Jim Hitt Explains How Self-Directed IRA Owners Can Spot Ponzi Schemes and Avoid Trouble

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The Ponzi scheme seems like it’s easy to discover—until individuals fall for one. Jim Hitt of American IRA, a Self-Directed IRA administration firm, recently released a blog post explaining how to spot and avoid Ponzi schemes before it’s too late.

American IRA CEO

American IRA CEO, Jim Hitt

Although the blog post argues that Self-Directed IRA owners tend to be a careful and financially savvy group of investors, their nest eggs tend to also make them targets of Ponzi schemes that are never designed to pay out their investors.

When Bernie Madoff’s Ponzi Scheme came crumbling down to earth, investors lost millions. But despite such popular warning tales, investors—particularly Self-Directed IRA investors with a lot of wealth saved up—are still vulnerable to Ponzi schemes, argues Jim Hitt of American IRA.

Jim Hitt, the American IRA CEO, recently released a blog titled “How Self-Directed IRA Owners Can Spot Ponzi Schemes – Before It’s Too Late.” Although the blog post argues that Self-Directed IRA owners tend to be a careful and financially savvy group of investors, their nest eggs tend to also make them targets of Ponzi schemes that are never designed to pay out their investors.

The post details some recent Ponzi scheme convictions, showing that Ponzi schemes are a very real threat even to today’s investors. In one Ohio case, an individual was convicted of defrauding 34 people out of $4.2 million. These numbers may sound large, but when dividing them up into individual pieces, it’s easy to see why even non-wealthy Self-Directed IRA investors will want to keep a watchful eye out for Ponzi schemes.

The solution, according to Jim Hitt, is to watch for warning signs. These signs include the promises of unrealistic returns that defy common sense, investments with returns that are “suspiciously consistent,” and systems which employ complicated strategies that seem impossible to understand. Compared to traditional investments like stock, real estate, precious metals, and more, these investments should at least raise a red flag as investors weigh their options.

“It’s not that people are foolish,” says Jim Hitt. “It’s that sometimes our judgment gets the better of us. By learning the warning signs of Ponzi schemes, investors can protect their Self-Directed IRA funds through careful planning. Whenever a ‘red flag’ goes off in your mind, there’s usually a reason for it.”

Other signs, like not being able to visit an investment property, show that there is a lack of accountability with the investment that should concern anyone, even if the history of returns are solid. In following Warren Buffet’s number one rule of investing—don’t lose money—many watchful investors can keep building their retirement nest eggs without worrying about schemes and fraud.

About American IRA, LLC:

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American IRA services thousands of clients and has over $300 million in assets under administration.

American IRA was built by investors for investors, and brings their successful investment experience to the table, providing excellent educational material showing the public that their Self-Directed IRA account can invest in a variety of assets such as real estate, private lending, limited liability companies, precious metals and much more.

American IRA is conveniently located in Asheville, NC and Charlotte, NC, and serves clients nationwide.

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Sean McKay
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