Build Green by Going Green in a Self-Directed IRA

With Earth Day coming up, are you concerned about the environment and the impact of your own carbon footprint on the world? Do you worry when you hear daily reports about the ramifications of global warming, yet wonder what you can do about it? Did you know that besides making physical changes to help preserve the environment, you can also invest in options and companies who desire to do the same? You can even earn retirement income by going green when choosing assets for your self-directed IRA.

When it comes to planning for your retirement, you can do something to positively affect the environment. In fact, you can do well and good at the same time. How? If you are passionate about protecting the environment, yet still want to invest in assets that have the potential to help you build healthy income, you can invest in eco-friendly alternative assets. Your conventional IRA custodian is not going to permit this type of investment in a brokerage account, but many of these eco-friendly companies offer stock and ownership on a private basis. A self-directed IRA is then needed to make this investment using your retirement plan.

Choose your own assets using a self-directed IRA.

With a self-directed retirement plan, you can choose alternative assets to help build retirement income. Self-direction lets account owners pick assets that they are interested in—instead of just investing in traditional assets offered by the typical retirement plan custodian. This means that if you use a self-directed IRA or other plan, you can choose to invest in the green energy sector and into the private companies that align with your personal beliefs, as well.

Why are investors going green?

The focus of up-and-coming clean technologies is to increase resource efficiency and productivity while decreasing negative environmental impact. These assets are commonly called “green” investments and include opportunities such as energy and energy efficiency, water and waste technology, agriculture, transportation, advanced materials, manufacturing, and more. There are plenty of investors out there who are profoundly dedicated to doing their part in protecting the environment as best as they can.

According to Ed Sappin, CEO of Sappin Global Industries, the alliance of investment and environmental impact is here to stay. “As millennials take over the workforce – inheriting billions – along with evolved views of business responsibility – environmentally conscious investment will flourish.”

Investors pursuing green investments have a variety of options to meet their goals.

They can:

  • Choose a private company where they see a shared passion and can, for example, invest in commodities such as solar technology or tree farms.
  • Choose natural resources – oil, gas, and clean energy technologies.
  • Choose eco-friendly investments in businesses or energy efficient homes or structures.
  • Choose to invest in companies that work to save energy, protect the environment, and promote a green, healthy planet.

With ever-increasing gas prices and dooming voices regarding global warming, investors and entrepreneurs are pursuing ways to make a difference while still making a profit. After all, investing is first and foremost about profit. Going green is not just about balancing environmental sensibilities with profit. Instead, it’s about finding new, fresh solutions which are environmentally conscious and profitable.

Corporate interests which have long been at odds with environmentalists are finally coming together to tackle the tough problems facing our planet and future generations. Although impact investing is growing and shows continued potential, it remains a small piece of the larger investment market.

Of course, all investments carry risks, so if you’re considering investing in these assets you’re your self-directed IRA, you must do your research when choosing any assets. Due diligence is critical and can potentially safeguard your retirement plan and ensure you choose the right opportunities for you. Always seek the advice of a tax or financial professional for these important decisions and to ensure your self-directed IRA remains in compliance with IRS regulations.

Your takeaway.

You can do your part in choosing green investments, but not at the expense of your retirement savings. Diversity is key, so make sure you consult your tax or financial professional to help guide you through the proper steps of creating a healthy diversity in your portfolio. By choosing a few viable “green” assets, you can follow your heart and still enjoy long-term, tax-advantaged growth. Explore your options for socially responsible investing while building the retirement you desire.

Contact Advanta IRA for more information about self-directed IRAs and how you can add a little “green” to your portfolio using these plans.