Beyond Stocks: What Can I Invest in With My Retirement Funds?

When most people think of retirement accounts, they picture the usual mix of mutual funds, ETFs, and maybe a few individual stocks. But what if you could invest in real estate, private businesses, or even cryptocurrency—all within your IRA?

Welcome to the world of the Self-Directed IRA (SDIRA) and Self-Directed Roth IRA—powerful tools for investors who want more control, flexibility, and opportunity.

Let’s explore what you can invest in, what you can’t, and how to stay compliant while growing your wealth tax-advantaged. 

What Is a Self-Directed IRA or Roth IRA?

A Self-Directed IRA is simply a retirement account that allows you to invest in a much broader range of assets than a traditional brokerage-held IRA.

The account itself follows the same tax rules:

• Traditional SDIRA: Contributions may be tax-deductible, and growth is tax-deferred.

• Roth SDIRA: Contributions are made with after-tax dollars, but growth and withdrawals are tax-free.

The big difference? You choose the investments—not your broker.

Top Alternative Investments You Can Hold in a Self-Directed IRA

The following are investments that aren't available to you in a traditional brokerage and only when you have your accounts at a custodian that facilitates self-directed investments.  Think outside the Schwab, Vanguard, Edward Jones, UBS custodians.

Here’s where it gets exciting. With a properly structured SDIRA, you can invest in:

1. Real Estate

• Residential rental properties

• Commercial buildings

• Raw land

• Real estate syndications or private REITs

Pro tip: All expenses and income related to the property must flow through the IRA. 

2. Private Businesses & Startups

• Equity in LLCs, private companies, or startups

• Angel investing through your Roth for tax-free future gains

Pro Tip: Note that ROBS investments are becoming more and more popular but also more and more scrutinized by the IRS. If you are looking at funding your new C Corporation startup with ROBS investment, you will need to find a tax preparer that handles those filings as they are complex.

3. Cryptocurrency

• Bitcoin, Ethereum, and other digital assets

• Held through a compliant custodian that allows crypto trading 

4. Promissory Notes & Private Lending

• Lend money to individuals or businesses in exchange for interest income

• Can be structured as secured or unsecured loans

5. Precious Metals

• Gold, silver, platinum, and palladium (IRS-approved types only)

• Must be held by a qualified trustee (not in your personal safe)

Pro tip: Physical possession is prohibited—you cannot store it at home.

6. Farmland or Timberland

• Invest in raw land that produces income or appreciates over time

• Sustainable, long-term investment options that can diversify a portfolio 

7. Tax Liens and Deeds

• Purchase tax lien certificates from municipalities

• Earn interest when property owners repay back taxes

! What You Can’t Invest In

The IRS places a few hard boundaries around what’s off-limits:

• Life insurance

• Collectibles (art, antiques, wine, rugs, etc.)

• S-Corporation shares

• Any transaction that benefits you or a disqualified person (i.e., using SDIRA funds to buy a vacation home for your family)

These are considered “prohibited transactions” and can trigger serious tax penalties.

Who shouldn't use self-directed

1. If your books are a mess and you sometimes or all-the-time comingle funds, this is going to require an even higher level of scrutiny and compliance and not for you.  Organization and following the rules is critical and not just recommended, but mandatory.  
2. If you are happy investing in Wall Street products and satisfied with your current return rates, there is no need to move your funds to Self-Directed custodian and account.  You can have a much cheaper alternative at a traditional custodian like Schwab, Vanguard, Edward Jones, etc.
3. If you are not a rule follower and think the stringent rules don't apply or you can get around them, that is a game not worth playing.  Know getting into these investments, rules must be followed.
4. If you have very little in your retirement accounts, the greater rate of returns you may make by Self-Directing your investments may not cover your annual admin costs.   Build your retirement accounts and roll them into Self-Directed when the numbers make sense.

Watch Out for These Common Mistakes

• Mixing personal and IRA funds – All investments must be 100% owned and operated by the IRA.

• Using IRA-owned assets personally – No staying in your IRA-owned rental for the weekend!

• Working with the wrong custodian – Most banks and brokerages don’t allow alternative investments. You’ll need a specialized SDIRA custodian. 

Why Consider a Self-Directed IRA?

If you’re an investor who:

• Wants more control over your retirement funds

• Sees opportunities in real estate or private ventures

• Is looking to diversify beyond Wall Street

Then an SDIRA or SD Roth IRA can unlock tax-advantaged growth in places most investors don’t even think to look.

Ready to Diversify Your Retirement?

Whether you're eyeing a rental property or want to invest in private lending...with your retirement account, a Self-Directed IRA can make it possible and keep your tax advantages intact.

But here's the thing—navigating IRS rules and compliance requirements is critical. One mistake can cost you big in taxes and penalties.

That’s where we come in. Let’s talk about how a Self-Directed IRA fits into your tax strategy, retirement goals, and wealth-building plan. 

What custodian do you recommend?

You can research self directed custodians and find one that works with you.  It is important you feel comfortable with the company you choose. We work with Directed IRA.

As always, with any investment, we highly recommend you do your due dilligence and research - after all it's your money you are putting on the line.

Quick Recap: What Can You Invest in With a Self-Directed IRA?

• Real estate (residential, commercial, raw land)

• Private businesses or startups

• Cryptocurrency

• Private lending / promissory notes

• Precious metals (IRS-approved)

• Farmland, tax liens, and more