By Sergio Altomare, CEO & Co-Founder of Hearthfire Holdings

Last week, we had the pleasure of hosting another educational event in our new facility as part of our ongoing commitment to providing value to our investor community. Our “Beyond Stocks and Bonds” session featured Tara Bogard, SVP of Business Development for Retired.com, who shared her extensive knowledge about self-directed IRAs and alternative investment options.

Why We Hosted This Event

At Hearthfire Holdings, we believe in expanding investment horizons. With approximately 30-40% of our investors already utilizing self-directed accounts to invest in our funds and storage properties, we recognized the importance of creating a space where our community could learn more about these powerful vehicles. This event wasn’t just about directing investments toward our offerings – it was about empowering our investors with knowledge about financial tools that can help them build wealth on their own terms.

Understanding Self-Directed IRAs

Tara kicked off the session by explaining the fundamentals of Individual Retirement Accounts (IRAs). While most people are familiar with traditional IRAs offered by institutions like Schwab, TD Ameritrade, and Fidelity (which typically limit investments to stocks, bonds, mutual funds, and ETFs), self-directed IRAs open the door to a much broader range of investment options.

The key insight: Every retirement account is technically self-directed – the difference lies in what the custodian allows you to hold. Self-directed IRA custodians specialize in alternative assets beyond the standard stock exchange offerings, creating opportunities for “normal people” to invest in assets traditionally reserved for accredited, high-net-worth individuals.

The Power of Alternative Investments

One of the most compelling aspects of Tara’s presentation was the creative potential of self-directed IRAs. She shared fascinating examples, including:

• A retired firefighter who purchased fire trucks in his retirement account and leases them to a city in Colorado, with quarterly lease payments flowing back into his IRA
• A farmer who “studs out” bulls, with the fees returning to his retirement account
• Investors using their retirement funds for private lending, real estate, and various other alternative assets

These examples highlight how self-directed IRAs allow investors to leverage their unique knowledge and networks to potentially generate returns that might outperform traditional market investments.

Types of Self-Directed Accounts

Tara walked us through several account options, including:

• Traditional IRAs (tax-deferred)
• Roth IRAs (tax-free growth after paying taxes on contributions)
• SEP IRAs and Solo 401(k)s for business owners (with contribution limits up to $69,000)
• Direct custody IRAs and checkbook control models

For those unfamiliar with the “checkbook control” approach, this involves creating a trust or LLC owned by your IRA, giving you more direct control over your investments while maintaining the tax advantages of an IRA. This structure is particularly valuable for investors engaged in high-transaction activities like fix-and-flips or those who want more flexibility with their investment strategy.

Practical Insights from a Recent Adopter

One of our attendees, Has, shared his recent experience transitioning from a traditional custodian (Vanguard) to Rocket Dollar. His testimony highlighted the practical benefits of Rocket Dollar’s flat fee structure compared to the percentage-based fees he was previously paying (nearly $1,000 for nine months with no activity). He also praised the technological interface and support provided during what can be a challenging transition process.

Important Considerations

Throughout the session, Tara emphasized several critical points:

1. Prohibited Transactions: Understanding who qualifies as a “disqualified person” (linear descendants of you and your spouse) is crucial to avoid IRS penalties
2. Fee Structures: Most alternative asset custodians charge either asset-based fees or flat subscription fees
3. Legal Compliance: While checkbook control offers flexibility, investors must still operate within IRS guidelines

Looking Forward

This event was just one of many educational opportunities we plan to offer our investor community. Based on the engagement and notes I took during the session, future topics might include 1031 exchanges, tax strategies, and estate planning.

The exploration of self-directed IRAs perfectly aligns with our philosophy at Hearthfire Holdings: providing alternatives to traditional investment approaches and empowering individuals to take greater control of their financial futures.

If you’d like to learn more about self-directed IRAs or connect with Tara Bogard at Retired.com, please reach out to our team. And if you have suggestions for future educational events, we’d love to hear from you.

A Timely Opportunity: Whitehall Valley Self-Storage Investment

As you consider the potential of self-directed IRAs, I’m excited to share that we currently have an exceptional opportunity that’s perfectly suited for this investment vehicle. Our Whitehall Valley self-storage project represents the largest development Hearthfire has ever undertaken, strategically positioned in the #1 ranked midsize market for economic development in the U.S.

This Class A self-storage facility offers compelling advantages:

• Premier Location: Positioned along a high-traffic retail corridor in Whitehall, PA with exceptional visibility and accessibility
• Strong Market Fundamentals: The Lehigh Valley is experiencing 7.5% population growth (outpacing Pennsylvania’s 2.1%) with over 7,440 new residential units under development
• Limited Competition: Only 6.4 SF per capita of total storage in the 3-mile radius, well below the national average of 8.5 SF
• De-Risked Development: Already fully entitled with construction shovel-ready by March
• Exceptional Returns: Projected 25%+ AAR, 18%+ IRR, and 2.3X equity multiple

Over 40% of our current investors have already repositioned their retirement funds into our self-storage investments through self-directed IRAs. This strategy allows them to diversify beyond traditional market investments while maintaining tax advantages.

I encourage you to watch the full video recording here. You’ll gain valuable insights from Tara’s presentation and learn more about how self-directed IRAs can open new doors for your investment strategy.