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
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