<prompt> Human: I thought about posting this on rexplainlikeimfive but figured I might get better answers over here. Keep politics out of this--I just want to know how this happens.Assistant: I think the ELI5 version is:1 Romney works for Bain Capital. 2 Bain Capital buys a company for 1,000,000. 3 Say one share is worth 1. 4 Bain Capital gives Romney 30,000 shares the limit is 30k, not 5k, for these types of IRAs. 5 The company is restructured and sold at 10,000,000 6 Romneys IRA is worth 300,000 10yr it made in tax-free growth.Human: Sorry, as this may be incredibly basic, but the piece I dont understand is how you get shares of a company that Bain bought into the IRA. Eg. I put cash into my IRA and decide what funds in Vanguard its allocated to. Are you saying Romney skipped the putting cash into the IRA or am I missing something?  <response>: Technically, you could do it too. Youd find a firm called a boutique investment firm that specializes in this sort of thing. For a fee, theyll allow you to put whatever you like in your IRA, even tough to value investment options. You can wager that if you are paying the fee, theyll error on the side of valuing your investments for less money.So you put in some stock or ownership stake in a company that is a long shot with a ton of uncertainty, but you are pretty sure is going to pay off maybe because you are pulling the strings. The uncertainty makes the value of that stock low, and when it does become a success the value is much, much higher than when you put it in. Then you sell it off and use that money to buy similar investments. Rinse and repeat and you can get a lot of money in that account. 