Wealth Podcast Post

Alternative Investments with Tara Fung

George Grombacher January 23, 2022

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Alternative Investments with Tara Fung

LifeBlood: We talked about alternative investments, using IRAs to invest in things like crypto and private companies, the tax benefits of doing so, the process for making it happen, and how to get started with Tara Fung, Chief Revenue Officer of AltoIRA. 

Listen to learn an easy way to get started with alternative investments!

You can learn more about Tara at AltoIRA.com, Facebook, Twitter and LinkedIn.

Thanks, as always for listening!  If you got some value and enjoyed the show, please leave us a review wherever you listen and subscribe as well. 

You can learn more about us at LifeBlood.Live, Twitter, LinkedIn, Instagram, YouTube and Facebook or you’d like to be a guest on the show, contact us at contact@LifeBlood.Live.

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Our Guests

George Grombacher

Tara Fung

Episode Transcript

george grombacher 0:00
Come on one level this is George G and the time is right welcome today’s guest strong and powerful Tara Fung. Tara, are you ready to do this?

Tara Fung 0:19
I am so ready, George.

george grombacher 0:21
Alright, let’s let’s go Tara is the Chief Revenue Officer of auto IRA. They are the leading platform for investing in any size and level of sophistication to use their retirement accounts for investing in alternative assets such as private companies, real estate, unregistered funds, crypto, and marketplace. liens. excited to have you on, tell us a little about your personal life’s more about your work and why you do what you do.

Tara Fung 0:49
Yeah, well, first, thank you so much for having me, George. It’s a real pleasure. As you said, I’m the Chief Revenue Officer here at Alto IRA, we enable folks to use their retirement funds to invest in a wide swath of alternative assets. It’s actually a lot of fun. We’re based here in Nashville, Tennessee, as the FinTech firm, but we have operations all over the United States and employees all over the US. And my background, personally, is, I love financial technology. I think money touches people’s lives. And I’ve tried to focus my career on being able to help more folks by unlocking various financial products and services. Previously, I was the Chief Commercial Officer at a firm out of New York called common bond that offered student loan solutions to individuals. So I know a lot about student debt. That’s a separate podcast. And also, we really think that individuals should be empowered to be able to use their retirement funds to invest in whatever they want, not just public markets. And so we have an alto IRA or standard Ira product, which is funny because it’s called standard but it’s for alternative assets, that allows you to invest into startup to securitize, collectibles, real estate, and on and on and on. And our crypto IRA, which is growing like crazy enables an individual to use their retirement funds to invest into more than 100 Different crypto tokens. And that’s all powered on the backend through our direct integration with Coinbase. Which Coinbase is the name in the crypto world it’s very well known, so important to understand who’s the digital asset custodian of your crypto as anyone who’s investing into crypto probably knows. And so if you’re thinking about investing in crypto doing so in a retirement account makes so much sense because the tax benefits associated with it. And for me, personally, I come from a small town in rural North Carolina. I have lived all over though I did my undergrad at South Carolina to study economics and figure out how the world works. And then I’m a glutton for punishment. So I went back and got my MBA at Harvard, and have been in FinTech ever since.

george grombacher 2:54
Awesome, I appreciate you sharing that. So we had the CEO, Eric sets on a few years ago. And I imagine we’ll just kind of catch us up on what’s what’s what’s changed with alto since then.

Tara Fung 3:10
Yeah, so I joined a year and a half ago, so probably about six months after your conversations, and the growth has just been absolutely incredible. I think we’re living in such a zeitgeist of active investing, where people really want to take ownership of investing. And we’re seeing that apply to alternative assets as well. We have seen so much adoption of alternative IRAs, both on the standard Ira side as well as the crypto era side. You know, within the world of investing right now, so many people are looking for options to hedge inflation. And bitcoin is one area where many investors have gone given the fact that there’s fixed supply and it’s not tied to the US dollar. And then within the world of startups, you know, we see so many IPOs nowadays, but there’s also such an Active Early stage and late stage pre IPO market and startups. And so we’ve seen a ton of folks come to Alto to be able to use their retirement dollars to invest into both early and late stage startups. They recognize these funds might be tied up for a long time. And so if I use an illiquid funding source, like my retirement account, that can make a lot of sense. To put numbers to it. We’ve seen we’re going to do 15x revenue year over year, we’ve grown our total account size by more than 20 years, since I joined a year and a half ago. And every single month is a record or banner month for us. So it’s been a fun and wild ride.

george grombacher 4:39
What percentage of the growth do you take personal responsibility for all of it? All of it? Excellent. Outstanding. I think that’s super exciting. So just from I’ve got a bunch of notes, Can folks open traditional IRAs Roth IRAs

Tara Fung 5:00
We offer in support traditional Roth and SEP IRA.

george grombacher 5:04
Well, okay, so even if you already a small business owner, you are able to open up a SEP IRA as well. So, yeah, fascinating, in what a, for lack of a better term a brave new world with all these different crypto projects or tokens, or whatever the term is, how how has that process been, from a compliance and a due diligence standpoint, partnering with a great company? Like I think you said, Coinbase?

