An IRA and 401k are one of, if not the best way, to save and invest for your retirement. An IRA and 401k are not something you actually invest in but are a tool that allows you to invest tax free for retirement. As most of you already know this you are probably trying wanting to know more about some of the best types of investments inside of an IRA or 401k. As we have discussed in length before an IRA or 401k can invest in many other things besides stocks and bonds. Typically when investing in things other than stocks and bonds you’ll need to find an investment firm who allows for self-directed IRAs and self-directed 401ks. These types of IRA and 401k accounts allow for just about any type of investment.
Some of the most popular types of investments inside of a self-directed IRA and 401k is real estate and gold. While these have been some of the most popular types of investments inside of IRAs and 401ks there is a newer type of investment that is starting to catch on. This new type of investment is called crowdfunding.
What is crowdfunding? Crowdfunding is the practice of funding a project or venture by raising money from a large number of people. This is typically done through the internet. The JOBS act, is a law intended to encourage funding of U.S. small business by easing various securities regulations. The JOBS act is what propelled crowdfunding to what it is today.
The JOBS acts has certain restrictions to protect investors. One certain restriction states that in order to be an investor looking for private equity, you have to be a credited investor. A credited investor is an investor who has a net worth of $1 million dollars or more, not including home property value.
It has been nearly impossible for the general public to invest in companies in exchange for private equity in the company simply because they were not considered a credited investor.
There is now good news for non-accredited investors. Title III to the JOBS Act will allow non-accredited investors to invest and participate online in start-up business and private firms. This law is not currently in place but when the future is very bright for those who are non-accredited investors.
According to the following chart you will see that crowdfunding is a trend that is on the rise. This year the crowdfunding industry is poised to to have the best year ever. This is great for investors looking to invest with their retirement accounts because it is possible to invest in some sort of crowdfunded investment with a self-directed IRA. This is also good because it means that there will be many more options available than ever before and it doesn’t look like it will be slowing down either.
If crowdfunding is something you are interested in and you want more information as to how it works with a self-directed IRA then contact us today. As self-directed IRA experts we do everything we can to make investing with your self-directed IRA hassle free and enjoyable.
Author: Nick Barker