How much risk are you taking with your current retirement plan?

401(k) is one of the most preferred retirement plans in the country. Does that mean it is also the safest one? You can decide that for yourself after reading the next few lines.

401(k) plans were never designed with employees’ best interests in mind, but only to provide retirees with supplementary income. So don’t be surprised if you hear your employer tell you that they were not meant to carry your weight for you in your future. Also, it is quite a difficult job to determine just how much cash you will end up needing after retirement, and the last thing companies have on their agenda is to spend valuable time and resources in figuring it out for you.

Also you might be wondering what happens to a 401(k) plan if the business goes bankrupt. The answer is that the plan will end but you will have the chance to keep the money by rolling it over to another retirement account. You will have to let go of employer contributions but you get to keep all of your own contribution. Granted a 401(k) can be an effective retirement plan, the risks that many people don’t know about can land them in a deep hole.

These are just a few of the risks you take when you opt for a 401(k). You are better off with a self-directed IRA with complete freedom of where you want to invest. And what more would you want with a tax-deferred account? Most people with 401(k)s have no choice but to stick to the traditional forms of investment in stocks, bonds and mutual funds. With a self-directed IRA account, you not only have the choice to invest almost wherever you want including real estate, gold bullion and small businesses, but you also have checkbook control of your account, which proves valuable for conducting on-the-spot and time-sensitive transactions.

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How much risk are you taking with your current retirement plan?

How your Savings Can be protected from a Fluctuating Market

It can be quite a difficult job to make investment decisions, even when the economic conditions are healthy. But with the fluctuations going on in the market these days, people wonder whether or not it is really worth it to invest using a self-directed IRA. Keeping in mind how the market has been behaving over the past few years, there can’t be any guarantees no matter what investment strategy you go for. The best we can do for ourselves is to make an informed decision using the information we have at hand.

A self-directed IRA is possibly the most preferred option for those confident folks who want to decide their own financial future and take full control of their investment strategies. Many people do not know this, but according to the rules laid out by the IRS, self-directed IRA account-holders can choose to invest in businesses that go far beyond the stocks, bonds and mutual funds, that are offered by big brokerage companies. Whether you want to invest in precious metals, structured settlements or real estate, you can be your own boss because instead of making a list of allowed investments, the IRS has listed a few prohibited asset types.

It is considered a good idea to make diversified purchases using self-directed IRA. This means that you should invest in not just one but a few asset types, keeping in mind the fluctuations in prices. For example, if you have invested in real estate, an LLC and gold bullion using your self-directed IRA, you have a better chance of weather the fluctuation that hits one of those assets. Even if you lose some money on the LLC, you can make up that same amount or even more from the real estate that you invested in.

Remember to study up on your investments before making them, because you wouldn’t want to turn up for an exam you have not studied for. Gain enough knowledge about the market rates of what you are investing in, so that you can maximize your returns.

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How your Savings Can be protected from a Fluctuating Market

How to Make Efficient Investments without Spending a Fortune on Custodian Fees

According to the Internal Revenue Service regulations, for conventional IRA account holders, a custodian such as a financial institution or a trust should hold the assets on behalf of the account owner. This part of the contract adds quite a few costs that can accumulate quickly and eat into your profits if you are not careful. In today’s financial environment, where interest rates are largely on the lower side, it is important to save every bit of cash wherever necessary. One thing that the typical investor today can certainly do without is the custodian fees.

With a self-directed IRA, you can not only invest in assets other than the traditional stocks, bonds and mutual funds, but you also do not need a custodian to conduct transactions on your behalf. Instead of paying your custodian, say $25, for every time you want to pay the lawnmower or the plumber for servicing your real estate, you pay a flat annual fee and make as many transactions as you want and keep as much money as you want in your self-directed IRA. It is important to remember, however, that if you want to withdraw money from your self-directed IRA before reaching the retirement age of 59.5, you will have to pay a 10% penalty.

You can maximize your chances of earning big profits by diversifying your investment portfolio using a self-directed IRA. As mentioned above, you can use your self-directed IRA to invest in assets beyond stocks, bonds and mutual funds. The more asset types you invest in, the higher will be your chances of earning big returns, while at the same time cushioning you from if you are hit by market fluctuations. In other words, it is a win-win situation for everyone: you, your financial institution and the IRS.

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How to Make Efficient Investments without Spending a Fortune on Custodian Fees

How a self-directed IRA can make you money from real estate investments

A self-directed IRA is a retirement plan that lets its owner invest in assets other than stocks, bonds and mutual funds, unlike the more traditional retirement accounts like the 401(k) and the simple IRA. Assets which are most preferred by self-directed IRA investors include real estate and gold bullion.

The types of real estate investments in a self-directed IRA include unimproved land, multiple-occupant dwellings, foreclosed properties, mortgages, rental houses and office buildings. As is the case for most investments, it helps to have some experience with the market that you are planning to invest in. When you use your self-directed IRA for the purpose of investment in real estate, you are essentially lending money to yourself to pay for the real estate, and the income generated from the property go back to your account so the loan can be repaid.

Rates of loans when lending from a self-directed IRA can be a lot higher from the more conventional lending sources like banks and mortgage companies. Don’t be surprised if you see rates in the 12% to 18% region when borrowing from an IRA.

Just follow these simple steps to start investing in real estate using a self-directed IRA:

1. Start up a self-directed IRA account.

2. Transfer funds to your self-directed IRA account either by cash or from another IRA.

3. Make the investment, if you have not hired a custodian, to conduct transactions for you, in which case you will have to direct them to take this step.

After the opening of your self-directed IRA account, you can then transfer the agreed upon amount of money for the investment. The next step is merely a formality in which the two parties sign an agreement. Your IRA now holds the real estate.

It is important that you study up on IRS rules related to self-directed IRA because the last thing you want is fall in a hole as a result of some careless investments you yourself made.

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How a self-directed IRA can make you money from real estate investments

Why a self-directed IRA is better than a 401(k)

Self-directed IRA is a retirement plan that has been gaining quite some popularity over the past few years. This plan has existed for more than 30 years but makes up only 1% of the six-trillion-dollar retirement market. However, over the past few years, the growth rate has exploded at 25% annually. The reason for the small share of the self-directed IRA funds in the retirement market is a not so well known IRS code, 4975, which acts as the basis which has motivated self-directed IRA account holders to go this way.

There are many reasons why the self-directed IRA is preferred over the traditional 401(k) by investors. Listed below are a few of those reasons.

1. You have the option of having direct access to your funds in your self-directed IRA. This means that you do not have to hire a custodian to conduct transactions on your behalf. This is particularly useful for one-the-spot and time-sensitive investment opportunities.

2. You can invest in whatever you like, from gold bullion to real estate to businesses that you can control. Unlike most of the other retirement plans, you can look beyond investment in stocks, bonds and mutual funds.

3. You can use commodities to keep your wealth protected from the frequent market fluctuations that we see today.

4. If you already have a retirement plan like a Roth IRA, or a 401(k), you can transfer those funds to a self-directed IRA and you will not be charged a single cent for this rollover. Also, you will not need to sell any of the assets that you currently have control of.

If you are a self-directed IRA account holder, you can invest in any area that you have some knowledge about. For example, if you know a thing or two about the real estate market, you can put that knowledge to good use and increase your returns.

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Why a self-directed IRA is better than a 401(k)

"Checkbook Control": Make your own Investment Decisions without a Custodian

Most of the conventional retirement plans require you to hire a custodian, which could be a financial institution or a trust, to conduct transactions on your behalf.

There are both advantages and disadvantages of this regulation but the question you need to ask yourself is that “is it really worth it to pay someone who has custody

of your hard-earned money?” Yes, if you do not know too much about the current market situation and need someone to make the difficult decisions for you, you are

probably better off with a custodian.

However, if you are confident enough to keep the money in your own pocket and invest where you see fit, then a self-directed IRA is what you are looking for. With a

self-directed IRA, you can invest in practically anything you want, whether it is real estate, precious metal or an LLC, and you can make your transactions whenever

you want to without the need to call anybody for verification.

The importance of such an advantage can be illustrated using an example. Suppose you are about to close a potentially lucrative investment deal but you only have a few

minutes to make your decision before someone else jumps in and grabs it. You are calling your custodian for their nod but he appears to be busy and is not taking your

call. You have no choice but to let go of the deal. Now imagine the same scenario except that you are the owner of a self-directed IRA. With a self-directed IRA, you

are the custodian of your own money and you alone have the power to make the decision. You simply whip out your checkbook, sign the check and the deal is done.

