It is never too early to think about funding your retirement. You want to have enough set aside to enjoy your post-career life.

Traditionally, people have turned to IRAs and employer-sponsored 401k funds to grow their retirement funds.

These vehicles may be fine for the average investor, but some people prefer to have greater control. If you enjoy being in charge of how your money grows, a self-directed 401k or IRA may be the right choice for you.

What is a self-directed IRA?

An SDIRA is an investment product similar to other IRAs. It comes in both regular and Roth varieties, giving investors options of when to pay the taxes on the income. However, a self-directed IRA provides greater freedom for investors.

In a self-directed arrangement, an appointed custodian administrates the fund, but the owner makes the investment decisions. Investors must take a hands-on approach to their retirement funds. The fund custodian’s job is to buy and sell according to the directives of the investor.

These retirement products have access to a wider variety of investment options. While traditional funds work with stocks, bonds, and CDs, a self-directed vehicle can include investment opportunities such as real estate and commodities.

The Benefits of an SDIRA

People who enjoy investing and following markets may see several benefits from a self-directed 401k or IRA. They are free to do market research and follow through with investment decisions. For some investors, this arrangement offers a welcome sense of control and oversight.

Including alternative investments is another positive attribute. Long-term real estate investments can provide a stable base for growth. Higher-risk investments like commodities and cryptocurrencies may allow short-term gains that will outpace the stock market.

At the same time, an SDIRA provides the same tax benefits as traditional IRA products. For example, withdrawals from a Roth SDIRA do not incur income tax in retirement.

The Risks of an SDIRA

The potential risks of self-directed funds relate to the independence and flexibility they offer. The fund administrator merely holds the fund on behalf of the investor. They are prohibited from offering advice, so they cannot protect you from bad investments. Some investors will work with an independent financial advisor as they make decisions about their funds.

Cashing in investments can represent another challenge. Typical investments like stocks and bonds are relatively easy to buy and sell. Most transactions happen in less than a business day. More complicated investments like real estate can delay the process. If you are trying to sell a rental property, there is no guarantee of an immediate buyer.

Opening an SDIRA

An SDIRA is a specialized financial product and is not available from every broker. You will need to find a knowledgeable provider who is willing to serve as your custodian.

Once you have established your plan, the same contribution rules apply as with traditional IRAs. Currently, you can contribute up to $6,000 per year if you are under 50. People 50 and older can contribute an extra $1,000.

Getting the Most from an Self-Directed IRA

With a self-directed fund, diligence is critical. You are responsible for the success or failure of your investment strategy. Your research should begin with understanding the limits of the products offered by different providers.

Although self-directed funds allow for less common investment opportunities, custodians are not required to work with every type. If you are interested in using IRA funds to invest in precious metals, you want to confirm that your custodian works with that type of investment.

Self-directed fund owners should expect to pay more attention to their portfolios. With IRAs, the custodian manages the investments to protect investors from losses. You are responsible for maintaining growth and handling market downturns with an SDIRA.

Because of the higher risks involved with self-directed funds, these products may be a better fit for younger investors with more time to make up losses. As you near retirement, you will want to keep your money in a low-risk environment.

Is a self-directed retirement account the right choice for you?

Choosing a self-directed retirement vehicle is often a matter of personality. If you are someone who stresses out at the first sign of a volatile market, this type of investment is probably not for you.

However, if you have the time, interest, and risk tolerance to handle changing markets, a self-directed fund can be a thrilling financial venture.

Researching unique investments will allow you to learn more about the world of finance. You can carefully examine new businesses, follow emerging trends, and discover the challenges of the real estate market. At the same time, tolerating a higher risk can lead to greater returns and more funds to enjoy at the end of your career.

For the right investor, self-directed retirement funds are an exciting and profitable way to save for the future.

In a robust capitalistic society, the relationship between new companies and their investors is a game of mutual risk and reward.

These new startups need capital to get off the ground.

For willing investors, the potential to get a massive return on the investment exists. The trick is finding the right investment.

If you are interested in venture capital investment opportunities, then you need the best information to guide the process.

What Is Venture Capital?

Venture capital is a unique form of financing. It comes from private equity sources.

In other words, it is funding from private individuals or companies.

