Self Directed IRA Investments

Investing with a self-directed IRA can present some problems for investors. First and foremost the sheer amount of self-directed IRA investment options can be overwhelming. If you thought choosing between 20 different funds for your company 401(k) was a difficult decision, try choosing from the near infinite options offered by self-directed IRAs. Here are some things to consider when trying to figure out what self-directed IRA investments you want to make:

  1. Doing nothing is not a good investment. While you are contemplating your investment options, it is a good idea to at least set up a brokerage account for your self-directed IRA so you can invest in traditional investments like stocks, bonds and so on. If you know you are going to make an investment within the first couple weeks, many custodians offer money market funds for their IRA accounts – so at least you can earn something on your money.
  2. Do you have any specific knowledge or experience that might be useful? For example if you have been successfully investing in real estate for the last 10 years, why not use that knowledge you have gained over the years to help with your self-directed IRA investments?
  3. Remember you can lose your retirement funds if you make a bad investment. There are lots bad investments you can make, and lots of bad people out there that will try to take your money. Self-directed IRA scams are becoming more and more popular as the industry grows. So not only to do have to ensure your investments in general are sound, but any company you choose to invest with should undergo intense scrutiny. If you are nearing retirement, like most self-directed IRA investors, the last thing you want is to lose everything. If an investment promoter is talking about guaranteed returns, or returns that seem too good to be true – run away, and fast.

Here is a list of some of the more common self-directed IRA investments:

Vacant land
Long term rental properties
Vacation rentals
Precious metals
Tax liens/deeds
Businesses
Oil & Gas
Private notes
Peer-to-Peer loans
Foreign currencies