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Three Simples Reason to open a "Truly Self Directed" IRA

By: Carl Fischer
The "Truly" self-directed IRA, 401K or other qualified plan allows you to:
1. Truly diversify your investment portfolio with investments you really know and understand,
2. Make any investment tax-free or tax deferred and
3. Be in control of your financial future.
Diversification of your portfolio is the number one rule of all financial advisors. It adds a whole new meaning to portfolio diversification when you can add investments you know, understand and work with everyday. A "truly" self-directed account allows a realtor to invest in real estate, a farmer to invest in livestock, a doctor to invest in medical equipment, a mortgage broker to invest in loans, a car salesman to invest in cars, a librarian to invest in books, a software programmer to invest in software royalties, and on and on - you get the point. These individuals know the risks and rewards associated with these investments. Their investment becomes less stressful, more rewarding and easily understood. The self-directed account facilitates diversification while utilizing your expertise and knowledge.
A "truly" self-directed IRA, 401K or other qualified plan allows you to make any investment tax-free or tax deferred that otherwise may be taxable. Tax free/tax deferred investments grow more quickly (exponentially) than taxed accounts considering the same rate of return on an investment. Of course, the growth rate is dependent on each individual's tax rate and the investment return rate.
Very few Americans know that they can make a self-directed IRA investment in real estate or other alternative assets. Most IRA custodians allow you to self direct in anything "they sell", which restricts your options for selfdirected IRA investing to standard assets such as stocks, bonds, mutual funds, commodities, futures and CD's. It is important to understand the effect of taxes on your money.
Assumptions: A 14 year old child contributes $11.00 per day or $330.00 per month or $3960.00 per year to an account for only four years, with no further contributions. A 10% rate of return and a 30% tax bracket is assumed for the taxable account. Compare the difference at 65 years old.

You control your financial future and make all the investment decisions. Historically, Americans depend on themselves and their neighbors. They want to be in control of their own destiny as much as possible. Isn't it just common sense to invest in what, where, and who you know? You direct the purchase and sale of any legal investment (except art, rugs, antiques as described in IRS Code section 4975) no one will recommend or advise you to purchase or sell anything, so there is no conflict of interest and no commissions.
Truly self-directed IRA's, 401K's or other qualified plans are wealth building tools that defy the old adage that "if it seems to good to be true - it is". The longer plans are put off for retirement, the more money it will take to fulfill those plans. No matter what your age, it is never too early, or too late, to begin planning for the future. A self-directed account provides a formidable combination of your knowledge and expertise, tax-free earnings and high-profit investments.
It may not be beneficial to open a "truly" self-directed IRA, 401K, or other qualified plan if you are in one of the following categories:
1. You don't want to diversify and you don't know or understand anything, or
2. You don't feel you pay enough taxes and don't need tax free/tax deferred investments, or
3. you want someone else to control your financial future.
If you are not in one of these categories open a truly self directed account today.
For more information, please visit www.entrustcama.com
Carl Fischer is the Managing Partner of EntrustCAMA located in Spring House, Pa. Entrust is one of the leading self directed retirement plan administrators in the country.