Using a Self-Directed IRA to Invest in Private Businesses
One of the most powerful tools at your disposal is a Self-Directed IRA.
A Self-Directed IRA is a unique type of IRA that allows you to invest in range of different investments – since, after all, you are the one doing the directing of your IRA. These Self-Directed IRAs offer you the flexibility to invest money in precious metals, in real estate, and yes, in private companies as well.
Investing in a private business is a great way to earn money over the long term – if you know what you’re doing. For others, it can be a scary and intimidating way to invest their money outside of the public realms of the stock market.
Where do you fall within these two categories? If you’re like most people, you haven’t done a lot of investment in private business. But that doesn’t mean you have to be limited to public trades on the stock market as the sole source of your retirement investments. In fact, if you truly want to diversify your portfolio, as so many experts say you should, then you should certainly look into private investments as well.
But just because you know how to get started investing in private businesses with a Self-Directed IRA doesn’t necessarily mean that you’re ready. To that end, we’ve put together this quick guide for navigating the risky – and often rewarding – world of private company investments.
Getting Started with Private Investments
One thing that many people will do to kick off their foray into private investments is start an investment club. This is a great way to meet like-minded people who are interested in private investments, of course, but it’s also a great way to get some lower-risk “practice” before making even larger investments. Experience, after all, is one of the most important teachers there is; it will help you to practice looking at individual companies, understand which variables to value, and ultimately, give you a better set of “instincts” when it comes to investing in private companies.
You can also do a lot of private reading to ensure that you cut the learning curve short. There are lots of books about private investments that you can seek out – and it won’t hurt to seek out the philosophy of some major investors, such as Warren Buffet, as well. Adhering to some basic principles of investing will help you no matter which stage of the game you find yourself in.
Finally, you should look for opportunities around you, as well. Learn to read the business section and find out which companies are on the move. Discover what kinds of things you can do to learn more about your business community, whether that means joining a local business group or simply keeping your finger on the community pulse.
Options for Private Investing
We’ve said the word “company” a lot. And if you’re going to invest in a company with your Self-Directed IRA, it would help if we could narrow down that vague term a little bit. There are, after all, plenty of options for investing with a Self-Directed IRA; you shouldn’t feel limited to any one specific kind of business.
- Consultant firms
- Retail stores
- Services businesses
- Tech businesses
The list of potential businesses you can get involved in goes on and on – and what’s great is you can use these investments within a Self-Directed IRA to build a nest egg for yourself that doesn’t rely on the public stock market. It’s wise, of course, to seek out the businesses that you have an interest in or know yourself – that way, you can use your experience and passion to ensure that your investments are sound.
[tweetthis twitter_handles=”@iraexpert” hidden_hashtags=”#SelfDirectedIRA”]Use investments in a Self-Directed IRA to build a nest egg for yourself[/tweetthis]
If you want to learn more about investing in private businesses through a Self-Directed IRA, be sure to contact us at 866-7500-IRA(472) to learn about your full range of options.
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