Exploring Self Directed Investing Options

Roth IRA

I simply love the concept of self directed investing.

You are able to choose where to invest your money at the returns that you expect.

 Most people turn to a self-directed IRA if they feel that their current investment options are limited.

If you feel the same, self directed investing could be the answer.

Did you know that you can invest in almost any kind of asset with your IRA funds?

Except for collectibles like antiques, art, jewelry, most types of coins, life insurance and an S corporation, you can put your money into whatever you choose.

The first time I heard about self directed investing I was surprised that I had not heard about this before. Like a lot of people, I have been contributing to an IRA for several years and now I regret it because if I had invested in, say, real estate or gone into business with my IRA money, I would have been a lot richer.

However, now that we know about it, let’s look at the various self directed investing options available:

Real Estate

You can look at raw land, building lots, single-family homes, multi-family homes, vacation properties, contracts for sale or lease options, among others. Investing your retirement funds in real estate is a popular option. It provides income as well as capital appreciation while allowing you to build a diverse retirement portfolio and giving you complete control over your investments.


If you have a self-directed IRA account, then loans are an excellent income-generating investment option for you. Businesses or individuals can borrow money from you on a secured or unsecured basis. You can also lend money towards purchasing a home, vehicle or equipment. Builders can borrow money from you for new construction with the land and home as security. Another lending option is factoring receivables and financing commissions. See how endless the list is?

Private equity investments

By investing in business, you strengthen your retirement plan while strengthening the economy.  With your IRA account, you can invest in different types of businesses, including C corporations, limited liability companies, partnerships, private debt placements, hedge funds, and so forth. You cannot buy shares in an S corporation, though. Still, as a self-directed investing option, I think private equity investments are a wonderful growth opportunity.

Brokerage accounts

With a brokerage account, you can buy and sell publicly traded stocks, bonds, mutual funds and other instruments with your IRA money.

Tax liens

I personally feel tax liens make a good self-directed investing choice because you don’t need huge amounts of cash to do it. Instead of investing in real estate, you can opt for this, even with a small account. In this case, when a property owner defaults on taxes, the local tax authority puts up the property for a “tax sale”. The investor pays the taxes due and the homeowner is allowed to repay the investor within a given period, after which the property is forfeited.  The investor gets a pre-fixed interest rate on the investment.

You can also invest in vacation properties, property flipping, precious metals and much more.

To me, with self-directed investing, the options you have are limited only by your imagination.

As long as you do not violate the rules related to prohibited transactions, you can invest in practically anything.

It could be race horses or it could be manufacturing a product about which you are passionate.

A diversified investment portfolio is the best way to get the maximum income and security you need from your investment.



    Subscribe to Our Blog
  • RSS
  • Googleplus
  • Yahoo
  • My MSN
  • Bloglines



Don't worry -- your e-mail address is totally secure.
I promise to use it only to send you Retirement Investment Planning.