One of the other advantages you get over traditional retirement plans is that with a self-directed IRA, there are no asset-based-holding charges or transaction

charges. Instead, a self-directed IRA charges a fixed annual amount regardless of how many transactions you make or how much money you have in your account.

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"Checkbook Control": Make your own Investment Decisions without a Custodian

How You Can Protect your Savings from Economic Fluctuations

Market fluctuations are one of the deciding factors that investors take into account before staking their money in any business. Over the past few years, we have seen the values of stocks go down in value. Just take a look at Bear Stearns and Lehman Brothers. All sorts of things have been happening that are contributing to negatively affecting the markets. In a situation like this, one can’t blame the investors if they are extra cautious with their investment strategies.

If you are a 401(k) investor, then you have probably seen the value of your assets go down quite fast over the last 12 months. This is because the assets in a 401(k) account are almost always invested in the stock market. This means that the value of the assets in the account will go down with the declining values of the stocks. A great alternative for you would be a self-directed IRA. If you choose a self-directed IRA as your retirement plan, you can take a lot more control on your wealth, compared to the other plans.

The wealth in your self-directed IRA account will be unaffected by how the stock market is doing. You will have the ability to invest in whatever business that you choose. You do not even need a custodian to conduct transactions from your self-directed IRA. You might need the help of a counselor for the transfer of your assets from a 401(k) to a self-directed IRA, but that would be pretty much all. From that point onwards, you will have complete control of your wealth and write and receive checks under your own name.

So whether it is real estate, rental properties or deeds of trust that you want to invest in, it doesn’t matter because the choice is yours if you have a self-directed IRA.

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How You Can Protect your Savings from Economic Fluctuations

What you should know about self-directed real estate investments

Real estate investment is slowly but surely becoming one of the more preferred areas of investment by folks who look forward to their retirements. According to statistics, only 2% of all retirement funds in the United States are invested in real estate. However, this situation is changing as the self-directed IRA retirement plan is becoming more and more popular. With a self-directed IRA account, you have the ability to directly invest in pretty much any non-conventional assets beyond stocks, bonds and mutual funds. There is a far greater amount of flexibility in this retirement plan with plenty more to choose from than the traditional 401(k) or the simple IRA.

The owner of a self-directed IRA account has the authority to make their own investment decisions and not depend on decisions made by the financial institution. Before making an investment using a self-directed IRA, you should first choose a qualified trustee or custodian to hold your account. The job of this person would be to provide administrative services, like maintaining records and exchanging paperwork with the IRS. They will also let you know if there are any limits that apply to your account.

As mentioned above, if you are the owner of a self-directed IRA account, you can choose what asset types your money should be used to invest in. Your investment options will not be limited to traditional asset types like stocks, bonds and mutual funds. So if you think you have some knowledge about the current real estate market, you can use it to your advantage and take your pick from multi-unit homes, condominiums, apartment buildings, or improved or unimproved land.

Another great advantage of the self-directed IRA retirement account is checkbook control. You can make purchases and conduct transactions as and when you please by writing checks on behalf of your self-directed IRA. The transactions will be conducted through the LLC that the IRA owns.

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What you should know about self-directed real estate investments

What you should know before deciding on a retirement plan

You have probably noticed the rising trend of choosing self-directed IRA as a retirement plan. Sure enough, statistics point to the increasing popularity of the self-directed IRA account even though it makes up a small percentage of the total funds in retirement accounts across the country. You may also have heard more than once a couple of pensioners going on about how they are tired of the traditional investment methods like stocks, bonds and mutual funds. Investments in gold bullion, real estate and cattle farms are among the options on the table when you are the owner of a self-directed IRA.

There is really nothing to lose with a self-directed IRA. You can experiment on a new investment strategy or just buy some shares from a small business that you think is resourceful; all that from a tax-deferred account. There are some rules that you have to work with, mostly in the real estate area – like you can’t deal to your own family or to yourself – but that is a small price to pay for the freedom to invest where you like.

Just like with any new job that you start, you have to be careful for a few days until you start getting the feel of things. Many people misunderstand the meaning of investing freedom and go on a spending spree only to end up with regret. The main culprit here seems to be the vast amount of choices one has after opening a self-directed IRA account. But you can use this to your advantage and make some educated guesses while using some of your own knowledge to maximize your returns.

You do of course have the option of hiring a custodian or a legal adviser to help you out in making your decisions if you are not confident enough to make them yourselves. At this point, your question shouldn’t be if but when you are opening your self-directed IRA account.

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What you should know before deciding on a retirement plan

5 Things You Need to know about Self-Directed IRAs

It doesn’t matter what retirement plan you decide is the best for you, whether it is a 401(k) or a self-directed IRA, you need to know the merits and demerits of each one so you can be satisfied with your decision. The self-directed IRA is one of the fastest growing retirement plans and there are plenty of reasons for it too. But that does not mean that you don’t have to be careful before opening a self-directed IRA account. Listed below are a few things that you should know about the self-directed IRA.

1. You can purchase almost anything using a self-directed IRA account. With the more traditional retirement accounts, your options are limited as you can only invest in stocks, bonds and mutual funds. With a self-directed IRA, you can take your pick from gold bullion, real estate, a small business, or pretty much anything. The only prohibitions are life insurance contracts and collectibles.

2. Almost anyone is eligible for the opening of a self-directed IRA account. There is no age or income limit (upper or lower).

3. You are allowed to make investments without any lower limits to your account balance. This means that you just have to make sure you have enough money in your account for the investment you want to make. You don’t have to worry about keeping a minimum balance to keep your account alive.

4. The income and profits generated in a self-directed IRA are tax-exempt until a distribution is taken.

5. You are the only custodian of the funds in your self-directed IRA account. So unlike most of the other retirement plans out there, you have “checkbook control” of your money and conduct transactions as and when you want. You will not have to wait for someone to pick up their phone just to authorize a time-sensitive transaction.

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5 Things You Need to know about Self-Directed IRAs

Does a Self-directed IRA have Extra Advantages over the Traditional IRA?

It is always a good idea to plan ahead for the future. It is quite difficult to predict where you are going to be in a few years after your retirement. It may be an equally difficult decision to make to select which retirement plan to go for to save up for a comfortable post-retirement life. Among the options available to most people are the traditional IRA, the 401(k) and the self-directed IRA. In this article, we are going to discuss whether you would be better off with the traditional IRA or a self-directed IRA.

First of all, it is important to understand the difference between the traditional and the self-directed IRA. The latter is essentially a specialized for of the former. The most well-known difference between the two is that a custodian is required for the simple IRA and your only options of investment are the conventional brokerage accounts (bonds, stocks and mutual funds). With the self-directed IRA, on the other hand, you can make your own choices on the areas where you would like to invest, including bonds, stocks and funds.

Many people consider it a risk to open a self-directed IRA account because of the possibility of losing assets by investing in an unstable business. However, such a situation can easily be avoided by you if you know a thing or two about where you are about to invest.

The catch is that the money put into a self-directed IRA cannot be withdrawn until the account-holder reaches the retirement age (59.5 years), after which the withdrawals will be subject to federal taxes. Transactions that take place within the account (profits, interest and dividends) will not be affected by any taxes. If you decide to withdraw the money from your self-directed IRA account, you will be charged a 10% fee.

Another difference between the traditional and the self-directed IRA is that the account holder cannot use the assets in their self-directed IRA for personal benefit. This means that if you are the owner of a self-directed IRA and have invested in real estate, you or your lineal family members cannot live on that property.

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Does a Self-directed IRA have Extra Advantages over the Traditional IRA?

Which is better: 401k or a self-directed IRA?

The self-directed IRA and the 401(k) fall among some of the most popular retirement plans in the country. For someone who is new to the concept, it can be quite a difficult decision to make because you never know where your choice will land you after you retire and the last thing you would want at that stage is to regret a decision you made in your early years. So the best thing to do is to study up and make the right choice.

With a self-directed IRA, you will have direct control over the funds in your account which means you do not need to hire a custodian who will conduct your transactions for you. You will not need to pick up the phone and make some calls every time you want to make a withdrawal or find a place where you would like to invest. You would do away with these luxuries if you opt for a 401(k).

