Self-Directed IRAs Let You Invest Your Retirement Money in Your Own Hometown

One of the great scenes in cinematic history came in the classic Christmas movie, It’s a Wonderful Life. Jimmy Stewart plays a small town bank manager, trying to stem a run on his bank during one of the many panics in the first half of the century.

“The money’s not here!” Stewart exclaims to the crowd gathered in the lobby to demand their savings back on the spot. “It’s in Joe’s house! That’s right next to yours! And the Kennedy house, and Mrs. Maikland’s house, and a hundred others! Now, you’re lending them the money to build, and they’ll repay you back as best they can, or what are you gonna do? Foreclose on them?”

That doesn’t quite close the deal with the crowd – so Stewart’s character, George, reminds them that there’s a bigger power at work, trying to take advantage of them all.

“If Potter gets a hold of this building and loan there will never be another decent house built in this town. Now he’s already got charge of the bank, he’s got the bus line, he’s got the department stores and now he’s after us. Why? Well it’s very simple, because we’re cutting in on his business, that’s why! Because wants you to live in his slums, and paying the kind of rent he decides! Joe, you had one of those Potter houses, didn’t you? Have you forgotten? Have you forgotten what he charged you for that broken down shack? Ed, remember last year when things weren’t going so well and you couldn’t make your payments? Well you didn’t lose your house, did you? You think Potter would have let you keep it? Don’t you understand what’s happening? Potter’s not selling, he’s buying! Because we’re panicking and he’s not!”

It would be a wonderful thing indeed if Americans were able to keep more of their investments in their own communities and others like them, rather than helping to fund huge skyscrapers and plush headquarters with thousands of employees in far-off cities.

But 98 percent of all IRA accounts are invested with the big brokerages and investment companies that direct the vast majority of Americans’ retirement wealth to Wall Street, not Main Street. They invest the money in Fortune 500 companies and tech companies that are hundreds or thousands of miles away from where we live, while there are great opportunities to profitably invest that money right in our own home towns.

That’s why we love the Self-Directed IRA concept: You can be as local as you want to be. You can enjoy the satisfaction of watching your retirement nest egg go to work improving the lives of people right around you. For example:

Your Real Estate IRA can be invested in building or improving homes right along your morning commute.

You retirement account can help provide safe, affordable housing to the families of children your kids go to school with. Or their teachers.

You can invest your retirement account in an LLC or partnership or corporation that provides jobs for your neighbors.

Through your Self-Directed IRA, you can be the lender for your local farmers, and help make it possible for them to make it to harvest time and feed their families and continue to pay their laborers and keep their tractors running, and make a fair profit in the process. Those laborers themselves may be customers at your own business or trade, in or out of your IRA.

Your retirement account can be a source of capital that helps build your local agriculture or industrial base, through programs like Slow Money, or just plain-old local lending and partnership. Or it can help provide capital for promising entrepreneurs in your own town to start or expand businesses of their own, creating jobs for your neighbors and wealth for you and them alike.

Your IRA can be the lender that makes it possible for Joe and Ed and Mrs. Maikland to buy their dream home – providing you with a fair rate of return, secured by an interest in the real estate. All without funneling the money through Wall Street and giving them their usual cut.

That’s a big part of the beauty of the Self-Directed IRA: Not only does it help you diversify into different kinds of assets not normally available in an off-the-shelf retirement account marketed by an investment company. It also empowers local entrepreneurs to help their own communities grow as well.

You have to be careful to avoid conflicts of interest, of course. You can’t lend, borrow, buy or sell to yourself, or to certain members of your family. But you can certainly do business with your neighbor, your cousins, your friends, your fellow members of the Chamber of Commerce, your fellow congregation members, and people whom you know and trust, with the aim of doing well by doing good.

American IRA, LLC is a leading authority on the possibilities of the Self-Directed IRA. For more information on Self-Directed IRAs, including real estate IRAs, visit us at and peruse our extensive library of valuable information. Or call us at 866-7500-IRA(472). We look forward to working with you.