By Belinda Savage, Retirement Account Specialist

Where are Americans investing their retirement fund since mutual fund companies have released the fact that in one quarter of 2010, over $375 billion in mutual funds were converted into cash?

The answer is becoming clear as Americans are becoming tired of the volatility of the financial markets and seek to grab hold of the higher returns from the alternative asset sector. What are alternative assets, you may be wondering? These are the assets that Americans rely upon in their housing needs and from community or national interest: residential real estate, precious metals, senior housing, trust deeds, dormitory housing projects, tax liens, private business, and the list goes on and on.

But how can you utilize your retirement savings within this alternative asset sector when your financial advisor or CPA has only allowed you to invest in mutual funds and stock or bonds? Did you know that Americans hold $5.9 trillion in IRAs and 401Ks, which could be the explanation for the major financial institutions maintaining secrecy regarding true Self-Directed IRA/401Ks? Since 1976, when Congress passed the historical legislation (after ERISA in 1974) Americans have the opportunity to utilize their IRA or 401K savings in any investment other than a life insurance policy or a collectible such as antiques, coins, wine, or artwork. According to this section (408) of the IRS code, the language is exclusionary allowing Americans the choice as to where they may invest which includes international (real estate or private business).

By establishing your own true Self-Directed IRAs or 401Ks, you may enter into the world of owning investment property, buying trust deeds, starting businesses, lending in the form of a promissory note and a whole array of investment vehicles. As a former Wall Street bond trader and market analyst, I discovered this wondrous investment arena 10 years ago. I never looked back as clients invested in a variety (27 asset sectors) of projects or investments which have garnered between 7-20% ROI annually. The challenge is to perform due diligence. Most of us perform due diligence when choosing a home or buying a car for their families. It’s no different with your investments, you need to learn enough about what you are investing in so that you can do proper due diligence before you buy.

To open a self directed IRA or 401(k), you need a custodian. IRA Services Trust in San Carlos, California has been in business for 33 years, member of the Retirement Industry Trust Association & CMA dedicated to providing excellent education and custodial services for their 28,000 clients. You can find out more about IRA Services Trust and the benefits of investing using a self-directed IRA from this recording of a webinar that Joanne Musa hosted with Belinda Savage of IRA Services on Wednesday December 7, 2011.

You can watch the video at http://taxlienlady.com/HowToInvestTaxFree/HowToInvestTaxFree.html.