1. What are the “Prohibited Transaction” Rules within the Strategic Affluence 401k? This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

2. Prohibited Transactions Rules Now that you know who is considered a “disqualified person”, you can better understand the “prohibited transaction” rules. This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

3. Prohibited Transactions Rules Basically, a Prohibited Transaction occurs between your Self Directed Plan and any disqualified person, including yourself. This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

4. Prohibited Transactions Rules The purpose of the prohibited transaction rules is to discourage any disqualified persons from dealing with the assets of your plan. Investment transactions must be arms-length… This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

5. Prohibited Transactions Rules The types of prohibited transactions generally fall into three categories: Direct Prohibited Transactions Self-Dealing Prohibited Transactions Conflict of Interest Prohibited Transactions This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

6. Prohibited Transactions Rules A Direct Prohibited Transaction generally involves one of the following: This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

7. Prohibited Transactions Rules The direct or indirect sale, exchange, or leasing of property between a Self Directed Plan and a “disqualified person.” For example: This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

8. Prohibited Transactions Rules A father uses his Self Directed Plan funds to purchase an LLC interest owned by himself or his son. A son sells an interest in a partnership owned by his Self Directed Plan to his father. A daughter rents property owned by her Self Directed Plan to her parents. This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

9. Prohibited Transactions Rules Another prohibited transaction is the direct or indirect lending of money or other extension of credit between a Self Directed Plan and a “disqualified person.” For example: This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

10. Prohibited Transactions Rules Someone personally guarantees a mortgage loan to her Self Directed Plan to purchase investment property. A husband lends his wife $10,000 from his Self Directed Plan. A father uses his Self Directed Plan funds to lend to an LLC which is controlled and owned by his son. This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

11. Prohibited Transactions Rules The direct or indirect furnishing of goods, services, or facilities between a Self Directed Plan and a “disqualified person.” For example: This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

12. Prohibited Transactions Rules A father buys a rehab property with his Self Directed Plan funds and hires his son to do the repairs. A mother owns a rental house with her Self Directed Plan and hires her son to manage the property. Someone buys a rental with her Self Directed Plan funds and personally fixes it up. This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

13. Prohibited Transactions Rules The direct or indirect transfer to a “disqualified person” of income or assets of a Self Directed Plan. For example: This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

14. Prohibited Transactions Rules Someone invests her Self Directed Plan funds in a real estate investing fund and then receives compensation for providing management services to that fund. Someone takes $15,000 from his Self Directed Plan to pay a personal debt. This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

15. Prohibited Transactions Rules A Self-Dealing Prohibited Transaction generally involves one of the following: This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

16. Prohibited Transactions Rules The direct or indirect act by a “disqualified person” who is a fiduciary whereby he/she deals with income or assets of the Self Directed Plan in his/her own interest or for his/her own account. For example: This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

17. Prohibited Transactions Rules A real estate agent uses his Self Directed Plan funds to buy an investment property and earns a sales commission. An investor desires to buy a residential property for $100K and would like to own the property personally but does not have enough funds. As a result, he uses $20,000 from in his Self Directed Plan and $80,000 personally to make the investment. This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

18. Prohibited Transactions Rules And lastly, a Conflict of Interest Prohibited Transaction generally involves one of the following: This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

19. Prohibited Transactions Rules Receipt of any consideration by a “Disqualified Person” who is a fiduciary for his/her own account from any party dealing with the Plan in connection with a transaction involving income or assets of the Plan. For example: This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

20. Prohibited Transactions Rules An entrepreneur uses her Self Directed Plan to loan money to a company which she manages and controls but also has a small ownership interest in. An employee uses her Self Directed Plan to lend money to a business she works for in order to secure a promotion. An investor uses his Self Directed Plan funds to invest in a fund that he manages and where his management fee is based on the value of the fund’s assets. This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

21. Prohibited Transactions Rules You may want to review this list of examples from time to time to better familiarize yourself with the rules, and make sure you are staying in compliance. This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

22. Prohibited Transactions Exemption Requests Another thing to remember is the ability to request an exemption from the rules from the Department of Labor. This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

23. Prohibited Transactions Exemption Requests For example, if your plan owned a piece of real estate that you thought would make a great summer home, you could actually request an exemption from the rules. This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

24. Prohibited Transactions Exemption Requests Using this example, if the sale was going to be a one- time cash transaction, and you were going to pay the fair market value as established by an independent appraiser, there’s a pretty good chance your exemption request would be approved! This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

25. Prohibited Transactions Exemption Requests You can find the Exemption Request procedure by searching for it on the Department of Labor’s website. This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

26. Prohibited Transactions Rules Again, we strongly encourage you to participate regularly in our monthly training calls where we continue to cover these types of relevant topics on an ongoing basis. This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com