The self-directed industry is growing very strong and is expected to see around $2 trillion enter the market in the next two years. There are over 45 million retirement account holders, and less than 4% of those are held in nontraditional assets. This number is expected to grow significantly over the next five years as more individuals and their financial advisers attain a greater awareness of self-directed IRAs.

Yes!  The Employee Retirement Income Security Act (ERISA) of 1974 passed the responsibility of retirement saving from the employer to the employee. Created in 1975, IRAs provide individuals a chance to direct where their retirement funds are invested.

The IRS code, instead of distinguishing which investments are allowed, identifies which investments are not permitted under these laws. Under both ERISA and IRS Codes, there are only two types of investments excluded: life insurance contracts and collectibles such as works of art, rugs, jewelry, etc. Refer to Internal Revenue Code Section 401 (IRC § 408(a) (3)).

The largest benefit of a self-directed IRA or real estate IRA is that you can invest in what you know.

With great tax advantages provided by all individual retirement accounts and 401ks, as well as the wider range of possible investments of a self-directed IRA or real estate IRA, you can potentially build wealth and secure your future much more effectively than through traditional retirement plans.

If you work in or know the real estate field, you can invest in real estate.

If you work in or know the mortgage field, you can use your IRA as a lender.

If you know of or work for a company looking to raise capital, you can invest in a note with that company.

With a self-directed IRA or real estate IRA, you are not limited to the investment offerings of an IRA custodian or trustee. You have much greater flexibility in the number of investment choices you have.

You are not limited to investing in stocks, bonds or mutual fund investments that are set up by the custodian.
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- The term “self-directed” simply means that you, as an individual, have complete control over selecting and directing your own individual retirement account or 401k investments.

- Once established, your account can buy real estate, notes, limited partnerships, commercial paper and many other types of assets.

- With a self directed individual retirement account or real estate IRA, you make all of the decisions regarding your investments.

- The self-directed IRA custodian or administrator completes the documents required to establish your account and purchase your investment.

- A real estate IRA is simply a self-directed IRA that holds real estate.

- In 1975, as part of the Employee Retirement Income Security Act of 1974 (ERISA) and the creation of IRAs, self directed IRAs were also permitted.

- At that time, qualified plans, such as Defined Benefit, Profit Sharing and Money Purchase Pension Plans, were self-directed IRAs.

- The investments of choice were most commonly real estate and notes.

- The self directed portion of the retirement industry continues to evolve and today is an accepted investment diversification strategy.

- Investors are able to purchase a wide variety of assets that comply with the federal rules guiding permitted transactions through IRAs and 401k plans.