Is investing in Aptera via self directed IRA a good idea?
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- Опубликовано: 9 май 2024
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With your thoughtful analysis I can add that risk reward is a spectrum that is further complicated by liquidity. Privately owned stock in non-public companies are next to impossible to sell, illiquid. Until an IPO, Aptera shares are privately traded, good luck finding a buyer.
Adding that into the mix, make an IRA account a deal only if you can justify it being dead money until the IPO!
☝️this! start up company risks are already high and then you have to gamble that there will be an IPO so you can sell your shares in retirement. I think this is a wreckless strategy for aptera to try to get new investment money from their existing investor/follower base. I’m sensing some high desperation now in bringing in new money.
I totally agree with you on this. Retirement money for most people is not of the kind you can afford to lose.
I agree with your basic point. If you cannot afford to lose the money you invest in a pre-IPO startup, then don't invest. That applies no matter what investment account you use. But using Thiel, who is waaaay out on the right edge of the bell curve of retirement account holders, is a bit extreme. There are many people who have been diligent in funding 401k accounts that thanks to the stock market growth of the last number of decades do have disposable income in their IRA's. Putting a small portion of that in a Roth account as part of a balanced investment strategy can't hurt.
I've seen the argument that if you're young and have a lot of time, it's more advantages to user high risk / high reward investments for aggressive growth, and cool it closer to retirement for stability
Yes, have less risk as you grow older.
I'm 71, and lived in that time of transition to IRAs. I did everything, including taking a financial planning class to make wise decisions. It all worked out wonderfully for me. But you had to make good choices and short attention spans are the normal pattern followed by the average "Joe". This opportunity for a retirement scheme is definitely not a wise choice, and if Aptera is indeed behind this 'get retirement scheme' I am disappointed.
It can be good if done as part of a larger strategy involving a small part of a person's portfolio in high risk investments that are well researched.
My gamble was to invest in Aptera and in the Accelerator program, and I am comfortable in taking that risk to help Aptera reach production, but I won't be doing the IRA investment. Like you say, it is best to consult with investment professionals before making any financial decisions that could affect your future retirement income.
If you think Aptera is going to survive and win, it is an awesome idea. With a self directed Roth IRA all the gains will be tax free. The only issue is do you have enough to fund your retirement if you loose your money. High risk, high gain probability. You have actually been able to do this for a while, just not through Aptera. There are several banks and business out there that will act as the custodian for a self directed IRA, set up an LLC for you to fund that allows you to invest in many different investments with an IRA.
I especially like your analogy of winning the lottery to investing in a startup to fund retirement or other money needs. Certainly applicable to an EV startup at this time with the current financial markets and economy. This is an observation from a person very familiar with statistics and the probability of winning (Not) a lottery. This advice alone qualifies you to provide investment advice. Thanks for being straight forward about this issue. This is an example of why we trust your channel to provide researched, balanced information.
How can you save for retirement when we are getting ripped off by corporate executives (low wages for us) and high housing costs?
Most people can’t.
The situation in the U.S. is insane. Thankfully states, towns, and even the federal government are shutting down anti-competitive price fixing for rentals and banks buying entire neighborhoods. But it’s going to take time to untangle that mess.
@@petedawg "going to take time" I did the math and now that the problem has been recognized, expect a remedy in 1-2 generations ☹
I am not a fan of self-directed IRAs. Self directed IRA custodians are fairly expensive for small investors. For example, Alto IRA is one of the least expensive ones and they charge $37.50 quarterly for accounts under $30,000. If you make a 1 time investment of $7000 (max annual IRA contribution) that $150 you have to pay every year in fees is over 2.1% of the accounts value. That is a terrible expense ratio. Typically, there are also fees to setup the account, close the account or transfer your assets to a different provider.
Nailed it. This is not a "retirement account" this is a way for people who want some tax benefits in the unlikely event Aptera is extremely successful. I put money into the Accelerator program because I want Aptera to happen. I don't need that money. I don't *expect* to get that money back. I DO trust that they are legitimate and are trying to make it happen. But this is a hard enough thing that they can be smart, have a great idea, work hard, get lucky, and still fail. We've got to be OK with that.
Informative Steve, thank you.
I have seen a lot of people asking Aptera about the IRA thing, even though it didn't make sense to me because it would definitely be crazy to put your retirement money in an automotive start-up. I suspect it is not just Thiel running all their investments through a Roth IRA for the tax advantage.
A Roth IRA is not taxed or penalized post investment IF you are at returement age when you withdraw it, but as pointed out, the money invested needs to be from funds that have already been taxed, and those funds more often than not come from 401Ks or regular IRAs that people don't pay much of their taxes on until they file their taxes the following year. Something people need to be very careful about.
