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The Different Path

That great financial sage Yogi Berra once allegedly said, “When you come to a fork in the road, take it.” For some people, choosing a different path has, as Robert Frost said, made all the difference in the world. When it comes to IRA investments most people seem to put their money into the tried and sometimes true stocks, bonds, CDs or mutual funds. But other people want to take Yogi’s fork in the road, confident that indeed it just might make all the difference in the world.

Although the law does permit many forms of nontraditional IRA investments, few people take advantage of the law. Nontraditional investments are generally held in what are called self-directed IRAs. Not all forms of investments are allowed to be part of an IRA. Collectibles such as coins, stamps or works of art are examples of prohibited IRA investments. However, the law will allow you to put into an IRA such less common investments as real estate, gold bullion, limited partnerships, private mortgages, foreign securities, futures contracts and equipment leases. Yet although it is legal to have your IRA invested in those vehicles, you may find it difficult to find an IRA custodian willing to hold them for you. IRA custodians must meet IRS guidelines or risk losing their certification to act as an IRA custodian. The average bank or brokerage house, neither familiar with the IRA rules pertaining to those types of investments nor wishing to take the risks associated with those investments, is unlikely to act as your IRA custodian in those instances. If you buy a vacation home as an IRA investment, you must run it as a business and cannot use it personally.


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