Some thoughts on Self-Directed IRAs

I’m currently reading the book Delivering Happiness by the Zappos CEO, Tony Hsieh. There’s a great quote that he uses in the beginning of the book that I think really applies to Self-Directed IRAs:

“First, they ignore you, then they laugh at you, then they fight you, then you win.”


When we first started offering Self-Directed IRAs in 2004, we weren’t even a blip on the radar screen for the big brokerage houses. We had clients coming to us and telling us that their broker had told them that it was illegal to invest in real estate or precious metals through their IRAs. The brokers tried to explain to their clients that they DID offer Self-Directed IRAs; they would allow you to “direct” your IRA into any Mutual Fund you wanted.

Over the next few years, Self-Directed IRA Custodians continued to put out their message and the number of people with Self-Directed IRAs grew at an amazing rate. It was getting harder to ignore Self-Directed IRAs, so they began to mock them. TV analysts would say things like, “Why would anyone ever want to put their money in gold? Everyone knows that traditionally the value of gold has not kept up with the inflation rate.”

When the laughing didn’t work, it all of a sudden got more difficult to transfer the accounts over. I would get calls from clients saying that their brokers were discouraging them from investing in real estate and other non-traditional IRA investments. Big companies began dragging their feet with the transfers. More and more transfer forms were getting rejected for strange reasons. They would then require the client to send a new form, delaying the process even further.

Right now I feel like Self-Directed IRAs are right on the cusp of the fourth part of the quote. We’re no longer being ignored or laughed at. We’re still being fought on a lot of things, but I feel like in a lot of ways, we’ve already won. I even get calls from brokers who want to work with us. They would rather assist their clients in purchasing a non-traditional IRA investment than lose the account completely.

Self-Directed IRAs are not for everyone But for those who are willing to fully research their investments and do the proper due diligence, a Self-Directed IRA can be a powerful investment tool to save towards retirement. If you have questions about Self-Directed IRAs, we strongly urge you to speak with a CPA or tax attorney.