Key Points 

• A Solo 401(k) is a retirement savings plan designed for self-employed individuals and small business owners.
• A Solo 401(k) allows contributions as both an employer and employee, leading to higher contribution limits.
• With Broad Financial, you can use your Solo 401(k) to invest in various alternative assets, such as real estate, private placements, and cryptocurrencies.

Being your own boss and building your own business can be extremely gratifying. Along the way, so can planning for retirement. Employees at companies often participate in employer-sponsored 401(k) plans. Business owners have a similar option in a Solo 401(k). If you're self-employed or own a small business, a Solo 401(k) might be right for you. And if you’re interested in alternative assets aside from Wall Street products, a Self-Directed Solo 401(k) can open up a world of opportunities to invest creatively, strategically, and in tune with your knowledge and interests.

A Solo 401(k), also known as an individual 401(k), is a retirement savings plan specifically designed for sole proprietors and small business owners with no W-2 employees except possibly a spouse. The plan can cover you and your spouse if you work together in the business. And, because this type of plan allows you to make contributions as both an employer and employee, you can choose to save at a faster pace than you would be able to in other retirement accounts.

With Broad Financial’s Self-Directed Solo 401(k), you can branch out from stock market offerings and invest in various alternative assets, including:

1. Real Estate

Is there a property or plot of land you have an eye on? A Solo 401(k) allows you to invest in real estate like rental properties, commercial buildings, and raw land while receiving tax advantages. Any potential gains are tax-deferred if you have a Traditional Solo 401(k) or tax-free if you set up a Roth Solo 401(k). Or, if you choose, you can set up your Solo 401(k) to have both Traditional and Roth funds. Real estate is a staple investment for many retirement investors because it's a tangible asset that can generate rental income and possibly appreciate over time.

2. Foreclosures

If you see a neighborhood poised for growth or redevelopment, using your Self-Directed Solo 401(k) to invest in foreclosures in the area could be a smart strategy. You can buy the property at a discount, renovate it, and perhaps see a profit once you find a renter or new buyer. Investing in foreclosures sometimes involves less competition than other types of real estate.

3. Private Placements 

Private placements are stock shares that aren't publicly traded. These private sales are popular in startups and venture capital operations. Purchasing private placements through your Self-Directed Solo 401(k) lets you invest in promising companies and potentially see lucrative returns. By participating in these investments, you gain the opportunity to enter at an early stage of a company's growth, which could lead to significant rewards if the business succeeds.

4. Cryptocurrencies

The cryptocurrency market offers a distinct profile that is not directly correlated with traditional markets. Investing in these digital currencies with your Self-Directed Solo 401(k) allows you to diversify your retirement portfolio. While cryptocurrency investments are a newer option compared to more established asset types, they provide exposure to innovative financial technology and have the potential to at times realize significant gains, while also presenting an intriguing long-term outlook.

5. Private Loans

As a Self-Directed Solo 401(k) investor, you're able to loan retirement funds to business entities and individuals. This flexibility allows you to potentially generate interest payments while also spurring business growth by providing much-needed capital. By offering private loans, you can tailor the terms to suit your investment goals and risk tolerance, such as setting the interest rate and repayment period. Additionally, this type of investment can be particularly rewarding if you focus on sectors or projects you understand well or are passionate about.

6. Stocks & Bonds 

With a Self-Directed Solo 401(k) from Broad Financial, you don't have to choose between traditional Wall St. products and alternative assets. You can invest in stocks and bonds like you would in a regular 401(k). The difference is that a Self-Directed Solo 401(k) gives you more control over your investment choices, broadening your available asset classes to include options typically unavailable to those with employer-sponsored 401(k)s. 

7. Small Businesses

Many quietly successful businesses never enter the publicly traded market. You can invest in these privately held businesses with your Self-Directed Solo 401(k). Private companies seeking capital, new partners, and expansion opportunities may be looking to team up with independent investors. 

This investment avenue not only provides small businesses with the essential funds they need to grow but also offers Self-Directed Solo 401(k) owners the chance to be part of potentially lucrative ventures. Engaging with small businesses can allow you to directly influence and contribute to their success, while also perhaps deepening your community involvement if you invest in a business in your area.

Get Started with Broad Financial  

Opening a Self-Directed Solo 401(k) with Broad Financial lets you invest in any of the above assets, and so many more. Solo 401(k)s offer a combination of high contribution limits, tax advantages, and with self-direction, a new dimension of investment freedom.

Are you self-employed and interested in learning more? We can also help you set up an IRA LLC or IRA Trust for a Self-Directed IRA. A Self-Directed IRA could become a Crypto IRA, Real Estate IRA, or other investment vehicle, depending on your passions and interests. Schedule a discovery call to explore all the options today!