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3 min read

Be Prepared When Opportunity Strikes

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With the unexpected winter weather our team has experienced over the past few days in Austin, many of us have been thinking about being prepared. For the past few days, being prepared meant having water, food, and a heat source should electricity be out, as it was for many of us over the past 72 hours. Thinking of being prepared has us thinking about general preparedness in other areas of our lives.

Being Prepared for Opportunity

There are two types of opportunities, those we actively look for and those that come to us. An example of seeking an opportunity could be wanting to become a real estate investor and actively seeking out potential rental houses or funds that you could invest in. An opportunity that comes to you could be someone in your network needing to sell a home that would make a great rental unit. We have fantastic partners that focus on educating their potential investors and provide resources for their potential investors. Master Passive Income, Wall to Main (real estate), Bankless (crypto), Kingscrowd (startups and crowdfunding) all provide fantastic resources for their audiences. 

You can't always control when an opportunity presents itself, but you can take steps to ensure that when it does, you're ready. For some, that could mean having a savings habit that allows them to take advantage of investment opportunities or income loss. If you know how much of your portfolio you'd like to dedicate to these types of opportunities, being ready might make the difference between making an investment or missing out. It could be having a stockpile of food and water for when a winter storm hits (our team could have been better about this one!). Others keep a sort of hierarchy in their existing portfolio of marketable investments of which assets could be liquidated to create ready capital, in many cases one does not have to hold cash to be ready to pounce - your ‘dry powder’ could very well be current investment that no longer serves its purpose or has a lower expected future return than the new opportunity you have discovered.

Taking Advantage of Investment Opportunities

For many folks, a retirement account is their largest source of long-term investment capital. However, many people cannot access their IRA or 401(k) savings to invest in many opportunities they may come across. These accounts are often perceived as untouchable or only allowed to be invested in stocks, bonds, or mutual funds. How many times have we heard from others in our lives about the fantastic investments they could have made if only they'd had the cash to make it? Many investment opportunities arise from networks that you're a part of, and in today's era of digital community, there are more opportunities than ever!

Retirement accounts are a fantastic source of funds for these types of long-term, high-growth opportunities for several reasons. 1) retirement savings represent most folks' largest pool of investable assets. 2) The money can be used for long-term investments because it is not competing with lifestyle dollars. 3) Once it is in a self-directed account, the IRS only has a short list of what you can't do with your retirement money. Most investments are allowable IRA or Solo 401(k) investments. Our partners page is a great resource to browse potential investments and platforms. 

Why not just get the account when the investment arises?

As much as we'd love to fund your Rocket Dollar account instantly, the process of rolling over or transferring funds from your previous account is not immediate. While we aim to make the process as fast as possible, when other custodians are losing accounts, they don't make the process quick. We've seen custodians take up to a month to release funds! And while we can do our best to speed up the transfer of funds, it is usually out of our control.

Suppose a Rocket Dollar or any self-directed account is something you see for yourself or fits into your retirement planning. If this is the case, we recommend not waiting for the opportunity to arise but rather be prepared for the opportunity that will inevitably come your way. 

Like our winter weather the last few days here in Texas, the ones who were either lucky enough or had the foresight to prepare for the storm fared the best. In the same way, investors who can identify opportunities and are prepared to take advantage of them when they do arise will have much better outcomes.