When you hear IRA experts talk, they always advise investing in what you know. In this introduction to the Investing In What You Know Series, David Moore talks about the advantages knowledge of the investment gives you.
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Today we’re talking with David Moore, co-founder of IRA Advantage, a firm that specializes in truly self-directed retirement accounts.
David, as IRA experts you and Tom say invest in what you know. Why?
David Moore: Well, I think we’ve all had a hard time the last decade and I always tell people I’m always very happy to learn, but I get very tired of being taught things; so, you can take so many kicks to the head. If you look at investing and investing smartly, if you know something about what you’re investing in, you obviously have a tremendous advantage. We like to say invest in what you know, because why take more risk than you need to? The issue with Wall Street investment so often is insider trading rules prohibit any specific knowledge that will give you a leg up.
If we look at off Wall Street investments like real estate, for example, or making loans, buying notes, if you’re in one of those businesses you probably have some knowledge that gives you a leg up to seek some opportunities. When we’re talking about things off Wall Street there’s absolutely no reason you can’t invest in what you know, which reduces your risk and hopefully increases your yield.
David, do you have an example of where that really helped a client?
David Moore: Sure. I’ve got many, but one that comes to mind right off the top of my mind is a gentleman that was a mortgage broker and he saw an opportunity after the crash where money was tight, money’s expensive, and that’s what he does for a living. For him to be able to self-direct his retirement account to make loans to people, that was only a natural situation, something that he had the skills to take care of to ensure that he was doing it safely. He had the ability to give himself a very nice, safe return investing in something that he truly knew inside-out.
Thank you, David. Listeners may call 503-619-0223 or can visit IRA Advantage for more information.
Although investing in what you know can really help you, there are restrictions as to what is and is not allowed. Follow this series of posts to learn more, or to get started right away, give David and his team a call today!