Thu, 29 January 2015
143-Intro to Self-Directed IRAs: How to Invest In Real Estate, Tax Liens, Physical Gold and Silver, Structured Settlements, Horses, Livestock, Farmland, Timberland, and More In Your IRA
I've been looking for an expert on self-directed IRAs to bring on the show and I was thrilled to meet Kirk Chisholm at FinCon last year.
Kirk is an expert in both the self-directed IRA niche and the alternative investments world. His firm, Innovative Advisory Group, helps serve clients in this space with advice.
Self-directed IRAs can be a powerful tool in your arsenal. Just think of the magic of Mitt Romney's $100,000,000 IRA!
When you combine an IRA with alternative investments, you might really be able to work some magic.
What is an Alternative Investment?
Well, right from Kirk's site: "The term “alternative investment” has become a trendy term in the financial services industry to describe new approaches to investing. It is frequently used to describe different asset classes or investment types such as: hedge funds, structured products, managed futures, or even Timber REITs. If you describe traditional assets as stocks, bonds and mutual funds, then by contrast everything else is an alternative investment.
"We look at the term “alternative investments” differently. We take a step beyond the current industry definition and use it to describe assets or investments such as physical real estate, tax liens, physical gold and silver, structured settlements, horses, livestock, farmland, timberland, and more. We would characterize alternative investments as an asset or investment which is: not publicly traded, has a low-correlate to most traditional investments, is too small for institutional investors, is illiquid, is not easily able to be securitized, or is not reliant on the publicly traded markets to be profitable.
"The characterization of what is a suitable asset for diversification purposes is a fluid concept. Some asset classes, which have traditionally provided a low or negative correlation to other assets, have become much more highly correlated since early 2000. Asset classes such as managed futures, timberland, farmland, and certain types of hedge funds in the past did provide a low correlation to the traditional markets, however, due to a higher level of institutional interest in these areas, as well as changing market conditions, they have become more highly correlated to traditional markets. This minimizes the effects of diversification as a risk management tool."
This interview is super fun and super deep.