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Most Popular Self-Directed IRA Investments

Most Popular Self-Directed IRA Investments

Most Popular Self-Directed IRA Investments

Here, we’re going to list the four most popular Self-Directed IRA investments.

While most of the world was focusing on the pandemic, IRA Financial was putting together a list of the most popular Self-Directed IRA investments for 2022.

The Self-Directed IRA

A Self-Directed IRA offers you the ability to use your retirement funds to make almost any investment. These are known as nontraditional, or alternative investments.

The main advantages of using a Self-Directed IRA to make investments is that you can generate tax-deferred or tax-free gains on investments you understand.

The following are some examples of investments that you can make with your Self-Directed IRA:

However, after spending time crunching the numbers, the following are the four most popular Self-Directed IRA investments for 2022.

Related: Beginners Guide to Alternative Investments

Real Estate

Real estate is among the four most popular Self-Directed IRA investments. Most Americans have an enormous amount of exposure to the financial markets. Whether through retirement investments, such as IRAs or 401(k) plans, or personal savings. Many of us have most of our savings in the stock market.

In fact, over 90% of retirement assets are invested in the financial markets.

Real estate continues to be the most popular alternative asset investments for retirement accounts. This trend has been steady over the last 10 years or so. The Internal Revenue Code permits you to engage in almost any type of real estate investment. Of course, you cannot make investments involving a disqualified person.

Income or gains an IRA generates is tax-deferred/tax-free. When you use a Self-Directed IRA to purchase real estate, the IRA earns tax-free income/gains. You pay at a future date rather than the year the investment produces income. In the case of a Roth IRA the income/gains are always tax-free.

The following real estate investments have been popular with our Self-Directed IRA clients:

*Not all Self-Directed IRA Custodians allow you to invest in real estate. While IRA Financial offers you this option for a low flat fee, many companies do not. Furthermore, many companies charge account valuation fees instead of an annual fee.

Learn More: Beginners Guide to Real Estate Investing

Why Real Estate?

Real estate is the most popular alternative investment among retirement account holders. A Real estate investment is a highly tangible asset that can diversify your investment portfolio. Furthermore, it acts as a hedge against inflation: while the value of many investments erode during inflation, real estate thrives. With the rise of inflation comes the inevitable rise of rental income.

You can make any type of IRS approved real estate investment, including commercial, such as multi-family properties, residential, and land real estate.

With a Self-Directed IRA:

Why use personal funds when you can use your retirement funds to make a lucrative investment? By investing in private placements with a Self-Directed IRA, the income and gains the investment generates will be paid at a later date. When it’s time to “take home” your investment funds, you are more likely retired or partially retired and earning less than during your peak years. Thus, you are in a lower tax bracket and can keep more of the funds you earned over the years.


Bitcoin and other cryptocurrencies took off in the summer of 2018. Cryptocurrency had a rough and cold winter in terms of popularity from retirement account holders.

However, the summer has been warm and inviting for a growing number of Self-Directed IRA investors. Bitcoin has seen a nice rebound in price this summer and many investors are more interested in Bitcoin and other cryptocurrencies as a Self-Directed retirement investment.

According to a Wells Fargo Gallup Investor and Retirement Optimism Index poll, just two percent of Americans surveyed own Bitcoin. The poll is based on US adults who have at least $10,000 or more invested in things like mutual funds, stocks, and bonds.

The Gallup survey also reveals that 26 percent of the US residents are “intrigued” by Bitcoin but have no plans in investing any time soon.

The most popular cryptocurrencies for Self-Directed IRA investors are:

  • Bitcoin
  • Ethereum
  • Ripple
  • Litecoin
  • Bitcoin Cash

Before investing in Cryptocurrency or any other Self-Directed investment, IRA Financial recommends that you make sure that your IRA Custodian is licensed, regulated and insured.

Why Cryptocurrency?

The cryptocurrency market is still very young, created in 2009, and many investors believe the future of Bitcoin and other alt coins is strong, thus a good long-term investment. Many investors see crypto as “the currency of the future” and it has grown in popularity among Millennials, as they feel more confident making cryptocurrency investments over stock market investments. However, it is still a risky investment due to its volatility.

With a Self-Directed IRA:

A Traditional IRA, established at a bank or financial institution, will limit your investment opportunities, so you won’t be able to invest in Bitcoin and other cryptocurrency with your retirement funds. At IRA Financial, we don’t limit your investments. By establishing your Self-Directed IRA with us, you will have the freedom to make cryptocurrency investments.

Precious Metals

Gold and silver remain common commodities held in a Self-Directed IRA. While individuals must ensure that they purchase IRS approved precious metals, precious metal IRA holders can have physical access to their investments.

*Individuals should not hold precious metals in their IRA at home. Instead, precious metals should be stored with a fiduciary.

