By J.P. Dahdah, Founder & CEO of Vantage
Just because you have a Self-Directed IRA does not automatically mean you will become a successful investor. There are plenty of stories of investors using Self-Directed IRAs who could not take advantage of the opportunities available to them.
Being successful with Self-Directed IRAs requires an eye for the right investments and sufficient knowledge to ensure you stay clear of transactions that can lead to tax penalties.
Here are tips you can use to take advantage of Self-Directed IRAs to maximize your investment success:
1. Diversify.
A Self-Directed IRA is very empowering because it gives you control over your investment decisions. Don’t put all your eggs in one basket, even if that basket is genuinely profitable. Any market can crash at any time. Diversify your Self-Directed IRA across real estate, private company stocks, and bonds, so you always have a contingency plan for any risk.
2. Choose your Self-Directed IRA provider carefully.
The legal ramifications of prohibited transactions are stiff. Even if you have decision-making capabilities on your IRA, you’ll want someone in your corner to tell you if your investment plans can lead to tax penalties.
3. Be wary of investments that look like they are too good to be true.
Even if you are working with Self-Directed IRAs, the rule for sound investing remains: if it seems too good to be true, it probably is.
Stick to investments that you understand to maneuver your way around the risks as you would if you were using money directly out of your pocket.
For more information on how you can discover your IRA investing alternatives, contact our team at (866) 459-4590 or ClientService@VantageIRAs.com. You can also schedule a time for a call that is most convenient for you by clicking here.