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The Rocket Dollar Guide to Self-Directed Retirement Plans
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2 min read

Investing Locally With a Self-Directed Account: How to Invest in a Taco Truck Small Business With Your Rocket Dollar IRA

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Investing in your community is a great way to have a positive impact on your local business environment, and also a great way to make investments that you can feel great about making. Rather than investing in a soulless mutual fund, making investments in local shops, restaurants, bars can be a great way to put your money to work, while funding projects that you'll often visit and support.

Your friend is opening a Taco Truck and needs investors.

Let's play out an example of when a great opportunity comes across your desk, and you want to take advantage of a great chance to not only make a healthy return but help a friend fund their dream.

Your friend John is a creative, successful chef in town, who is ready to break out from working at corporate restaurants and branch out on his own. You know from experience that he makes the best tacos in town and that he's passionate about researching new methods, combinations, flavors. He's a taco nut.

John approaches you to be one of his early investors to help him get off the ground. He's spent the last six months working on a business plan, getting permits, finding the right truck, and getting approval to park his food truck in a fantastic, high-traffic location near a park. Now all he needs to get started is some seed money to execute on the equipment and inventory purchase.

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You're in, but liquidity is a problem.

John is asking for a minimum $20,000 investment from each of his investors. You're in, excited, and think his food truck is going to be a resounding success, but between the mortgage, car payments, two kids who are quickly approaching college, and all of the expenses life throws your way, you don't quite have the liquidity to write a $20,000 check.

You have one significant advantage, however. Because of your diligence in making regular contributions to your retirement accounts, you have a healthy IRA that's been passively earning interest by being invested in whatever twelve mutual funds you selected when you opened the account years ago.

Take advantage of a Self-Directed IRA from Rocket Dollar.

When you open a Self-Directed Retirement account from Rocket Dollar, you are free to make great investments from your IRA that you might not have otherwise been able to make, such as Johns Taco Truck.

You'll have checkbook control of your IRA funds to make investments directly into the projects you care about, not just a menu of mutual funds.

The best part is, you keep all of the tax benefits of a retirement account, which means that when John begins paying dividends on the profits of his taco truck, all dispursed funds will flow back into your IRA, tax-free.

Retirement savings can be a great source of funds to deploy when you have exciting projects coming across your desk. Using the money expressly set aside to be invested and grown for your future makes a lot more sense than using the money competing for mortgages, vacations, schools, and more. A Rocket Dollar Self-Directed IRA or Solo 401(k) allows you to keep the benefits of a retirement account, with the flexibility of cash.

Learn more about Self-Directed retirement plans with our ultimate guide.

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