Due Diligence Level 2: Ready, Set, Invest

Due Diligence Level 2: Ready, Set, Invest

Using a self-directed retirement account to invest in notes is a great idea, but there are some preliminary steps that must be done.  First, you must open and fund a self-directed retirement account with a custodian that allows you to do these types of investments.  Please do not expect the large Wall-Street-oriented firms to understand what you want to do.  You will need to use one of the custodians in this incomplete list:  Quest Trust Company, Kingdom Trust Company, Equity Trust Company, CamaPlan, NuView Trust Company, IRA Services and MidAtlantic.  These companies are just a fraction of the 40+ choices available.

Once you choose to use a self-directed retirement account to invest in notes, you are required to learn very important rules, such as the types of prohibited transactions, disqualified persons, prohibited investments and other things related to Unrelated Business Income Tax (UBIT) and the plan asset rules.  There are all sorts of books and YouTube videos available to teach you much of that information.

You need to know your custodian or administrator.  How do they operate?  What do they require?  What are the procedures they want you to follow for directing them to make an investment in notes?  Remember, it is a self-directed retirement account.  It is your responsibility to make sure you manage and understand your account.

On my Facebook page “Watson Invested,” I have posted several short videos about self-directed IRA investing and notes.  Enjoy each of these brief videos.