Interesting Insight
The Case for the Self-Directed IRA
By: Lisa Moren Bromma
Many investors, regardless of their investment strategy, look to their IRA as their safety net to retirement. To play it safe, many have been sitting on the sidelines, leaving their cash in the bank, which is falling behind due to earning less than 1%. I can understand this conservative strategy for those who have lost a lot of money in the market over the last two years and are concerned about losing more. But how can we really grow at 1% or less.
Others invest in mutual funds, stocks, bonds, or similar traditional investments looking for a higher return. This strategy could be a way to increase your returns, especially if you have a financial advisor you know and trust. On the other hand, many have lost money with their advisors because of the market, the economy, and the decline of the real estate markets.
What is an investor to do to try to grow their IRA to ensure a financial future? One suggestion is to control your IRA by investing in assets you know, understand, and can “kick the tires” or research. In other words, investing that involves you and the choices you make.
Does this take work? Yes. You need to understand what you are investing in, educate yourself on how a truly self-directed IRA works, and be comfortable with the administrator who does this work for you. Fidelity, Schwab, and others say you can self-direct your IRA. But what they call “self-directing” is investing in their funds and portfolios. I’ve yet to hear about a brokerage house that allows an investor to acquire a piece of real estate in their IRA.
The Entrust Group, the largest network of third-party administrators in the country, works exclusively with self-directed retirement plans in which the investor selects the asset and the administrator follows your direction. That is the true definition of a self-directed IRA: You control, and we follow your instruction. Entrust is committed to providing industry-leading customer service, listening to our clients, and executing the acquisition of the asset in a timely professional matter, all at a reasonable price.
Entrust does not give investment advice or make recommendations. We strictly do the recordkeeping on behalf of your IRA. Sound interesting? Visit www.entrustgroup.com and locate the closest office to you. Learn from what other successful investors have learned: At times, it is best to trust yourself to control your financial future.
Lisa Moren Bromma has been a real estate investor since 1978, a note investor since 1998 and has worked with some of the top private mortgage institutional buyers. She is an advisor to The Entrust Group, the nation’s largest network of self-directed IRA administrators, and the author of Real Estate Investing for the Utterly Confused, and Wise Women Invest in Real Estate. Visit her web sites at www.wisewomeninvestor.com or www.theentrustgroup.com.
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