Feeling the chaos of the stock market tug on your retirement plans? Dmitriy Fomichenko joins Melissa
Aarskaug to dive deep into the world of Solo 401Ks—a game-changing strategy for self-employed
professionals and small business owners. Learn how to bypass custodians, invest in real estate, save big
on taxes, and maintain full control of your financial future. If you’re ready to make your money work
smarter and harder (without Uncle Sam taking the lion’s share), this episode is your blueprint.

Chapters:

00:00 – Intro: Why Solo 401Ks Matter Now
01:18 – Dmitriy’s Immigrant Journey & Founding Sense Financial
02:54 – IRA vs 401(k) vs Solo K Explained
04:43 – Investing Beyond Wall Street
06:55 – Massive Tax Advantages of Solo Ks
11:24 – Real Estate Leverage Without Tax Penalties
14:06 – Prohibited Transactions & IRS Rules
19:44 – Maintenance Made Easy
23:10 – Dual 401K Strategy for Married or Multi-Income Households
26:41 – Final Tips: Control, Leverage & Long-Term Wealth
28:47 – Where to Connect with Dmitriy

Melissa Aarskaug (0:2.862)
Tired of watching your retirement savings do the cha-cha with the stock market? What if you could take control of your money and make it work for you without paying extra to a custodian? Today on Financial Freedom Blueprint, we’re diving deep into Solo 401Ks, AKA Solo Ks. It’s the ultimate retirement plan for the self-employed and small business owners.
Get ready to learn how to build wealth, leverage real estate, and enjoy tax deferred or tax free growth all while staying in the driver’s seat. Whether you’re flipping properties, running an online business, or just want your retirement accounts to stop snoozing, this one’s for you. Welcome, Demetri.

Dmitriy Fomichenko (0:55.573)
Thank you so much for inviting me. It’s uh great to be here with you. Looking forward.

Melissa Aarskaug (1:2.774)
I’m so excited to talk to you and hear a little bit about your background. Now to kick it off, tell me a little bit about you and I love your accent. Let’s talk a little bit about where you’re from and how you got into the business you’re in today.

Dmitriy Fomichenko (1:18.283)
Sure. Yeah. I do have an interesting story. As you can hear from my accent, I’m not from here. Originally, I actually immigrated in this beautiful country back from the former Soviet Union. So I’m from Russia originally, uh but it’s been 29 years ago. So it’s to believe how time flies. We came here as refugees. My uh parents and grandparents, they’ve been persecuted for their…
faith for their Christian beliefs. uh my uh grandfather actually was sentenced to death because of holding a Bible study. My father was kicked out from the medical school. But uh both my parents and my grandparents, they ended up here. My grandparents are gone now, but I have a great heritage. And uh I’m so blessed to live here in this beautiful country, especially uh
with the fact what’s going on in uh my home country where I was born.

Melissa Aarskaug (2:27.086)
Thank you for that. That must be very difficult and we’re grateful to have you here. And I want to take a deep dive into all things solo 401k and solo K. It’s often called the ultimate retirement plan. Could you help me understand the difference between IRAs, 401ks and why self deployed individuals should consider a solo uh K?

Dmitriy Fomichenko (2:54.887)
Absolutely, yeah. So oh an IRA is individual retirement account. Anybody who has an income or has other retirement account can set up an IRA and contribute individually. The limit for contribution is $7,000 a year. uh Now, there are employer sponsored plans, such as 401k, 403b, 457.
Those are established by the employer that you’re working for, and they offer the opportunity for you to contribute to that plan. But if you’re self-employed or own a small business without full-time employees working for you, then you can actually establish your own plan. That’s where the Solo 401k comes in, in the Solo 401k, essentially, it’s a 401k.
might have working for somebody, but you’ve got to have your own business. So you establish a 401k. And there is no other participants in this plan besides business owner and sometimes the spouse also participates. Plans uh are very powerful, number of advantages, but that’s the difference between uh those various retirement plans.

Melissa Aarskaug (4:9.838)
That’s a great example. So talking a little bit about your retirement, your roles, unlike IRAs, solo case give you the freedom to invest in a very different, a variety of different assets. And kind of like you mentioned it, when you work at a W-2 job, you have to invest in exactly what that employer has for you to look at.
What are some of the non-traditional investments that can supercharge retirement savings?