Investing tax-free in real estate is considered impossible by some people. With a self-directed IRA, it is not only possible, but easy as 1-2-3. You may be able to find a solo 401(k) with which investing tax-free in real estate could be possible, but the hidden charges that would be incurred every few weeks would cost you a fortune. The self-directed IRA program has been approved by the IRS and was designed specifically for small-business-owners.

By going with the self-directed IRA, you will not only firmly secure your future and ensure a convenient post-retirement time, but also have the chance to invest in whatever business that you please increasing your odds of winning big time. Just remember to keep your common sense intact at all times and to not use your new-found freedom to invest in trying to revive a dying business. Other than the odd silly thing that people tend to do while handling large amounts of money, you should be doing fine with your self-directed IRA.

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Which is better: 401k or a self-directed IRA?

Why a Self-directed IRA is a Top Retirement Option

Individual Retirement Arrangements (IRAs) were started in the 1970s and have been around ever since. However, the focus of most companies has been firmly on market-dependent aspects like stocks, bonds and mutual funds. Because of the heavy fluctuation of the market, investors are looking for options which they can have more control over, like a self-directed IRA. A self-directed IRA is a retirement plan in which the account holder does not need a custodian to conduct transactions and has full control over all his assets. In other words, it is the perfect way to plan for your retirement.

Adam Bergman is a tax attorney and partner at a New York and Florida IRA firm. According to Adam, public interest in self-directed IRA has sky-rocketed over the past few years. There are many theories as to why this has happened but the most widely accepted one is that after the financial decline of 2008, people started to look for alternative ways to invest. After five years, the self-directed IRA has stood out as the most preferred retirement plan among them all.

With the way Wall Street had been doing, people had to stop depending on it and start looking to invest in something they had more knowledge about or were able to control. With a self-directed IRA, they had the option to invest in whatever they chose to, whether it was a friend’s business, gold, real estate or live cattle.

Presently, more than 45 million IRAs are there in the United States holding approximately $13 trillion in retirement assets. As the awareness of self-directed IRAs is spreading fast, more and more people are expected to join the club and according to estimates made by financial analysts, a further $2 trillion are expected to enter the self-directed IRA industry over the next two years.

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Why a Self-directed IRA is a Top Retirement Option

3 Reasons to Invest in Real Estate Using your Self-directed IRA

The recent difficult economic times have prompted people to adopt non-conventional methods of investment and saving up for retirement. The self-directed IRA option has been taken by many people for the purchasing of non-traded assets like real estate. Unlike other retirement plans, in which money is invested in return only for paper securities, the self-directed IRA, which is offered by some big-time firms like Equity Trust and The Entrust Group, allows you to invest directly in tangible assets like real estate and gold bullion or any other business of your liking.

The real estate is considered one of the safest markets to invest in because of its stability and almost guaranteed profits. Listed below are three reasons why you should invest in real estate using your self-directed IRA.

1. With a self-directed IRA, you are the custodian of your own account, you will have a free hand to make as many transactions as you want with no need to worry about losing money on transaction and custodian fees.

2. It is called a self-directed IRA for a reason. You are the director of your account and you have all the decision making power. You don’t have to take permission from any trust, financial institution or custodian every time you want to conduct a transaction.

3. The money in your self-directed IRA is well-protected from creditors and litigators because your account is set up by a limited liability company (LLC). Without the LLC tag, your retirement assets are left vulnerable to frivolous lawsuits.

With a self-directed IRA, you have a wide range of options in which you want to invest. Of course, you can always invest in the good old-fashioned stocks and mutual funds, but in addition to this, there is real estate, gold or pretty much any business that does not breach the rules laid out by the IRS (which is almost all of them).

It goes without saying that common sense should be used whenever dealing with matters involving money, especially large amounts of them. The laws regarding the self-directed IRA are complex and a little carelessness can lead the IRS to ask you some tough questions. Remember that you cannot take advantage of your self-directed IRA funds until you retire. If you are found living in a house you bought using those funds, your IRA account status could be invalidated.

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3 Reasons to Invest in Real Estate Using your Self-directed IRA

Top 5 reasons why you should start a self-directed IRA

Are you thinking about starting up a self-directed IRA account? This is not the time to think, because every second you are wasting, you are letting go of cold hard cash that would be available to you after the age of retirement. A retirement account is designed in a way that ensures the owner lives a luxurious post-retirement life without being dependent on anyone else. You probably know of most of the benefits that you stand to gain after signing up for a self-directed IRA, but here is a list of a few reasons anyway.

1. You want control of your own money

In a self-directed IRA, you can choose to take possession of the checkbook that is linked to your account. This means that you will have full control of your money and you can just sign a check and conduct the transaction the moment you see a potentially lucrative opportunity of an investment. An additional advantage of this feature is that you wouldn’t have to pay a transaction fee to your custodian every time you conduct a transfer for your brand new purchase.

2. You want to be able to borrow money from your retirement account

Contrary to popular belief, it is possible to borrow money from your self-directed IRA. You will have to pay a small penalty because the purpose of a retirement account is to save money for the age of 60. If you want to withdraw some money from it before reaching that age, it stands to reason that you would have to pay a fee for it. Besides, the many advantages that come bundled with a self-directed IRA easily outweigh the few disadvantages.

3. You want to spend your golden years in a good amount of comfort

Once again, the reason one opens a retirement account is the hope to spend the golden years of one’s life in a good amount of comfort without being dependent on anyone. With other retirement accounts, you will retire with enough money to feed yourself and maybe one other person for a couple of decades. If you go with a self-directed IRA and hit the right notes when presented with investment opportunities, you can live your remaining years quite luxuriously.

4. You want to invest in whatever you want

With the other more traditional retirement plans, you can only invest in stocks, bonds, mutual funds, treasuries. With a self-directed IRA, the sky is the limit for you to make investments. If you think you can earn money from it, you can use your self-directed IRA to buy it. Technically, you can even invest in something that wouldn’t return you any profits, but you wouldn’t want to do that, would you now? There are a few restrictions that the IRS has put in place, however, so you would want to watch out for them.

5. You want to make tax-free investments

The advantages just don’t seem to stop, do they? This can’t be said any simpler: you don’t pay a single cent in taxes when you use your self-directed IRA to make investments.

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Top 5 reasons why you should start a self-directed IRA

5 Secrets you don’t know about self-directed IRAs

Before deciding on a certain retirement plan, you should know about all the options available to you in great detail and also talk to a few people about it. You could be wasting precious time and money by opening up the wrong retirement account and by the time you realize that, it could be too late. The reason your financial adviser hasn’t talked to you about self-directed IRAs could be that they are afraid to lose your business or it could be that they simply do not know about it. Here is a list of facts about self-directed IRAs.

1. You can invest in non-traditional assets

With the more common retirement accounts including the 401k, you can only invest in stocks, bonds and mutual funds. The likes of these items are the only ones that are allowed by the Internal Revenue Service (IRS) for account-holders of the popular retirement accounts. Using a self-directed IRA, you have the option of investing anywhere that you think will fetch you a good profit.

2. You can borrow money from your self-directed IRA account

It is a common misconception that the IRS does not permit borrowing of money from an IRS account. You are allowed to borrow non-recourse loans within a self-directed IRA. All this means is that in the event of a foreclosure the person who lent the money will the right to take custody of the property by which the loan was initially secured.

3. You can invest with the help of private lenders

Most people stop investing when they run out of funds and the thought of borrowing money to keep the profits coming does not even cross their minds. You are fully permitted to borrow money from private lenders to continue buying real estate and pay part of your profit to the lender as interest. As mentioned in the previous point, even if foreclosure is filed by the lender, you are only liable to give back the property and not a cent more.

4. You can have control of your own funds

Unlike other retirement accounts, you can have control of your own money. The common term for this privilege is “checkbook control”. This means that you do not have to wait for your custodian or broker to approve of your transaction. This feature is especially helpful for time-sensitive investments where the window of opportunity is only open for a few hours. Another advantage of this is that…

5. You don’t have to pay transaction fees

Because you are making transactions yourself and are not asking anyone else to do it for you, you don’t have to pay for it either. Custodians deduct transaction fees after approving a fund transfer in retirement accounts where the account-holder is not given control of their money. The transaction fee may appear small at times but if you are an avid investor, those fees can pile up quite quickly. If, however, you do prefer your custodian to review transactions before making them, you have that option too with the self-directed IRA.

