When you direct your own IRA, what can you then invest in? The question is too big to answer. It might be more accurate to ask: what cannot you invest in when you have a retirement account with more control? As a Self-Directed IRA investor, you will be able to open up your retirement portfolio to a wide range of assets that potentially include but also go beyond the stock market. Let’s look at some of the most popular Self-Directed IRA investment options to explain:
Option #1: Real Estate
Real estate is one of the most popular Self-Directed IRA investment options because it helps people establish an income they can use for retirement. By investing in retirement properties that establish cash flow, investors can create a more substantial overall portfolio while also bringing in money on a regular basis.
Option #2: Precious Metals
A “Gold IRA,” as it is sometimes nicknamed, can be a powerful way to build a more secure overall retirement portfolio. This is because of the role precious metals play in hedging against inherent economic risk, particularly risk in the stock market and inflation. As the overall supply of money increases, the amount of precious metals grows in a more stable way, allowing retirement investors to have confidence that their precious metals are maintaining more of their purchasing power.
Option #3: Private Lending
Making a private loan with a Self-Directed IRA has some caveats, but it can also be an effective way to invest. It may allow investors to generate cash flow that would otherwise be difficult to find on the stock market. It’s important to keep in mind the restrictions on retirement accounts, however—you cannot use private lending with an IRA to lend money to someone you know, such as a brother or a sister.
Option #4: Private Companies
Owning stock in a private company that takes off can be one of the most exciting investments an investor can make. Having that money within a tax-protected account makes it all the more exciting. However, owning stock in private companies also requires diligent research, as it can be even riskier than investing in the public stock market.
Option #5: Tax Liens
Smart investing in tax liens can result in the investor seeing substantial returns on their money. But it is a unique form of asset class that investors will want to familiarize themselves with before entering.
Option #6: Single Member LLCs
With a Single Member LLC, an investor can use a “Checkbook IRA” to use their IRA with the convenience of writing checks. This is a highly active and independent form of investing that requires a lot of diligence and responsibility on the part of the investor.
Option #7: Joint Ventures & Partnerships
Joint ventures and partnerships can allow investors to pool resources together for the sake of buying large-ticket items like real estate. Joint ventures can be thought of as short-term partnerships with a looser definition; long-term partnerships are more formal arrangements.
Option #8: Brokerage Accounts
Want to play the stock market on your terms? Using a Self-Directed IRA for brokerage accounts means you can still invest in the most popular form of retirement investment—stocks—but with the independence you’ve always wanted.
Option #9: Other Investments
It does not stop there. There are all sorts of Other Investments you can use within a Self-Directed IRA to diversify your retirement portfolio and build a more sustainable path to wealth.