Venture capital is focused on startup companies. These new companies are usually at a stage of extreme growth, which is why they need additional funding to realize rapid expansion.

Venture capital investments are typically made in exchange for an ownership stake in the startup. While such an investment has the potential to be extremely lucrative, it can also yield nothing.

Many venture capital investments fail.

Venture capital opportunities are often found in dynamic industries like information technology, biotechnology or clean technology.

Finding Venture Capital Investment Opportunities

Given the high levels of risk and reward, it is important to pick the best venture capital investment opportunities. However, finding these opportunities can be easier said than done.

Startups are being developed all over the world, and they represent a wide range of industries. Getting access to the information you need to make an informed decision is imperative.

Resources to Guide Your Investment Search

To guide your search for a viable investment, make sure you have access to several tiers of data. First, you need to be able to find these startup companies. There are numerous resources and news websites that talk about the hottest developing companies. Staying on top of the latest news can alert you to some of the best opportunities.

Before you invest in a company, you need to know its business model and how it intends to continue growing.

You should look closely at the company’s history, and you need access to its growth projections. This information is needed to decide whether or not the investment interests you. You can find this information when you leverage key networks and databases designed for investors and startups.

Urban Capital Network

Urban Capital Network (UCN) is an extraordinary resource. Although there are many networks for venture capital investors, UCN seeks to broaden access to such investments.

In this manner, UCN has essentially created a more democratic investment process.

This means that more people than ever have access to these investments, and the growth potential is substantial. All the investment opportunities on the network are vetted for their viability, making this a powerful resource for novice and experienced investors.

Angel Investor Networks

Angel investors are important players in venture capitalism. These investors buy up large portions of a company during its early phases.

Then, when the company has grown, the angel investor will sell his or her shares at a profit. Angel investments are seen as relatively short-term.

A network of angel investors seeks to connect investors to viable investment opportunities. It is important to remember the unique role of an angel investor before putting your name out there as a potential angel investor. However, if the scope of the role suits your interests and resources, then becoming involved with this kind of network is a smart idea.

Venture Capital Databases

For more standard venture capital investments, hooking up with a venture capital database can be a great option. These databases are designed for potential investors.

You can list your information in such a database. Then, startups will seek you out.

This can make it easier to sort through the possibilities since you only have to vet companies that reach out to you. When you put your information in the database, you will be expected to disclose some key details so companies know what kind of investor you will be.

Startup Databases

Startup databases look at the relationship between investors and companies from the other angle. When you peruse a startup database as an investor, you have the chance to consider each company for yourself.

You can expect to spend more time doing research when you leverage a startup database, but you will also have more control over what opportunities you want to pursue.

If you are new to the process, then this level of control can be overwhelming. However, many investors also find it empowering.

A Few Tips To Consider When Evaluating Investment Opportunities

Once you have access to the resources, you need to develop a process to evaluate your options. Consider the six following criteria to get started.

• Character: Consider the character of the business partners. This can be subjective, but you may be drawn to their experience, integrity, background and more.
• Capacity: Look at what the company is capable of putting out. The capacity will be tied to your potential earnings.
• Innovation: Focusing on true innovation can ground your search. Entirely new ideas have more potential to make inroads in the market.
• Community Benefit: You have to consider the value of the business. If the business yields palpable benefit to the industry or the world at large, then it might be more viable.
• Sustainability: The business should have a plan that outlines how growth can be managed over time. You do not want a hot idea that fizzles out fast.
• Finances: Ultimately, investment is about the numbers. You want to look into the company’s finances to understand the risk and reward.

Final Thoughts on Venture Capital Investment Opportunities

Venture capitalism is an important part of society. If you want to be a part of that process and experience the excitement and growth, then you have to be prepared with the best resources. Use these resources to do your research, and you can make your first investment in no time.

Expertise is not as revered as it once was. From scientists to historians, a large percentage of society has become distrustful of these experts.

However, experts can be beneficial for those who choose to listen to them. No one wants to be the first person to get on a plane designed by a chef.

Personal finance is another of the areas in life in which it can pay off to listen to experts. Investing is a team sport, and you’ll want to have experts on your team.

Investing On Your Own

Before we dive into building an investment team, you can definitely invest on your own – if you’re comfortable with it.

