Self Directed IRAs – Good for Investment Beginners?
Getting started with investments can be intimidating, especially if you’re young. When you’re young, it’s hard to see how your wealth might grow if you set it aside right now and watch it for fifty years. But you’d be amazed at how quickly an investment can grow if you tackle investing in a smart way. And you don’t have to be young to be an “investment beginner,” either—even if you’re older, you can accomplish a lot by using things like Self Directed IRAs.
“Self Directed IRAs.” Hmm. There’s that phrase again. It might not be familiar to investment beginners—but that doesn’t necessarily mean it’s wrong for them, either. With that in mind, let’s answer this question of whether or not Self Directed IRAs are “good” for investment beginners—or if beginners might want to start more slowly.
Defining the Self-Directed IRA…And the Beginner
First, we’ll have to define exactly what an “investment beginner” is. Much to our chagrin, it’s a relative phase. What one person might consider an “investment beginner” could be someone who already has a substantial amount of investments…while someone else, with no knowledge of investments and no investments set aside, would rightly consider themselves an investment beginner.
Let’s say for our purposes here that an investment beginner is anyone who’s never opened an IRA before, or has opened only the most basic IRA without a lot of research into what they’re all about and how they can be best utilized.
Most people who are relatively new to the world of investing assume that directing their own IRA investments is a bad idea. But that doesn’t mean it necessarily is a bad idea. For example, most people assume that they need a manager to look over their investments and take care of all of their stocks and bonds…but a Self-Directed IRA isn’t like that. Instead, a Self-Directed IRA could be considered a way of expanding your options. How so? Let’s look at the myriad ways:
Expand Your Horizons through Self-Directing
The best way to acquaint a beginner to investing is to make them fully aware of their options. Unfortunately, a lot of new investors get intimidated by the usual advice and make only conventional decisions…the problem is, this doesn’t necessarily reflect the kind of portfolio that they’ll want to construct over a long-term period to give themselves a solid retirement nest egg.
With a Self-Directed IRA, you have all sorts of retirement investment options, including:
- Real estate: commercial, retail, residential, etc.
- Precious metals: gold, silver, etc.
- Private companies
- Tax liens
- Private lending
The list goes on and on. In fact, despite what many people tell retirement “newbies” about retirement investing, you’d be shocked at how many different options there are available to you.
You might wonder: why do so many options work better for an investment “beginner”?
The truth is, more options allow you to choose the investment that suits you best. And because there are so many options, you’ll be able to pick one that you’re comfortable with over the long-haul. These investments represent a great way to diversify out of the traditional stock market investments and feel more secure about your retirement, even during periods of a bear market.
Getting Started with Self Directed IRAs
If you want to learn more about Self Directed IRAs, be sure to keep reading more here at AmericanIRA.com. Here, you’ll find all sorts of information about investment types, account types, and what retirement investment can look like when you open it up to self-directing. Be sure to contact us at 828-257-4949 if you want to learn more.