Private Placements IRA Benefits

Private placements IRAs are becoming quite popular with everyday investors looking for better ways to grow their retirement savings. The reason why these accounts are so popular is that they offer the accountholder a great deal more control over their investment activities as well as the rate of return they receive on their investments. They also provide investors with a better hedge against losses as well as inflation. Here are a few things that you need to know about the benefits of owning a private placements IRA.

Private Placements IRAs offer more control

As an investor, one of the things that most people hate about contributing to an IRA is the lack of control they have over the types of investments they make. A private placements IRA opens up many new investment opportunities by allowing investors to make investments in privately held companies. There are a variety of companies that private placements IRA accountholders can invest in that aren’t available by those who invest in traditional or Roth IRAs or even 401ks. These include limited liability companies, limited liability partnerships, C corporations, startup companies, small businesses and more.

Because of the greater flexibility in investment opportunities, investors are in a unique position to take advantage of up and coming ground floor opportunities that aren’t available to other investors, increasing the chances of a big profit.

Private Placements IRAs Offer Greater Rewards

Taking advantage of innovative new ideas or new companies is a pretty big risk. There is always the chance that companies will go under or that ideas will tank. However, with these larger risks comes greater rewards. This is because you are in charge of assigning a return to your investment. As the investor, you are in the driver’s seat when it comes to deciding how much your investment is worth in terms of the percentage of ownership you will receive. And, of course, the more of the company you own, the larger your profits will be when the company does well.

Of course, there are also downsides to taking such large risks. However, the risks can be mitigated by doing your due diligence on the company you are looking to invest in to ensure that their business model is sound and that they are doing the things they need to in order to ensure longevity in the marketplace.

Private Placements IRAs Offer a Hedge Against Loss and Inflation

While it is true that investing in privately held companies is risky, the truth of the matter is that because you are not invested in stocks, your investment is not directly affected by flagging financial markets. Of course, the company you choose to invest in must be able to thrive while others are flagging in order to reap this benefit, being able to disassociate your investments from financial markets is a great way to prevent a total loss of your savings because of another economic downturn.

Private Placements IRAs are a great way for those looking to grow their retirement savings more quickly than traditional retirement account options while helping to offset the risk of loss.