Find out if a self-directed account is right for you:

Why do investors use a self-directed IRA? There are four potential reasons to consider a self-directed account. Some benefits include:
1. Control
2. Alternatives
3. Tax advantages
4. Legacy

Transcript:

In this segment we’re going to be talking about the four most common characteristics for why investors find a self-directed IRA to be beneficial to them. And working with thousands of investors, I’ve found there are many benefits associated with using a self-directed IRA, but what we’re doing is we’ve synthesized this into four common characteristics.

The first is control. Having control over the ability to make the decisions on behalf of your own financial future, to make decisions on behalf of your own IRA, 401k rollover, or other qualified retirement program. So the idea is being able to ultimately make all of the financial decisions.

That leads us to investing in alternative assets. So how to take control. Many investors that are self-directing, truly self-directing into alternative investments, are looking to invest in real estate.

They’re looking to buy rentals, possibly flip properties. Invest in land, invest in tax liens and tax deeds, invest in foreclosures, make loans secured by real estate, buy existing trust deeds or mortgage notes, invest in venture capital, small business startups, private equity investment opportunities, precious metals, cryptocurrencies, also known as digital currency, and a wide array of other alternative investments.

So control and being able to invest in a wide array of other assets that go well beyond stocks, bonds and mutual funds.

And then tax advantages. You’ll learn that with a self-directed IRA or Coverdell Education Savings Account or health savings account or other tax advantage investment account, there are unique tax advantages.

If you do things properly, if you buy a property or you make a loan or you invest in a business startup, as profits flow back into that self-directed IRA, you could potentially mitigate against long term, short term capital gains tax or ordinary income taxes. So again, there are tax advantages associated with utilizing these self-directed investment accounts.

And last but not least, leaving a legacy. And let me give you an example. I have a client, two clients in fact, of mine, husband and wife, and they have over a million dollars in Roth IRA cash and assets.

They have 13 rental properties across their two Roth IRAs producing $110,000 in net tax-free income every single year. And if they leave that Roth IRA or those Roth IRAs to their grandchildren, that could potentially be tax-free money and tax-free assets to their grandchildren. So very, very powerful concepts here. Control, alternative investing, tax advantages, and leaving a legacy….(read more)

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If you’re looking to open an Individual retirement account (IRA) and want more control over your investment decisions, consider a self-directed IRA. Unlike traditional IRAs, which limit your investment options to stocks, bonds, and mutual funds, a self-directed IRA allows you to invest in a wider range of assets, including real estate, precious metals, private equity, and more. Here are some reasons to consider a self-directed IRA:

1. Diversification: With a self-directed IRA, you have the opportunity to diversify your investments beyond traditional options. This can help reduce risk and potentially increase returns over time.

2. Alternative investments: Self-directed IRAs allow you to invest in alternative assets that are not typically available through traditional retirement accounts. This can be particularly appealing if you want exposure to different types of investments or are interested in non-traditional assets.

3. Control over investment decisions: Self-directed IRAs give you more control over your investment decisions, allowing you to choose assets that align with your risk tolerance, investment goals, and personal values.

4. Potential for higher returns: By investing in alternative assets that have the potential for higher returns, you may be able to grow your retirement savings more quickly than with traditional investments.

5. Tax advantages: Like traditional IRAs, self-directed IRAs offer tax advantages, such as tax-deferred growth and tax deductions on contributions. These benefits can help you save money on taxes both now and in retirement.

6. Legacy planning: With a self-directed IRA, you can pass on your investment assets to your beneficiaries, providing a way to transfer wealth to future generations.

While self-directed IRAs offer many benefits, they also come with risks. It’s important to do thorough research and consult with a financial advisor before opening a self-directed IRA to ensure that it aligns with your financial goals and risk tolerance. Additionally, make sure to understand the rules and regulations governing self-directed IRAs to avoid any potential penalties or tax consequences.

In conclusion, a self-directed IRA can be a valuable tool for diversifying your retirement savings and taking greater control over your investments. Consider the benefits and risks carefully to determine if a self-directed IRA is the right choice for you.