Earn Higher Yields With Lower Risk By Investing Your IRA In Promissory Notes
Investors use promissory notes to lend money. A note can be secured or unsecured. Like any investment, private lending has its own risks, such as the risk of the borrower not being able to meet their repayment obligations. Investing in promissory notes provides IRA investors with steady recurring income.
3 Reasons to Invest in Promissory Notes with Your Self-Directed IRA
EASY TO MANAGE
Private lending is a passive investment strategy that generally requires minimal management once the loan is in place.
PROVIDES LIQUIDITY
Contrary to equity-based investment strategies that can have long holding periods, promissory notes can be structured to provide monthly, quarterly, or annual payments based on the income needs of the IRA investor.
PERMITS FLEXIBILITY OF TERMS
The IRA investor creates the terms of the promissory note to properly reflect the amount of risk he/she is willing to take versus the amount of interest that the borrower is willing to pay. For example, the interest rate is commonly based on the strength of the borrower’s financial statement, security instrument and/or credit score.
