Where People Invest Using Self-Directed Accounts

Where People Invest Using Self-Directed Accounts

Self-directed retirement accounts give investors the ability to move beyond traditional stocks, bonds, and mutual funds. With a Self-Directed IRA or Solo 401(k), account holders can invest in a wide variety of alternative assets, including real estate, private companies, notes, LLCs, precious metals, and more.

But where are people actually investing?

Based on recent transaction activity, investors using self-directed accounts are showing a strong preference for private market opportunities, real estate-related structures, and alternative income-producing assets.

The Most Popular Self-Directed Account Investments

The largest category is Private Placement Memorandums, or PPMs, representing 34% of total activity. This shows that many self-directed investors are using their retirement funds to participate in private offerings, such as syndications, private funds, and other investment opportunities not typically available through a conventional brokerage account.

The second-largest category is IRA Owned LLCs, at 23.1%. This structure can give investors more control and flexibility when making investments through a self-directed retirement account. Many investors use an IRA LLC, sometimes called “checkbook control,” to streamline investment activity.

LLC contributions make up 11.9% of activity, further showing how common LLC-based investing is among self-directed account holders.

Notes and Real Estate Remain Strong

Self-directed investors continue to show interest in lending and real estate. Unsecured notes account for 8.7%, while secured notes represent 6.1%. These investments may appeal to those seeking income-producing opportunities through private lending.

Physical real estate represents 7.6% of total activity. While real estate is one of the best-known self-directed IRA investments, the data shows that many investors are also accessing real estate through syndications, LLCs, private placements, and lending arrangements.

Other Alternative Investments

Self-directed accounts are also being used for a variety of other asset types, including:

• Private stock: 1.7%
• Capital calls: 1.3%
• Crypto: 0.9%
• Note purchases: 0.7%
• Interests in LLCs: 0.3%
• Partnership agreements: 0.2%
• Precious metals: 0.2%

While these categories represent smaller percentages, they demonstrate the broad range of possibilities available through self-directed retirement investing.

What This Tells Us About Self-Directed Investors

The data shows that self-directed account holders are not just buying individual rental properties. Many are using retirement funds to access private deals, LLC structures, real estate syndications, lending opportunities, and other alternative assets.

This reflects a larger trend: investors want more control, more diversification, and access to investments they understand.

A self-directed account does not guarantee success, and every investment should be carefully reviewed. Investors must also follow IRS rules, including prohibited transaction rules, disqualified person rules, and proper account titling. But for those who want to take a more active role in their retirement strategy, self-directed accounts can open the door to a much broader investment universe.

Final Thoughts

Self-directed retirement accounts are being used in many different ways, but the strongest activity appears in private placements, IRA-owned LLCs, LLC contributions, notes, and real estate.

For investors who want to diversify beyond Wall Street, these accounts can provide a powerful way to use retirement funds for alternative assets.

Before investing, always perform due diligence and work with qualified tax, legal, and financial professionals who understand self-directed retirement account rules.