Dmitriy Fomichenko (4:43.507)
Yeah. So the problem is with having a, just a conventional retirement account, whether it’s an IRA or a 401k or even a solo 401k. guess what? You can establish solo 401k. You can go to Vanguard or Fidelity and you can establish solo 401k if you’re self-employed, but it will be a custodial plan. There is a custodian. Let’s call them a middleman. They hold the assets of your 401k and they providing you the investment platform.
And as a custodian, they have the power to limit the investment choices for you. And they always limit to those confined to the stock market, because that’s how they make money, by selling you those kinds of investments. Well, we are different. We are working with self-employed individuals. We’re establishing the plan for them. But we’re not a custodian. We are just a document provider. And when we create this plan for them, it’s an open architecture plan.
The plan documents don’t have any restrictions on investments. Again, those restrictions, they’re placed by the custodian that you’re with, the Fidelity, the Schwab, the Merrill Lynch, the Wells Fargo, right? Well, when you have a solo 401k plan created by our team, then you don’t have restrictions. IRS doesn’t have restrictions uh for… uh
real estate or alternative assets, can invest in virtually anything. Let me actually correct myself. There are some restrictions and we can get into those, just limitations. But you can invest in virtually anything with Self-Directed Solo 401k Plan. A lot of our clients invest in real estate. The problem, look, this is not new, Melissa. What we experienced just in the last couple of weeks with the
with the tariffs announcements, the market dropped 20%. I mean, that’s for some people who are approaching retirement and they need this kind of money, it can be a devastating loss. Well, guess what? You and I, have no control over that. We have no control over that. When you invest in alternative assets, you have much greater control and your risk is much smaller.

Melissa Aarskaug (6:55.694)
Yeah, spot on. I know I personally hate when the market goes down 20%. It is not a great day for me. I know one thing that has become such a hot topic is taxes, right? all, two things for certain, we’re paying taxes and we’re gonna die. I wanna talk about the tax advantages and kind of the power play.
of the solo case, you can you can minimize or even a limit them I understand. So can you explain to us a little bit about pre tax Roth and the profit sharing contributions that work within an actual solo okay.

Dmitriy Fomichenko (7:36.145)
Absolutely. Yeah. Let’s dive into that. Let me just give you a quick disclaimer here. I’m not a CPA. Taxes is not my area of expertise. I understand enough taxes. I’ve done my own taxes for a number of years. I don’t do them now because of the complexity of my tax situation, but I talk with people every day. I can say that probably I know more than some of the CPAs out there, but again, I’m not a tax expert. So let me just give you a general
a picture here, a dry picture for you. Well, if you own a business or self-employed, the difference between being an employer, right? Because if you’re working for someone, you’re earning a salary or you’re getting an hourly pay, and there is a limit, right? Because look, there is 24 hours in a day. You can work more than 24 hours for somebody. But when you’re self-employed or own a business,
And if you’re good at that, you have virtually unlimited income potential there, because you can build a system and you can make a lot more money. So if you’re good at what you do and you start generating good income, the problem that we all have in common, the more income we make, the more taxes we’re going to pay.
So solo 401k on top of all the other advantages, being able to invest in alternative assets, it’s a great tax shelter because guess what? With the solo 401k, you can contribute to this plan over $70,000 a year per person, okay, participant. So think about this way. If you also bring your spouse into the picture, right? Your spouse is also involved in your business and your spouse also receives compensation from your business.
then you can double that. Now think about that if you put 70 grand and your spouse put 70 grand that’s hundred and forty thousand dollars. So what you’re doing is you actually dropping your taxable income or reducing your taxable income by hundred and forty thousand dollars in this example. Well

Dmitriy Fomichenko (9:46.475)
immediately you probably will drop a of tax brackets down. So you’re going to be paying $140,000 less in a lower tax bracket. So the tax savings can be $40,000, $50,000, $60,000 potentially depending on your overall picture. So this is a great tax shelter. Rather than paying to the ankles hem, why not set up a self-directed solo 401k?
contribute to that plan, maximize your contributions, reduce your tax liability, pay yourself instead of to the uncle Sam, and then the money that you contribute now you have in your solo 401k, you get to invest how you wish. So it’s super awesome. Every time I talk about this, I get excited because it’s so powerful.

