One of the chief fears people have about Self Directed IRAs is that they’re afraid that they’re going to make mistakes. But mistakes are a part of life.

In fact, mistakes are part of just about every investment strategy: it’s your ability to prevent and adjust to mistakes that defines your success. That’s why it’s important to know how to minimize mistakes and learn from them the best you can: after all, when you work towards a better financial future, there will be turbulence even on the most peaceful rides. Here’s how to avoid and deal with common mistakes in Self Directed IRAs:

#1: Do your Self Directed IRAs research.

One of the fastest ways to ensure that you make a mistake? Go headlong into them without any research. Action is important, but the phrase “knowledge is power” is around for a reason. If you don’t know what you’re doing, you can make some of the classic mistakes such as not knowing how to handle any of the taxes, not understanding what limitations each account might have, and not understanding the limitations on the account types. Doing your research might not be fun—in fact, at times, it might feel like homework—but you’d be amazed at how quickly it can change your disposition from “confused” to “knowledgeable.” Be the latter.

#2: Give yourself a plan.

Dwight D. Eisenhower one said that plans weren’t that important, but that planning is everything. The reason he said that is because planning gives you the preparation and knowledge to deal with uncertainties in life. The truth is, no one knows how their investments are going to end up. That’s just a fact of life, and it’s part of the risk you take by engaging in investing at all. But if you enter the arena with at least a plan, then you can use that plan to gauge just how well you’re doing. If your plan isn’t working, you’ll know which parts to adjust and you can move on from there.

If you don’t plan at all, then you’ll often succumb to the whims and winds of the market. You might not know how to adjust if you’ve never put any thought into the construction of your portfolio at all. Plans might not always hold up, but remember what Eisenhower said: planning is everything.

#3: Make specific goals.

One of the fastest ways to ensure that you never get where you’re going is to never have a specific goal driving you there. Consider driving across the country using GPS. You wouldn’t tell your GPS to head “east,” would you? No, you’d give your GPS a specific location and then work on the steps that lead up to that specific location.

Specific goals often work the way with Self Directed IRAs. Just give yourself one thing to accomplish every month, even if it seems like a simple goal at the time. You’ll be amazed at how quickly these goals add up. But keep an over-arching “end goal” that’s specific; this allows you to adjust your investment strategy as necessary because you’ll have more measurable results to work from.

If you’re interested in adding a Self-Directed IRA to your portfolio, keep reading our articles and guides here at AmericanIRA.com to give yourself a solid footing from which to research. You can also contact us at 828-257-4949  if you’re still confused about some issues. Remember: knowledge is power. If you want to avoid mistakes with Self Directed IRAs, you’re going to have to know what those common mistakes are. And with knowing comes better action and better results.