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Unlock Hidden Wealth: A Quick Guide to Investing with Self-Directed IRAs

Have you ever pulled out a pair of pants you haven’t worn in a while and found

$20 or $30 bucks in the pocket? Oh man, nothing beats that!

Now imagine finding $20k or $30k!

Well, that’s how I look at self-directed IRAs. Not familiar? Then you’ll definitely

want to read on.

Finding an old 401k is like finding money in your pocket.

What is a Self-Directed IRA?

First, the basics. A self-directed IRA isn’t some exotic breed of IRA. The term "self-

directed" simply means that you’re in charge of your own money. Unlike conventional retirement accounts, controlled by brokers or other middlemen, SDIRAs are under your

control. You have a wide variety of investment options beyond just stocks, bonds,

or mutual funds.

Advantages of Investing with SDIRA Funds

So, what are the advantages of investing with an SDIRA versus other more

traditional retirement accounts?

SDIRAs allow to achieve better returns by investing in alternative assets.

1. Alternative Investments:

Traditional channels sometimes yield lackluster outcomes. With SDIRAs, invest in what makes sense to you – it could be real estate, a local venture, or a promising startup. Of course, there are some limitations. You can’t buy a vacation home and then call it an

“investment property.” While like most things taxes, it can get complicated, the bottom line is that you can’t invest in anything that you will benefit from now. How do I know? Because I’ve done it myself!

2. It’s Easier Than You Think:

I wouldn’t blame you for thinking there is some unnecessarily complicated process to set up one of these accounts and then invest with them. The fact is, it’s actually pretty easy. A lot of service providers handle all the paperwork which is a simple rollover from one of

your orphaned 401k or TSP accounts. Once you’re set up, investing in something like a real estate syndication is not too different than if you were investing directly.

3. Tax Benefits, The Magic Within:

SDIRAs offer tax-free or tax-deferred growth. Understand the time value of money. Why part with your gains to capital tax each sale when you can maximize your growth by reinvesting?

4. Borrow, Without Penalties:

Here’s the cherry on top. Many SDIRA custodians offer the option to borrow against your account without penalties. You’ll have to pay interest on it, but that cash could be exactly

what you need in an emergency or for that investing opportunity you might have missed without that dry powder.

My Solo401k Journey

Now I don’t want you to think I read an article and that is the extent of my experience with SDIRAs. I’ve actually had a Solo401k since 2020 and in that short time, I’ve done money lending, went full cycle on a passive real estate investment, and invested in another multifamily property.

The other nice thing about investing with my SDIRA is that it has allowed me to diversify, getting into opportunities with a longer hold time. After all, I don't plan on collecting retirement anytime soon!

In terms of performance, my Solo401k foray into commercial multifamily assets led to a doubling of my money in a tad over two years. Yes, the COVID wave did influence the scenario, but it highlights the tremendous potential of this investment vehicle.

A Solo401k is an SDIRA available to entrepreneurs

Attention to all the veterans out there:

Remember those Thrift Savings Plans (TSP) we've all accumulated during service? Well, that's investing potential lying dormant. Many of us exit active service, leaving behind our TSPs, forgetting that they could be prime candidates for a rollover into a more flexible SDIRA. This can allow our funds to grow in areas we're passionate about or see potential in, like commercial multifamily real estate. Don't let your money be lazy, put it to work!

Thrift Savings Plans or TSPs can be rolled over into an SDIRA


Investing is all about making your money work for you, and a self-directed IRA is a

tool that provides you with the control and flexibility to do just that. From my

own experience, I’ve seen firsthand how this vehicle can lead to significant

financial growth, especially when venturing into commercial multifamily assets.

Whether you're a military veteran with an old TSP or you have an orphaned 401k from a previous employer, exploring the world of self-directed IRAs could be your first step toward unlocking a wealth of potential. It’s time to take charge of your financial future, leverage your funds, and explore investment avenues that resonate with your goals and values. After all, you might have more in your financial pockets than you think.

Want recommendations on SDIRA firms or want to know more about passively investing your SDIRA into commercial real estate deals? Shoot me an email at or let's grab a virtual coffee and chat about it!

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