Tara Fung 5:35
Sure. So, you know, crypto currently is treated as property under IRS guidelines as an asset that you can invest in with your IRA. I mean, the IRS is always catching up. But we took the step of, hey, we’re going to actually separate and have a distinct IRA for anyone who wants to invest directly into crypto, not because we expect that the IRS is going to change the way that they treat this asset class. But in case they do, or in case any changes come about, those assets are isolated. So that’s, that’s one step that we’ve taken to protect consumers should things change in the future. When you come to alto, the experience is honestly amazing for the crypto Ira product, because also you click sign up, and you can open a new Ira invest in under 60 seconds, and choose how you want to put money in it, you can choose like a Roth, a traditional or a SEP IRA, as you mentioned, most people transfer funds from an existing IRA or retirement account they have elsewhere. But you can also contribute cash. And then you literally come to a screen where it’s like, where do you want to? Or what do you want to buy ourselves in terms of crypto and you have more than 100 tokens, or cryptocurrencies that are at your disposal is the largest selection within the crypto Ira world. And what’s so different is that most crypto Ira providers are setting up a checkbook LLC, where your IRA then owns an LLC, and then you need to go out to a coin base directly or a Gemini directly or a kraken or any of these crypto exchanges. And you need to apply for an institutional account there and get set up and it can take two months. With also you do everything from our site. So you never have to leave because we did all the work to integrate directly with Coinbase. And so it’s a really seamless trading experience, something that you would recognize from other trading experiences you’ve had elsewhere. And that I said, it’s the widest selection of cryptocurrencies and tokens, and we’re updating it regularly.

george grombacher 7:39
Nice. I appreciate that. So certainly, from a customer experience, it sounds like it’s super easy and super streamlined to to make it happen within 60 seconds, or however long it takes it probably take me a little bit longer. But from a from an education standpoint, how, how are you thinking about that?

Tara Fung 8:01
Yeah, so one of our company values is actually educate, to drive equality. Eric, who you met with before, he’s a very mission driven person. And the whole thought process that alternatives are too complicated, too nuanced. For the average investor, we just we simply don’t believe that we believe that people should be empowered to educate themselves, and to be able to take steps to take ownership of their own investments. So we have recently hired a CMO. And one of her main goals is to focus on the value of educate to drive equality, we have a team that’s putting out content and research to try to bridge the gap. A lot of folks aren’t aware of some basic financial tenets related to IRAs, such as the IRA account types, or what are the tax benefits associated with IRAs, like many people actually refer to, and I know this sounds ridiculous, a Roth IRA as the god account. Because if you’re really into crypto, and you use after tax dollars that you put into a Roth, to invest into Bitcoin, or for E, there’s so long, or what have you token, and then that token appreciates in value. When you take it out in retirement, all your gains are tax free forever. And so for certain very high yielding assets or potential high yielding assets, a Roth account makes so much sense and all of your trading in IRAs are is tax deferred, because these are tax deferred accounts. So you don’t have to do some complicated tax accounting at the end of the year. So like these are the things that aren’t well known or understood and we’re trying to educate and more people on so that they can make the best decisions for themselves. And then the other thing that I would say in regards to education is we sit at the intersection between investors and really incredible alternative investment opportunities beyond crypto, like I came to also because I I actually was a customer before I was employee. And I invested into a securitize piece of art on one of our partner platforms called masterworks where they go out, and they buy high end art. And they enable individuals to buy specific portions of ownership of that art. And in doing so, it gives people like me the ability to get exposure to high end art, even though that I can’t go out and buy a $2 million Monet, all on my own. And so we’re able to highlight our investment partners and the research that they’re putting out because all of them are specialists in their asset class. No alternative assets is a broad umbrella category. And it can mean everything from very highly volatile assets that are high risk, potentially, such as certain hedge funds to some of the least volatile assets that are out there such as farmland, though we have several partners that provide exposure to investors to farmlands as an asset class, which just behaves so differently. So we try to highlight our partners who are in the very deep in the details related to their specific asset classes. And it’s definitely something we care about, and something that we know we need to continue to invest in and do better as we grow.

george grombacher 11:15
Well, super exciting. Educate to drive equality, I think that I see zero reason why a company like yours wouldn’t be focused on that. And at the same time, there’s a million reasons why, why you why you wouldn’t, because you just be focused on other things. So I think it’s awesome that you’ve made the decision to invest time and energy and, and money to, to, to help educate people on these different opportunities, and how cool that there’s opportunities to invest in things like farmland, and art, and all these different things. And I think it would probably be a little bit irresponsible if you started offering that and didn’t educate. So it all makes sense.

