Rocket Dollar Review:
plus A Deep Dive into Self-Directed IRAs and Alternative Investments
What is Rocket Dollar, who is it for, and is it worth your time? Self-directed IRAs isn’t the most inspiring topic, but it’s a concept worth knowing for any investor who wants to rock the righteous path to financial independence.
Let’s discuss! But before getting into the nuts and bolts of Rocket Dollar, let’s go over the basics of self-directed IRAs (SDIRAs).
Overview of Self-Directed IRAs
Self-Directed Individual Retirement Accounts (SDIRAs) are a powerful financial tool for those looking to diversify their retirement portfolios beyond traditional stocks, bonds, and mutual funds. Unlike standard IRAs, SDIRAs allow investors to explore a broader range of asset classes, including real estate, precious metals, private equity, and even cryptocurrency. This flexibility can provide significant growth opportunities and potential for higher returns, especially for those with a keen interest or expertise in alternative investments.
Benefits of Self-Directed IRAs
Diversification: SDIRAs enable investors to diversify their portfolios with alternative assets, reducing reliance on the stock market.
Control: Investors have greater control over their investment choices, allowing for personalized strategies.
Tax Advantages: Like traditional IRAs, SDIRAs offer tax-deferred growth, and in the case of Roth SDIRAs, potential tax-free growth.
Using SDIRAs for Alternative Investments
One of the most compelling uses of SDIRAs is the ability to invest in alternative assets. For instance, real estate crowdfunding has emerged as a popular option.
Investors can pool their resources to invest in properties they might not be able to afford individually, potentially reaping significant returns from rental income or property appreciation (the type of benefits you can see via “private” real estate versus REITs). Similarly, private equity investments in startups or small businesses can offer substantial growth potential, albeit with higher risk.
Note that Rocket Dollar also offers solo 401K plans and SEP IRAs. These are interesting options for self-employed folks.
Rocket Dollar: A Platform Overview
Rocket Dollar is a financial services company that facilitates the setup and management of SDIRAs and Solo 401(k) accounts. Founded with the mission to make alternative investments accessible and straightforward, Rocket Dollar provides a robust platform that caters to both novice and experienced investors.
Key Features of Rocket Dollar
Ease of Setup: Rocket Dollar simplifies the process of setting up an SDIRA or Solo 401(k), guiding users through each step with a user-friendly interface.
Broad Investment Choices: The platform supports a wide range of alternative investments, including real estate, private equity, cryptocurrency, and more.
Flat Fees: Rocket Dollar charges a flat monthly fee, which can be more cost-effective compared to the percentage-based fees of some traditional custodians.
Educational Resources: The platform offers extensive educational materials, helping investors make informed decisions about their alternative investments.
Pros of Rocket Dollar
User-Friendly: The platform is designed to be intuitive, making it accessible for users of all experience levels.
Comprehensive Support: Rocket Dollar provides strong customer support, ensuring users have assistance when needed.
Cost-Effective: The flat fee structure is transparent and can save money over time compared to traditional percentage-based fees.
Access: Rocket Dollar allows you to invest in a whole host of asset classes that are hard to get at with a traditional IRA (where you can mostly just invest in public assets). With Rocket Dollar, you can use an IRA to invest in things like real estate, fine art, startups, or crypto.
I found it really easy to get up and rolling with Rocket Dollar
Cons of Rocket Dollar
Learning Curve: While the platform is user-friendly, there is still a learning curve associated with understanding and managing SDIRAs.
Limited Traditional Investments: Investors primarily interested in traditional assets might find Rocket Dollar less appealing.
Fees are kinda high for small account balances (though the fee structure is favorable to larger investment portfolios)
The Righteous Money Take
Rocket Dollar provides a streamlined, easy way of setting up a self-directed IRA and accessing types of assets that you can’t through a more traditional IRA custodian. I find it intuitive and straightforward. Investing through a SDIRA is really about fee load and administrative stuff (how fast will the custodian review investment materials, how quickly can you get up and running with an investment). Rocket Dollar does very well in terms of being simple and with account support. The fee load is relatively high for small balances, which is the main knock on the platform.
Otherwise, fairly righteous! 4.0/5 stars.
A Tour Around the Rocket Dollar Platform
How much does the Rocket Dollar platform cost?
You have a couple of different options when it comes to account structure. Ultimately the startup cost is a little higher than I’ve seen with other SDIRA custodians, but also the fees are flatter / more capped. Notably there’s no percentage fee, which may matter a lot when you’re talking about relatively large investments.
Once you have your account set up, you can fund your account via transfers or contributions. You can then specify an investment channel / asset manager and an investment, and fund that investment. There isn’t a ton to see here! Investing with a SDIRA is mostly about review and approval behind the scenes. Hence, a lot of this isn’t really about technology or a slick UX/UI, it’s about timely reviews by people behind the scenes and good customer service. From the experience so far, I can say that Rocket Dollar earns high marks on the customer service front.
Once you do have investments, you can view your portfolio and cash balance within the app. The main thing here is that you can see your allocation and the status of any investments that are still in the review process.
Conclusion
Rocket Dollar is an excellent choice for investors looking to leverage the benefits of self-directed IRAs to explore alternative investments. With its user-friendly platform, flat fee structure, and comprehensive support, it empowers investors to diversify their portfolios and potentially achieve higher returns.
Whether you're interested in real estate crowdfunding, private equity, or other alternative assets, Rocket Dollar provides the tools and resources to make informed investment decisions. For those ready to take control of their retirement savings and explore the vast opportunities in alternative investments, Rocket Dollar is a worthy consideration.
By integrating Rocket Dollar into your investment strategy, you can unlock new avenues for growth and diversification, ensuring your retirement portfolio is robust and resilient.
What will you use Rocket Dollar to invest in? Check out more reviews to get some ideas.