Empowering Future Generations: Connecting Global Money Week with Self-Directed IRAs
Written By: Daniel Gleich
Key Points
- Global Money Week is an annual global campaign that aims to educate young people on financial literacy to improve their financial well-being and resilience.
- Opening a retirement account, such as a Self-Directed IRA (SDIRA), can help educate account holders about alternative investment opportunities and setting long-term financial goals, among other financial literacy principles.
- Madison Trust’s Self-Directed IRA Specialists are here to answer your questions about the self-directed investing process.
What Is Global Money Week?
Global Money Week (GMW) is an annual global awareness-raising campaign held in March. It is organized by the OECD and its International Network on Financial Education. This international campaign aims to educate young people on the importance of being financially aware and gaining the knowledge, skills, attitudes, and behaviors necessary to work towards making informed financial decisions.
This year’s Global Money Week is March 18-24, 2024. The GMW2024 theme is “Protect your money, secure your future”, which focuses on safe money management and the importance of taking an informed approach to personal finances. Organizations across the world plan their own GMW events to promote personal finance education.
Self-Directed IRAs and Global Money Week
Opening a retirement account, such as a Self-Directed IRA (SDIRA), can help account holders learn key financial literacy principles such as budgeting, saving, and investing. Let’s explore how investing with a Self-Directed IRA can enhance your financial literacy.
Understand Retirement Planning and Long-Term Financial Goals
When you open an SDIRA you get to choose when you would like to receive tax benefits and select an account that corresponds with your selection – Self-Directed Traditional IRA, Self-Directed Roth IRA, Self-Directed SEP IRA, or Self-Directed SIMPLE IRA. No matter what account type you choose, you can learn how to save within a tax-advantaged account and strategize possible ways to achieve your long-term financial goals.
Investment Education
Self-Directed IRAs provide individuals the flexibility and freedom to invest in a wide range of alternative assets including real estate, private equity, promissory notes, and precious metals. Being educated about types of investment opportunities, and their associated potential risk and reward, is considered essential to making informed retirement planning decisions.
Assess Your Risk Tolerance
An important step when investing with a Self-Directed IRA is determining your risk tolerance. This can be determined based on factors such as your financial goals, age, and investment experience. Once you know your risk tolerance, you can choose a suitable alternative investment option.
Diversify Your Retirement Portfolio
A Self-Directed IRA Self-Directed IRAs offer individuals the opportunity to diversify their retirement funds beyond Wall Street. By investing with a Self-Directed IRA, you can learn diversification strategies to potentially mitigate risk and maximize returns by spreading your investments across various asset classes.
Seek Professional Advice
Part of making informed financial decisions is consulting a professional. Before you invest with a SDIRA, you can consult a Self-Directed IRA custodian, financial advisor, tax professional, legal expert, or another financial professional
Stay Updated on Rules and Regulations
By investing with a SDIRA, you must understand IRS rules, tax laws, retirement account regulations, contribution limits, distribution requirements, and investment trends that may affect your retirement savings.
Practice Due Diligence
The hands-on aspect of a Self-Directed IRA, allows account holders to invest in almost any alternative asset they know and believe in. Account holders can select to upgrade to a Self-Directed Checkbook IRA, which gives you access to your retirement funds in real time through the creation of an IRA LLC or IRA Trust. To place an investment, you can simply write a check from your Self-Directed IRA LLC or IRA Trust checking account.
Before investing with a Self-Directed IRA, it is considered best practice to conduct due diligence. This can be done by verifying the legitimacy of the investment, researching the background of investment sponsors, and assessing the potential risks and rewards associated with each investment.
Monitor and Rebalance Your Portfolio
Part of the responsibility of having a retirement account is to regularly monitor the performance of your investments and consider rebalancing your portfolio as needed to maintain your desired asset allocation and risk profile. Having an SDIRA will teach you how you can adjust your investment strategy over time to adapt to changing market conditions and financial goals.
How You Can Participate in Global Money Week
Whether you are part of a school, group, or want to individually improve your financial literacy, there are a variety of activities you can choose to take part in during GMW including:
- Online activities like financial education lectures, hackathons, social media contests, Q&A sessions, online games, and virtual tours of money museums
- Visits to educational locations like stock exchanges, money museums, parliaments, central banks, currency exchanges, local businesses
- Financial workshops and rallies
- Financial education games, savings competitions, and research projects
- Global Money Week’s website offers many more activities.
Let’s Tie It All Up
Global Money Week is just one way to help young people develop sound financial habits, knowledge, attitudes to manage their finances and make informed financial decisions. Self-Directed IRAs are a tool that can help individuals save for retirement, improve their financial literacy, and achieve financial security.
You Have Questions? We Have Answers!
Get in touch with a Self-Directed IRA Specialists to get your questions answered about self-directed investing to be prepared for your financial future.
