8 Common Mistakes Using a Self Directed IRA
I decided to write this post because over the years while working with clients, I have come across the same mistakes over and over again. Some of these mistakes are from a misinterpretation of the rules, some are through a lack of knowledge in certain areas, and the most common one being unaware of the capability to invest in alternative investments inside a self directed IRA. While most of the rules are easy to find, unfortunately they don’t all appear in one place. I wrote this post to help address these common mistakes using a self directed IRA.
What is a self directed IRA?
I want to define “self directed IRA” for people who are unaware of the definition. A self directed IRA is an account with preferential tax treatment, which is capable of investing in alternative investments. These alternative investments could be assets such as real estate, tax liens, private mortgages, gold & silver, horses, livestock, farmland, medical equipment, and more. While a self directed IRA can invest in traditional assets such as stock, bonds and mutual funds, it is typically used to invest in alternative investments. For further information about what a self directed IRA is, please read the following post about self-directed retirement accounts