Melissa Aarskaug (10:35.362)
love it and I love your enthusiasm with it. And it’s great because now you’re really making your money work for you while you’re also working for your money. So that’s a great ah point with the spousal contributions. I’m curious, um I think I hear a lot as well, Demetri, real estate. I hear a lot of people that are looking at a piece of real estate as a retirement.
So I want to talk a little bit about many investors don’t realize that they can leverage real estate inside of Solo K without getting hit by the UDFI taxes. So how can you use non-recourse loans for real estate work with, I guess the second question is what are the benefits of doing that?

Dmitriy Fomichenko (11:24.551)
Yeah, so actually that’s a great question, Melissa, but let me back up a little bit. OK, let me explain the difference between. uh
a self-directed IRA and a self-directed solo 401k and how that affects leveraged real estate. So when you buy real estate inside of an IRA, you can pay cash for it. Obviously, it’s not advantageous, so it’s best to use leverage. And you can use leverage inside of a retirement account.
uh Some people just pay cash, you can actually obtain financing. Now, one of the rules that IRS places on retirement accounts is that you as the account owner cannot provide a guarantee for the loan inside of a retirement account, whether it’s an IRA or 401k. Therefore, the loan must be non-recourse.
Non-recourse simply means that you are not providing a guarantee and the property is the only security for a loan. Now typically, the rate is going to be a little bit higher and typically the lenders will require 20 to 40 % down, but you can still finance. Even if you put 50 % down, you can buy two properties instead of one, right? So when you do that inside of an IRA,
the portion of the income that is derived from the leveraged portion of the property, it’s called unrelated debt finance income or UDFI. Now this income inside of an IRA is subject to UBIT, which stands for unrelated business income tax. So if you finance property inside of an IRA, you can do that.

Dmitriy Fomichenko (13:4.479)
You can set up a self-directed IRA, you can buy a property using leverage, but then portion of the income will be subject to taxation. When you do that inside of a solo 401k, solo 401k is exempt from taxes on leverage through real estate. So this is a great way to use self-directed solo 401k to buy real estate with leverage and pay zero taxes. Hope I’m making sense.

Melissa Aarskaug (13:29.294)
That’s great. No, no, that was a great explanation. Thank you for sharing. I think it helps us understand the differences. I’m a big fan of understanding what not to do with investments, because sometimes it’s harder to unwind than just do it right the first time. So I want to talk a little bit about insights on what’s prohibited. So with great power comes great responsibility.
the common and prohibited transactions when it comes to solo case that people should avoid.

Dmitriy Fomichenko (14:6.025)
Melissa, I love that. With freedom comes responsibility. So it gives you a lot of freedom. Let me actually, before we dive into that, let me use this illustration because I love this. I often use this in my consultations when I explain this to uh newer clients for whom the subject is new.
What you’re basically doing for you is be creating a vehicle. And let me use this illustration. Let’s say you have just a regular Honda Accord, right? And you’re driving that, you get off your driveway and you go on the street, you take the highway, right? You get from point A to point B, but there are limitations. You can go off-road with this vehicle. Now imagine that you now have a four by four Mercedes that can go anywhere, right?
you can go off-road, you can go in the mud, it’s four by four, it won’t get stuck, you can even get through the mud, you can get through the snow, right? So that’s what we’re providing for you, we’re providing you with that vehicle that can go anywhere you want pretty much, and you are in the driver’s seat. We are not there with you, we’re providing the vehicle, you’re driving it, you’re in the driver’s seat. Now, IRS has certain restrictions.
And those restrictions, uh two aspects you need to understand. Number one, with an IRA, uh you cannot invest in life insurance and collectibles. So collectibles and life insurance are disallowed investments. Only two. There’s only two that you remember. Now one more is a subchapter S corporation.
And the reason for the subchapter S is because to invest in the S-Corp, you have to be a physical person. And your IRA or 401k is not a person. It’s an entity, but it’s not a person. So those are the only investment limitations. So you can invest, that’s why, in virtually anything, real estate, private lending, trust deeds, cryptocurrency, precious metals.

