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In this episode of the Investor Fuel podcast, host Michelle Kesil speaks with Ramez Fakhoury, VP and managing partner at IRA Club, about the importance of self-directed IRAs and alternative investments. Ramez explains how IRA Club empowers individuals to diversify their retirement portfolios beyond traditional stocks and bonds, emphasizing the need for education in making informed investment decisions. He also discusses the innovative AI-driven platform that IRA Club has launched to help manage retirement accounts effectively. The conversation highlights the flexibility and opportunities available to investors looking to leverage their retirement funds for real estate and other alternative assets.
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Investor Fuel Show Transcript:
Ramez Fakhoury (00:00)
whether you’re conservative or if you’re looking for a balanced portfolio or an aggressive portfolio. But again, our bread and butter here, make no mistake, is always going to be alternative assets, right? That’s what everybody knows us for, but we want your money working for you all the time. We never want it to sit. So that way you could jump into the next deal or the next real, you know, whatever it is that you’re, you know, what fancies your boat. That’s the only, actually, that’s one thing I should say. That’s the only advice that we give is stick to what you know and understand.You know, for example, if real estate is what you know and understand and you do it for a living, why not use a portion of your retirement dollars knowing that you can’t touch it anyways until you’re 60 years old?
Michelle Kesil (00:36)
Yeah, amazing. how does this specifically work for those in the real estate investing space? Like what kind of strategies and investments do you support them with?everybody. Welcome to the Investor Fuel podcast. I’m your host, Michelle Kesil. Today, I’m joined by someone I’ve been looking forward to chatting with who’s been making serious moves in helping investors use their retirement money with the IRA club. So really glad to have you on the show today, Ramez Fakhoury Yes. Yeah.
Ramez Fakhoury (02:41)
Thank you. Thank you. you. you. Apleasure. I love your platform. Love how you talk about education as being one of your forefronts and helping individuals, again, use a portion of their retirement dollars to invest in such things as real estate deals.
Michelle Kesil (02:56)
Awesome. Yeah, so first off, for those who are not familiar with you and your world, can you give a short version of what your main focus is?Ramez Fakhoury (03:04)
Main focus is education, right? And just a little bit about myself, just to keep it short and simple, I’m the VP and managing partner here at a company called the IRA Club. Where we ultimately give our members, we have about 15,000 plus members, manage a little under 1.5 billion under administration. We give them the flexibility to actually pick and choose their own investments. And in doing so,Many of our clients obviously have retirement dollars where we give them the flexibility again to diversify into alternative assets, not just like the stock market. And many of our listeners, I’m sorry, many of our members that join the IRA club, it always starts off with education, right? First and foremost is teaching them that there’s so much more out there.
than just what your current employers 401k may offer you, which is traditionally stocks, bonds, mutual funds, and ETFs. Keep in mind IRA Club has a trading platform. We don’t have an issue and or problem. We are actually advocates of the stock market, but we believe in alternative assets also. And it could be anything from oil and gas to real estate to private equity, multifamily.
mixed use and I think that’s a huge and powerful advantage that 97 % of Americans don’t realize that they can do.
Michelle Kesil (04:17)
Yeah, absolutely. So what are like some of the tools and strategies that most people maybe don’t have knowledge about or don’t know is possible that you’re helping people understand?Ramez Fakhoury (05:20)
Well, let’s start off with the basics. Like I said, 97 % of Americans that may have, let’s say, an IRA with Fidelity, Vanguard, or Schwab, right? Let’s use it like those are the big three in our industry. Those are the titans of our industry, right? Most employer 401Ks, 403Bs, 457s, even TSPs sit in the stock market, as I just stated. Well, IRA club, just like they are administrator of your retirement account,Michelle Kesil (05:22)
short.Ramez Fakhoury (05:45)
we give you the flexibility to do alternative assets. So that’s step number one is understanding that number one, you don’t have to use all of your retirement dollars inside of one asset class like the stock market. You can, for example, open up an account here at the IRA club, move a portion of those retirement dollars over to the IRA club. By the way, penalty free, no taxable event. It has to move from one like account to theanother like account, for example, a traditional IRA to a traditional IRA or a Roth IRA to a Roth IRA. And once the money is actually here at the IRA club, you now have the flexibility to pick a house, choose an alternative asset such as, as I mentioned, oil and gas, real estate, a private equity deal, it doesn’t matter. But remember, it is not you that’s investing in the asset class. It is the IRA that’s investing.
