By J.P. Dahdah, Founder and CEO of Vantage

Do you remember the last time you felt triumphant vindication for an important choice you made in your life? How did it feel?  It felt glorious, right?  That’s because after every choice we make, our natural human desire is to gain validation that our decision was the correct one.  For most people, a choice is proven to be the right one when it leads to the sought after result.  As usual, the continuum of time plays the biggest role in determining whether the result was in fact favorable or not, hence the popular saying “only time will tell.”  When we’re faced with a choice involving a topic as meaningful and personal as money, the emotional stakes are high.  Given that not every monetary decision we make carries an equal magnitude of substantial value and consequence in our lives, we tend to place an elevated level of emotional attachment to the outcomes of the choices we believe will have a profound impact in our lives.  For most of us, the investment choices we make for our retirement fall into this category.  As investors, the decisions on why, what, when, how and where we direct our retirement savings matter greatly due to the high value we place on our financial well-being.

One of the fundamental investment choices every IRA investor must make is the selection of asset categories and strategies for their retirement portfolio.  Will you choose to invest in publicly traded securities offered through brokerage firms that are commonly referred to as traditional assets or would you rather invest into alternative private investments, such as real estate.  Then again, perhaps a diversified combination of both is more in line with your investment appetite.  The reality is that we all have our own reasons, beliefs and justifications that support each personal investment choice we make, which is why I believe so strongly in Self-Directed IRAs.  They empower those of us that would rather direct our hard-earned nest eggs beyond the stock market, to do so, inclusive of all the tremendous tax-favored benefits retirement accounts offer.

One of the commonly highlighted differentiating characteristics between public and private assets is the variance in liquidity offered by each respective market. The public market offers a high level of liquidity through stock exchanges.  Stock market investors that find themselves in a financial crunch and need money fast find value in having the benefit of having quick access to their funds, particularly for funds held in non-qualified brokerage accounts.  Nevertheless, a major downside of the liquidity offered by stock exchanges is that it facilitates a significant increase in market volatility.    If we evaluate the liquidity benefit factor within the context IRA accounts, however, the value proposition decreases significantly given the IRA distribution restrictions and tax penalties imposed for early withdrawals.

Additionally, keep in mind that IRAs are accounts that are already illiquid by nature because the U.S. Government designed them specifically to be long-term investment vehicles for our income during retirement, not as our emergency cash reserve fund.  This makes them ideally constructed to hold illiquid assets, such as private investment real estate.  Additionally, based on sound financial management principles, retirement accounts should be tapped as the option of last resort for cash strapped investors.

All that being said, we find ourselves halfway through a year of drastic ever-changing uncertainty brought on by the COVID-19 global pandemic.  Now more than ever, investors are asking themselves “have I made the right investment choices with my IRA?”  Those of us that chose to direct our Self-Directed IRA funds into illiquid private assets are experiencing that triumphant feeling of vindication I eluded to initially.  At last, we are having our moment of glory because the current market conditions are providing us an opportunity to prove that our illiquid IRA asset holdings are delivering the exact result, we intended them to when we bought them.  Our IRA balance is protected from the rapid downside risk exposure conversely being felt by the millions of investors in the public markets.

If you currently own real estate, or any other type of illiquid asset in your IRA, I encourage you to take this moment to join me in rejoicing proudly and relishing in the magnificent splendor of choosing wisely.  If you don’t, or perhaps you didn’t even know you could until now, I encourage you to make this an opportunity to educate yourself about Self-Directed IRAs and evaluate if they aren’t a better option than what you currently have.

To learn more about Real Estate IRAs, please visit