Learn how to double your ROI with a self-directed IRA (individual retirement account)
Posted On July 6, 2023
A self-directed IRA is a vehicle that allows you to choose which investments you want to buy or sell, while still being eligible for tax-deferred or tax-free income. You can invest tax-free or tax-deferred in investments you understand, and with the ability to make compound interest work for you, you can grow your retirement income with a self-directed IRA in no time.
While retirement fund investing with real estate and other assets has been around for many years, you may not have heard of it. Because the vast majority of banks and brokerage firms focus on stocks, mutual funds, and CDs, most people think that’s all they can invest in. Like them, banks and brokerage firms, they don’t give you a choice when you invest your money with them. In fact, the misconception that mutual funds, stocks, and certificates of deposit are all you can invest in has been around for so long that some financial advisors who haven’t heard of a self-directed IRA don’t know any different. As long as you follow the rules, a self-directed IRA is the best way to save for retirement.
Some of you have asked, is your self-directed IRA guaranteed? Well, it’s not. You get very few investments these days that are guaranteed. However, with that being said, if you visit my website, the URL of which is at the bottom of this article, you will find one of the few investments where ROI is guaranteed. In reality, the ROI is guaranteed to be at least double what you earned last year. Most investors feel it is better to invest in areas they are familiar with, rather than stick with assets that banks and brokerage firms “allow” you to invest in.
A prohibited transaction can result in disqualification of your IRA, with strict tax penalties.
The IRS defines a prohibited transaction as follows:
“In general, a prohibited transaction is any misuse of your IRA or annuity by you, your beneficiary, or any disqualified person. Disqualified persons include your trustee and family members (spouse, ancestor, direct descendant, and any spouse of direct descendant) .”–Source IRS Publication 590
You may not buy or sell an investment to a disqualified person. The Self-Directed IRA is there to provide you with a nest egg in your retirement. It is not there for you to use now. Transactions also cannot benefit you indirectly. That is not allowed. These are some of the indirect benefits that are not allowed. You may not personally use real property purchased through your IRA. You cannot use a house for vacations, nor as an office, you cannot live in it. You cannot borrow money from your IRA. Unrelated business income tax or UBIT occurs with an investment that generates income with debt financing (for example, buying real estate with a non-recourse loan in an IRA) and is liable for UBIT in direct proportion to the income financed with debt.
If you find this is not your cup of tea, and would like a simpler TURNKEY solution, please click the URL at the bottom of this article. Go to my website, there you will find more information on real estate and IRAs.