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5 Secrets you don’t know about self-directed IRAs

How To Save For Retirement by Investing in a Business

When it comes to the options available for opening a retirement account, many people find themselves clueless as to which particular one to go for. One of the lesser known but even more efficient retirement plans is the self-directed IRA. You can use this account for the securing of your post-retirement future by investing in and gaining profit from pretty much anything you want. This is not an illegal offshore scheme either; in fact it is actually encouraged by the Internal Revenue Service (IRS). According to the guidelines laid down by the government body, investors who own a self-directed IRA are entitled to invest on a tax-free basis in anything they want (barring a few collectibles and alcohol among other items).

If you think you can predict the market for a certain land area, go ahead and buy some real estate with your self-directed IRA, and enjoy with tax-free returns. If you feel more comfortable investing in small businesses, whether or not you own them, you can do that too with a self-directed IRA.

A business owner knows his own business quite well and can make accurate predictions when the profits will start flowing in. This can be a useful strategy for investing with a self-directed IRA. However, a few things have to be remembered before diving into these affairs. As mentioned above, there are a few items you cannot use your self-directed IRA account to deal in. Here is a longer list:

•    Collectibles

•    Antiques

•    Rugs

•    Art

•    Metals (except gold, silver and palladium bullion)

•    Stamps

•    Gems

•    Coins (except some US-minted ones)

•    Alcoholic drinks

Before starting a business that you want to fund using your self-directed IRA, you will want to make sure that you are not buying or selling any of the above-mentioned items. Note that you should take a look at the IRS regulations for the complete list. Regardless, it is unlikely that you would be dealing in anything prohibited other than the items mentioned here.

Another thing that you would want to watch out for while using your self-directed IRA to invest in your business is that you can’t treat that business in the same way as other entities controlled by it. For example, if you want the company under your self-directed IRA hire your company to smooth out the woodwork, even if you pay market rates, then forget about it because this is not permitted. You can’t even hire, borrow from, sell to, or lend money from anyone in your family. Exactly the same applies to your financial advisers and lawyers and their businesses.

You should know that you can contribute only up to $5,000 to a self-directed IRA within any given year. The limit is increased to $6,000 at the age of 50, but this is still considered a small window for bringing in new capital. If your business happens to need some additional capital, you will have to pay for everything using existing self-directed IRA assets.

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How To Save For Retirement by Investing in a Business

3 Incredible, yet true facts about self-directed IRAs

We are all worried about our post-retirement years. We don’t know whether we will have the money to go on that dream vacation that we plan for all our lives. We don’t know whether we will even have someone to look after us in case we start losing it. Thankfully, there are a few ways by which we can ensure that we spend our golden years in comfort. Retirement accounts are made for people who want to save up money all their working lives so that they have some serious cash by the time they retire. But there are plenty of options available and it is hard to decide which retirement account to go for. Here are three facts about self-directed IRAs and they should help you decide which account to get.

1. You can invest in real estate

Did you know that it is not only possible, but actually encouraged by the Internal Revenue Service (IRS) to invest in real estate using a retirement account? Using a self-directed IRA, you have plenty of options for investment and you can really look beyond the stocks, bonds and mutual funds that only return you a small margin of profit. There are plenty of advantages of a self-directed IRA, but it is hard to find a firm that offers a truly self-directed IRA. Many firms will just give you checkbook control and not allow you to invest in anything other than the traditional assets, so you will really have to search for the right broker for yourself to be able to invest in real estate.

2. You are allowed to use private lenders

If you have bought a lot of real estate and emptied your own self-directed IRA or have reached the upper limit, you don’t have to stop. You can continue investing and earning profits by borrowing money from private lenders and putting it into your self-directed IRA. You can pay them some interest from the profit you make and it is a win-win situation for both you and the lender. Using the money of private lenders, you can make an unlimited number of deals for an unlimited amount of money.

3. You have “checkbook control”

Even though you will not have physical custody of your money in a self-directed IRA, you will have full control with the help of a checkbook. Unlike other retirement plans, you wouldn’t have to call up your custodian or broker and ask them to approve a payment that they want to make. You can use your own decision-making skills and pay whomever you want for the purposes of investment. An added bonus of this feature is that you wouldn’t have to pay transaction fees either.

After knowing these facts about self-directed IRAs, it is important to remember that you should be careful before handing your money over to a custodian. You would want to make sure that they are qualified for the job. Don’t hesitate to contact the relevant authorities in your state for information.

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3 Incredible, yet true facts about self-directed IRAs

The Unbelievable Truth about Self-Directed IRAs

So you have finally decided to get yourself a retirement account so you can spend your golden years with a good amount of money at your disposal. But you are feeling a little bit overwhelmed by the number of choices available to you. You can’t seem to decide between a 401k that your employer has offered to set up for you and a self-directed IRA that you have just come to know about. Well, the answer depends on what type of person you are. Are you a risk-taker who likes to make adventurous decisions and enjoy the equally profitable rewards? Or are you the boring type of person who doesn’t like changes in his life and is happy spending every week exactly the same?

Assuming you are the second type, you should go for the self-directed IRA. You will have more control over your money and you will also be able to invest in non-traditional assets like real estate and gold bullion. With a 401k, you can only gain small monthly profits by investing in stocks, bonds and mutual funds.

Another thing you probably didn’t know about self-directed IRA is that it is remarkably easy to set up if you get help from a firm that specializes in the opening of these accounts. An investor new to this business will no doubt find plenty of difficulties while trying to do all the work on their own.

The self-directed IRA is not the most popular choice because most people do not like to take too many risks while making investment decisions. They like to play it safe and stick to the stocks, bonds and mutual funds through their 401ks. Another reason is that the self-directed IRA is perfectly legal and is not only permitted by the IRS, but investors are also encouraged to open by the government body to open this retirement account. There is a lot for the account-holders to gain through the self-directed IRA and not so much for brokers. This is why a large amount of advertising is not deemed a necessity.

The self-directed IRA account is opened up with an individual broker rather than with a mutual fund company. The amount of control you will have over your self-directed IRA can vary. Some brokers misuse the term “self-directed” and give their customers a traditional IRA under the guise of a self-directed IRA. This means that the account-holder will not have too much control of their money and the broker will need to be contacted every time a transaction is to be conducted.

With a true self-directed IRA, you would want be handed the checkbook for your account so that you can pay for potentially lucrative investment opportunities on the spot. Also, you will want to be able to invest in anything you want (barring collectibles, alcohol and some other stuff) and not just stocks, bonds and mutual funds.

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The Unbelievable Truth about Self-Directed IRAs

Top 5 Secrets that Can Make Your Retirement Portfolio More Effective

Saving for retirement is both scary and empowering. It can feel great to see your retirement accounts growing dramatically and thinking about how you will be covered in the years to come, but it’s important to realize that mistakes are easy to make on the road to retirement. These five secrets will help you make the most out of your IRA account so that you have plenty of money left over when it is time to settle down to a retired lifestyle.

Make a more lucrative investment decision and you will make more money for your retirement account. When put in terms as simple as that the advice doesn’t seem very helpful or difficult to follow along with. The fact of the matter is that you have a lot of freedom over what you invest in. It is up to you to make the right investment decisions so that you are maximizing your rate of return on your investments.

The fees that you pay to keep your self-directed IRA account running probably don’t seem like a big deal, but over the course of the account they can make a massive difference on the amount that you save up. While choosing a custodian to work with has him give you a list of the fees that you will be subjected to. Get clarification about any fees that you don’t understand and pay attention to the amount that each for the fees is as well as what they are for. Compare these fees with those charged by other providers and it won’t take long to weed out the poor options.

One of the best ways to make your retirement fund more effective is to get help from a professional to choose more lucrative investments. It makes sense to get information from someone more knowledgeable about investing than you are to do better with your money when your investment choice makes such a dramatic difference on how much money you make.

No matter how good your investment is initially there is always a chance that things will get worse over time. This is why you have to diversify your money between different options. The best way to diversify your money is to make investments in different industries as well as investments of different types. You can invest in real estate, precious metals, stocks, bonds, foreign currencies or just about anything else, but make sure you invest in a variety of things. The greater your variety is the more likely you will be to maintain a profitable investment portfolio within your IRA account.