Dmitriy Fomichenko (16:19.767)
private companies. You can go outside of the country. I have clients from all over and they actually invest all over. Majority of them are obviously in the US, but I have clients who invested in India, in Canada, in South America, in Japan, in Europe.
You can do all of that. You can actually buy investments outside of the US. You’re not limited. Because again, the only two investments that are disallowed, collectibles and life insurance. Now, in addition to that, IRS defines yourself, which is as an account owner, you and your immediate family members as disqualified persons.
And as a disqualified person, you’re prohibited from engaging in any transaction with your retirement account, whether it’s an IRA or 401k, or providing any services to retirement account. And let me give you a couple of examples, right? Let’s say you buy in a property in your solo 401k. And that property might need some work, right? It needs some fix up. You cannot do the work. You cannot hire your father to do the work.
or your father’s company to do the work because there is a connection. Your immediate family members, and that’s your parents, ah your kids, uh grandkids, and their spouses, and your spouse, and yourself. So think of it a vertical line. That’s easy to understand, a vertical line. You can go sideways. Your cousin, your sibling.
your nephew, your uncle or aunt, those are not disqualified. So you could technically, if you buying a property that needs fix up and your uncle owns a construction company, you’re for one, they can hire your uncle’s company to do the work, but not immediate family members. Another example, you are buying a property somewhere at the…

Dmitriy Fomichenko (18:21.863)
maybe vacation destination uh place, maybe it’s on the beach or uh in the mountains or on the lake, you’re not allowed to use that yourself or your immediate family members cannot use that. Whether you pay a fair rent or not, receiving the benefit from the asset that your 401k owns constitute a prohibited transaction. So the easy way to remember is that
All the transactions involving your IRA or 401k for that matter must be arm’s length. And arm’s length meaning that no disqualified person is involved in the transaction in any way, whether it’s directly or indirectly. And that’s how you stay out of trouble. ah There is so much you can do with this, but yeah, there are a little bit of boundaries that you need to be aware of.

Melissa Aarskaug (19:14.082)
Those are great examples. I appreciate you sharing those. um And correct, that’s what I was actually trying to say. With great power comes great responsibility. So thank you for that. Yes, let’s talk like easy one, two, three, maintenance. So setting up for a solo case sounds amazing, but complicated. So can you share a little bit about what’s the process and what should listeners

Dmitriy Fomichenko (19:25.225)
Yeah, yeah, that’s good to remember that.

Melissa Aarskaug (19:44.578)
consider to maintain these solo 401ks.

Dmitriy Fomichenko (19:47.923)
Yeah. So, uh, the process is pretty straightforward because you are not doing all the work. We are doing all the work for you. Okay. Now we are establishing the plan. We’re going to maintain that for you or in compliance with the IRS. Now, uh, the investments that you’re going to make with your 401k, those are your responsibility because remember you’re in the driver’s seat. So you need to understand the rules. They’re not rocket science. They’re pretty simple to understand. Okay. And.
I always tell my clients, look, if you’re not sure about something, don’t do it until you talk to me or someone on my team. Ask the question before. Don’t ask me question after the fact. Ask me before. We are available. Our clients have unlimited access to us. We provide unlimited support. again, once you understand the rules, they’re easy. But maybe in the beginning, there might be a learning curve. And that’s why we’re there.
for you, but ah If you if you are in the position right and that sounds attractive to you You want to be in control of your retirement because you know, frankly Melissa the fact is this ah No one is going to care more about your retirement than you are won’t you agree so And that’s why now I’m not telling you become super expert in investing or real estate and things like that
You can certainly use resources that are available, but at least be the main decision maker. And you can utilize the expertise of maybe a property manager or some investment providers and so forth. uh But don’t just hang up your retirement to somebody else, because they’re probably not going to do as good of a job as you can, because ultimately you care more.
So once you make that decision, you contact our team. You’ll complete an application, just a simple, basic information about you and your business. We’ll take you 10 to 15 minutes to complete. And then my team will create the plan documents for you. It takes a couple of days to draft the documents. Then we’ll send them to you for your signature. You sign it. Now your plan is in effect. The next step is you’re going to do the roll over.

Dmitriy Fomichenko (22:10.385)
or you’re going to fund your solo 401k. And there are two ways to fund it. ah Number one is you can do a rollover from existing retirement plan. So if you have an IRA, ah if you have an old employer 401k or a pension plan, you can move those into solo 401k. Solo 401k will accept rollover from any other qualified retirement plan with one exception. And that one exception is a RAT IRA.
So if you have a Rata array, it cannot be moved to a solo 401k. It can be self-directed too. So you can get control of those files. It just cannot be moved to a solo 401k. So that’s one way. Go ahead.

Melissa Aarskaug (22:54.158)
was gonna ask you made me think when you said that so for the married couple were ones a W two employee and one owns a small business can they have both uh solo K and a 401k that they’re contributing to what while they each okay.