You say "if you are like Peter". Well if you are would you please fund Aptera for the rest of us?
Do not invest money that you can't afford to lose. If putting $10 in the lottery will affect you in any way, don't do it. Same goes for Aptera. Diversify your investments based on income needs, risk tolerance, age, family obligations. Typically the younger you are the more the timeline can work in your favor. The older you get the less risk you should take. One slight correction; you stated that you can withdraw tax free from your IRA. This is true with the Roth only, and I believe it has had to exist for 5 years as well as your age restriction. The non-Roth IRA is subject to regular income tax as it is withdrawn (in almost all circumstances.)
My investment in Aptera is a gamble (just like the lottery) and I consider it more of an investment in the Green Energy Industry. I'm hoping that Aptera thrives, but I'm certainly not counting on it. I would NEVER put my actual retirement on a gamble like this...
The unspoken truth is that we are all banking on inheritance instead of saving.
"we all" … just confirmed for a friend his daughters will not inherit his debt. MOST Americans can’t even afford their own retirement.
90% of my portfolio is in low cost, broad based index funds. The other 10% is “fun money” and I had it mostly in TSLA. I sold off about $10k of the TSLA in my Roth IRA and transferred over to a self directed IRA to invest into aptera.
Not much going on with Aptera, huh, Steve. Im beginning to wonder.
All true
Well it certainly is a lot better than playing the lottery. The lottery is for people who really suck at math. Almost a guaranteed loss.
AKA a tax on the poor and redneck retirement ‘plan’ (Jeff Foxworthy).
Reminds me to go get some Lotto tickets!
Risky risky risky.
The way I think about it is this: If you are an active investor, and approaching retirement age, it may well make sense to do those investments via an SD-IRA rather than directly investing. That's the primary use-case of this option in my mind.
Obviously putting your core retirement funds (the money you actually need in retirement) into high risk investments would be a terrible idea. But non-core funds are another matter.
I hope that most of those millennials were using the lottery reference as a way to say "I have no money to spare for any kind of savings", but I fear that some people are dumb enough to try it.
Does anybody know if you can move stock that you already own into a self-directed IRA?
On the form for opening the self directed IRA you can do an in kind transfer, but I’m guessing that’s only public stock.
Not sure about an IRA but in Canada we have an account called a TFSA (tax free savings account) and if you are trading inside of it the government will still tax you on it. You can hold stocks in it, its if you are buying and selling in it then you are flagged and it gets "reviewed" and its up to one person whether you get you gains taxed or not but its gov, so chances are you till get screwed in the end. In my discussions online Id say 99.99% of people who use their TFSA dont know this fact.
I’ve toyed with the idea, but I’ve already maxed out based on my net worth/income (10% as I recall). Unless investing in an IRA removes that limit, I legally can’t do it.
This is a frustrating place for everyone to be.
This is better than pulling the money from a 401k and having to pay the tax and penalty for early withdrawal. But Steve is right that you should not be investing money you need for retirement in a startup. But I do feel like Aptera is a better bet than the lottery. Lower ROI, but better odds.
I will add that you may be able to use an investment company other than the two Steve mentioned. You will need to provide account details and they will get back to you on it. Be patient, it may take a while.
Business Insider is shady at best.
We are ultimately responsible for our own investment decision. However, brining up retirement account shows just how desperate Aptera has become. Legal but bad optics.
I disagree. Its a tax free savings account and it makes perfect sense to hold stocks in it
@@user-xj5xp6qz5g Perhaps. BUT those stocks should be carefully selected to balance risk and return and SHOULD NOT be in risky startups pre-IPO and not by people that depend on those funds for retirement (The average Joe most influenced by these pitches)
It's something that many people were specifically asking for.
I don't know the rules of how this would work. I certainly would not convert an existing Roth account into Aptera/start-up stock. But I don't see a problem with investing a year's contribution in a start-up via Roth IRA. The potential benefit that all proceeds from that Aptera stock would be tax-free is phenomenal. I just paid capital gains on the sale of my home, and it was painful.
If you're comfortable with the risk of investing in Aptera, and you're already investing in both retirement and non retirement accounts, i don't see why you wouldn't do this in a retirement account. You're taking the risk either way, and if it outperforms the market you'll be very happy with those tax free gains. Once they ipo, it also means you can sell the stock if you want to diversify. As long as you keep the money in the account you still don't pay taxes on it and can invest in something else instead
Aptera stock buy price $10.50, current stated value $1.96. I think I'll pass. Not even legitimate open stock anyway. Throw your money into a bottomless black hole.
Yeah but Thiel will have to pay more for his Medicare when he reaches 65.
