Monthly Archives: August 2016

IRA Investing – Are Ira’s Good Investments?

With the current credit turmoil and stock market meltdown you could be forgiven for wondering about your IRA. IF you contribute to an IRA you may be pondering are IRA good investments when the financial going gets tough as it is now?

The figures aren’t good. In the last year and a half, despite massive growth of IRA investments in such traditional areas of investing as mutual funds, stocks and bonds, retirement plans have lost something approaching $2 trillion.

That’s scary, and is evidence of a financial system in severe distress, despite the growth of IRA investments over the last decade.

However despite evidence that investing, including IRA investing, isn’t currently as successful as it used to be, the fact remains that we are all going to retire at some stage in the future. And population demographics, and in particular the aging of our population, suggest clearly that the government won’t be able to afford to be generous when it comes to retirement benefits.

The fact remains that, even if returns on investments aren’t good at the moment, we still need to plan and invest for our retirement. And an Individual Retirement Account is still one of the best ways to invest for your future. And a self directed IRA is still the best form of IRA.

Why are IRAs good investments? There’s a number of reasons. The first is the tax advantages. The government wants us to invest for our retirement to reduce the burden on the public purse, so to encourage us to do so it offers very significant tax incentives. These tax incentives are well worthwhile, and are attracted even during down times. Contributing to an IRA is an extremely tax positive way to save money.

And if you structure your IRA properly a good Individual Retirement Account allows you to invest in a wide range of investment vehicles, allowing you to diversify your portfolio.

How do you structure your IRA to do this? By starting a self managed IRA, or what is also known as a self directed IRA.

Unlike traditional IRAs where you invest your retirement funds with an organization like a bank or mutual fund, usually in their investments, a self directed IRA allows you to control your investments yourself. And if it is structured properly you can invest your funds in a much wider range of investment vehicles than you can with a traditional, and more limited, IRA.

For example in a well formed self managed IRA you can invest in and hold real estate. Many are unaware that it’s perfectly possible to invest your IRA in real estate, but it is, in fact perfectly possible. The fact that only around 4% of IRA holders hold a self directed IRA is testament to the fact that many people don’t appreciate the advantages of having an IRA that you can invest in real estate.

Why real estate? Despite current signs to the contrary, real estate is the best long term investment. It has significant long term growth, is relatively stable, and offers good income possibilities as well as capital growth. Even in bad times high quality real estate is in demand.

Note I said high quality real estate. Even right now there are excellent opportunities available to invest your IRA, or any other investment funds for that matter, in high quality real estate. Real estate that is in demand even now, and going up in price. There is one company in particular offering excellent returns on real estate right now, and generating returns for investors that would leave stock market investors salivating.

But choose the wrong real estate investment for your IRA and you could be badly burned. IRA investing for beginners has it’s traps, especially now, and you need good quality advice and a solid investment strategy.

So if you’re asking yourself are IRA good investments, be heartened. It is always important to invest for your retirement, and the tax advantages of using an IRA make them attractive at any time. But you need to structure your IRA properly, using a self managed IRA, and take advantage of some of the significant real estate investment opportunities available right now.

Invest your retirement funds in the wrong place and you may find that when the markets pick up you have no funds left to invest to take advantage of it.

So yes, IRAs are still good investments, as long as you do it right.

The best place to invest your IRA, now or at any time, is real estate. It’s generated the majority of wealth in our country and will always do so. Use your IRA to be a part of that.