In addition to saving money in a tax favored account, a Self Directed Solo 401k enables you to invest in virtually anything. Unknown to most people, retirement accounts and stock market investments do not have to go hand in hand. While the stock market only represents a small fraction of the investment opportunities out there, the Self Directed Solo 401k taps into those possibilities. Here’s a partial list of potential investments:
Precious Metals
Gold, silver, and platinum coins
Precious metals can offer a secure way to ensure wealth preservation. Gold has been used directly as money for the vast majority of human history. Own the only asset that has been time tested for thousands of years.
Real Estate
Cash purchased or leveraged, residential, commercial, land, options, tenants in common, mortgage notes, trust deeds, domestic or foreign
Owning real assets can be a predictable and understandable way to protect and grow wealth.
Private Companies
Stock in corporations, membership units in LLCs, promissory notes, private placements memorandums, hedge funds, domestic or foreign, revenue participation agreements
Invest in the startup or expansion of private companies… others’ or your own.
Miscellaneous
Foreign bank accounts
While you are probably familiar with holding the U.S. Dollar as a liquid asset in a U.S. bank account, today’s inflationary dollar policies create a strong incentive to hold liquid reserves in foreign banks denominated in a foreign currency that is likely to be more stable than the dollar.
Foreign stock markets
The crash of the American economy doesn’t have to leave you moping around waiting for it to be rebuilt. Take a look at the vibrant economies of other countries. Your Solo 401k can invest directly into stock markets in other countries.
American stock market – Expanded options
With our Self Directed Solo 401k, you can buy and sell options, trade on margin, sell stocks short, and invest in many stocks and funds that are usually unavailable to conventional IRA and 401k accounts.
What is and isn’t allowed
The only specific assets that aren’t allowed are collectibles and precious metal bullion. Rather than list allowable investments, the law names what is disallowed.
In addition to the 2 disallowed investments, “prohibited transactions” are not allowed. These are generally transactions that involve or benefit yourself or your family – outside of taxable distributions from your retirement account.
While there are flawed theories that attempt to convince Joe the Plumber to use the stock market as his sole source of investment opportunities, actual data suggests that across the globe the two leading sources of wealth are real estate and business ownership. Annual wealth reports also often dictate that the wealthy enjoy returns from their private investments far superior to their returns from publicly traded securities.
A winning investment strategy simply insn’t likely with a severely restricted investment platform. With a Self Directed Solo 401k, you can enjoy unlimited possibilities.
The above article contradicts itself on precious metals in the solo 401k. Are they allowed as per the second paragraph mentioning coins, or are collectibles and precious metals bullion not allowed as per the final paragraphs?
BC,
You’re right; the post isn’t clear. Let me clarify: bullion is not allowed in a self-trustee Solo 401k, but coins are as long as they don’t have collector’s value. Most people choose American Eagle gold coins.
Jeff
Thanks Jeff. I have read that for self directed IRA’s, that metal bars or coins of at leat .999 purity and by an approved refiner that is accepted for delivery at the COMEX or Nymex is allowed. Would this hold true for a self trustee solo 401k? Specifically I am interested in opening a solo 401k account and buying 100 oz silver bars and 10 oz gold bars. In your opinion would this be allowed?
Jeff,
Would the following transactions be considered self-dealing and therefore prohibited:
1) Buying real property in partnership with my with my 401K?
2) Having my 401K provide a motgage on real property I am buying?
3) Remortgaging my personal residence with a loan from my 401K and writing off the interest?
Also, can I transfer my IRA and my wife’s IRA to my solo 401K?
Thanks for your reponse.
Les,
1) See http://tinyurl.com/ldyedc
2) Yes
3) Yes
Jeff
Jeff,
You are the only person who is saying that…one can have a solo 401k Margin account. Every one including Fidelity ( Non Prototype ) is saying that solo 401K plan is a retirement account and hence you cannot trade on margin ? What is that you know that all other don’t?
Hi, Rajan.
What is it that Fidelity knows that I don’t? Ask them for the law or reg that says you can’t trade on margin in a Solo 401k. Laws & regs say what you can’t do; not what you can do.
At any rate, I wouldn’t actually recommend that you buy any U.S. securities. If you don’t have inside information, I don’t think you’ll get a good return consistently over the long run. If you have inside information, it’s illegal to use it.
I’d strongly recommend you figure out how to buy assets directly rather than those repackaged up in the Wall Street market place. Good luck
Jeff