Right? So it is titled always in the name of your retirement account. So the proceeds and the benefits, like say for example, if you’re getting a preferred rate of return or cashflow from a rental property, that will go back to your IRA tax for your tax deferred, depending on the account type. Hope that helps us as plain as easy as we can. Now, the only thing I should mention that we cannot do is choose the investment for the investor.
The term self-direction just means control. That’s just a marketing term that we use in our industry. We want to give the flexibility back to you, the investors, to decide, again, what’s best for your future. Not just you, but creating generational wealth, generational legacy. But it starts with education first and foremost, understanding what’s available to you. And the beauty of IRA Club is we’re here to handhold you every step of the way.
Michelle Kesil (07:25)
Amazing. So yeah, what got you like started on this path? How did you personally learn all of this to be able to share it with others?Ramez Fakhoury (07:34)
That is such a loaded question. it’s, most people don’t know this about me. I actually come from the hospitality world. And it’s funny how you do a transition in your life when you meet somebody. In this case, at the time I was dating a girl who helped start the IRA club 14 and a half years ago. And I came on board, I would say about 10 years ago, four and a half years after we got married.Michelle Kesil (07:36)
Right?Ramez Fakhoury (07:57)
I made a career change and got my series 65 and whatnot. But I actually attended an event that she was at with the president of IRA Club. His name is Dennis Blitz. Very well respected man in our industry for those that are listening that may know a fiduciary or an RIA that has a securities license like a series six, seven, 65. This is the man that wrote the test and the text for the US government. So we.we refer to him as Mr. Compliance. I call him Master Yoda at the end of the day. But I actually listened to him at an event and was intrigued because I actually had an old employer 401k. This is about, again, 10 plus years ago where I was like, ⁓ my goodness, I can use my retirement dollars to buy real estate because that’s always been a forte of mine. This has been embedded in our family roots, real estate and how to acquire it.
fix it, position it, and then that’s where I started putting some of my restaurants at that time into those deals. But I used to work for a restaurant group called Let Us Entertain You. I had an old 401k, not much in there, I would say about $57,000 give or take. And I rolled that money over from Fidelity over to the IRA club. And I actually bought my first two parking spots. Inside of that, I had a Roth IRA account.
And I’ve had them ever since for the last 10 years and I generate about $250 in rent tax free every month. Obviously it doesn’t go back to me as of yet until I, you know, I reached the age of 59 and a half. That’s when you constitute that you could actually touch those funds. But that rental income goes right back into my Roth IRA tax free. And then what do I do? I don’t let the money sit here at the IRA club doing anything. We actually, like, as I mentioned, we have a trading platform, don’t have an issue with the stock market.
We actually teach our clients and our members to shift that money back into the market to accelerate it. What’s other also very exciting here at the IRA club, we are the first in our industry to launch an AI driven platform where the AI is protecting the IRA or 401k or HSA or any qualified retirement account that we’re dealing with to protect and preserve it, right? It’ll do the actual buying, selling and holding depending on your risk tolerance.
whether you’re conservative or if you’re looking for a balanced portfolio or an aggressive portfolio. But again, our bread and butter here, make no mistake, is always going to be alternative assets, right? That’s what everybody knows us for, but we want your money working for you all the time. We never want it to sit. So that way you could jump into the next deal or the next real, you know, whatever it is that you’re, you know, what fancies your boat. That’s the only, actually, that’s one thing I should say. That’s the only advice that we give is stick to what you know and understand.
You know, for example, if real estate is what you know and understand and you do it for a living, why not use a portion of your retirement dollars knowing that you can’t touch it anyways until you’re 60 years old?
Michelle Kesil (11:15)
Yeah, amazing. how does this specifically work for those in the real estate investing space? Like what kind of strategies and investments do you support them with?Ramez Fakhoury (11:26)
Well, all qualified retirement accounts. There’s actually only three things that you could not use your retirement account for, whether it’s Fidelity, Vanguard, Schwab, or even the IRA club. And those three things is you could not invest in your own life insurance policy. You could not invest in your, an S-corp, and you could not invest in collectibles. So an example of a collectible would be ⁓ an antique car or that expensive bottle of wine or that artwork, right? Those are the only three things. Everything else is fair game.Doesn’t matter what it is. I just can’t choose it for you. But ⁓ we help walk you through that process. The beauty of IRA Club and what we offer is not only is it a streamlined process, we’re very tech forward and tech savvy. Everything can be done online. And we do have a educational marketplace where we work with other capital raisers, institutions, private funds. It doesn’t matter what it is.
where you could discover different types of investment opportunities. I still highly recommend that you do due diligence on anything, right? Anything that you jump into. In fact, that’s one of our biggest disclaimers is make sure you reach out to your CPAs, your lawyers, right? If you are using a fiduciary before you jump into anything. So that’s first and foremost. But also when you talked about the process, it starts with you. Process always starts with the individual.
