When you’ve started your own business and become successful through your hard work and personal ingenuity, investing can feel like taking a back seat when you’re used to driving. You’ve worked hard to earn enough that now you’re setting money aside for your future, but you’re not a retail investor kind of person. You want your money to work harder for you than it does for others.
Getting together with other investors such as family, a business partner, or even an investing club can help you pool money together and make the kind of investment moves you might not be able to do alone. The best way to do this is through an LLC – a limited liability company that exists for the purpose of investing.
Why Set Up an LLC?
1. Invest as a Family or Group
When you invest as a family, partnership, or group, you need some kind of agreement and structure for making those investments collectively. An LLC allows you to create an agreement that controls the terms under which shares in the LLC can be sold, helping keep it within a family or a tight group.
2. Tax Advantages
An LLC offers better tax advantages than you would gain by investing through a corporation. Profits and losses are passed on to members who can use their personal tax advantages – IRAs, capital gains credits when you take a loss, etc.
3. No SEC Reporting
An LLC is never a public corporation, so there is no Securities and Exchange Commission reporting you have to do. An LLC can also have as little as one member, and be owner directed.
Investing in Alternatives with an LLC
LLC’s are a popular method of investing in alternative assets, including real estate, commodities, and cryptocurrency. These are assets that can benefit a great deal from pooling your money together, but they have complications without using a structure like an LLC.
Real Estate
Real estate investments are among the most common reasons to start an LLC. Pooling money together can allow you to buy real estate in the first place. More importantly, real estate is one of the rare investment assets that comes with liability that affect you personally, especially if it’s a multi-unit property. You can protect yourself from this liability by using an LLC.
Gold and Silver
LLCs and precious metals naturally complement each other. Investors are inclined to buy gold and silver because they dislike uncertainty when it comes to their wealth. An LLC provides another layer of asset protection for gold and silver, keeping them separate from your personal liability. Your gold and silver are safe even if you are sued.
Since you can invest in gold and silver as part of an IRA, you should also learn more about buying silver with an IRA-owned LLC. One of the biggest advantages of a self-directed IRA is the freedom to invest in alternatives like gold and silver.
You can also buy larger volumes of gold and silver as a group than you could alone. Large purchases come with lower prices per ounce.
If you want to set up a way to invest as a family or a group, an LLC is a compelling tool to try.