By J.P. Dahdah, Founder & CEO of Vantage
Do your homework, learn from setbacks or mistakes and you’ll be on your path to becoming a more profitable self-directed IRA investor.
Being a successful self-directed IRA investor means refining the habits of success. It’s like Brian Tracy said, “Successful people are simply those with successful habits.”
Here are 7 habits of successful self-directed IRA investors:
1. Take Responsibility
It’s sad, but true. Nobody is going to step in, wave a magic wand and solve all of your financial woes. As an independent-thinking investor you know it’s up to you to take responsibility for your financial well-being.
2. Use Time to Your Advantage
Use time to your advantage and put the power of compounding interest behind your portfolio and reap the rewards. There are “no shortcuts” to building wealth, but this is a good thing because it means you have the time necessary to make your money work for you.
3. Develop a Customized Financial System
Ask yourself the important questions… What level of annual returns do I want? How much time can I devote to working on my self-directed IRA?
It’s common advice that before starting a traditional investment portfolio, you should have three to six months of income put aside for a ‘rainy day.’ Having that money set aside frees your mind from immediate financial concerns and leads to better decisions.
You may also want to separate your investment capital into two portfolios. The first is your core portfolio. Your top priority here is capital preservation, and this portfolio should be very diversified and conservative. The second portfolio is your growth and exploration portfolio. This portfolio has capital growth as its top priority with higher risk and volatility; the price for the potential of higher returns.
4. Create a Plan
Create a plan and follow it with discipline. It’s easy to be emotional about money, but that won’t make you a profitable self-directed IRA investor. Instead, be systematic. Create a plan you are comfortable with and it will be easier for you to stick to it.
5. Learn Self-Directed IRA Investor Rules and Regulations
Would you expect to become a brain surgeon after attending a weekend seminar and reading a few books? Becoming a successful self-directed IRA investor isn’t any different.
Are you genuinely interested in the vehicle in which you’re investing or are you just lured by the potential for profit? It’s much easier to learn about an asset class that interests you.
6. Manage Risk and Review Performance
We’ve all been there. You invest and it rapidly appreciates in value. Then it stumbles and begins to decline. Should you buy more, let it ride, or sell to protect your gains?
Just like your annual physical, it is wise to review your portfolio annually to make sure you’re on track to meet your financial goals. One of the advantages of investing in most alternative investments is that they undergo much less volatility on a short-term time horizon.
7. Control What You Can!
You cannot control the stock market here or anywhere else in the world, nor can you control the real estate market or any of the assets you may invest in.
The fastest way to investor burnout is to try and control what you can’t. Focus on controlling your own emotions and your own knowledge about the markets you invest in.
For more information on how you can discover your IRA investing alternatives, contact our team at (866) 459-4590 or Info@VantageIRAs.com.