I like to think of myself as a reasonably savvy investor. I mean, I should be, right? (MBA, financial industry experience, blah, blah, blah.) But, perhaps like many people, I’ve for the most part thought of “diversification” in terms of international stocks versus domestic stocks, energy stocks versus packaged goods, growth versus income, etc., etc. Surely with all the variety in the public markets, it must be possible to diversify using just my discount brokerage account, right?
I think we all now know the correct answer to that question.
Thankfully, I’ve taken on a consulting assignment with a trust deed investment company called Sterling Pacific Financial that has opened my eyes to all sorts of new opportunities. Chief among them: true retirement account diversification into real estate, private equities, notes and deeds and more.
What’s that you say? CPA or adviser told you it’s not possible to invest your IRAs in these kinds of things? I’ve been there, too. Back when I started my publishing business, several experts told me it was simply impossible to invest my retirement funds in it. Costly misinformation, as I wound up taking several early withdrawals and paying stiff tax penalties on them. Now I know better.
True IRA diversification is possible, provided your account is truly self-directed. Not “self-directed-into-anything-my-brokerage-sells,” but self-directed into anything I want (save the one or two truly improbable investments the IRS actually forbids, such as collectibles).
This kind of information is crucial for anyone concerned about their financial future, but, in my opinion, it’s even more so for independent professionals and entrepreneurs. So expect me to harp on it a fair bit more.
A couple of good resources to check out:
PENSCO’s Symposium - PENSCO is a custodian that can help you establish a truly self-directed IRA. They do IRA-related events like this from time-to-time, all over the country, that are helpful for investment professionals and investors alike.
IRA Association of America – a non-profit dedicated to educating the investment community and the public about true self-directed IRA investing.
I met their CEO, Liza Atwood, through an AFWPI event a couple of years ago. 