One piece of advice that can benefit many Americans is the recommendation to purchase index funds. The Oracle of Omaha, Warren Buffett, told investors that purchasing a simple S&P 500 index fund is the best strategy for the vast majority of people.

Investing in index funds can be a great option for those who want to execute a do-it-yourself plan when it comes to investing.

This strategy can pay off with 10% returns on a regular basis. Some years will have higher growth; other years will have lower returns.

However, on average, the American stock market has returned an average of 10% over the long run.

While this strategy can build wealth over a period of decades, it’s not likely to give market-beating returns because you’re effectively investing in the market as a whole.

Amass A Team For More Investment Opportunities

Your financial team should have experts to help you beat the market.

You’re not guaranteed to achieve otherworldly returns, but experts can give you the scoop on some investments that are not available to the general public.

Hire An Accountant

An accountant should be one important member of your financial team. The right accountant can help you navigate a complex tax code and file your returns. She can also give you advice that can help you minimize your taxes in the short run and the long run.

Accountants can at times provide a good idea of how business financial reports function, and this can help you better navigate the world of investing.

Talk With A Financial Planner

A financial planner provides a more holistic service than many financial advisors. Some financial advisors tend to serve primarily as brokers. For this reason, you’ll probably want to look for a planner who serves as a fiduciary agent. This means that the advisor or planner will act in your best interest.

Those who do not serve as fiduciaries can use a suitability standard and recommend investments that are “suitable” for someone in your situation. What might be suitable for you might not be the best strategy for your individual circumstances.

An advisor who holds to a fiduciary standard will attempt to act in your best interest whether he or she gets a hefty commission. Many fiduciaries are fee-based advisors who charge a flat fee for their advice, and this alleviates the concern over commissions that some funds pay out.

A financial planner will also give taxation and long-term planning advice. This can involve recommendations for life insurance to protect your family’s financial standing should you or your spouse die early.

Additionally, financial planners will recommend retirement accounts that might work for your specific situation. Long-term care insurance can also make sense for many people. A financial planner can also give insight into estate planning so that your heirs are able to keep more of your accumulated wealth and so that less of it goes to the government.

While you can definitely cherry pick different individuals to invest with, perhaps the better opportunity is to invest with a team that provides various investment opportunities for you.

Investing Is A Team Sport – Be Part of an Investment Group

Involving yourself with these experts can help you improve your financial health over the long run. It can be a good idea to get started with some index funds if you’re beginning your investing journey, but if you want to move past this initial stage and really plan for the future, you’ll want to team up with other investors or companies that provide investment opportunities.

Peter Thiel is perhaps best known as the founder of PayPal. He’s also gained some notoriety recently for amassing a $5 billion fortune in his Roth IRA.

He bought shares of PayPal for pennies and then watched them grow for years. Because he stayed within the contribution limit for a Roth account, he can withdraw his billions on a tax-free basis.

You can’t buy PayPal for pennies a share today, but you can learn about cutting-edge investments if you’ve surrounded yourself with an investment team like Urban Capital Network that keeps up with great opportunities.

Interacting with a team like Urban Capital Network can allow you to ask questions that will help you make educated decisions. Not all of your choices will pay off like Thiel’s Roth IRA investment, but a few strategic small investments can wind up paying off in huge sums over time.

Surrounding yourself with a team that can make good recommendations will increase your likelihood of finding an investment that will pay off handsomely over the long run.

Many of the best investments are not even on the public markets.

That’s why you should want to be part of a group like Urban Capital Network so that you can surround yourself with a team of people who have knowledge of the pre-IPO market.

If you’re looking to work with a team that will help you achieve your goals and provide you with salient investing advice, be sure to contact us. We’re ready to work with you.

You work hard, and taking your retirement plans seriously is just part of who you are. A well-managed investment portfolio can help you to achieve your retirement goals and more.

How do professional financial advisors create investment portfolios that can fund your child’s college education, the family’s dream vacation to Disney World, and your daughter’s wedding?

The answer is diversification.

A diverse investment portfolio is a balanced one that contains different categories of assets that help to reduce the risk of investing in a volatile, global marketplace.

What Does a Diverse Investment Portfolio Look Like?