⁓ making that initial phone call. Cause remember at the end of the day, cannot sell you anything. There’s nothing to sell here at the IRA club. We are basically think of us as the middle man to execute the, the actual deal for you. Or I like to tell people, think of us like the title company, except for we, we operate just like a bank. Okay. you’re going to present the investment docs, but it starts with step number one, opening your account. And in particular, we always say schedule a call.
right with somebody from our onboarding team or just call or visit the IRA club. That’s our website, IRAClub.com and just see what’s available to you on the platform and then lead it into the funding part. So once your account is open and you had that initial conversation with the onboarding team, we will, our transfers team will go after those retirement dollars for you and bring them over here to the IRA club. So after that point is completed, you will identify the investment opportunity. So for example,
If this is the house on 123 Green Street, and this is, you know for a fact that this is something that you want to invest your retirement dollars in, we will work with the title company to execute that deal. And the rental income, once you put in the tenant, the rental income will go back to your IRA account. If you’re jumping in a private equity deal, it’s the same concept. If they’re paying a dividend every quarter, every year, every month, it doesn’t matter. Same concept, it will go back to your IRA club account.
And then if you want to go ahead and invest in other alternative assets such as crypto, even the stock market, really doesn’t matter to us. We give you the flexibility. like thinking of us as a one-stop shop, if that’s the right word. Pick and choose what makes you happy.
Michelle Kesil (14:15)
Amazing. So is there any sort of like criteria that someone needs to have to work and like use your platform or it’s for everybody?Ramez Fakhoury (15:05)
It’s for everybody and anybody. It doesn’t matter. could start off, you know, it could be for a non-accredited investor. You could just simply open up a Roth IRA account, make a contribution of $7,000 because that’s the limit. If they qualify, if they’re a small business owner, if they have zero employees, we could set up solo 401ks or set by arrays, which makes a much larger contribution. Solo 401ks are $23,500.We could also set up profit sharing plans. We even are the first, we have a sister company called IRA Club SBS, which stands for Small Business Solutions. So if you do have W2 employees, we actually can offer a self-directed ⁓ traditional 401k or Safe Harbor ⁓ 401k for you and your employees. So think about how great that is. We give you the flexibility to put all of your employees inside of the stock market to start. And as their accounts grow,
They could use a portion of those retirement dollars to invest in private equities, or they could go buy real estate deals if they choose to do so through time, obviously, as it grows.
Michelle Kesil (16:08)
Yeah, amazing. What do you kind of see as, like, what makes you guys completely different than these other, yeah, like, IRA systems?Ramez Fakhoury (16:19)
Custodians.Well, believe it or not, there’s not too many self, true self-directed companies that are out there. Number one, I will tell you, I will never bad mouth my industry because at the end of the day, we’re all educators. It really just comes down to the customer service. Something that’s extremely important to understand is fee structures. One thing that is,
kind of disappointing in my field is, or my industry is going to be that many of our custodians and sister companies that we kind of work with in the industry are switching over from a flat fee model, which is what IRA club believes in to a percentage based model. I don’t like percentages based models because that doesn’t make me any better than let’s say fidelity, Vanguard or swap. you know, at just understanding that fees will probably eat away potentially a third of what you make inside your IRA. Remember when your money,
goes up inside your 401k, so do their fees, right? At the end of the day. And that’s just numbers you should actually go Google yourself and do a little bit of due diligence and educate yourself on that. But here at the IRA club, we’re a flat fee model. So for example, if someone let’s just say has $200,000 inside their 401k or even 100,000 in their 401k, the national average is about 2.27%.
And because the majority of those 401ks sit within mutual funds, it’s north of 80%. So mutual funds, if they’re charging you 2.27 % per $100,000, bare minimum, they’re taking $2,200 from you. IRA club is charging a flat fee of $195. We don’t care if you have 10,000, 100,000 or a million. What’s the most we could take from you? $195.
versus a percentage based model, the only time you get paid inside a 401k or IRA with the bigger brokerage firms is when the market’s up. If the market is flat or the market’s down, are they still taking their two to three percent? Of course they are. It doesn’t matter. But, you know, it’s funny you ask, most people ask, wait a second, you’re making $195. How is IRA Club making any money? And that is a good question to ask. But the way we really make our money is per asset class, per investment.
