FEATURE
See the Investment Potential of IRAs By Clay Malcolm, Advanta IRA
M
ey from their retirement plans to invest in alternatives. The assets are purchased by the IRA, titled in the name of the IRA, and thereby owned by the IRA. Investments such as private notes provide tax-advantaged growth that can exceed the ROI of typical stocks, bonds, or
ost people in the US are unaware that tax-advantaged accounts, like Tra-
ditional or Roth IRAs or old 401(k) s, can invest in “alternative” assets such as private loans.
How-
ever, the IRS actually does allow
self-direction offers. The most well-
Private Lending investments, real estate, private placements, gold, and For private lenders,
mutual funds.
known bank and brokerage house retirement plan custodians restrict IRA holdings to assets they sell, which are typically stocks, bonds, and mutual funds.
“self-directed” accounts to invest in
much more.
Individuals do not have to take mon-
The self-directed IRA custodians that handle alternative assets give indi-
Investing in Private Notes with a Self-Directed IRA Self-directed plans can invest in tangible assets like real estate, as well as private notes that hold property as collateral. If property is used as collateral to back a note and the note goes into default, an IRA has the abil-
viduals the ability to control their re-
ity to take possession of the proper-
very large source of capital.
tirement account investment choices
ty. The IRA can rent or even sell the
in a way that can mitigate (and pos-
property to recoup the balance owed
It is not surprising that many indi-
sibly avoid altogether) the highs and
on the note. In the event of the sale
viduals are not aware of the power
lows of the stock market.
of property, capital gains fall under
this knowledge can create a new and
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