Tara Fung 11:59
Yeah, no, I appreciate you saying that. Because education, just from a company perspective, means that you’re investing a lot in people that are going to be able to write content to educate, so truly is an investment. It’s a strategy for our business. And it’s part of our mission. Because, you know, if you think about the ultra high net worth, mega wealthy people, they’ve had access to alternative investments for a long time. It’s the massive flow with the average investor that hasn’t. And we think that’s a problem. And it needs to change. Because if you look at the professional investors portfolio, between 20 to 50% of their investments are allocated to alternative assets. And the normal investor, I use a retail investors portfolio, it’s one to 2%. And how that translates to their outcomes financially, we think are very detrimental over time, particularly as public markets are becoming less and less diverse. And so it’s very tied to our mission, we are in this for the average investor who’s looking to get access to alternative assets. And we do think that education is a really critical part. For me personally, I don’t invest in something unless I have confidence that I understand what I’m investing in. That’s my personal mantra. I think it served me well. And so that’s what we’re trying to do as a firm as well.

george grombacher 13:20
That’s super interesting stat right there that for the ultra wealthy 20 to 50%, roughly speaking of their portfolios are invested in alternatives, but the ordinary investor, regular folks, only one to 2%. That’s really interesting. I think we’re at this inflection. Well, I don’t know if it’s inflection point. We’re at a time where, where people are so interested, which you mentioned earlier in active investing, and you’ve got companies like Robin Hood coming online, and now companies like yours who are making this so available. What do you see, as maybe plans for 20 years from now what invest in retirement planning looks like?

Tara Fung 14:04
Oh, man, I mean, I was actually on a call the other day, and it involves a professor that is a futurist at NYU. And it was so fascinating to really think about a 20 years from now, what does retirement look like? And one of the beginning questions was, is there actually a retirement like, is there this concept of not working at some point? Or do we just have different income streams that result from various projects, whether that’s, you know, earned income or investment income or otherwise? So I have no idea what the world looks like 20 years from now, but I do feel confident that more and more people are excited about investing as an activity and something that they do personally, like we are in this site, guys, as I mentioned, of people wanting to take ownership. And I think with that ownership, there’s always some mistakes that happened along the way. There’s also a lot of education. And so retirement investing 20 years from now, I think it’s going to involve a lot of asset classes, because no one’s going to want to put all of their eggs in one basket. And tomorrow’s retirement won’t look like yesterday’s retirement. In fact, we might not, as I said, even be talking about retirement, I think we’ll be talking about freedom and choice. And for individuals, what I like to say is, it’s time to start thinking about what kind of financial plan you should put in place today, to enable that freedom to choose how you spend your life tomorrow. And there’s probably a sliver of that an allocation of that that needs to go into diversifying your investments, such that again, you don’t have all of your eggs in one basket, particularly when the public market basket, the number of publicly traded companies has dropped by 50% in the last 20 years.

george grombacher 15:59
There’s another great statistic right there. So the number of publicly traded companies has dropped by 50% in the last how many years

Tara Fung 16:07
20 to 25 years. So there was actually a big headline the other day, because for the first time in 20 years, we now exceed 4000, publicly traded companies, it used to be 8000. There are a lot of reasons for this. But what it’s resulting in is that private market investors are able to see returns that are greater than public market investors and public market investors that are only invested into public markets have a smaller selection of companies. And if you think about investing as as a as a as a way in which to approach your future, you want to make sure that you’re diversifying, right. And so you can’t get the same diversity of investment choices focused exclusively on publicly traded stocks, bonds, mutual funds that you that our parents could have.

george grombacher 16:56
I like it. Well, Tara, people are ready for your difference making tip do you have for them?

Tara Fung 17:02
Yeah, so I think my number one difference making tip is in don’t be scared by the title of alternative assets. alternative assets means nothing in and of itself. There are all of these asset classes underneath it. If you’re interested in starting and you don’t know how to start small, become a knowledgeable in one asset class that is interesting to you. For me, it was artwork, but for others, it could be farmland, it could be crypto, and you don’t have to go all in on read, you know, you can truly educate yourself. Begin small with alto, you know, on our crypto Ira side, you can begin with as little as $10. And in the case of also we support all individuals, you don’t have to be ultra high net worth or mega wealthy to work with us. But I would say educate yourself start small and don’t be afraid to venture out.

george grombacher 17:56
Well, I think that that is great stuff that definitely gets a Come on. It’s got to get started. Gotta get started. Terrell. Well, thank you so much for coming on. Where can people learn more about you? How can they get started with alto IRA?

Tara Fung 18:09
Yep, so you can go to also ira.com to learn more about us and you can find me on LinkedIn or Twitter. Or reach out to me at Tara at also ira.com

george grombacher 18:22
Perfect. Well, if you enjoyed this as much as I did, so tear your appreciation and share today’s show with a friend who also appreciates good ideas go to alto Ira com that’s Al toira.com and get started you’ll find Tehran, LinkedIn and Twitter as well as all those in the notes of the show. Thanks. Good, Tara.

Tara Fung 18:42
Thank you, George.

george grombacher 18:43
And until next time, keep fighting the good fight. We’re all in this together.

Transcribed by https://otter.ai

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