The last way to get the most from your retirement account is to contribute as much as you possibly can to it. Do whatever you can to max out your annual IRA contributions and you will have more money in your account to accrue interest over time.

Use these five secrets and your retirement fund will swell in size. It’s not easy to perfect these different steps right away, but as long as you keep them in mind you should be able to improve the performance of your account as you go along.

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Top 5 Secrets that Can Make Your Retirement Portfolio More Effective

Self Directed IRA Risky or Smart?

If you ask a bunch of investment professionals whether you should be investing in self-directed IRAs you are going to get mixed results. This is because some think it’s a great idea and others think that it’s just too risk for the average person to do on their own. I happen to agree more with the latter set of investors, but that doesn’t mean that a self-directed IRA would be a risky decision for you.

Even though I believe that the average person would be hard-pressed to earn a good return on an investment they make in a self-directed IRA, that doesn’t mean that you’ll be. If you are an above-average investor or you are willing to work hard enough it is very possible to earn a great return off of investments that you choose yourself.

The first thing that you should do when trying to decide if this is the right path for you is to think about your skill set and how that helps to make you a better investor. If you have a very good understanding of any particular industry that’s a great place to start. For instance if you worked as a contractor all your life and know a great deal about houses you may be able to build your retirement account investing in real estate. If you worked at a bank denying or approving loans for new businesses you may have the knowledge required to invest in new companies who need capital to grow. The more applicable knowledge that you already have, the better your odds are of being successful with self-directed IRAs.

You also have to consider how hard you are willing to work to make your investments pay off and how much time you can commit. If you have all the time in the world to learn about a new type of investment, there is no reason that you can’t be successful with it. However, if you can only put in an hour or two a week learning new concepts and studying you will have a hard time achieving the level of expertise needed to make good investment decisions.

Hopefully now you have a better idea of whether or not investing in a self-directed IRA is a good move for you. For many people it is a bit risky, but if you have faith in your ability to choose a good investment then there is no reason to believe that you can’t earn a sizable return for your retirement account.

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Self Directed IRA Risky or Smart?

Inside Secrets of the Self-Directed IRA

If you are worried about spending your post-retirement life, or the golden years of your life as they call it, comfortably and worry-free, then you are not alone. It is perfectly normal to worry about the future, especially in the economic situation as it is. But it doesn’t have to be this way. With a self-directed IRA retirement account, you can say goodbye to those worries, and rest assured that your post-retirement life will not only be comfortable but luxurious. It all depends on how good an investment decision maker you are. Confused? Let me explain.

Did you know that you can invest on anything on a tax-deferred basis using your retirement account? Well, not just any retirement account, but specifically a self-directed IRA. That’s right, one of the secrets of this retirement plan is that you are allowed to invest in any business, real estate, stocks, bonds and mutual funds. In fact, anything that seems profitable to you, you are allowed to invest in it, as long as it is not alcohol or collectibles.

The reason you didn’t know about this is that this retirement plan, for obvious reasons, is not as publicized as the traditional ones. In fact, many people think that the 401k is the only retirement account available because that is what they heard. Not too many people bother to research into this.

Another well-kept secret of the self-directed IRA is that you have the option to have “checkbook control.” This means that it would be you, not your custodian, who would decide who and when to pay. This is especially useful for time-sensitive opportunities, where you can just sign the check and conduct the transaction. This also means that you don’t have to pay the absurd transaction fees that other retirement account holders have to pay.

Many people also believe that once funds are transferred into a self-directed IRA, you can’t withdraw or “borrow” from it until you reach the age of retirement. You can certainly borrow from your account, though you would have to pay a small percentage of the money you want to withdraw. Remember that depending on the custodian, there is a fixed annual fee that cover the maintenance charges of the self-directed IRA account.

Now that these secrets about the self-directed IRA have been uncovered, is there still a reason not to start one?

To Learn about: Closely-Guarded Secrets Big Financial Institutions Don’t Want You to Know About Retirement, Click Here

Inside Secrets of the Self-Directed IRA

The Truth about Self-Directed Retirement Accounts

Interest rates have been at an all-time low recently and that has many investors looking for new ways to generate money for their retirement accounts. One of the most talked about investment options today is a self-directed retirement account. Many people say that these accounts are risky and that they make bad investments. The truth is that you can make money using this investment but you have to do it carefully. Learn more about what is involved to see if it is right for you.

Most people are quick to judge a self-directed IRA as being a very risky move because they have probably heard a horror story about a friend who lost his whole retirement making a poor investment. This is definitely a possibility, but that doesn’t mean that good investments can’t be made. That’s like saying that the stock market is a poor way to invest your money because people have lost their entire savings investing in the wrong company.

In order to make self-directed retirement accounts pay off for you, you need to make a good investment. The investment could be in real estate, in a new start up that you believe in, or even in your neighbor’s business. Just make sure that you do plenty of research about the investment before you commit to it and only invest if you are confident that it will pay off over time.

To be successful with a self-directed IRA or SDIRA you should have a lawyer working with you and you need a good custodian to manage your money. The custodian is necessary to make this type of investment at all, the lawyer is helpful to keep you out of trouble. Since this type of investment is so free and open there are lots of rules and regulations around it. If you aren’t very well-informed you could break one of the rules and be hit with a stiff penalty that crushes your retirement fund.

As long as you do your research and hire a good lawyer to help verify your investment plan you shouldn’t have a problem expanding your retirement account with a SDIRA. The next time someone says that handling your retirement funds on your own is dangerous; just tell them that it is only as dangerous as the investment you make and that you do your research before risking anything.

To know about, the 3 Facts You Didn’t Know About Self-Directed IRA, Click Here

The Truth about Self-Directed Retirement Accounts

The Top 4 Facts You Need to Know About Choosing a Custodian

Choosing the right custodian to manage your investments can make the difference between having a profitable investment fund and one that is actually sapping money from your retirement. When it comes time to pick the custodian you are going to be dealing with there is a set of questions that you need to ask them to make sure you are getting the best deal that you can be. Learn what to expect from a good custodian and you can evaluate each option that you have until you find the right professional to work with.

Watch Out for the Fees

Different custodians charge different fee rates and some have more fees than others do. Before you begin working with any custodian get a list of his fees so you know what you can expect. It’s pretty amazing how much of a difference you will see between one custodian and another by doing a bit of research.

Focus on the Investment Options

If you are going to invest in stocks and bonds without really worrying about making any other investments then you probably don’t care about the different options that your custodian has for you. However, the more specialized the investments you want to make are, the more you really need to think about what custodian you are going to be working with. A very flexible custodian gives you the opportunity to branch out more if you decide to do so later on without having to worry about finding another custodian to work with as well.

You are On Your Own

When it comes to choosing your investment opportunity it is really up to you to figure out which is the right one to go with. Just because a custodian says he has a great opportunity for you doesn’t mean that you should believe him. Most custodians don’t have any interest in helping you make money and instead are doing something that is going to serve them.

Customer Service is Vital

Since the custodian you choose to work with is in charge of your money you need to make sure that they are going to be easy to work with and that they will be there when you need them. Make sure they have a toll free number that you can call when you need help or information. Also look into how closely you will be able to monitor your investments. It is important that you can see exactly what is going on all the time because it is your money that they are working with.

Hopefully you’ll be a little more sure of what to look for when deciding on a custodian now. What seems like a simple decision is actually quite complicated, and without knowing key pieces of information such as the investment options that they offer as well as the level of control you have over your money you really can’t choose the best custodian for you.

Learn about the main 4 reasons why a self-directed IRA is better than a 401k, Click Here

The Top 4 Facts You Need to Know About Choosing a Custodian

How to Transfer Funds from a 401k to a Self-Directed IRA

If you have just discovered the self-directed IRA and were satisfied with a 401k for a long time, don’t worry because this is a very common mistake. Also, it is never too late to make the right decision for the planning of your post-retirement future. Obviously, you have figured out the advantages of having a self-directed IRA rather than a number of 401k accounts.

According to statistics, a rollover of funds from other accounts to a self-directed IRA occurs most often when the investor reaches the age of retirement or is separated from their last job for any reason. A less common reason is that the person receives either cash or assets or both. In this case, only 60 days are given to the investor to complete the rollover.

