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Earth Day isn’t a one-day and done affair. Saving for retirement isn’t something you can do once and forget about either. You can do both when you own “green investments” in your self-directed IRA. A self-directed IRA makes it easy to invest in a wide choice of environmentally friendly assets. Here are five ways to go green with your retirement savings:
1. Real estate
Green doesn’t have to mean buying undeveloped land. Increasingly, developers are building and retrofitting existing housing and commercial buildings to be more energy efficient. According to the National Association of Realtors, the median prices of houses bought by buyers who consider energy efficient “very important” were $12,400 higher than people who place less importance on energy efficiency. Those houses also save money on heating, cooling and water bills. This is good news if you want to buy and flip—or even rent—a house using your IRA.
2. Alternative energy
Solar, biofuel, wind, and water all offer investment opportunities and the promise to wean the world off carbon-based fuels. This can be a win-win-win: You diversify your investment portfolio. The environment gets a break. Future generations breathe cleaner air.
3. Clean transportation
Whether it’s an electric or hybrid vehicle, a clean-emission public bus, or a ride-share car, there are lots of clean transportation options for consumers and investors. The companies that make rechargeable car batteries, develop driver-less car technology, and produce light-rail vehicles all contribute to greener transportation. Investments like these diversify your IRA as well.
4. Green bonds
Safer dams and reservoirs, upgraded water and wastewater systems, new buses and more efficient trains. When a city or state decides to upgrade its infrastructure, the funding typically comes from a bond. These tax-exempt bonds, backed by local, or state or federal governments are generally very secure investments.
5. Private placements
The focus on greener and leaner has birthed a plethora of products and services, everything from Earth-friendly dry cleaners and household cleaning products to compostable picnic plates, glasses and utensils. Most of those companies started out small, with the backing of family and friends. Now, it’s easier for other investors to get in on the ground floor. Using a self-directed IRA, qualified individuals can invest in private placements, such as private stock, unsecured notes, crowdfunding, LLCs (limited liability companies), and LPs (limited partnerships) dedicated to creating the next generation of products and services designed to protect the planet.
A free consultation with an Entrust professional will give you the green light to create a self-directed IRA, the first step in greening your retirement savings.