Like any powerful tool, it’s not enough to simply have a Self-Directed IRA. This is true of Self-Directed IRAs as it is with a hammer you might have laying around the house: it only works if you use it properly.
This is true no matter how great the tool. There are, after all, plenty of legitimate tools that help you to expand your retirement nest egg over the years. But how often have you been actively pursuing these tools? If you’ve been up on things, you’ve likely created a plan and followed through with it when it comes to the funding of your investments.
But if you haven’t already done so, you’ll find that it’s never too late to get started. After all, many plans don’t work; it’s the process of planning that makes them so effective. The great military commander and former U.S. President Dwight Eisenhower himself said that plans are worthless, but that planning is everything. And the good news is that you can start planning today. Here’s how.
Funding Your Self-Directed IRA: A Primer
We recommend having a sufficient amount of money set aside so that you can start a comfortable and modest account right away – something substantial enough that your investments can start working for you. Some people, especially those who are living check-to-check, find that this can be a difficult proposition. So our advice is: start small. You can easily set aside a certain amount of money every month in anticipation of funding your Self-Directed IRA. You don’t have to do it all at once. The point of the Self-Directed IRA in the first place is to think about things in the long-term: to build a future of wealth over a longer period of time.
“Baby steps” is the key phrase here. Once again, it doesn’t matter when your plan lands you a fully-funded Self-Directed IRA; it’s that you actually have that plan in place, stick to it, and adjust as necessary. Things only start going awry when you abandon your willingness to plan and prepare for the future.
Finding Ways to Fund Your Self-Directed IRA in Your Current Budget
If you’re going to continue to grow your Self-Directed IRA over time, you’re going to want to ensure that you have a plan in place: and that means making room for your Self-Directed IRA in your current budget. What are some ways to do that?
[tweetthis twitter_handles=”@iraexpert” hidden_hashtags=”#SelfDirectedIRA”]If you’re going to continue to grow your Self-Directed IRA…[/tweetthis]
- Find small sacrifices. Looking at your recent bills, you might find that there are things you wouldn’t mind cutting out of your life – sometimes, expensive Be willing to part with a few of these small sacrifices and send them to your investments instead.
- Make it automatic. Perhaps the most important way to ensure that you stick to a plan is to make it automatic – for example, a savings plan that automatically deducts money from your checking account will ensure that you stick to the plan even when you forget. It works the same way with investments.
- Take on additional work. Can you work freelance? Can you take on tasks on the weekend? Some people find that they actually enjoy adding work to their week if they’re doing something they enjoy.
Of course, if we’re to listen to Dwight D. Eisenhower, we can’t give you a specific plan at this point. Every one, after all, is different. But we can acknowledge that planning is essential: which means that even if you start small, you’ll find your new plan to build and grow a Self-Directed IRA will help you invest in your future.
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