This is a guest blog written by Doug Smith of Castle Rock Capital Management
Are you interested in investing in real estate? Did you know you could do so with your retirement funds? Because of Trump’s expertise and success in the industry, many are hopeful that his administration presents significant progress in this realm. If you understand how to invest in real estate with a self-directed IRA, you gain the opportunity to earn tax-sheltered income for retirement on successful endeavors.
Private lending investments offer many different avenues to earn income. Investors can choose to extend money to individuals for mortgages or other things (like a car or a boat). They can also loan money to businesses and other entities in much the same way a bank or other lending institution would when loaning funds. Your self-directed retirement plan can also extend loans in this manner and earn tax-sheltered income for your retirement.
Thanks to today’s tough requirements, borrowers are often unable to qualify for loans from traditional lending institutions to purchase homes. Borrowers often find a more lenient avenue to acquire funds through privately owned mortgages.
The main reason people self-direct retirement plans is to gain access to the large pool of alternative investments permissible in these accounts. One such asset that is gaining popularity is in the realm of private notes and mortgages.
Alternative investments include a wide variety of assets that many individuals acquire to build retirement income. While everyone agrees a certain percentage of traditional investments, such as stocks, bonds, and mutual funds, should make up part of your portfolio, diversity is essential and the alternative asset class provides exactly that.
By all accounts, the stock market has gotten off to an absolute horrific start in 2016. Nasdaq fell by more than 7 percent; S&P suffered nearly a 6 percent loss. The Dow blue chip-index plummeted by more than 5 percent. In fact, this has been reported to be the Dow Jones’ worst welcoming in of a new year since records on it have been kept—and that would be since 1897.
Energy. We need it. We use it. It’s certainly not going away. In fact, according to a report published in 2013 by the Energy Information Administration (EIA), energy consumption across the globe is on the rise and is demand is expected to increase by 56 percent between 2010 and 2040. Specifically, the article states: