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Genuine Self-Direction: Invest In What You Know

By Curtis L. DeYoung, |Founder, President, CEO, American Pension Services
Wednesday, 15 Jun 2011 | 12:50 PM ET
retired couple paperwork
Ron Chapple | Taxi | Getty Images
retired couple paperwork

Why risk your retirement investing in what others claim to know? Technically all retirement plans can be self-directed, but unfortunately the majority of plans are limited to the assets sold by the plan provider.

In contrast, self-directed retirement plans offer account owners the freedom to invest in what they know.

The great disappointment of the last half century has been the account owner’s unwitting surrender of personal responsibility for retirement to someone else, anyone else, surrendered with the hope that the elective someone else cares more about their money than they do.

When the traditional retirement industry told Americans “This is easy! Hand over the retirement reigns and when you hit the golden years I’ll let you know how we did” they listened surrendering personal responsibility for their future to their broker/adviser/friend.

Account owners must take back the responsibility and start investing in what they know.

If your retirement plan eliminates your freedom to invest in what makes most sense to you it is because the institutions offering the plan limits it, not the law.

The law allows a wide range of traditional and non-traditional investments in retirement plans.

These investments include but are not limited to: real estate, IPO stocks, trust deed notes, closely held stock, promissory notes, oil and gas leases, LLCs, sales contracts and C corporations.

There's also options, franchises, leases, tax lien certificates, stocks, coins, bonds and mutual funds.

While banks are busy adopting stringent lending practices, self-directed IRA and 401(k) account owners are making hard money loans earning tax-advantaged interest within their plans.

While real estate is on sale, and buyers struggle to fund transactions, self-directed account owners are purchasing property in their IRAs and 401(k)s.

While the majority of account owners hope for a retirement fortune from the sidelines, self-directed account owners are building a financial legacy investing in what they know.

There are trillions of dollars in IRAs and 401(k)s and billions contributed to 401(k)s each week.

With the freedom to invest retirement funds in tangible assets as diverse as real estate and oil and gas investments, account owners self-directing have the power to significantly improve the current financial landscape.

The key is account owners becoming intimately re-connected with their retirement funds.

Few people know they can, or even want to take full responsibility for their own retirement.

The field of genuine self-direction is not well suited to everyone.

However, if you are a maverick, if you are independent, if you are self-employed, if you know what you want, if you are prepared to invest in what you know genuine self-direction may be for you.

Curtis DeYoung will share more investing advice today on "Power Lunch," 1-2pm ET, as part of a special week-long series, "Hands-On Investing."

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Curtis DeYoung is Founder, President, CEO at American Pension Services.

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