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If you care about your retirement portfolio, then you need to diversify it as much as possible. Many investment portfolios focus on stocks and bonds, be they individual shares or funds.
Later on, they might expand into other asset classes, such as real estate, precious metals, or cryptocurrency.
Broad Financial has bitcoin IRA options you can look into for potential retirement investing. You can invest in any particular cryptocurrency through a Broad Financial IRA.
Diversification can mean investing in cryptocurrencies for the first time or in many different digital currencies within the industry.
Through Broad Financial, you can invest in either a traditional IRA or a Roth. The company doesn't have mandatory minimums or asset-based fees, nor is there a custodian.
Knowing more about the cryptocurrency IRA options through this provider helps you make informed decisions.
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About Broad Financial
Broad Financial has headquarters in the New Jersey city of Montvale. The company operates financial and investment services. Originally founded in 2004, the company started off dealing in private real estate investing.
Since then, the company has expanded its services. In addition to traditional, Roth, and SEP real estate IRAs, it also offers precious metals IRAs. Broad Financial now also offers bitcoin IRAs.
Broad Financial has a close working relationship with Madison Trust Company. It is Madison who serves as the custodian for all Broad Financial clients. Many IRAs require some form of a custodian, per IRS regulations.
Bitcoin is one kind of cryptocurrency. It's often considered the very first of all cryptocurrencies. It's also usually been the biggest name and had the highest values.
A cryptocurrency is a form of digital currency. It's not a kind of currency backed by any particular nation or government. Certain investors believe that cryptocurrencies are smart ways to further diversify their investment portfolios.
Advocates for cryptocurrencies argue that bitcoin and other digital currencies serve as a hedge against economic uncertainty and financial turmoil. Not everyone is sold on this, but many investors are turning to cryptocurrencies as part of their investment mix.
Having said that, cryptocurrencies can have quite a bit of volatility to their value independent of what is happening in other investment sectors and asset classes.
A bitcoin IRA from Broad Financial lets you invest in the world's most famous cryptocurrency in an IRA format that has serious tax advantages. You would pay an initial setup fee to start this account.
An annual fee is also required to maintain the account each year.
Broad Financial Cryptocurrency IRA Pros
Any investment you do should only happen because it's advantageous for you to do so. There are no guarantees with any retirement investment. However, a cryptocurrency IRA from Broad Financial might have any number of potential benefits for you.
First of all, Broad Financial doesn't require a minimum investment for a cryptocurrency IRA. Minimum investment levels are common in other asset classes, such as precious metal IRAs.
However, they also tend to keep such investment options only for those who can afford them, but a lack of minimum threshold here means that anyone can invest in a digital currency IRA and those who do can invest as much or little as they prefer.
Secondly, Broad Financial offers flat-rate fees. No matter how much you choose to invest, you'll pay the same fees as anyone else. This makes it much easier to plan out this part of your retirement portfolio.
Third, you can enjoy self-trade options. Much like a gold IRA where you pick your specific precious metals, self-trade options in a cryptocurrency IRA mean you decide when to invest, what to invest in, and how much.
Cryptocurrencies are bought, sold, and traded between users and owners, and self-trade options mean you make your own decisions instead of blindly relying on a fund manager or stock broker to make moves with your money for you.
Fourth, you can choose between either a traditional IRA or a Roth. Traditional IRAs typically use pre-tax funds and let the investment grow in value free of taxes until you start taking distributions or making withdrawals, often at retirement age.
Conversely, a Roth uses income that has already been taxed, but you can start making withdrawals free of taxes at the end after 5 years.
Fifth and finally, you can use a Broad Financial cryptocurrency IRA to invest in any digital currency you want. Bitcoin is the biggest name, but Ethereum is a solid second place.
There are many other cryptocurrencies you can pick from, so you can choose one that appeals to you or a basket of several to get a good spread across the industry.
Broad Financial Cryptocurrency IRA Cons
There are many aspects to Broad Financial cryptocurrency IRA options that you might find appealing. However, they aren't perfect, and you should be aware of the potential downsides.
They include a lack of support from financial advisors, cryptocurrency volatility, and the potential for future legislation. If you rely on the services or advice of a financial advisor, then investing in cryptocurrencies of any kind might not be cohesive with this.
Many financial advisors shy away from recommending digital currencies out of legitimate concerns with them, given how new and unusual they are.
Others simply don't understand them, which happens to many people, and they just don't want to recommend them given how seriously unpredictable they are.
That unpredictability is a tremendous risk. While bitcoin has seen incredibly high values and explosive growth since its inception, it has also lost a lot of its value from its peaks.
Other digital currencies might have room for growth, but many of them may simply never take off or even just fade into obscurity or out of existence.
Governments around the world have been a bit slow to react to cryptocurrencies, and the ones that have are all over the place in terms of regulatory response.
