Interesting facts about gold and other unconventional assets IRA

The total amount to be held in individual retirement accounts is said to be about $8 trillion. About $50 billion of that total is said to be in unconventional assets.

Compared to the total of $8 trillion, the $50 billion can be considered relatively small. However, the Government Accountability Office saw this as reason enough to sound the alarm about the dangers of unconventional assets in IRAs.

According to the report released in January 2017, GAO believes investing in these unconventional assets can be risky. You can click on it to learn more about this report.

They believe these accounts increase investor responsibility far more than they might realize. This can result in penalties and taxes. In addition, an account may be closed early. Or fraud can go undetected when worthless assets are purchased because the value of the assets has not been correctly or accurately determined.

However, that doesn’t mean you can’t invest in these unconventional assets. With the right guidance, you can very well diversify your IRA with them. We’re here to help you understand a few important things so you don’t regret it in the long run.

First the basics

Before we dive into these assets, you must first understand some important basics.

The first thing you need to know is that the law doesn’t allow investing IRA funds in collectibles and life insurance like the following:

  • antiques
  • carpets
  • arts
  • gems
  • Metals (expect certain approved precious metals)
  • stamps
  • S company
  • Alcoholic drinks
  • Coins (expect certain coins)
  • Investments Prohibited by IRS Laws

However, the law allows IRA funds to be invested in several unconventional and conventional assets. Some well-known conventional assets include stocks, bonds, mutual funds, ETFs, and so on.

Common unconventional assets that IRA funds can invest in include private equity, hedge funds, precious metals, and real estate. Other less common ones include limited liability companies, church bonds, promissory notes, private placements, and limited partnerships.

Is Investing in Unconventional Assets a Smart Choice?

Most investors will answer this question with a resounding no, as sometimes it can get very complex to buy and even value the investment. Also, RMD is required for distribution in most cases. You would also need to have an attorney review the custodian’s contract from time to time.

Some people often come to the conclusion that when all of this is taken into account, it’s not worth the stress. However, for accredited investors, such investments are great.

An investor would need to meet one of the following requirements before they can be considered accredited:

  • Must earn over $200,000 in annual income for the past 2 years (could also be $300,000 cumulative income with spouse). You would reasonably expect the same amount in the current year as well.


  • Her net worth is over $1 million. This can be alone or with their spouse. The value of the person’s primary residence is also not included in this net worth.

So what can work?

Notwithstanding what has been discussed above, certain options can still work when it comes to this investment decision. Below are some:


ROB is an acronym for Rollover as Business Start-Up. This is when an investor transfers the funds to their IRA in a 401(k) and then uses the funds to start a business. This allows an investor to have a business funded with their retirement savings.

Typically, this plan does not violate IRS prohibited transaction laws. However, the plan is usually scrutinized by the IRS to ensure they comply with the somewhat complex rules.

2. Gold

Holding physical gold in IRAs is becoming more popular every day. However, this option can be quite expensive. This may be due to the fees that must be paid to set up and keep the account running.

In order to get a bullion account, you would first need to find a trustee to oversee the transactional aspect of the investment. This custodian would charge a fee for services rendered. Thereafter, a deposit must be paid when buying the precious metal.

This is because the IRS does not allow bullion purchased with IRA funds to be stored by individuals as they are considered collectibles. You can visit if you are interested in a Gold IRA and want to learn more about how to open an account.

3. Private Placements

Private placements, also known as unregistered offerings, relate to securities that are exempt from SEC registration. This is also another perfect choice if you are considering adding an unconventional asset to your IRA portfolio.

It may not make sense to include your own company in your IRA. But if an investor is being offered shares in a small business or corporation in which they have no interest, then that might be just the thing.

However, if you choose to do so, we advise you to use a separate IRA to invest.

4. Real estate

The laws that govern IRAs are not against real estate investing. However, trustees do not have to offer this option either. As a result, some brokers may not allow real estate investments such as a rental property in an IRA.

However, some advisors, trustees and administrators specialize in self-directed individual retirement accounts. These accounts allow investors to invest in any form of investments that the law allows, such as: B. Real estate. These professionals (custodians and trustees) often help investors know how to use their IRA to make real estate investments, among other things. They will also help you with the valuation of the property and take away some of your worries about this unconventional investment.

As with private placements, if you choose this option, we recommend that you create a new account each time you wish to make a new investment.

5. Bitcoin

Recently, most people have started investing bitcoin in IRAs. You can read this to learn more about Bitcoin. This is a relatively recent development, and Bitcoin is quite volatile. Our advice, therefore, is that you tread carefully if you must.


In this article, we’ve explored some very interesting options available to you when it comes to unconventional assets and IRAs.

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