Although he did not use a ROBS account, Daniel Sheehan, CFP and owner of Sheehan Life Planning, used his individual retirement account to fund a start-up company, which he sold, years before he entered the financial industry.
He was in the computer components business in the early '80s, when products were developing quickly and demand was booming.
"I needed money fast, due to the window of opportunity," he said.
Sheehan took $40,000 out of his $60,000 IRA. Within 10 years the enterprise became a $40 million business.
Was he afraid of the large withdrawal?
"No," Sheehan said. "I knew it was going to be a success, and I would do whatever it took. You have to have a certain mind-set to make something real out of a dream."
He wonders if it was the right decision, though.
"In retrospect, I gave up a lot, but the business was successful," he said. "However, who knows what the value of my IRA may have become if I left it alone, as this was in 1982 and the markets had a pretty good run from there." — D.N.