Gold. Real estate. Tax liens. These are great alternative assets you can include in a Self-Directed IRA to give you more options when investing. But part of the appeal of the Self-Directed IRA is that you don’t have to limit yourself to any one asset class. You can think about other investments as long as the IRS counts them as legitimate retirement assets. What are they? Let’s focus on some of the lesser-known investments you can have with a Self-Directed IRA.

• Auto Paper: Auto paper, loans backed by automobiles, can be an interesting asset class to add to your Self-Directed IRA. This type of paper typically involves buying auto loans or financing contracts from auto dealerships or finance companies. Why auto-paper? These loans often come with relatively higher interest rates. Just make sure you’re doing your due diligence to understand the risk and structure of the auto paper before diving in.
• Commercial Paper: Commercial paper is a debt instrument corporations might issue to raise funds for their short-term needs. Typically, these are unsecured promissory notes with maturities of up to 270 days. Since these are often issued by large, financially stable companies, they can be a relatively low-risk option within your retirement account. (A quick note: just ensure you’re investing in high-quality issuers.)
• Convertible Notes: Convertible notes are a hybrid form of debt that can be converted into equity under certain conditions. This makes them attractive investments for any retirement investor who wants to gain exposure to potential equity upside while still receiving the benefits of fixed income. By holding convertible notes in your Self-Directed IRA, you can diversify your portfolio with a unique security offering both debt and equity-like characteristics.
• Hedge Funds: While not always a first choice for many investors, hedge funds can be a valuable inclusion in your Self-Directed IRA. Think of them as pooled investment vehicles. They typically involve strategies such as short selling, leverage, or other complex techniques aimed at producing high returns. However, hedge funds can be less liquid. And they may require a minimum investment, so make sure you understand the risk profile before investing. If you want to add an alternative investment strategy, hedge funds might be an option for someone with a lot of money in a retirement account.
• Foreign Stock: Don’t limit yourself to U.S.-based stocks. Self-Directed IRAs allow you to invest in foreign stocks, providing you with global diversification. Looking to invest in emerging markets? Established international companies? Foreign stocks can be an excellent way to expand your portfolio. But keep in mind that foreign stocks might involve additional taxes or regulations, so you’ll want to consult with a tax professional.
• Royalty Rights: Royalty rights give you a portion of the earnings from intellectual property, including music, patents, or natural resources. This type of investment can provide a steady income stream since royalties can continue earning money well into the future. If you like a mostly hands-off approach to collecting income into a retirement account, royalty rights can be a fun way to diversify.

This is just a sample of the “other” investments that count as valid assets within a retirement account. The key ingredient? Self-Directed IRAs. With a Self-Directed IRA, you’re the one calling the shots, which puts you in the position of choosing your path to retirement. For more information about how this works and how you can get set up with a Self-Directed IRA for your retirement plan, reach out to us at 866-7500-IRA. We’ll be glad to help you start your investment journey on a new footing.

Interested in learning more about Self-Directed IRAs? Contact American IRA, LLC at 866-7500-IRA (472) for a free consultation.  Download our free guides or visit us online at www.AmericanIRA.com.