Ha ha with 5 billion, do you think he cares?
@@andrewfuller8440 He will not be participating in the Medicare program, my sarcasm was meant to inject irony, but not contempt.
I'm from the EU. I got the email as well, while this is a US-only thing. They know I'm not from the US, so I didnt get why they sent me this.
The emails are on an automated list.
@@JoeBMancoI think thats obvious.. i imagine his point is that it should have been programmed to only send to it to US citizens which is data they have access to.
Thanks
@@user-xj5xp6qz5g What data? When I signed up for their email updates they got an email address, not my home address. With roughly 60 people working for Aptera, they lack the resources to check who lives in the USA and who does not.
Why are you on their mailing list? Their vehicle isn't even road-legal in Europe.
Thiel is pronounced teal, like the duck
TL;DR: No
RED FLAG: Most car companies got bankrupt, Aptera doesn't have a single validated product, y the hell would u invest in the company that hasnt even announced when production might start lol.
Every investment carries some risk, and if you wait until a company has a validated product, the stock price will skyrocket and you’ll be buying high. It would be really dumb to dump all your money into Aptera, but there’s also nothing wrong with putting a little.
Investing in start ups is always risky. But that risk comes with potentially much higher rewards than investing in established companies. Not everyone is comfortable with such risks, but many of us are.
It's an optimistic hope for the human population on earth. Aptera represents the most efficient form of fast personal transportation. Even at 80 mph, it will probably get 6 miles for 1 kWhr of energy. Replies here correlate EV start up investment with playing the lottery and It's basically true. There are many things that can go wrong and few ways to get it right. I don't usually play the lottery. I play it now if the cash option is >100 million. I would use it to fund Aptera. Our planet and our species needs this vehicle. Hopefully optimistic.
@RomanChaar - If you have to ask that question, you have very clearly shown your simplistic understanding of venture capital. You should not invest. Stick to a secure savings account at a large bank.
@@mkmac9539 Quote: "your simplistic understanding of venture capital". No, I'd categorize his statement as solid, sage experienced data.
I don't know if I have a self directed IRA but I have considered seeing if I can make an investment in order to get the $1000 or $2500 off. As I've mentioned previously, I'm not going to be buying a car for a while so I've got time to work it out. I'm pretty sure that I can take out a loan on my IRA if nothing else.
Let me add that I am talking about a VERY small portion of my IRA, and if I take it out as a loan I will end up paying it back anyway. This is just to get $1000 off of my Aptera. If I lose the $2000 I will probably lose the Aptera too.
High rollers don't always win either. Are the Stormy days over for The Donald?
Yes, unless there’s an appeal in which case he’ll have to face her again.
@@gr8dvd Appeals rarely involve reexamining witnesses.
@@unclegeorge7845 Depends on what grounds… granted true on some technical legal procedural claim but otherwise often total redo.
Is the self directed IRA contribution still eligible for the $1000 coupon off the purchase price? I'm thinking of investing $2k for this benefit, but if this could be done via self-directed IRA, I'd probably go that route instead since I'm only 4.5ish years away from being eligible to make a withdrawal.
I think that if we want something or believe in something we will have to be willing make sacrifices to get it. I wouldn’t say that anyone should risk any portion of their retirement that they can’t afford to lose on a startup. I am sure that each of us could choose to make sacrifices in our lives that we could apply savings to the increase of our retirement accounts while supporting what we believe in. If not you probably have bigger problems in your life and should be spending your time solving them, not reading the comments section.
They're preying on the weak.
No
I just upvoted you.
I NEVER upvote you.
Should give some idea how bad this idea is.
@@robertkirchner7981
One day you will know so much more about Aptera
I have to ask:
What is everyone's expectation as to what the upcoming May update will bring to the table?
Given the $60 mil (?) spent since the Delta design release of 16+ months ago, and the availability of the CPC BinC, I would hope they will surprise you with one (1) Gamma finish-level Delta rollout that they could use to demonstrate the key claims, including 400 mi. range and full 30-40 mi./day full solar, adequate cooling under all conditions, moose test with single driver @ full cargo capacity, etc..
The November "PI's completed in the first few months of next year" and December's "The Most Efficient Vehicle Validation Possible" with PI.1 handling range testing, with PI.2 being "The pretty one that you can sit in and drive" sounded great and they openly set an expectation. IF this had actually happened, it would have been awesome for the cause, including additional funding, I would presume.
But by the March update (the end of "the first few months of next year) it seems like all of this had unravelled for reasons that raised more questions than they answered. And now it's 2 months later. "Crash data by mid-year" is now where when (time flies), as 4th of July is like 7 weeks away?
So, honestly, what's your expectation at this point?