Jean Chatzky Discusses Self Directed IRAs on the Today Show– New Direction IRA Reports: Sexy Investments are not Just for Wall Street Any More

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Following on the heels of disclosures about Mitt Romney’s stellar self directed IRA performance and the Wall Street Journal article, “IRAs get Sexier”, NBC’s Today show continued exploding the myth that IRAs are limited to investing in publicly traded securities. Finance Editor Jean Chatzky’s discussion of Alternative IRAs revealed a wide range of investment options. Jean showed that the door is open for individual control of retirement investments, and revealed that investment options for IRAs are not limited to Wall Street offerings.

With a self-directed account the investor is not limited to one type of asset. Securities and bonds as well as real estate are possible within one self-directed account.

Following on the heels of disclosures about Mitt Romney’s stellar self directed IRA performance and the Wall Street Journal article, “IRAs get Sexier”, NBC’s Today show continued exploding the myth that IRAs are limited to investing in publicly traded securities. Finance Editor Jean Chatzky’s discussion of Alternative IRAs revealed a wide range of investment options. Jean showed that the door is open for individual control of retirement investments, and revealed that investment options for IRAs are not limited to Wall Street offerings.

The interview highlighted several things independent investors should note when taking charge of their IRA. Sexy IRAs are not just for the wealthy. New Direction IRA, a provider of Self Directed IRAs, reports their average account size is around $80K.    All of New Direction’s clients are in complete control of their IRA. They make the choices for investments, including such things as real estate, private lending, gold and silver, start up and private company investing, and, as mentioned in the Wall Street journal article, Koa Trees. The take-charge investor is in control of their funds whether that is a lot or a little.

Many New Direction clients are augmenting the real estate buying power of their IRAs via debt leverage. A typical real estate IRA taking advantage of a bank loan benefits from a buying power increase of close to 3 times. Catherine Wynne, one of the New Direction’s founders explains, “an $80,000 IRA can purchase stock worth $80,000 or a piece of real estate worth around $235,000. With a willing lender, the IRA can borrow and have significantly more buying power. Taking advantage of leverage enables a successful investor to rebuild their depleted IRA balance faster”.

Wynne also pointed out “about 30% of New Direction investors direct their IRA to purchase real estate, and about 1/3 of those use debt to finance the purchase”. New Direction does not recommend investments or any particular investment strategy, but account holders are encouraged to examine the world of possibilities available to a self-directed IRA. There are many options available for those experienced investors looking to grow their IRA, Roth, or Health Savings Account (HSA), and yes, you did hear HSAs.

Real estate’s decline in value and the related increase in foreclosures puts investors with cash in an advantageous position. Some investors are moving funds out of low performing bonds and into real estate in a hunt for better cash flow. With a self-directed account the investor is not limited to one type of asset. Securities and bonds as well as real estate are possible within one self-directed account. The choice is up to the IRA account holder.

Chatzky mentioned that fees are a consideration when buying alternative assets in your IRA. Since self-directed IRA providers such as New Direction do not sell investments like Wall Street does, they only charge for services. “New Direction’s fees are related to paper pushing.” Wynne explained, “We charge fees for services. Our fees are very visible because they are charged separately and not buried in the asset purchase price. Compared to the securities industry, whose fees are deducted and part of the purchase price, our fees may seem high, but they are generally much less”. Remember, with a New Direction account the clients are providing the investment skill; there is no advising charge, nor any commission embedded in purchasing an asset.

Independent investors find the control and options of a self-directed New Direction plan enable them to broaden their choices, and thus the growth potential of their accounts. They can thus maximize the tax free or tax deferred growth in their accounts, ensuring for themselves a better retirement with less financial stress.

Lastly, Chatzky described the rules for IRA investments. Although not complicated, they are new for most investors. To help investors choose their strategy, New Direction IRA focuses on client eduation. Wynne reveals that New Direction IRA wants clients to be comfortable with what an IRA can and can't do. Learning opportunities range from highly technical classes taught at the University of Denver to quick intro webinars hosted on our website at NewDirectionIRA.com. New Direction imparts their expertise in self-direction via hundreds of free webinars and classes to educate both beginners and experienced investors. Each client has his or her own idea about what a Sexy IRA looks like. With New Direction, they can make that IRA a reality.

New Direction IRA, Inc., a self-directed IRA plan provider, also offers self-directed Roths, Health Savings Accounts, SIMPLE IRAs, Individual 401k plans, SEP IRAs and Coverdell ESAs. They can be reached at 303-546-7930 or toll free at 877-742-1270. Visit their website at NewDirectionIRA.com.

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John Sheflin
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