Why Precious Metals?

With the current price increase of gold and silver, it is apparent that precious metals are still a valuable asset. Long before the current tension between U.S. and China trades, precious metal was seen as a safe investment that was attractive in many ways, such as the ability to act as a hedge against inflation.

With a Self-Directed IRA

Some banks and financial institutions may claim you can open a Self-Directed IRA with them, but this is not a true Self-Directed IRA. You will still be limited to the financial products they sell, therefore if you want to remove your funds to invest in gold and other precious metals, you may not be able to, because these institutions won’t make money that way. At IRA Financial, we offer a truly Self-Directed IRA, because we are a passive custodian and don’t benefit on establishing and administering your account. All investment decisions are yours.


The term “ICO” or initial coin offering is starting to gain a lot of attention.

Start-ups generally use an ICO to get around the complex regulations with raising money through venture capitalists or public markets. In an ICO drive, a percentage of the cryptocurrency is sold to early backers of the project or business in exchange for fiat or other cryptocurrencies. Most often, it’s for Bitcoin or Ethereum. As of now, most ICOs are not regulated by any governmental agency.

ICO Rating agency summed up the results of the first quarter of 2018. The volume of attracted funds around the world through the ICO amounted to $3.3 billion. For comparison, over the past year, ICO-projects collected $6.1 billion.

Read: Five Things To Know Before Buying Into ICOs With Retirement Funds

ICO is one of the most effective ways to attract venture capital. According to ICORating, more than 46.6% of the projects did not have a ready-made project at the time of token sales start. The minimum viable product was only 26.2% of the projects. Only 15.5% of ICO companies had alpha-version of the product and 11.2% beta — version.

Before you put your money in a specific token, numerous factors must be taken into account to determine the best ICO, such as:

  • amount of investments
  • risk score
  • technological innovativeness
  • developers behind the project

The most popular ICOs in terms of amounts raised have been:

  • Telegraph
  • Dragon
  • Huobi Token

Learn More: Alternative Investments in a Self-Directed IRA

Tax Deeds & Notes

Tax deeds and notes are a common way for individuals to invest in real estate. Tax deeds and notes provide flexibility and diversification. Individuals can purchase tax deeds or notes directly through their IRA or Solo 401(k). Furthermore, individuals can decide whether their investments will be tax free or tax deferred.

Read More: Buy Tax Liens and Notes with Retirement Funds

Why Tax Liens/ Tax Deeds?

Self-Directed IRA investments that offer real estate exposure without purchasing property is a winner, and that’s exactly what the purchase of tax lien certificates can do for investors. Tax lien investing is not for everyone, as novice investors can get easily burned. On the other hand, experienced investors can generate high returns on their investments.

With a Self-Directed IRA

Gain control over your investments when you establish a Self-Directed IRA with checkbook control. With checkbook control, also known as the Self-Directed IRA LLC, you don’t need custodial consent each time you make an investment. When you see an investment you want, such as tax liens or deeds, simply write a check or wire the funds from your LLC bank account and the investment is yours.


Crowdfunding is an evolving method of raising capital through the Internet for a variety of projects. Title III of the JOBS Act has a federal exemption under the securities laws. So, you can use this type of funding method to offer and sell securities.

Before the new rules, private companies could seek money only from “accredited investors.” These are individuals who own more than $1 million in assets, excluding their primary residence. Or they have an income of more than $200,000 for at least two years.

Under the new rules, those with more modest wealth will be able to invest in startups, with limitations. People with annual income or net worth less than $100,000 can now invest a maximum of 5 percent of their yearly income or net worth, or $2,000 if that is greater.

Those with higher incomes can invest up to 10 percent. An individual can’t invest a total of more than $100,000 in all crowdfunding offerings during a 12-month period. Investors generally could not resell their crowdfunding securities for one year.

The SEC also specified that crowdfunding must go through an intermediary, either a broker-dealer or a registered funding portal. Outside accountants must check offerings, Offerings need to be checked by outside accountants, and, in some cases, fully audited.

Crowdfunding for Start-ups

Crowdfunding provides another strategy for startups or early-stage companies ready to take it to the next level. Before, a business owner was subject to the caprices of individual angel investors or bank loan officers. Now it is possible to pitch a business plan to the masses.

Many Self-Directed IRA investors are using crowdfunding websites as a vehicle for investing in startups. The most popular type of equity related crowdfunding sites are:

Using one of IRA Financial Group’s Self Directed retirement plans to make alternative asset investments offers a number of investment opportunities. This includes the ability to diversify your retirement portfolio and the ability to invest in what you know and understand.

These are our most popular Self-Directed IRA investments after much research. What alternative investments are you investing in?

To learn more about our Self-Directed retirement plans, please contact a Self-Directed retirement specialist at 800-472-0646.


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