Did you know your IRA could invest in alternative assets and not just Wall Street? As of 2024, there are more than $15 trillion in Individual Retirement Accounts (IRAs). These accounts can own real estate, private funds, small businesses, start-ups, crypto, and more—allowing true diversification beyond the stock market.
When most people think about IRAs, they picture stocks, bonds, and mutual funds—the staples of traditional investment accounts. What they don’t realize is that the IRS doesn’t limit your IRA to those traditional assets. Instead, retirement accounts like Traditional and Roth IRAs have far greater flexibility, allowing you to invest in alternative assets such as real estate, cryptocurrency, promissory notes, private funds, and precious metals. You can even be a private lender with your your IRA!
Why doesn’t everyone know this? The answer lies in how traditional financial institutions operate. Major banks and brokerage firms like Fidelity and Vanguard are designed to limit an IRA’s investment options to publicly traded assets like stocks, bonds, and mutual funds. Partnerships with mutual fund providers who charge expense ratios allow a brokerage firm to collect a share of the fees for including the funds in their offerings.
In other words, brokerage IRA custodians generate revenue through the sale and management of traditional investment products. Allowing investments in alternative assets like real estate conflict with their business model and requires significantly more administrative effort by the custodian.
If you’d like to invest your IRA outside of Wall Street, you’ll need to set up an IRA with a custodian who offers Self-Directed IRAs. These accounts follow the same rules and regulations as brokerage IRAs while providing the flexibility to invest in a wider range of assets. Download a free copy of the #1 book on self-directing, The Self-Directed IRA Handbook.
Self-Directed IRA custodians like Directed IRA allow investments in any asset allowed by law. In fact, Directed IRA does not sell investments of any kind. As the owner of a Self-Directed IRA, you’ll have the freedom to find and invest in whatever you’d like. Your IRA provider simply acts as a custodian of your account—facilitating, processing, and securing the investments you choose.
The following are common investments held inside of Self-Directed IRAs.
Open an Account
Open an account with a self-directed IRA custodian like Directed IRA in as little as 5 minutes.
Fund an Account
Fund your account by making a new contribution or by rolling/ transferring funds from another retirement account to Directed IRA.
Make an Investment
Invest your account into your planned self-directed investment
While there’s significant freedom in what you can invest in your IRA, some assets are restricted. Here are five common investments that are prohibited by the IRS.
Alternative investments aren’t just for IRAs. With the right custodian and account setup, you can also self-direct the following accounts:
Yes, you can transfer funds from your existing IRA or 401(k) into a Self-Directed IRA. This can typically be done through a direct rollover or transfer, allowing you to move your retirement funds without incurring taxes or penalties, as long as the process is completed correctly. Visit our Fund Account page to learn more.
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Directed IRA is a Tradename of Directed Trust Company. Directed Trust Company performs the duties of a directed custodian, and as such does not provide due diligence to third parties on prospective investments, platforms, sponsors or service providers, and does not sell investments or provide investment, legal, or tax advice. Directed Trust Company is not an FDIC-insured financial institution. Alternative investments are not insured by the FDIC; are not deposits or other obligations of, or guaranteed by Directed Trust Company or any of its divisions; and are subject to investment risks, including possible loss of the principal amount invested. While uninvested funds in certain types of Directed Trust Company accounts may be eligible for FDIC pass-through deposit insurance, certain conditions must be satisfied for such insurance coverage to apply. 2025 Directed Trust Company
Mat Sorensen, Attorney, CEO, and Founder of Directed IRA, wrote the #1 book on self-directed IRAs – selling over 50,000 copies nationwide. The Self Directed IRA Handbook is a comprehensive guide written for both investors and advisors alike. Download your free copy today!