Why Self-Directed IRAs are the Ideal Investment Option for Creatives
Written By: Daniel Gleich
Key Points
- Investing in a film or television production via your Self-Directed IRA (SDIRA) incorporates your creative side with the potential to accrue retirement savings.
- If you harbor a passion for music, investing in royalties of an artist you enjoy is a possible Self-Directed investment.
- Businesses and even real estate can also serve as creative investment vehicles. Self-Directed IRAs open the door to a beacon of cultivated organizations, artists, and ideas.
Concerning the future, preparation is crucial. Saving the funds necessary to retire securely is a well sought accomplishment. Many prospective investors are inclined towards creativity and yet remain uninformed about the variety of creative investment opportunities that exist.
An astonishing array of artistic alternative assets are available for investment through a Self-Directed IRA. You can relish your interests while potentially acquiring deep pockets, regardless of your preferred medium. Simultaneously, you’ll be saving for your retirement within a tax-advantaged account.
Rolling! Take Your Self-Directed IRA to Streaming or the Silver Screen
Stars are in your eyes, and you carry a passion for cinema. Let’s say you’ve determined that the alternative investment of your choice is a theatrical production. By utilizing your Self-Directed IRA to invest in the production, you can to play a developmental role in a project that has captured your enthusiasm.
Many streaming services and major networks view content as king. By instructing your SDIRA custodian to send funds directly to production, you’re helping said project get created. Investing in production with your SDIRA lets you assist a distributor in discovering new, entertaining content for their subscribers. Moreover, you’re backing visual art that resonates with you on a personal level. You’re helping to obtain the appropriate funds to film a particular story.
Your Favorite Tune May Bring Money into Your Self-Directed IRA (SDIRA)
If you have an affinity for music but lack the expertise of a powerhouse vocalist or an award-winning composer, you can still take part in your beloved field. Investing in music royalties through a fund is possible with a Self-Directed IRA. Music royalties are typically uncorrelated to the performance of the stock market. This type of fund is a conceivable alternative asset to invest in through a Self-Directed IRA.
Streams, album sales/downloads, usage in commercial/film/television, and more, can accumulate music royalties. These music royalty funds are typically long-term investments that help pay for the artist, which prompts the possibility for substantial appreciation.
You may additionally opt to invest in a private song management company. This business model centers around the company securing music catalogues.
Be Creatively Business Savvy with Your SDIRA
Private businesses, LLCs, and real estate are some of the most popular alternative investments among SDIRA investors. If you’re interested in supporting a creative venture, you can simply provide capital to their pursuit. You can achieve this through a hedge fund, startup, crowd funding, or private REIT.
If real estate is more up your alley, you may consider investing in commercial real estate for a creative purpose. Purchase a central office for a creative business, or provide additional residency, gifting them the ability to expand.
The types of creative businesses that exist are vast. Many institutions focus on music, performing arts, literature, fine art, fashion, cosmetology, interior designing, party planning, and miscellaneous art. Through investments affiliated with these mediums, you can stay grounded in your creative roots while growing your retirement savings.
Important Considerations
Like all investments, there may be risk factors with investing in creative assets. Researching and performing due diligence on a prospective investment is considered best practice. Once you resolve all concerns, you can be on your way to growing a potentially impressive return.
It’s important to note that investing in copyrights is different from investing in antique artwork or actual artwork itself. The IRS prohibits IRA funds from investing in collectibles. Investing in a collectible would be a prohibited investment.
Conclusion: For the Artist, the Showman, and the Maestro
Self-Directed IRAs are wonderful investment instruments for those who are creatively inclined. Investing in a creative business, or theatrical production allows you to diversify your retirement portfolio all while investing in something you know and believe in.
Let Madison Trust Be the Haven for Your Self-Directed IRA
Are you new to self-directed investing? We’ve got you covered! Here at Madison Trust, we pride ourselves on maintaining top-tier customer service and celebrating client victories. If you’re curious about investing in creative endeavors, schedule a free discovery call today. Learn more about the expansive range of alternative assets you can invest in with a Self-Directed IRA!