One of the major advantages of choosing a single self-directed IRA rather than having a number of 401ks set up by ex-employers is an increase in flexibility. Additionally, you will no longer be restricted to the rules and policies defined by your former employer’s retirement plan. By transferring your funds from your current retirement plan to a newly-created self-directed IRA, you will maintain the tax-deferred status of your retirement funds and you will also not be required to pay any taxes on your profits until you withdraw the money.

If you ask your employer-sponsored retirement plan to write a check to fund your new self-directed IRA account, you will be liable to pay 20% of the amount you want transferred in the name of taxes. By requesting a direct rollover to the IRA, you can do away with the withholding tax and also the risk of missing the 60-day deadline.

Regardless of whether you are retiring, switching jobs, or keeping yourself away from work for any other reason, leaving a workplace can be the perfect opportunity to reevaluate where you stand as far as retirement funds are concerned. The process of rolling over to a self-directed IRA can seem like a cumbersome task, but do not be intimidated. It’s literally as simple as 1, 2, 3.

1. Contact your current plan administrator and after getting the distribution packet, fill out the paperwork and select a direct rollover to your new self-directed IRA account holder.

2. If you do not already hold a self-directed IRA account, you’ll have to do that first. That too is quite simple; you just have to follow the instructions in the new IRA opening kit.

3. Come back to the completed forms in the distribution packet of your previous plan administrator and complete the formalities.

The time it typically takes for funds from an employer-sponsored retirement account to a self-directed IRA is 3 to 6 weeks. A rollover from one IRA to another one takes even less time. According to IRS regulations, an individual is entitled to rollover funds from one IRA to another just once in a twelve month period.

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How to Transfer Funds from a 401k to a Self-Directed IRA

How to Invest in Precious Metals with Your Retirement Fund

Today most IRA accounts invest in low-interest ventures and for that reason they don’t generate much return other than what you put in the account. Sometimes the accounts can’t even keep up with inflation, and that is truly concerning. Some investors have been investing in precious metals as a more lucrative option than the fixed-income investments and it’s entirely possible to do this using a self-directed IRA, but it will cost you.

If you decide to diversify your retirement account more by investing some of your money in precious metals you need a custodian or administrator that will let you make such an investment? Any of the banks or brokerages that allow this type of investment often call the accounts self-directed IRAs or SDIRAs. SDIRAs come along with more start up and maintenance fees than standard IRAs do and that is because you are requiring the custodian to do more work by setting one of them up.

Your custodian will have to purchase the gold or silver, or whatever precious metal it is that you want with your IRA funds and then hold onto them for you until you are ready to cash them in after retirement. This is a vital concept to understand if you hope to avoid getting hit with fees. Your custodian has to hold the metals at a location designated for your account. You cannot use your IRA money to buy precious metals and then store them in your home.

But having a custodian buy all of this gold or platinum for you and then store it as well is not a free service that he will do out of the kindness of his heart. You will have to pay to have your account setup and then will have to pay a yearly maintenance fee and probably a storage fee as well. All of these fees add up and that is why you have to be careful with your purchases.

Of course investors will try and choose precious metals that are going to increase in value over time, but there is no way to know that they will. Investing in precious metals is a good way to protect your overall portfolio, but you shouldn’t invest all of it this way. Instead only invest a portion of your money in precious metals and keep the rest of your money in other investments.

You will make your portfolio safer and giver yourself more opportunities to earn returns on your investment. If something does go wrong with one of your investments you will have several others to fall back on. Just make sure you read up on the rules involved with purchasing precious metals with your IRA before making a move and you should be fine.

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How to Invest in Precious Metals with Your Retirement Fund

Top 3 Advantages of Self-Directed IRA's

If you have made the decision of going for a self-directed IRA rather than any of the traditional retirement plans, you can rest assured that you are in safe hands and you can retire with a lot more money than many of the other folks out there. The advantages of a self-directed IRA may not be readily apparent, but as you start researching about it, you find yourself wondering what the need for any of the other retirement accounts is. Listed below are the top 3 benefits that owners of self-directed IRAs are entitled to.

1. You get “checkbook control”

Owners of the traditional retirement accounts have to contact their custodian before making investments and can push through with the transactions only after the firm approves of it. So making investments on public holidays is not an option as the custodian will under most circumstances not be working on those days. With a self-directed IRA, you can choose to take possession of your own checkbook and conduct transactions whenever and wherever you feel like. In the event that you think your custodian can make better investment decisions on your behalf, you can let them keep possession of your funds. This option may incur transaction fees, though.

2. You can invest in anything that seems profitable

Forget about the boring old stocks, bonds and mutual funds. If you want to invest in a small business that appears it’s about to hit it big time, you can buy its shares and the profits will go straight to your retirement account that you can use once you are retired. You can also withdraw the cash before the age of retirement by paying a small penalty. If you think you can predict the prices of real estate in a certain area go ahead and buy it. There are a few restrictions, however, that have been put in place by the IRS. For example, you can’t invest in the same residence that you are living in. And you can’t invest in collectibles and alcohol, among other items.

3. All your investments will be tax-free

If you have been in the real estate investment business for a few years, you would know that it is impossible to legally invest in a piece of land without paying annual taxes for it. After paying those absurd amounts of taxes and selling the piece of land, you would be lucky to break even. Those days are long gone, with the advent of the self-directed IRA. You can enjoy tax-free profits in not just real estate, but practically any business, as mentioned in the previous point.

At the end of the day, the self-directed IRA is one retirement plan that will give you the chance to retire rich. You don’t need to worry about your post-retirement days as you will have enough money by the time you retire to keep not only yourself but your whole family happy in your golden years.

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Top 3 Advantages of Self-Directed IRA's

The Difference between a Traditional and Self Directed IRA

If you’ve heard about self-directed IRAs you’re probably wondering how they are different from traditional or Roth IRAs. The answer is they are different in many different ways such as the investment opportunities that they allow, their fee structures and the amount of time that you have to invest in managing your account.

One of the major differences between traditional IRAs and self-directed IRAs is the range of investment options that you have available to you. The standard IRA account will let you invest in many stocks, bonds or mutual funds. You will often get a choice of what you want to invest in, but only the things listed by the custodian you are dealing with. The self-directed IRA gives you many more options to choose from and often lets you choose an investment type that isn’t on a list of items at all. With a self-directed account you can invest in real-estate, precious metals, tax liens, currency or a new business down the road as long as you don’t have a stake in the company. As you can see you get a lot more variety in the investments that you can make using a self-directed option.

You will be charged fees with either IRA type that you decide to use, but there is a good chance that one type will charge more in fees than the other. Traditional IRAs usually charge you to set up the account and then they will charge a yearly maintenance fee for all the work that is done on your behalf.  Self-directed IRAs charge those fees and you also have to pay transaction fees to your custodian each time that you want to make a new investment. These fees can really start to add up if you are making investments on a regular basis. You can avoid most of these fees by relying on a checkbook style self-directed IRA, but many industry professionals are concerned that the IRS is going to begin penalizing these types of accounts because it doesn’t like them.

The last difference that you will notice between the two types of IRAs is your level of involvement. When you use a traditional form of the IRA you are picking out the investments that you like and leaving it at that. From there on out the professionals handle the account and you just put more money into it. This isn’t how a self-directed IRA works. Instead you will be picking out your investments and then deciding how to precede every step of the way. You will have to make investment decisions down the road and you will need to be very careful with what you choose to do because you are the professional in charge of your money.

A traditional IRA is very different from the more modern self-directed option. Some people prefer one to the other, but each has its own purpose and can be very useful when utilized properly.

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The Difference between a Traditional and Self Directed IRA

Discover How to Buy a Home Using Your Retirement Account

If you are trying to come up with the money for a house for retirement you may be able to use your retirement account to fund the purchase. You just have to be very careful to follow the rules and regulations when making the purchase, and realize that you are not going to be able to use the house until after you retire.

With what is known as a self-directed IRA you can put the money stored in an IRA toward purchasing a piece of property. That means that you could track down a retirement house that you really like and use the account to buy it with. Many people use this method to purchase houses in affordable foreign countries that they want to retire in.

There are a few stipulations involved with this type of transaction that you have to be aware of though. First and foremost is that you can’t benefit from this house in any way until after you reach 59 years of age. That means you can’t live in the house, work on the house, or let family or friends live in the house until after that point. If you do break this rule you put yourself at risk of a stiff penalty from the IRS.

