So today's question comes in from Brock and he says, hello, Marco. I just listened to your two-part series regarding wealth growth and creation using one's IRA and found it very interesting. And I plan on listening to it multiple times. Am I able to do something similar to this concept with my 401k, or does it have to be a self-directed IRA? Thank you very much for your time and podcast Brock.





Okay, so this is a very good question. And so just as a quick recap, these are individual retirement accounts. These are retirement accounts that you can self-direct and it gives you the investor control over the buy and sell decisions of whatever you're doing with it. It permits the ability to invest in alternative investments. Other asset classes from precious metals to even cryptocurrency.

A lot of people use them to invest in notes, performing, and nonperforming notes. You can use it for real estate. There's very few limitations. It's typically art collectibles and the light. The short answer to your question is anything and everything you can do with a self-directed IRA. You can also do with a self-directed 401k, they're slightly different vehicles, but they are essentially accomplishing the same thing, which is allowing you to defer the taxes that you would normally pay on income and gains that you make from your investments to later years. And the power of that is that you can take that tax money or what you would be paying in taxes. Now today, this year and applying that towards those investments. So you actually have more purchasing power if you will, because you have more to invest from the deferral of the taxes. And so that allows you to essentially compound and accelerate the growth in your retirement account.

But what you can do in a self-directed IRA is the same as what you can do in a self-directed 401k, as long as they're both. Self-directed the thing with the 401k is often those are tied to employers. And so you're going through your HR department and whoever the administrator and custodian is, that's tied to that 401k. And so often you don't have a lot of flexibility. In fact, most of the time they're not self-directed. So you need to actually talk to your employer or HR department to find out if it can be self-directed and if it can, what you need to do sometimes they'll just tell you that it can't win an actuality. It can be some of the time. I know they don't like to turn it into a self account cause it's more administrative work. And sometimes it's just outside the lane of where they want to operate that 401k.

Now, if you leave the employer, then the 401k comes with you. It goes along with you. You don't have to cancel it. You don't have to liquidate what's in the 401k. It just becomes a 401k that is now attached to you and you are responsible for it. Your employer has nothing to do with it anymore. And if you were getting contributions where you would get a match, so for every dollar you put in, they would put another dollar or 50 cents just as a match in your contribution. You obviously lose that because you're no longer with that employer. So now you have the ability to convert that 401k into a self-directed 401k of some kind, such as a solo 401k. I would just go back to the recent podcast episode about this topic. In fact, I think it turned it into a two-part episode just because it was so long with so much detail, but it's worth going back to listening to that because we talk about wealth growth and creation strategies, using self-directed retirement accounts.

That is basically the long and the short of it. Just some last comments here, self-directed IRA is held by a custodian that you choose. So they essentially hold the IRA assets and execute the purchase and sale agreements or whatever paperwork is required for the investments that you make. So they're essentially handling that retirement vehicle on your behalf. As far as contribution limits go,