4 Creative Uses of a Self-Directed IRA

A self-directed IRA can provide you with a way to have more control over your retirement investments. Many people get very creative when it comes to choosing investments for a self-directed IRA. Here are a few creative uses of a self-directed IRA.

1. Foreign Currencies

Most traditional IRA brokers do not provide the ability to invest in the Forex market. However, if you set up a self-directed IRA, you could potentially get involved in Forex. The Forex market is the single largest financial market in the world with over $2 trillion per day changing hands. Therefore, if you use an investment strategy that works, you could potentially bring in a substantial return on your investment. Some people will put their money with a managed Forex trading account. This allows a professional Forex trader to trade your funds for you. Some people have made much higher returns with this type of investment than they ever could have in the stock market.

2. Franchise 

Another creative use of a self-directed IRA is to purchase a franchise. Many people do not consider this form of investment when thinking of potential uses for IRA funds. However, with this type of investment, you can oversee the business and make sure that you are provided with a substantial return on your investment. Franchises are great because they want to ensure the success of each individual franchise. Therefore, they take the time to put policies into place in order to make the franchises successful.

3. Real Estate

Another possible use of funds from a self-directed IRA is to purchase real estate. If you have enough money in your IRA, you could potentially buy houses or commercial property in order to generate a regular income. This would be similar to investing in a bond with the monthly income that it would provide. However, this will typically be on a much bigger scale. This type of investment also allows you to have some type of say over the returns that you can generate. You could manage the property yourself and oversee any repairs or maintenance that needs to be done.

4. Commodities

Many people also choose to use the funds from a self-directed IRA to invest directly in commodities. Typically, most standard brokerage accounts do not allow for this option. By investing in futures contracts of commodities, you could potentially realize an astounding return on your investment. You could get involved with speculation on oil, gold, silver, wheat, soybeans or corn. Any kind of commodity that can be traded could help you make money for your retirement account. Make sure that you know what you are doing when it comes to trading commodities, though. Many people will get involved in this market because of the astounding returns that they have heard of people making. However, unless you have a sound money management and investment strategy, you could potentially lose a lot of money.

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