With the rising popularity of alternative assets, most notably the surging growth of Bitcoin and the digital assets class, it makes sense to revisit how your retirement portfolio can be a great way to capture this growth explosion today. This is both a story on the history of the Individual Retirement Account (IRA) and the birth of Dorado
History of the IRA
Kicked off by a stock market crash in 1929, the following ten years would come to be known as the worst economic downturn in the history of the Industrialized world. Coined as The Great Depression, millions of Americans were thrust in to a spiral of poverty, hunger and discontent. Over the next several years, consumer spending and investment plummeted, causing steep declines in output and employment figures as failing companies laid off workers. By 1933, a year commonly recognized as the lowest point of Industrialized America, over 15 million Americans were unemployed and more than half the country’s banks had failed.
Like a phoenix rising from the ashes in 1935, social security was born. A safety net signed in by President Roosevelt, generated by payroll tax, has helped Americans stay above the poverty line during their retirement ever since. The following 10 years, scarred by World War II encouraged an increase of Americans into the workforce who, of course, were paying tax. With the knowledge of the depths the economy had sunk freshly imprinted in the minds of all, the government began focusing more attention on how to help workers better save for retirement.
In 1947, Congress with union assistance created guidelines on how to administer and maintain a pension plan for employees. Not until President Gerald Ford signed into law the Employee Retirement Income Security Act (ERISA) in 1974 and the Revenue Act of 1978 was the IRA or 401(k) a legitimate vehicle for retirement investor.
Heralded as the greatest tax break in history, Americans were finally given a way to save for retirement via the Individual Retirement Account and the financial institutions were given the task to be the custodian. Within the weeds of this bill, the Internal Revenue Code failed to state what investments were permitted and instead chose to only list the investments which are not permitted… Life insurance, collectibles and transactions with disqualified persons.
Here’s the catch
If all investment opportunities are permitted aside from the aforementioned three, are investors then able to invest in whatever they choose?
The answer is technically yes but it ignores a caveat. The true description should read — Investors are allowed to invest in whatever they choose, but only if their chosen financial institution elects to custody it.
This made it next to impossible to diversify in to alternative investments as the effort to custody an alternative asset such as an individual property or start up, doesn’t move the financial institution’s bottom line.
Thus, a demand for alternative asset custody grew, and, as the market always does, a supplier was created. This bespoke service offered by custodians will come to be called a “Self-directed IRA”, and given a string of high price tags and hidden fees to match its demand and validate its existence.
This retirement vehicle was born under the ethos the individual should be in control of their retirement account… but only to then have that control limited by the self-directed IRA and the high barriers to entry in fees. Convoluted pricing structures, backdoor fees and centralized management would again limit the investor and again the investors decision making was limited to the custodian’s allowable investments.
This is where Dorado comes in
Born from the rubble that was the second largest recession in modern America, The Financial Crisis, was the idea that finance and currency could be decentralized and built on a technology decades ahead of its time. The birth child of a frustrated generation at an age in time that fostered free flow and access to information and technological advancement was the blockchain, and bitcoin its native currency.
Individual thoughts on the value of cryptocurrency aside, the blockchain technology, given its web 3.0 nickname, is the foundation digital assets are built on. This technology is undeniably superb and its presence has already laid the groundwork for an amazingly beneficial relationship with its users. The impact on custodial and financial systems as we know it are about to change forever and is understandably a disruption to the normal course of business.
With such an amazing asset class presented to the world, it’s clear long-term investment horizon and capital appreciation potential, the Dorado team spent months working through a lengthy history of red tape, institutions, custodians, incentives, fees, structures and limits with the goal of building the perfect product for a new age of investors… Digital Asset Investors.
A new beginning
We are a generation scarred from the atrocities that occurred in a prior retirement system. We’ve witnessed asset managers abusing their principal agent relationship. We’ve watched intermediaries skim as much as they can from conscious savers through murky and convoluted pricing strategies. We’ve felt the pain from our older generations as they struggle to retain financial independence during their retirement, hanging their head in shame at a financial system that has let them down.
Enough is enough…
We are at a pivotal moment in history, bearing witness to the greatest financial transition the world has ever seen. With such an important time comes great responsibility, a great opportunity to write the wrongs of the past and create a new beginning.
Join US
Dorado is a retirement savings platform and community we can be proud of. With a vision that thanks the past for making their mistakes so we can progress forward. Dorado is building a retirement platform and community for you, the modern investor, the digital asset investor. We are 100% focused on cryptocurrency and digital assets and we don’t apologize for this.
With goals of a decentralized future, driven by a passion for technology and a thirst for transparency, Dorado will provide customers the opportunity to make full use of the digital asset investor toolkit over time. Powered by Prime Trust and Fireblocks, through their initial beta launch in July 2022, Dorado will be the first to market with staking available to select users, a diverse selection of cryptocurrency as well as a community of like-minded, long-term savers.
Early subscribers and contributors to the Dorado community will be rewarded with on and off platform perks and air drops as well as early access to products and features.
We are building Dorado for you, for us, for those who have been let down by the past and for those with high hopes of the future. Hit join the waitlist at www.dorado.tech, follow our socials with the same name, help make a difference and build a savings partner and community you can be proud of.
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