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So, What is a Self Directed IRA Anyway?

So, What is a Self Directed IRA Anyway?

So, What is a Self Directed IRA Anyway?

Google search the term “Self=Directed IRA” and you will get tens of thousands of results. When you browse the CapSource website, the term shows up dozens of times as well.  But what is it? If you have been curious about this special type of IRA, then this post is right for you.


A Self Directed IRA (SDIRA) is a special type of personal retirement account that allows you to invest in different and somewhat non-traditional investments. Unlike a traditional IRA that limits you to mainly stocks and mutual funds offered by your employer or financial adviser, a SDIRA opens up your choices. The investment options are approved by the IRS.


Here are just some of the different investment options available with a Self-Directed IRA:


  • Real Estate
  • Trust Deeds
  • Corporations
  • Crowd Funding
  • Gold
  • Farms
  • Stocks
  • Mutual Funds
  • And More…


As you can imagine, having more choices can really change your investment strategy. As if having many more different investment options wasn’t enough, there are actually different Self Directed IRA types that can add even more flexibility to your portfolio.


Some of these types are:


  • Traditional Self Directed IRA
  • Roth Self Directed IRA
  • SEP Self Directed IRA
  • Individual Self Directed 401(k)


These different types will play a large role in how your IRA is taxed. Depending on how much you plan on investing, your age, and your current portfolio status you could save thousands in taxes by selecting the right account type.


Self Directed IRAs also come with their own specially licensed custodians. In most cases you are not going to find a truly self directed IRA with some of the major investment firms out there like TD Ameritrade or the like. In order to house a self directed IRA, a custodian has to have special licensing and abides by a different set of guidelines regulated by the FCC and the Trade Commission.


Some of these custodians can be found by following these links:


Horizon Trust Company

Provident Trust Company

Equity Trust Company



Finally, a self-directed IRA is about more than just an account type, it is about an investment lifestyle. Choosing to use a SDIRA means that you are choosing to self direct your investments and take more control over your financial future. You have heard the quote “with great power comes great responsibility.” Well, the same holds true when using a self directed IRA. You have more investment options and in turn more investment power.  Having more investment responsibility means that you have to be ready to analyze your options and investigate who you are working with too. Don’t be afraid to do a little homework because it could lead to much stronger results in your favor.


CapSource is here to help! If you have more questions surrounding this topic or any other investment topic, then please feel free to reach out to us.

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