Category Archives: Saving Money

Using Your IRA to Invest In Precious Metals: A Quick Guide

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Whether you’re an amateur or a seasoned investor, you need to understand the importance of asset diversification to maintain a healthy portfolio and a secure retirement. When you own a self-directed IRA, your investment options are practically limitless.

Investing in precious metals is one of the many investment options you have with a self-directed IRA. Unlike the typical stocks, annuities, bonds, and mutual funds, precious metals like gold and silver don’t pay you any interest, but they have historically grown in value over the long term.

Including precious metals into your retirement portfolio may help in the following ways:
>>  Minimize investment volatility and risk
>>  provide a tax-efficient shelter for potential gains, and
>>  Serve as a hedge in the event of an economic downtown.
However, you cannot hold the physical precious metal in your regular individual retirement account (IRA); there are specially designed precious metal IRAs for that.

If you are interested in using your IRA to invest in precious metals, this article is for you. Read on…

What Is a Precious Metal IRA?
A precious metal IRA is a form of self-directed individual retirement account specially designed to allow you to invest in a wide variety of unconventional assets, including real estate, art, and precious metals.

What Precious Metals Can You Invest in for Retirement?  
You can invest in gold, platinum, silver, palladium, and other precious metals, but IRS has set specific purity standards that the precious metals have to meet:
>>  Gold (99.5% pure)
>>  Silver (99.9% pure)
>>  Platinum (99.95% pure)
>>  Palladium (99.95% pure)

Options for Using IRA to Invest in Precious Metals
>> Physical IRA investments in precious metal coins and bullion
IRAs are allowed to own certain precious metals, but you’ll need an IRA trustee or custodian for that. You will have to find an IRA trustee who is willing to set up a self-directed IRA and facilitate the physical transfer and storage of precious metal assets.
>> Indirect IRA investments via precious metal ETFs
If you don’t want to deal with the issues surrounding the physical ownership of precious metals, you can consider buying shares of an exchange-traded fund (ETF) that tracks the precious metal’s value.
>> Indirect IRA investments via precious metal mining stocks
Another option of investing in precious metals is to buy common stock shares of mining companies with your IRA. This idea doesn’t attract any federal-income tax-law problem.

How Much of Your IRA Should Include Precious Metals?
It depends on your financial situation. However, most financial experts recommend investing not more than 5% to 10% of your retirement funds in precious metals. Why so low? That’s because experts believe that:
1.    The portfolios with diversified assets minimize the risk associated with market fluctuation. Investing more in one type of asset (precious metals, in this case) makes you vulnerable to market volatility.
2.    Precious metals are easily accessible to you in times of trouble. In a way, they are as volatile as stocks. Also, when prices rise during market fluctuation, their value may fall once stocks recover.
3.    Although precious metals are known to have historically held their value over the long term, they are not as dynamic in performance as other asset classes, such as stocks. If you invest too much in precious metals, you may restrict the growth of your retirement fund.

How Do You Make a Withdrawal From a Precious Metal IRA?
You have 2 options:
>> Depository Purchase: In this option, you can choose to have the depository purchase the precious metal from you and give you the value of the investment.
>> In-Kind Distributions: In this option, you have the actual physical precious metal shipped to you after you make the distribution.
Whichever option you choose, you’ll need to have a custodian initiate the transaction for you. And always remember that the same rules apply to your precious metal IRAs as normal IRAs.

About the author:
Rick Pendykoski is the owner of Self Directed Retirement Plans LLC, a retirement planning firm based in Goodyear, AZ. He regularly writes for blogs at MoneyForLunch, Biggerpocket, SocialMediaToday, NuWireInvestor & his own blog for Self Directed Retirement Plans. If you need help and guidance with traditional or alternative investments, email him at or visit www.sdretirementplans.com.

You Need a Budget

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The description “You Need a Budget” is basically an American multi-stage personal financial budgeting tool based on the envelope technique. In recent years, it has been the most popular personal budget software among Lifehacker subscribers. You’ll be presented with a wide variety of financial scenarios on every page of the program. Every month you’ll receive an envelope with three to five different financial options and you can choose which one you want to apply for. After you have chosen your option, you simply follow the instructions on that particular financial goal and you will end up having the money you need for that goal.

This budgeting tool also helps you in planning for future goals. For example, if you are looking forward to earning more money in the future, you need to think about how much extra money you will need now and in the future to achieve your financial goals. With this budget, you will no longer have to do your budget calculations once a year because you will know ahead of time the total amount of money you need to set aside and for how long in order for you to reach your financial independence.

This budgeting tool is very easy to use. There are only a few steps that you need to follow in order to prepare and implement your own personal budget. This can be done entirely online. In fact, you can even make changes to the format and layout as often as you like in order to suit your lifestyle.

Although the Simple Budget Planner claims to provide a very simple budgeting method, you will still find several features that you need to look out for. Most budget programs allow you to add and delete categories, but not all do. Other budget tools require you to input a lot of personal information that may be quite sensitive. The budget template you need to use should have space for at least seven categories, but you might need more. This means that you need to search for a budget program that can really help you to plan out your personal financial well-being.

A budget is important for everyone, since it helps you to control spending and prevent yourself from becoming over-indebted. With careful budgeting, you can avoid the accumulation of debt, even when you have a tight budget. When you understand how to properly create and maintain a budget, you will not only be able to save money, but you will also feel more confident about your financial status. When you start using a budget, you will immediately see how much difference it makes to your daily routine. No more worry about missing the bus or spending too much money on impulse buys.

Even if you have already achieved your dream of financial freedom, you can still achieve more by making use of your budget. You will find that the more time you devote to creating your personal budget, the more disciplined you will become. You will be able to know which expenditures are essential, which is unnecessary and which can be minimized or improved. By creating your budget on paper, you will be able to see if there is any room for improvement. If you stick to the plan you have created, you will soon realize that you need a budget!