Answering Common Objections to Self-Directed IRAs

Whether you’ve heard of the possibilities involved with Self-Directed IRAs or are just now learning about them, there’s a good chance that you’ve encountered some objections.

Some people don’t like the idea of Self-Directed IRAs because they prefer a more hands-off approach. Or they might think that they’re not any good at managing their money. Others might simply have a knee-jerk reaction to Self-Directed IRAs, believing that it “sounds like” too much work for what they’re willing to put in toward their retirement.

While Self-Directed IRAs can be a different fit for every type of investor, we here at believe that Self-Directed IRAs are a great way to empower yourself and invest long-term in your retirement future…even for more casual investors. But we understand some of the trepidations. Let’s “zoom out” for a little bit and address some of the most common objections—and why or not they might be valid.

Objection #1: “I’m no good at managing my own money.”

This is, of course, an objection that depends on the person saying it. Maybe you haven’t had a very good history of managing your money. However, the fact that you’re merely looking into Self-Directed IRAs shows that you’re a prudent individual who thinks about retirement.

The truth is, you don’t have to be a particularly wise investor to have success in investing. Much of successful investing is about common sense and patience, not any type of financial wizardry. Many people opt for the traditional “money manager” route, outsourcing their decisions to fund managers, such as a mutual fund manager. But think about it this way: you make small decisions with your money every single day. Simply having money in a bank means you made a choice as to which bank to invest in.

We believe that a Self-Directed IRA contains a lot of potential success even for people who don’t view themselves as extraordinary investors. For some people, using a Self-Directed IRA is part of their commitment to learning more about money and taking greater control over their financial future.

Objection #2: “Money managers are better than me. Why not just pay them to do it?”

The most traditional form of investment is to put your money in a fund, like a mutual fund, and keep it in the stock market until it’s time to take it out. This relies on money managers to take care of your investments for you. That can work, as a strategy. A lot of people have had success with it.

But does that mean there are absolutely no pitfalls to this course? Of course not. Money managers charge fees—some more than others. These fees can dip into the savings you think you’ve been putting away for some time. What’s more, money managers don’t always have a particularly stellar record—truth be told, it’s different from fund to fund, manager to manager.

That’s not to say that you should never invest in a mutual fund. It can be a great idea. It might even comprise a majority of your investment dollar. But that doesn’t mean it has to be your only strategy.

Objection #3: “I don’t know how to get started.”

This is, perhaps, the easiest objection to overcome. Because if you want to get started with investing in a Self-Directed IRA, all you have to do is contact someone like at 866-7500(472). We can talk to you about the process and you’ll learn that it’s not quite as complicated as you might have initially thought. In fact, it can often just take few minutes or a few hours of your time, all added together, before you have a Self-Directed IRA ready to go.