Dispelling the Most Common Myths About Self-Directed IRAs

The truth about the myths surrounding Self-Directed IRAs…

Have you ever watched a health report on the evening news, wherein even the most credible researchers appear to completely reverse an earlier notion about which foods are healthy to eat and which are not?

Truth is, we’ve all experienced myths like these in our lives. Sometimes we buy into them, like believing that an urban legend is real when it turns out to be a fabrication. And sometimes we wisely keep clear of the myth by not making a judgment one way or another.

Most of the time, these myths are innocent. But sometimes these myths embed themselves into the popular consciousness and prevent people from making fully-informed decisions.

Consider the world of Self-Directed IRAs. Myths about these IRAs are rampant-some of them true, some of them way off base. If you’ve just discovered this site, now’s the time to learn more about Self-Directed IRAs so you can evaluate them with a clear head… and a mind free of myths.

“The Only Possible Investments in Retirement Accounts are Stocks, CDs, and Mutual Funds.”

You might not have even heard this one directly. It simply seems to be the underlying assumption that many investors make. Even money managers make this mistake often enough that the myth has become pervasive. The truth? Self-Directed IRAs allow you the ability to invest in intellectual property, real estate, private companies, gold, and more. There aren’t as many limits on retirement accounts as you might think.

We should note, however, that if you want to expand your retirement investment options, you might have to switch over to a Self-Directed IRA. These IRAs will allow you the financial freedom to make more of your own decisions, pay fewer fees to wealth managers, and take charge of your retirement destiny.

Our ruling on this one: Myth.

“Self-Directed IRAs Are Inherently Riskier.”

Have you heard this from a money manager? Try asking yourself if they were selling you on their latest mutual fund.

The real truth about IRAs and investment in general is, well, a little murkier. Sure, we could sell you on a number of easy platitudes and generalizations, but the truth is, different retirement accounts work for different people. Self-Directed IRAs might work out better for you than the traditional IRAs you’ve been sold all your life.

If you have a lot of experience in real estate investing, for example, then you might actually have less financial risk associated with Self-Directed IRA real estate investments. You know the market well, you know how to handle the investments, and you know how to generate a return. Is that riskier than the traditional IRA? You tell us.

Our ruling on this one: Myth.

“I have more options with a Self-Directed IRA.”

Is this one really a myth? Consider the limited scope of the traditional IRA: CDs, mutual funds, stocks. That’s the traditional route. With a Self-Directed IRA, however, you can open up your investments to real estate, private IRA lending, private stocks, tax liens, precious metals, and more. Opening up a Self-Directed IRA will expand the breadth of your options… and possibly the depth, as well.

One common argument money managers often make is that Self-Directed IRAs require a more subtle appreciation for the difficulty investments. And while this is true, it’s not prohibitive by any means. Ordinary people make real estate and private investments all the time-often, with stable, effective results.