The First Steps to a SDIRA
At the beginning of the month we hosted the OREIA conference. We met with many eager investors and potential investors who wanted more information about self-directed IRAs and retirement accounts. Almost every single person had the same question:
How much do I need to know about investing to open a SDIRA?
The answer isn’t simple, as much as we wish it were.
The last few years have been brutal on individual retirement accounts; we can’t count the number of people who walk through our doors frustrated and in disbelief at the marginal returns or, in some cases, stunning losses, they’ve incurred. These people come to us for the same reason: they want to earn more for retirement, or make up for the losses of the last few years.
We’re so happy to put a smile on the face of those downtrodden and discouraged investors when we say “There is a way to turn it all around!â€
Take one of our clients, a real estate agent who recently bought a $70,000 house, fixed it up with another $10,000, and pulls in over $10,000 each year in rent- a modest return on his investment, and more of a return than he was seeing in his traditional portfolio.
However, we have to do our due diligence by saying that there is some elbow grease involved in such investing success.
First, there are many rules on how to administer a SDIRA.
The best way to stay in compliance with IRS rules and regulations is to do your own reading and research- we can get you started learning those here.
Another important point is that investors should look for asset classes they know and understand. Are you a real estate agent? Do you have experience with precious metals? Know a thing or two about property development? If you already have experience in or know something about an area in which you can invest, you’re halfway there.
If you don’t you should do your homework. That goes beyond looking at the Wikipedia page about the asset class you’re considering. Get to know the industry you’re thinking of investing in very well. Look at current events that could impact the industry. Unlike a traditional IRA, in which decisions on investments are made for you, you have control over a self-directed IRA. You make the calls. Equip yourself with the information you need to make the best decisions you can. IRA Assets News is a great online source for self-directed investors.
If you’re ready to roll up your sleeves and do your homework, a SDIRA is a great way to diversify your portfolio and see some returns on your investment. As always, we’re here to help every step of the way.