Tips on Setting Up a Self Directed IRA

That free and easy setup self directed IRA might not be a good choice. I looked at the company’s offering that deal. The additional fees that they charge are numerous and the services they offer are limited. Remember to always shop around before you make a final decision.

A self-directed account is a good idea, because, generally speaking, you have more options, but the company’s that are offering free set up are brokerages. Maybe you only want to invest in stocks, bonds and money market funds, but they are charging high fees for each transaction.

A better choice is a company that charges a reasonable set-up fee and an annual fee, but no transaction fees. Of course, you’ll always have to pay a fee for trading stocks or foreign currencies online, but as long as you stick with standard stock market investments, some companies do not charge an extra fee.

Instead of a free and easy setup self directed IRA, you may want to consider a little more diversification. There are a number of allowed investment types that are not related to the stock or money markets.

Some of them can yield very high returns. Others are yield less, but you have to go with the investment types that you understand.

For example, one investor that I know of is a music teacher. His students and others were interested in renting musical instruments. He used funds from his self-directed account to buy a number of instruments and began renting them out.

In less than a year, the rental income paid for the initial investment. So, after two years, he doubled his initial investment and the account will continue to grow in this way for as long as the instruments hold up. With proper maintenance, they could last for a hundred years or more.

With one of the free and easy setup self directed IRA accounts, he could have never made that type of investment, because it’s not allowed by the custodian. Even though, it is allowed under the tax law. But, there is one investment type that anyone can make and the profits can be very high.

Holding real estate in a retirement account is allowed and some advisers encourage it. Real estate is typically not affected by the volatility of the stock market.

You can find an easy setup self directed IRA custodian [http://smart-ira-investing.com/] that allows real estate transactions, but set up is not “free”. It costs about $50. But, custodians that charge for setting up the account may not charge transaction fees or percentages on un-invested cash balances. That’s good, because you need cash balances to invest in real estate.

All of the costs, including the purchase price, must come from the account. All rental income or other profits must be returned to it. There are certain prohibited transactions and rules you need to learn before you get started, but the real estate market can help you secure your future faster than you ever dreamed possible.

Choose the right easy setup self directed IRA and look for some good advisers. Help is available, if you know where to look.