Cryptocurrencies are seriously young as an asset class compared to stocks, bonds, real estate, and precious metals, so it's hard to guess their future based on historical performance.
However, guessing what government laws, once passed, will do to the industry is even more of a crapshoot, and there's no telling how that might impact your investment portfolio.
What Makes Broad Financial Bitcoin IRAs Different?
Broad Financial isn't the only place to invest in a cryptocurrency IRA. However, the company does things differently than most others. That largely stems from the fact that they create and then file a special LLC for you that you can invest through.
That LLC is what you can use to open your investment account. You can utilize that account to fund your purchases of bitcoin or other cryptocurrencies. Those purchases happen via an exchange or a digital wallet.
Broad Financial charges $1,295 for the initial setup fee. The annual maintenance fee is $320. Most other bitcoin IRA brokers charge as much as 15% of your investment allotment.
With a bitcoin IRA through Broad Financial, only you can access funds, only you choose your exchange, and only you direct the investments. This is considerably more personal power than you would get with another broker.
In most cases, the broker would make all those decisions for you. You also have the power to include other investment assets in your bitcoin IRA. You can choose other cryptocurrencies, but you can also include stocks, bonds, and real estate.
This means you can diversify your IRA just as much as you use your IRA to diversify your overall portfolio.
Ratings and Reviews
The BBB rates Broad Financial as an A+ company, and BBB users average 5/5 stars in their ratings.
There are no official complaints in the last three years via BCA, which rates the company as AAA. Sophisticated Investor rates the company 9/10 stars, and Google Reviews average 4.5/5.0.
Should You Invest in Cryptocurrency?
Whether or not you should even invest in cryptocurrencies is a hotly contested debate. If you like to gamble on highly speculative assets in a rising interest rate environment, the answer is yes.
But you'll want to ask around, and you'll usually find three schools of thought. They tend to focus on advocates, opponents, and those who are just unsure or neutral.
Proponents of digital currencies point out how valuable bitcoin and other cryptos got at certain points. There is still potentially tremendous room for growth in value in the future.
As these are currencies not subject to the whims or events of a nation or government backing them, they can be a hedge and storage medium for investment value not subjected to market forces or political decisions that impact fiat paper currencies.
Those who are opposed to digital currencies as an investment might be investors scared of the sheer unpredictability and volatility of the industry along with former investors who got burned badly in some of the crashes.
Others are concerned about the sheer newness of this industry that has only been around a few decades as compared to centuries or even millennia of ownership in other asset classes.
The lack of regulation and industry reputation as being potentially associated with criminal activity around the world keeps even more investors away.
Many investors are just sitting on the sidelines. The underlying blockchain technology behind digital currencies isn't common knowledge or even easily understood by average investors.
Quite a few stay out of cryptocurrencies simply because they don't know enough about something so new and innovative.
Your retirement portfolio should more than likely include a heavy dose of stocks followed by bonds. You might also want to diversify into real estate, commodities, and precious metals. Whether or not cryptocurrencies enter that mix is entirely up to you.
How Much Should You Invest in Cryptocurrency?
If you do choose to open a cryptocurrency IRA, you should only do so as part of a properly diversified and balanced portfolio. Many investors have looked at the surges bitcoin had in the past and regretted missing it.
As such, they put way too much into digital currencies after the fact for fear of missing out on the next run. This has cost some investors a lot of their overall portfolio. That's something you need to avoid if you can.
You should think about it more in terms of the percentage of your portfolio than the total number of dollars.
Precious metal IRAs have been a good comparison point to cryptocurrency IRA options, and that paves a path you can follow in your portfolio.
An investment of 5% can be enough to give you exposure to the industry so you balance enjoying gains while minimizing your downside risk. Going as high as 10% or 15% can still provide a good asset mix in your portfolio.
As with anything concerning investing, you have to be honest with yourself about your risk tolerance. Cryptocurrencies are simply among the most volatile assets out there that you can invest in with your retirement funds.
Their potential is mindboggling, but their future is also highly unpredictable.
Key Takeaway
Investing in cryptocurrency is a very contested decision, and it's one you have to make for yourself. If you choose to do it, doing so through an IRA format does provide you with great tax benefits.
If you're comfortable with this industry and making your own trades, then Broad Financial's bitcoin IRA options make things simple with reasonable fees and no investment minimum required.
Broad Financial is an acceptable company be we do not recommend their crypto IRA. There are much better options for investors that want to protect their wealth from inflation, like physical precious metals.
There are significantly better companies to partner with if you are interested in protecting your savings with a precious metals IRA, that we have written about extensively.
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I started BMOGAM Viewpoints as a way to compile all my views on investing in one place. I own my home, have some real estate, and own a few stocks like most people, but what really drives my interest in investing is I have a strong love of precious metals, especially gold.
