That word “portfolio” can be vexing to a lot of young people. It’s the kind of work that evokes images of people with millions of dollars saved away, of middle-aged men and women who have been putting away money in a 401(k) and have substantial amounts of money invested. For your average 22-year old or even 32-year old, the idea of having a “portfolio” can sound positively alien. But as the saying goes, Rome wasn’t built in a day, and neither are retirement portfolios; and if you want to get started, one of the best ways is through Self Directed IRAs.

Self Directed IRAs are simple: they allow you to invest in a retirement account with lots of flexibility and freedom.

For example, you can invest in stocks and bonds…or you can invest in real estate, precious metals, private companies, and more. There are really few restrictions as to what you can invest in with Self Directed IRAs, which is what makes them such an attractive option for someone looking to build a retirement portfolio at any age.

But we’re talking about young people in today’s article, so that’s where we’ll focus: on building a retirement portfolio that can stand the test of time. Here are some tips for getting started with your retirement portfolio even if you’re “young and broke.”

Go for the Long Haul with Self Directed IRAs

One of the most difficult—and one of the most important—aspects of building a retirement portfolio when you’re young is understanding just how far away retirement might be. Depending on how aggressive you are and what your assets may be like, retirement can be as far away as 30-50 years. Many people don’t like to think about money in terms of decades. After all, you have expenses now; how can some money put away for fifty years from now possible do you any good?

This ignores, however, the possibility of accumulating wealth through compound interest. With compound interest, the earlier you start, the better off you finish. Even if you don’t start with a sizeable portfolio, if you average a certain percentage of growth over time, you’d be surprised at where you can end up. So think about the long haul with Self Directed IRAs; even if that means putting away just a little bit here and a little bit there. It adds up.

You Can Afford to Be Risky

Unless your financial situation is dire, the younger you are, the more you can afford to be a little risky with your retirement investments. That doesn’t mean that you should throw caution to the wind; instead, it means that you can seek out calculated risks in markets that tend to be a little more volatile. Real estate, for example, can be a somewhat risky venture if you don’t know what you’re doing; as can investing heavily in the stock market.

Simply stated, you can afford to purchase gold and silver at this stage of the game, even if their prices go down temporarily, because you might trust that they’ll increase over the long-term.

Diversify as You Go

It’s tempting for many investors to diversify right away; you generally don’t have to do this if you’re very young, as you can tolerate more risk. “Diversify as you go” simply means that you can place many of your investments in “one basket” for now and slowly add other baskets as you grow older and accumulate more wealth.

If you want to know more about Self Directed IRAs and what they can do to help you grow a portfolio over the long-term, be sure to call us at 828-257-4949 or keep reading AmericanIRA.com for more information.