Laying a Foundation for a Tax-Free Future

Estimated reading time: 2 minutes(Last Updated On: April 26, 2021)

What are tangible assets?

Tangible assets have a physical value: think real estate, notes, and even private businesses. These are different from intangible assets, which are investments in the market and include stocks, bonds, and mutual funds.

Why should I invest in them?

To diversify your funds.

Diversification is the main reason people choose to invest in tangible assets to grow their retirement savings. Putting all of your money in stocks and bonds subjects your retirement fund to the whims of the stock market. So, your income during retirement will be highly dependent on the state of the stock market at the time of your retirement.

Diverting some of your funds to tangible assets can provide a buoy to even out investments in the stock markets since the value of your intangible assets is unlikely to be affected by market changes.

To avoid inflation.

The value of stocks and bonds is dependent on the market and lessens over time due to inflation. However, intangible assets have inherent value. This means that their worth will not be affected by inflation. Real estate is a good example of this. Even when the dollar decreases in value, real estate appreciates over time.

To pursue your interests

Tangible assets are a great choice for those who have a special interest in or knowledge of an area. Those who have experience in real estate, for example, can benefit from knowing that section of the market deeply and making informed choices that can have a big payoff.

Big risk, big reward.

This statement is especially true when it comes to tangible assets. Many proponents of tangible assets view them as a way to grow a retirement fund quicker than if it was in the stock market. Tangible assets do carry risks. However, many investors prioritize the ability to invest aggressively wherever they foresee good results.

How can I invest in tangible assets?

A self-directed IRA is key when investing in tangible assets. Not all IRAs are created equal generally, with traditional custodians, your money is limited to investments such as limited to stocks, CDs, bonds, mutual funds, and other related types of investments at the discretion of the custodian in charge of your funds. However, through a truly self-directed IRA, you get to decide how to invest your money — offering a far greater range of options for investment, including real estate, promissory notes, private companies and much more!


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