Investment Options

What can I invest my 401(k) into? Steve of Check Book IRA lays out the endless investment opportunities of the Solo (k) as well as the IRA/LLC.

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Investment Options in Solo 401(k)

The investment possibilities with a Solo 401(k) are just about endless. First of all, as far as investments themselves, you can invest in everything but life insurance and collectibles and you’re not going to do that anyway. Now, that means everything else is legal but there are some people, if they’re somehow involved in the investment, or somehow involved in a transaction, that will make even a legal transaction, basically, a prohibited transaction and then you run into some issues. For example, you could buy real estate, obviously, but you can’t have any dealings with your spouse, yourself, your parents, your children or their children or any entity that any of those individuals that I just mentioned might control. So, if you have a family trust or a partnership, your kids own an LLC — that’s all off-limits because that entity is like, a son or a daughter now, it becomes a prohibited entity. But other than that, the door is wide open, so you need to stay away from the prohibited transactions and you need to know who those prohibited parties are. And basically it’s you, your spouse, your parents, your children, their spouses, and any entity that might be controlled by any one or combination of those individuals. So stay away from the prohibited parties.