Self-Directed IRAs Part I

What makes a self-directed IRA such a great tool for making money? The answer begins with you. If you have knowledge and expertise in certain investments, imagine the returns you could receive in a tax free environment! Self-directed IRAs not only provide tax free profits but also provide asset protection, estate planning and tax deduction benefits.

 

For those who may not know what an IRA is, an IRA (Individual Retirement Account) is an investment vehicle to grow retirement savings. Many people mistakenly think that an IRA itself is an investment however; it’s just the basket in which you keep stocks, bonds, mutual funds and other assets.Self Directed IRA

 

Why should you have an IRA?

  • Did you know that the Social Security Administration’s most recent report states that Social Security will begin to run a negative cash flow by 2017 and by 2040 won’t be able to pay full benefits? With the impending Social Security crisis, it is essential to begin planning for your financial future today.

What is a Self-directed IRA?

  • There’s technically no difference between a self-directed IRA and any other IRA (or 401k). A self-directed IRA is unique because of the additional investment options.
  • Most IRAs only allow bonds, approved stocks, CDs and mutual funds.  A truly self-directed IRA allows those types of investments and notes, real estate, tax lien certificates, private placements, and more.

What are the benefits of a Self-Directed IRA?

  • Not only are there a plethora of IRA benefits (tax-free profits, tax deductions, asset protection and estate planning), but you are also able to invest in tax-free investments and through the power of compounding interest, will create true wealth for you.

Allowable investments for an IRA account – Types of investments that your self-directed IRA can make include:

  • Residential real estate—including apartments, single family homes, and duplexes
  • Commercial real estate
  • Undeveloped or raw land
  • Real estate notes (mortgages and deeds of trusts)
  • Promissory notes
  • Private limited partnerships, limited liability companies, and C corporations
  • Tax lien certificates
  • Foreign currencies
  • Oil and gas investments
  • Publicly traded stocks, bonds, mutual funds
  • Private stock offerings, private placements
  • Judgments/structured settlements
  • Gold bullion
  • Car paper
  • Factoring investments
  • Equipment leasing

 

Self-Directed IRAs are imperative for your financial future and can help you with unexpected expenses. Stay tuned for part two where we will discuss Self-Directed IRA rules, Self-Directed IRA custodians and How to select a Self- Directed IRA custodian.