If you want to go through the steps to acquire a home in this manner then you will have to set up a self-directed IRA with a bank and have them purchase the house for you. You can fund a new IRA account by simply rolling over your funds from existing accounts that you have. This only takes a few weeks and is usually the way that people fund their self-directed accounts. If you don’t have enough in your account or you want to save up more money you can also make your yearly contribution into the new account to put toward your house.

When you buy the house you are free to rent it out to other people as long as all of the money that you make from renting it goes back into the IRA account until retirement. This is an ideal way to hold onto the house since you will have to pay a maintenance fee to have the account open anyway.

As long as you are careful to follow all of the guidelines, you could purchase a home for retirement with your retirement account, and have it waiting for you when you reach 59 years of age.

Discover How to Buy a Home Using Your Retirement Account

What is The Quickest Way To Open a Self-Directed IRA?

So you have finally made the decision that you want to live your post-retirement days worry-free by opting for a self-directed IRA. You have done your research and now want to know the procedure to open up an account for yourself. At this point, you might want to know that most brokerage firms charge no fees for rolling over funds from another retirement account to a self-directed IRA. Before moving further, you should know that wherever there is money, there are fraudsters and stammers. You should be very careful throughout the process and at no point should you let your guard down. Read on to know what to do to get your account up and running.

First, you would want to visit a few firms that offer the services of maintaining self-directed IRAs. If you want to open a self-directed IRA to invest in real estate, you should verify this with the firm because some of them do not allow real estate investment despite offering a self-directed IRA.

You should keep yourself informed of the rules outlined by the Internal Revenue Service (IRS). The specific passages that you would want to go through are IRS Publication 590 and Internal Revenue Code Section 408. This is where you can find the laws of investment in real estate with an IRA, outlined by the United States government. One of those rules is that the property must not be a residence and that the profit gained must remain in your IRA until the age of retirement.

After you have landed on a specific brokerage firm and verified their legitimacy, it is time to open your account. Fill out a predefined form and provide all the required details. This information typically includes your name, date of birth, address, Social Security number, and a beneficiary name.

According to IRS regulations, IRAs cannot be used as collateral for a loan. This means that you will not be allowed to take out a mortgage on your purchased property. You will need cash to buy the property and the cash should come from your IRA.

Remember that you have to use the services of an outside agent. Using the money in your self-directed IRA, you must hire someone whose duty would be to collect the rents and perform maintenance works on your real estate. IRS regulations do not allow the self-directed IRA account holder to manage the property on behalf of the IRA.

Do not forget that technically, the owner of the account is the IRA. You have to monitor all cash flows because all money, whether coming in or going out, will be flowing through the account. Money to buy and maintain the property must come from the IRA and all rents and income generated by the real estate must be stored in the very same account.

It merits mentioning again that you must be careful of every step you take because if you fail to follow even the small guidelines of the IRS, you might lose your tax-advantaged privileges, meaning you will be liable to pay tax and potential penalties on the entire amount of the self-directed IRA.

What is The Quickest Way To Open a Self-Directed IRA?

What is a Safe and Easy Way to Invest In Real Estate?

Many people think of investments as a side job. It is a common perception that it is just a money-generating mechanism that requires no time or looking after. Though this might be true in most cases, it is not for real estate. To fruitfully invest in property, one has to donate a considerable amount of time and money. In return, the real estate investor will earn higher levels of profit, compared to the traditional, stocks bonds and mutual funds. If you are wondering whether it is possible to invest in real estate using a retirement account, the answer may surprise you. Most Americans like to stick with the 401k that their employer sets up for them and are satisfied with low returns. But that doesn’t mean you should do the same.

With a self-directed IRA, not only can you invest in a wide range of commodities, but you also have full control of your money. This means that, unlike traditional retirement accounts including the 401k, using the checkbook model of the self-directed IRA, you can pay anyone anytime for investment purposes using the funds in you self-directed IRA account.

Of course, wherever there is money involved, you can’t be too sure of what you are doing. Luckily, there are many ways to verify the legality of financial institutions who offer services of opening up a self-directed IRA. Once verified, you should take a look at the regulations of the IRS pertaining to the investment in real estate using a self-directed IRA.

One of the most prominent rules is that the property that a self-directed IRA account holder wants to invest in must be only an investment property and not a residence. Another frequently forgotten rule is that the money for the purchase of the real estate must come directly from a self-directed IRA and the profits gained must stay in the account until the age of retirement.

It is okay to provide the brokerage company with personal information such as date of birth, address and Social Security number as this information is required for the pre processing of your self-directed IRA account.

While filling out the application form, you can choose whether “checkbook control” stays with the custodian or is handed over to you. If you take it upon yourself to make payments for potential investment opportunities, you would want to go for checkbook control. This will do away with the need to call your custodian every time you want to make an investment. Also, you will have to pay no transaction fees.

Remember that it is not only real estate that you can invest in using a self-directed IRA. Anything that has the ability to generate profits is considered an investment option for the self-directed IRA account holder. Whether it is gold bullion, real estate or a small business, open up a self-directed IRA and start reaping the benefits.

What is a Safe and Easy Way to Invest In Real Estate?

Closely-Guarded Secrets Big Financial Institutions Don't Want You to Know About Retirement

Most people looking for a retirement account go for the traditional 401k, simply because that is all they know and that is everything they have been taught by the people before them, and they just do not know any better. It is the employer that has to do most of the work in setting up the account and all the retiree has to do is collect the small profits. But you don’t have to settle for that. You can do so much more for yourself by getting self-directed IRA. But the reason this particular retirement plan is not so much in the mainstream is that its advantages, all of them authorized by the Internal Revenue Service (IRS), are well hidden by the big time financial institutions. Below is a list of the facts, you probably didn’t know about self-directed IRAs.

You can own real estate in a retirement account

The folks with a 401k wouldn’t believe this because, well, it is true in their case. You are not allowed to invest in anything other than stocks, bonds, mutual funds and treasuries if you have a 401k. With a self-directed IRA, however, you can invest in anything that you want (except collectibles, alcohol and a few other items). Think gold bullion will earn you a good profit? Invest in it. Small business? Check. To invest in real estate, just start up a self-directed IRA account and start. What is more, you get to keep the money in your account on a tax-free basis.

You can open up more than one self-directed IRA

Suppose you screw up one of your accounts by making an illegal transaction and end up having to pay taxes and penalties on the entire amount you have on that account. Nobody wants to be in that situation. Be on the safe side and start a couple of accounts just to keep away from the penalties that you could be liable to pay.

You can borrow money from your self-directed IRA

Many people think that once you transfer funds to a self-directed IRA, you are not allowed to withdraw from it until the age of retirement. That is not true. You can borrow money from the account as and when you please by paying the custodian a small percentage of the fee. Also, the money that is out of your account will be taxable, so you might want to return it at the earliest.

You don’t need to pay transaction fees

Unlike most of the traditional retirement accounts, you don’t have to pay fees to conduct transactions for the purposes of investment. You can choose to have control of your own checkbook and invest whenever and wherever you like, without asking for approval from your custodian. There is however, a nominal annual fee that you cannot do away with.

After knowing about these secrets, there doesn’t appear to be any reason why not to open up a self-directed IRA account and start reaping the benefits.

Closely-Guarded Secrets Big Financial Institutions Don't Want You to Know About Retirement

3 Facts You Didn't Know About Self-Directed IRA

Have you finally made the decision to open up a retirement account? Your next step is to decide which particular account to go for. They all have their advantages and disadvantages, but it seems some retirement accounts are more favorable than others. It all depends on what you want to use the money for. If you want to invest in the traditional stocks, bonds and mutual funds, then you want to select the good old-fashioned 401k. If, however, you are more of a risk-taker and want to take your chances in earning higher profits by investing in real estate or a small business, then a self-directed IRA is what you are looking for.

Here are a few facts that you probably didn’t know about self-directed IRA:

1. You can conduct transactions as and when required

According to rules laid down by the Internal Revenue Service, every retirement account, including self-directed IRA must be held by a qualified custodian. The traditional retirement accounts require that you contact your custodian every time you want to make a transaction for investment purposes. There is a small fee for every instance which quickly adds up the more transactions you make. With a self-directed IRA, you have the option of having the checkbook in your own two hands. This eliminates the need to establish contact with a custodian and also does away with transaction fees.

