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A lot of companies of late have advertised to people that you can have a self directed IRA. But the question that you should ask yourself is this truly a self directed IRA?
A lot of companies try to sell clients a self directed IRA as one where the customer gets to pick what type of fund or stock they would like to have in their account.
If you would like growth stocks, you can choose which stocks in the growth sector you would like. If you want mutual funds you can choose from the list that your custodian offers. The Custodian will call this self directed because you are choosing from the list they provide you. This is not what we are looking for!
When you are looking for a truly self directed ira, you want to find one that will allow you to move seemlessly through investments. You want the ability to not only
invest in stocks, bonds or mutual funds but also in such things as real estate. Right now, a lot of custodians will not allow you to purchase land because there is no
profit in it for them.
But you do not want to be limited in your investing tools. You want to have the ability to purchase what you feel is the best opportunity for profit in your account. If
you feel safe with real estate you should be able to buy some. If you see a stock opportunity, you should seize it. This does not mean that there is no place for a
financial advisor.
In fact the opposite is true. You will need financial advice but you do not need to pay them according to the size of your account. Consult them and use their knowledge to make informed decisions.
So to set up a truly self directed account you will need to be able to invest in traditional markets, such as the stock and bond markets, as well as the real estate
market.
You should contact a company that will help you set up your self directed account because there are rules to be followed. This is not an area where you want to take chances. One mistake in setting up an account can cost you all that you are trying to achieve here.
You should not spend more than $2400 to do this but it is important that you have this done correctly. Once you are set up you will be on your way to self directing
your financial future.
Author: Andrew P Schirmacher Jr
