Investing With Self-Directed IRA: What are Your Options?

The fact of the matter is, you’re never too young to start investing in order to safeguard your financial future. It is usually recommended that as soon as you have a reliable salary that you set aside a set amount of money every month to build both an emergency fund as well as invest in an IRA.

A self-directed IRA is an account that comes with tax advantages allowing you to save for retirement. This particular IRA option offers more flexibility in how you expand your investment by including alternative financial streams. You would not be limited to stocks, bonds, mutual funds, and so on. If you’re interested in investing with a self-directed IRA, but not entirely sure about your options, then this article is for you.

self-directed IRA

Real Estate

Real estate is one of the most popular IRA investments out there. If you are a current property owner then this one should be familiar to you since it is associated with building equity that is seen as offering a great deal of stability. However, this kind of investment is different from purchasing a home in that the IRS establishes very stringent rules around how you choose to make this investment.

Therefore, you would need to purchase real estate with your IRA in as thoughtful a manner as possible, or else the repercussions will be fairly costly.

There are different kinds of real estate you can invest in, such as residential apartment buildings, single and multi-family homes, or even mobile homes. You can also purchase commercial real estate in the form of office buildings, beauty salons, gas stations, and so on.

Vacant land and undeveloped lots are also popular options, as are deeds and even mortgage notes. Of course, purchasing real estate with your IRA has some risks, but it remains one of the more stable and appealing options.

Litigation Finance

This one might seem a bit left of field, but litigation financing offers a compelling way to invest in your IRA. As the experts at TheEntrustGroup.com will tell you, this investment entails pre-settlement funding wherein the investor can advance funds to plaintiffs and defendants as their cases unfold.

The law firms and their clients of course benefit from this investment option tremendously since it reduces litigation risk, helps them to manage their budgets while maintaining their corporate balance sheets. For the investor, it offers an excellent way of diversifying your portfolio, since it is a fairly rare investment that has almost no direct correlation to the stock market.

So, if you’ve already covered your bases through investing in real estate and other common investments, litigation investments are different enough that their value will not fluctuate in relation to market differences that may affect the real estate portion of your IRA.

Pre-settlement funding is a bit complicated, and there are different ways of investing. For one, you can provide a kind of cash advance to plaintiffs against an anticipated settlement in a personal injury lawsuit.

Another option would be financing a law firm, which helps attorneys to offer free representation to clients and manage their cash flow much better for cases expected to run for a long while.

Other inventive ways of approaching this case entail buyouts of law firms wherein you can make leveraged buyout loans for a law firm hoping to acquire another firm, or finance their legal advertising, and even offer post-settlement financial assistance to plaintiffs awaiting settlement funds. Overall, this is another compelling way to invest with your self-directed IRA.

Gold and Precious Metals

This may seem like an old-fashioned idea but investing in gold and other precious metals is an excellent idea since it is considered to be a form of real money that offers significant protection from inflation.

There’s a common perception of rich people suddenly hoarding bars of solid gold in a cellar with the outbreak of war, and with good reason: it’s a way to hold onto wealth in the most tangible way possible, regardless of what happens to the economy. It’s also another excellent way of diversifying your portfolio with minimal risk and is money well spent for your self-directed IRA. 

self-directed IRA

While there are a few pros and cons to having a self-directed IRA as opposed to setting up something more traditional, and it may not be for everyone, it is still worth considering.

However, if you find a successful financial manager to help advise you, then you could easily embark upon a holistic retirement strategy that offers plenty of diversity for your investments.


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