As a goal-oriented investor, you probably believe that a diversified portfolio is one that maximizes profit. However, increasing high financial yields is not the main objective of diversification.

A diverse investment portfolio has a collection of asset categories that work together to reduce risk to the portfolio in its entirety.

You only have to look at the nation’s stock exchanges to know that financial markets can be volatile. Some market changes are easily predicted because they are caused by cyclical milestones. Others happen due to unexpected events such as a power plant meltdown or a regional crop failure.

By using a diversification investment strategy, you never have your nest egg in one basket.

How to Choose the Right Investment Strategies (and Which Ones to Avoid)

Every journey needs a road map, and your path to financial security is no exception. It requires an investment strategy that’s tailored to your particular situation, goals, and aspirations.

A person who has just started her engineering career at 23 years old needs a very different strategy than a middle-aged business executive who wants to semi-retire in five years.

Some common investment strategies include value investing and growth investing.

Value investing happens when you research a set of stocks and buy those that are underpriced. People who use the value investing strategy typically hold on to those discounted stocks for several years until their prices rise. This investment strategy was made famous by Warren Buffett.

Growth investing happens when you research stocks and choose to buy ones that are based on the growth potential of the issuing companies. A little-known company that has high-growth potential is an excellent candidate for a stock purchase if you want to use the growth investing strategy. Peter Lynch made this style of investing popular.

In the example of the 23 year old, newly-minted engineer, the value investing strategy may fit her better than the growth investing one. She has plenty of time to hold stocks and wait for them to rise in price before she needs to cash them in for retirement.

There are many investment strategies that people use to gain wealth. Some are generally not recommended by reputable financial experts due to their overly high levels of risk and speculative characteristics.

Here are some investment strategies that usually make the “Do Not Recommend” list for financial experts.

• Derivatives
• Futures and options trading
• FOREX trading

Startups

When societies face economic turmoil, startups offer a glimmer of hope. In these cases, a business owner usually has found a way to meet a need after a financial crisis. This is also a period when investors may have a hard time finding a place to park their money that will bring them adequate returns.

Investing in a lucrative startup fulfills that need effortlessly.

YouTuber John Williams gives a recent example of this. He created a new company that matches investors with homeowners who will be financially impacted when the COVID-related foreclosure bans are lifted.

Real Estate

Investing in real estate is a time-tested way to grow your wealth while reducing risk across your portfolio.

Although you can invest in real estate by buying land, homes, or commercial buildings directly, many financial advisors recommend investing in real estate investment trusts or REITs. With a REIT, you’ll gain a share in the income that’s generated by the trust’s property portfolio.

Stocks

Stocks are usually the go-to asset to have in your portfolio when you need the highest growth over a long period of time. However, these high-growth assets present a higher risk than many other assets.

Financial advisors recommend a mix of domestic and international stocks for investors who have a high risk tolerance and plenty of time to realize gains from their investments.
Bonds

Precious Metals

Precious metals such as silver, gold, and platinum have always been used to store value. When currencies suffer from inflation, gold and other precious metals retain their value. In fact, market trends show that a falling dollar is consistently followed by a spike in gold price.

Cryptocurrencies

While some investors have made a lot of money trading cryptocurrencies lately, many financial advisors exercise caution when recommending cryptocurrencies as part of a diverse portfolio strategy.

Cryptocurrencies are highly volatile but present investors with the potential for high yields. However, many of them have a speculative nature that’s off-putting to seasoned financial advisors.

Cash

Many people underestimate the investment power of cash until they are on the other side of a financial crisis.

During these times, financial advisors rebalance portfolios and use cash to purchase other investment assets at a discount. By doing this, cash helps to offset losses that investors incurred during the financial crisis.

These cash investments include money market funds and short-term certificates of deposit.

Final Thoughts on Creating a Diverse Investment Portfolio

As you stand in line at your favorite restaurant, you catch a glimpse of a silver-haired man smiling and having dinner with his wife. Her eyes sparkle as they share an inside joke. When you look at them, it seems as if they don’t have a care in the world.

That’s the look of financial security.

When you’re depending on your investments to achieve short or long-term financial security, you must begin with a diversified investment portfolio. If you’re ready to explore options, contact us today.