Dmitriy Fomichenko (23:10.443)
Absolutely. Absolutely. And it’s not even about the spouses, right? It’s just, let’s say you, right? You’ve worked for the employer, just one individual. You’ve worked for the employer. You have a 401k to your employer, but guess what? On the side, you flip one property a year, right? A good example of flipping. A lot of my clients in real estate, many of them flip. So if you flip one property a year, guess what? You’re in business. You’re self-employed.
Or maybe you have a real estate license and you do one sale a year. Or maybe you drive for Uber. And in fact, if you just employed and you don’t have any self-employment activity, maybe you should start driving for Uber one time a quarter and generate that self-employment activity to be eligible for Solofar 1K so that you can take advantage of that. uh And you can have.
they employer 401k and you can have a solo 401k as well. You can have multiple 401ks at once.

Melissa Aarskaug (24:10.338)
That sounds like a winner strategy to me, Demetri. I love that example. I wanna get kind of any final thoughts or any kind of extra tips and tricks that we may have missed that you wanna share with our listeners.

Dmitriy Fomichenko (24:26.635)
Yeah, absolutely. remember that you have unlimited investment potential there, unlimited investment options. And uh you want to invest in something that you understand. So I’m not going to tell you what to invest your money. I mean, if you’re comfortable with the stock market, stay where you are. But if you want to invest in something that you have better understanding, again, many of my clients are real estate agents.
you’re in real estate, you help people buy maybe investment real estate, you understand that nature of that business, then you probably will do better investing in real estate. Because look, you can also use leverage. You can use leverage to get advantage and you can buy, you can actually increase the purchasing power. Can do that with the stock market, unfortunately.
and you have no control over the stock market. But with alternative assets, you have much greater control. ah You can minimize the risk too, because look, stock market, we’ve seen that. And we’re talking about the 20 % drop. That’s just a cross, right? If you’re invested in index mutual fund, you experience probably 20 % drop or so. But if you’re investing in individual stock,
You can lose everything. I’m not a stock investor. I’m going to admit that. I have a little bit money in index mutual funds. But I wanted to play with the stock market. Let me just share my experience, which is, limited. I opened an educational account for my daughter. And I just wanted to play with this. So I put foreground in there. And I bought a few stocks. And one of them went almost to zero.
Now granted, didn’t invest much in that. It was the money that I didn’t care about losing. But uh it went almost to zero. I don’t know if it’s ever coming back. So that’s the challenge of this. And I have no control over that. It’s not going to happen with real estate because you have physical asset there that is, you know, there is always demand. And as we’ve seen over time, real estate goes up in value.

Melissa Aarskaug (26:41.644)
Yeah, it made me think when you were mentioning earlier about the stock market going down 20%. I hear that a lot with friends that work for large publicly traded companies, they’re investing a lot of money, because they can buy the stock cheaper at the company they work for. So they they’re dumping a lot of their money into stocks, like you said, that they cannot control. So I think this is a great solution for those who kind of can wear both hats.
We have covered so much today. I love it. Solo Ks are the place to be. For anyone that’s looking to learn more about Solo Ks or connect with you, where can they find you?

Dmitriy Fomichenko (27:24.627)
Well, you can find me anywhere on social media and Facebook and LinkedIn. I have a unique name. So I think you’ll find me there. uh Bigger pockets on Instagram. uh But you can also just go to our website, which is sensefinancial.com. is common sense because what we’re talking about here is common sense. So sensefinancial.com.
And uh you can request a consultation, complimentary consultation with one of our retirement account experts. uh I don’t do those as much now.
But whenever I do a consultation with someone, I always try to put myself in your shoes. I want to understand your situation before I can tell you, you know, maybe give you some recommendation, what makes sense, what doesn’t make sense. Ultimately, it’s your decision. You’re going to have to make that decision because it’s your retirement.
But I’ll give you my recommendation, so feel free to reach out and you can speak either with myself or one of my team members. uh just explore. Start learning. This may or may not be for you now. This might be a good opportunity for you, maybe for the future. But start learning and educating yourself so that when the opportunity comes, you can take advantage of it.

Melissa Aarskaug (28:47.042)
Dimitri, thank you so much for being here and sharing your time with our listeners. That’s the Executive Connect podcast.

Dmitriy Fomichenko (28:57.759)
Thank you so much for having me, it was fun.

Melissa Aarskaug (29:2.434)
That was great.

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