Self-directed IRA: The Difference; Real Estate Compared to Stocks

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A self-directed Individual Retirement Account, or IRA, differers from a standard IRA in that it requires the owner of the account - as opposed to an account adviser - to make decisions regarding the investments which go into the IRA. However, it is not a situation where the account holder is directly and solely responsible for every transaction which takes place within the account; an eligible "trustee" or "custodian" is required by IRS regulations who holds the assets in the IRA on behalf of the owner.

The difference here from a regular IRA is that this custodian or trustee simply listens to what the account holder wants and acts accordingly. In a regular IRA, there is someone, usually termed an "investment adviser," who manages the account completely, ultimately making all the decisions about transactions in the IRA. This leaves the account owner "in the dust," so to speak, and this adviser might not always act in the best interests of the account holder. With a self-directed IRA, the owner is in control of all the assets and transactions, a situation which is logically preferable and beneficial to the owner.

One question that might arise from this is how would the owner of an IRA possibly know how to act in such a way that all transactions fall within legal boundaries and regulations? The answer is simple: while the custodian who holds the IRA funds is there to listen to the owners' needs and fulfill them, he or she is also responsible to make sure everything is in compliance with federal laws, keep all required records, give financial reports to you and other parties who may need them, and perform other tasks to make it easier for the account owner to manage everything.

A key benefit to a self-directed IRA is the wide array of assets which it can hold. Real estate (including foreign), stocks, mortgages, franchises, partnerships, private equity and tax liens form only a partial list of what can be held. This means that the account owner can have a diverse portfolio compared to a standard IRA, and thus have many different ways to increase returns. While a few assets cannot be held in this type of IRA, it is nonetheless much more flexible than other forms.

Real estate is one type of investment which can be included in a self-directed IRA, and is one of the safest investments out there. It is one of the few commodities which tends to increase in value, and an investor gets a deed to a tangible parcel of land or a structure which is usually insured against most common forms of loss (for example damage from natural disasters). Stocks have none of these benefits, and historically have averaged around a 15% return on investment (ROI). With City Capital Corporation, a customer gets experts dealing with real estate who do all the work, and provide a ROI much higher than 15%. City Capital Corporation is dedicated to providing such win-win scenarios for investors.

Ephren W. Taylor II first revealed his extraordinary knack for making money at age 12 and he hasn't slowed down since. He was a self-made millionaire while still in his teens. In his twenties he became the youngest African-American CEO of any publicly traded company ever, City Capital Corporation (CTCC). Today Taylor and City Capital oversee tens of millions in assets for clients ranging from entertainment icons and pro athletes to church members and private companies. He is a dynamic speaker and author of the best seller "Creating Success from the Inside Out." Learn more at CashFreeInvesting.com, IRACashFlow.com or Ephren.com.

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