So we charge $195 to administer the account, but per investment is $195 additional. So it’s a grand total. Let’s say if you find one investment opportunity, it’ll be 390 in total for the entire year. And again, we don’t care the amount of the investment. Our job is to make sure that it’s IRS compliant. We actually do all the filing for you to work. You just simply point and invest and that’s it. We’ll handhold you the rest of the way.
Michelle Kesil (18:53)
Amazing, I love that structure. what are you like most focused on solving or scaling next in your business?Ramez Fakhoury (19:01)
IRA Club SBS. That is the newest project that we have here. And the reasons why is we’ve been working very diligently the last two years ⁓ because we’ve never had a solution for small business owners with W2 employees. Our concept was always tailored to the individual. We now have the flexibility here at the IRA Club with our sister company, IRA Club SBS, to offer, as I just stated, like a few minutes ago, youWhy not give your employees the flexibility also? That has been my biggest mission because it’s now state mandated across 15 plus states. I think the rest of the country is going to follow suit by the end of 2027, 2028. Pretty much almost every state is gonna say, if you have W2 employees, you’re gonna have to offer some sort of retirement account.
So what we’re trying to do is help not just the individual moving forward, we want to help everybody moving forward. And we’re excited again to be one of the first in the country to offer. Now, what’s great is Mr. Trump, our president, signed an executive order to allow private equity deals inside all 401ks about two weeks ago.
Now that’s great news for the IRA club because now everybody will be marketing private equity. We’re just gonna be so far ahead of the curve. And then again, we’re gonna be the first to offer the AI driven solution where we could put all of your employers inside of these, we call them smart folios to protect and preserve the retirement account. Now, as these accounts grow, we will work with the employees and the employer to offer alternative assets, even buy a house on 123 Green Street.
Michelle Kesil (20:38)
amazing. So this AI platform, it’s basically like helping people run their portfolios or what else does it offer?Ramez Fakhoury (20:47)
It’s actually exactly what it does. It’s got over, I think 20, I don’t know, give the exact number, but it’s got over 2000 algorithms that the AI manages, right? It will literally trigger a buy, sell or hold while the markets are alive. But also depending on your risk tolerance or many different types of AI smart folios that we offer, it could be in the tech space, it could be an energy, it could just be simply the S &P 500.We have obviously money market accounts, but really the core ones are, are you conservative? Are you balanced? Are you aggressive? But I want to really emphasize one thing, which is again, the AI is there to take human emotion out of what it is that you do and think about it. It is the perfect construction or vehicle for something that you can’t touch until you reach the age of 59 and a half.
So if the AI’s main focus is to protect and preserve, and let me give you the example back in 2022, according to Fidelity, the average 401k lost 23%, IRAs lost 20%, while our AI smart folios collectively were only down about 3.5%. So I tell somebody, if you know you can’t touch it with your current employer, right?
and you had $100,000 and you lost 20%, would you rather lose $20,000 or would you rather lose $3,000? Because that’s what ours lost. That’s what it comes down to. The problem is what most people don’t understand is now it’s a catch-up game. Now you have to make double the following year. In fact, it took 1.8 years to break out even and that’s what most people don’t get. You lose the most important asset in your life and that’s time.
Time is the most important thing to you, not money. you know what I mean? That’s what I’m trying to get at. Yeah.
Michelle Kesil (22:29)
Yeah, definitely. That’s such animportant point. I love that. So before we wrap up here, if someone wants to reach out, connect, learn more from you, where is the best place that they can find you?
Ramez Fakhoury (22:43)
IRAClub.com. You simply go there and we have hundreds of man hours of videos that you could be watching, YouTube channels, we have podcasts ourselves where we teach these types of strategies, ⁓ do’s, don’ts. But honestly, it starts with just education, as I just mentioned earlier, but take the first step, schedule a call. Again, it doesn’t cost anything. It’s just learn, ⁓ network, talk to each other at the end of the day.Then once you learn, right, everything that you need to learn, you want to take educated, calculated risks. So our main focus is, I would say, opening up doors and opportunities. But it starts with you. Visit IRAClub.com. You could schedule a call with somebody from our onboarding team. If you ever heard of Mia, you’re more than welcome to schedule a call with me. Just please note that I’m on the road 150 days out of the year. So traveling all over the country. So it’s kind of hard to get a hold of me.
Michelle Kesil (23:30)
Yeah.Perfect, well listen, I appreciate your time, your story and perspective. Yeah, so thank you for being here. Yes, and for those of you that are tuning in, if you got value, make sure you’ve subscribed. We have more conversations coming with operators just like Ramez who are building real businesses. And we’ll see you all on our next episode.
Ramez Fakhoury (23:37)
Thank you. Thank you. Thank you. Thank you for having me. Take care.
