a Wall Street warden. Bernard and a few others offered a way to make this cell a more comfortable place and possibly add a door to the outside on one of the walls.

A lot of what we heard aligned with our new mindset--freedom, control, growth, it all sounded so good. BUT there was a nagging voice that cautioned against moving too fast. Nevertheless we continued. We decided Bernard was the best one out there to help us with our SDIRA journey. We set up a call and in short order handed over $1600 to set up one account and $400 to unlock unlimited consulting for the year.

Though that nagging voice remained. Throughout the process he didn't really question our strategy or our goals. He always seemed distracted with something else to get to in order to cut the call short. If we asked the same question from a different perspective he would scold us with "We've already talked about this extensively." Apologies, but sometimes it takes a person a couple times before they can grasp extremely complex tax code that only a few people even know--as he himself liked to point out. And aside from his behavior a big question for us was "With all the complexities and the value of our accounts, is an SDIRA the right way for us to go?"

We pushed the voice aside and stayed on. We were committed to moving forward, perhaps too much.

We did express our concerns to him about going the SDIRA route. We even asked for a refund the day after making that first payment. But once we got on the phone with him to go over these concerns we were won back to the notion that SDIRAs were the best way to go. We finished that call with a payment of $3k so he could set up three additional accounts for us. Stupid for sure. We were still learning and trying to match the best strategy to fit our strengths and here we were $5k deep onto a path we were uncertain about.

We continued our research and we came to the blindingly obvious conclusion that we didn't want our money in a cell no matter how nice and accommodating that cell was. Bernard may be the best at the SDIRA game, but it wasn't a game we wanted to play. So before Bernard could set up any of our accounts, we pumped the brakes and asked for a refund. We expected to compensate him for time already spent consulting us. According to his billing that would be a grand total of $400 to cover the unlimited consulting for the year. Fine. A $400 lesson it would be--still far cheaper than any university course for an important education.

We got him on the phone again and this time he told us that the fine print in his emails stated that there would be no refunds. Despite the fact that he didn't actually set up one account for us (which he revealed is a ten minute process for him) he claimed he was under no obligation to return any of our money. But he was prepared to give us back $1k as a generous token. We continued talking and by the end of the call, he agreed to refund our second invoice of $2991, but none from the first $2k invoice. We weren't happy with losing $2k but it was still a better outcome than paying a lawyer to go after the money.

About a week passed and I emailed him asking for the refund and he told me that we needed to agree with some terms of separation--namely that we were not pursing SDIRAs anywhere, if we engaged with him in the future it would be considered a fresh start (we wouldn't have $2k in store credit, in other words), and, most concerning, the refund of $2991 would be minus some processing fees. We emailed him to question those fees and he reminded us that the refund was entirely out of the kindness of his heart and the processing fees were out of his control.

After several more days we got our refund minus $160--the processing fee, I assume.

So let our $2160 lesson be your free warning. Despite not creating one single account and chastising us for not understanding complex tax strategies upon a first listen, we lost a lot of money at a time when we have no income because we were too eager to begin. But more specifically, just be 100% sure you want to work with Bernard before you give one dime to ReSure.

[Basit Siddiqi]

@Jeff Terry

A SDIRA does offer more flexibility than a traditional IRA.

I personally would not consider a SDIRA unless you have a sizable retirement account(401k or IRA) and you plan to use the SDIRA to issue notes to other investors, invest in a syndication or purchase real estate all cash.

People will have their opinions but I wouldn't consider a SDIRA unless you have a minimum of $100,000 in retirement accounts, more preferably $250,000+