2. You can transfer funds from other retirement accounts to a self-directed IRA without penalties

One of the reasons why the self-directed IRA is one of the fastest growing retirement plans is the lack of penalties for the rollover of funds from other accounts such as a Roth IRA or a 401k. Unlike those other retirement plans, you do not have to pay a single cent to transfer your funds to a self-directed IRA.

3. You can invest in almost anything that you think will earn you a profit

Gold bullion, a small business or a piece of land, Take your pick. As mentioned in the introduction, you can use the funds placed in a self-directed IRA to invest in anything that appears profitable to you. There are few restrictions in place, but it is unlikely you will have to deal with them. For example, you cannot personally use the property that you have invested in. Also, life insurance, alcoholic beverages and collectibles are off-limits.

A self-directed IRA is perfect for folks who consider themselves as experts in a certain field of business and consider themselves in some position to predict exactly when a certain business will be making profits. So if you consider yourself a person who can take a few calculated risks to live a comfortable post-retirement life, feel free to open up a self-directed IRA account. Remember that different brokerage firms have different conditions and price ranges, and you might not want to go for a certain custodian based solely on their low price.

3 Facts You Didn't Know About Self-Directed IRA

4 Reasons Why a Self-Directed IRA is Better than a 401k

First things first, you need to know what a retirement plan is. It is a financial account, similar to bank account that holds funds for an individual to be used after retirement. It is considered as one of the safer and more efficient ways of saving up for retirement. However, one can get easily puzzled by the sheer number of choices available. Probably the most popular one is the 401k, in which profit is earned by investing in the likes of stocks, bonds, mutual funds and treasuries. A self-directed IRA is a lot more flexible in this regard as it allows the account holder to invest in anything that seems profitable. Here are 4 reasons why a self-directed IRA is better than a 401k.

1. Invest in anything you like

As mentioned above, you can choose what you want to invest in. Know of a small business that your instincts tell you is about to go big? Invest in it. Think you can earn higher profit margins in real estate? No one is there to stop you. Your options are quite limited with the 401k.

2. You have “checkbook control”

Unlike the 401k, where you have to contact your custodian every time you want to buy new stocks or bonds, with the self-directed IRA, you can choose to take possession of your own funds. This means faster transaction processing times and the elimination of the sky-high transaction fees. This feature is particularly useful for time-sensitive investment opportunities.

3. You can start your own account

Whether you are working or retired, you can open your own self-directed IRA account. In the case of the 401k, you need to be self-employed (business owner) to open your account, or if you are working, you will have to contact the HR department of your employers to get this account up for you.

4. You can roll over your funds from another retirement account for free

If you already own a retirement account and want to switch to a self-directed IRA, you can do so without paying a single cent. The whole process is smooth and efficient and you can open your self-directed IRA and start investing in almost no time.

4 Reasons Why a Self-Directed IRA is Better than a 401k

3 Unusual Ideas for Your Self-Directed IRA

The great thing about a Self-Directed IRA is that it really opens up your investment options. Bonds, certificates of deposit and mutual funds are fine for most people, but if you’d like something else to invest in try one of these three alternative investment opportunities opened up by self-directed IRAs. Each is quite a bit more specialized, and would make an attractive investment opportunity for someone with the right knowledge or experience.

Green Energy

As fossil fuel sources decline the importance of renewable energy sources grows and so do your investment opportunities. There are a variety of different companies in the renewable energy sector and you can easily invest in any of them by buying their stocks. If you believe that renewable energy sources such as solar or wind power is going to increase in popularity and value in the years between now and your retirement you might want to consider investing in some of these companies. Government agencies are beginning to put more emphasis on green energy sources and their importance. Getting in on these industries before they really explode could be a great way to boost your IRA account. For an even greater return on your investment you could also supply the startup capital for a new green company, but that increased profit potential would come along with increased risks as well.

Promissory note

Lending money to other people has always been a great way to earn interest as long as those people are dependable and you can count on them paying you back. Whether you want to help people get a house, a car, or just take a fancy vacation you could make great profits using your SDIRA as the funding source of someone else’s dream. The key to making this work is getting all the terms down in a comprehensive legal document, and to deal with people who are reliable. Buying a promissory note from someone is less risky if some form of collateral is involved, but doing your research is the most important step.

Private Mortgage

If you’ve ever had to pay a mortgage and wondered what it would be like to be on the other end of the deal now’s your chance. It is possible to setup a private mortgage using a self-directed IRA as the funding source. Private mortgages are very safe investment options as long as you only lend money for a home that is worth it, because the mortgage will be secured by the property. In other words, if the homeowner doesn’t make his payments you get the house to do with it what you wish. If you choose to go this route make sure you have a lawyer who is familiar with private mortgages working with you so that everything is legal and safe.

3 Unusual Ideas for Your Self-Directed IRA

Your Self-Directed IRA and Student Housing

Student housing is a great way to make steady profits off of real estate as long as you invest carefully. If you decide you want to invest in student housing but don’t have enough in savings you could use a self-directed IRA to make use of your retirement funds for the investment.

Student housing is often a great investment because once students begin renting from you they very rarely leave before the end of the lease period. Many students will want to pay for their lease up front and some colleges even enforce rent payments to stay in the schools.

If you have money tied up in an IRA account that you would like to access to try and get into real estate, you can roll it over into a more flexible self-directed IRA instead. Getting started with a SDIRA is simple after you find the right bank or custodian to handle your account for you. You may have to wait a few weeks for your funds to transfer from one IRA account into your self-directed account, so make sure you account for that wait period in your planning.

Always do your homework when you are considering purchasing real estate for student housing. Make sure that you are getting a good property and verify that you will have students to rent to as well. Talk with the local schools and find out what their housing policy is. Most schools allow their students to live nearby, and some even put together a waitlist of students trying to find housing that you could use as a resource to get tenants. Just make sure you have a market of students to rent to in the area that you pick out the property.

After you find the ideal property you need to make sure you have a rock-solid contract to give to each of your tenants to protect yourself. Always document the condition of your building before renting it out so that you will have proof when anything has been damaged. Also require a deposit from each student that you rent to and try to force parents to cosign as well to improve the chance that you will get all your money. Getting help from a lawyer to draw up a contract is an important step, and something that every investor should do.

As you begin making money from your student tenants you can increase the amount that you have in your retirement account. Many investors pick up a few different properties that they want to rent out to students and their retirement accounts slowly swell with steady profits coming in each year. Just remember that you can’t use the money from your IRA until after you reach 59 ½ years of age without incurring a ten percent penalty on any money that you withdraw.

Your Self-Directed IRA and Student Housing

How to Lend Money with Your Self-Directed IRA

Self-directed IRAs give you the power to invest in a variety of businesses and products that you wouldn’t be able to utilize with a traditional IRA, but they also allow you to lend out money without actually buying a stake in the company or product. This is a great alternative if you want a slightly lower-risk opportunity that still has the potential to pay off quite well.

Lending money from a self-directed IRA isn’t a very complicated process, but it is one that has to be completed carefully. If you make mistakes when setting up the loan, or picking who you loan money to you can end up losing a lot of money.

1.    Carefully choose a person or company to lend money to. Research the person or company and ensure that they are a worthy cause.

2.    Sit down with a lawyer and decide on the loan term as well as the interest rate that you believe is fair and profitable.

3.    Establish collateral on the loan such as real estate, or an automobile to protect you in case the loan goes bad.

4.    Submit all of your loan documents to your custodian for approval and a sign off so that the money can be released.

5.    The custodian will send the money to the borrower so they can make use of it.

6.    The borrower will make regular payments to the custodian according to the terms of the contract.

When you are loaning money to a business or individual out of your IRA it’s important to understand that it’s not your money, it’s the IRA’s. In other words, any contract that you make has to be in your self-directed IRA’s name, not yours. The administrator of your account is the one who has to sign off on the loan agreement, and if the loan ends up being profitable all of those profits have to be rolled back into the account to avoid being penalized. That’s why it’s vital to get professional help when setting up the loan, especially when having the documents drawn up.

The necessity to keep all the loans out of your name does have some drawbacks by complicating matters, but there are benefits as well. For instance your retirement account will be earning money and you won’t have to worry about managing the loans, instead you have the custodian to handle that. In other words, if you choose your loans properly you’ll have a steady stream of income coming into your retirement fund and you won’t have to devote time to managing it.

How to Lend Money with Your Self-Directed IRA