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If you are considering getting a retirement plan, your first step is deciding which particular plan to choose. For the record, it doesn’t take a rocket scientist to know that the self-directed IRA is the best possible option out there. It is incredibly safe to keep funds within a self-directed IRA because such an account is not only allowed, but is also encouraged by the government. It cannot be more secure where there is a government guarantee. However, wherever there is money, there are scammers. You would have to use your common sense when using a self-directed IRA, just as you would when using your credit card at the supermarket checkout.

There has been a sharp increase in the number of reports and complaints of fraudulent schemes that take advantage of the self-directed IRA mechanism. The Securities and Exchange Commission (SEC) has uncovered numerous cases where corrupt promoters of fraudulent schemes lead unsuspecting investors to self-directed IRAs.

Recognizing that self-directed IRAs are a safe and probably the most efficient way to save for retirement, investors should never let their guard down because all that glitters is not gold. Before proceeding to transfer funds to a custodian, you should verify their qualification so as not to get caught up in their network. Always check with an unbiased source if the custodian is licensed. A good place to check this information is the SEC or your state securities regulator.

If someone tells you about a good but unsolicited investment offer, take a step back and ask yourself “Why would someone talk about a great investment opportunity?” Ask yourself this question even if the person who informed you about the offer is a friend, coworker, or family member.

Keep in mind that no matter what you are investing in, there is always some risk, no matter how small the amount. The higher the risk, the more profit you will make if you succeed – it’s like gambling. One of the best weapons scammers have to lure innocent people into fraudulent schemes is “guaranteed returns.” This phrase should be a big red flag because there can never be a guarantee to make an investment. Scammers often request funds from a self-directed IRA as one of the terms of the investment.

Scammers often target people who are financially well off and willing to take big risks for big profits. So if you think you are lucky enough to fall into that category, you should be aware that the next scammer could be right around the corner.

Whenever in doubt, don’t hesitate to contact a financial expert.

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