Mind your own business
Say you've found a great business opportunity. If only you had money to buy it! Maybe you do -- but it's locked up in your retirement account.
You can buy a business -- or an interest in a business -- with your IRA. There's a catch, however. You cannot use your IRA in any way to benefit yourself before retirement. Nor can you or your close relatives make transactions with the IRA. There goes the idea of working for the closely held business, or even managing it yourself to save money.
"It's potentially even more risky" than investing in mortgages, says Evensky. The long-term value is likely the capital gain if the business rises in value. "That's not a very effective use of an IRA," he says.
The fact that you can only be a passive investor also is a concern. "You have to ask yourself, does this investment make sense, no matter where the money is coming from?" he says.