[sugarpile]

Anyone can create a self-directed Roth and do many creative and lucrative things with it. It’s hardly something only available to billionaires.

[mindslight]

The problem is that if you try to do this with only a small amount of wealth, the government will end up characterizing all of your nicely laid out corporate structures and duly filed paperwork as a self dealing tax dodge. These type of schemes only work when you're playing with an outsized amount of resources to involve enough other people and make it a group project. This even applies to the basic dynamic of an LLC itself - if you yourself are performing any role for the company, you can still be held personally liable based on those actions. The limited liability mechanic only works when everything is being done by judgement-proof patsies.

[sugarpile]

It's not insurmountable. Do you need to be mindful of self-dealing regulations? Of course. However, there are many investment opportunities available to non-wealthy people which can be pursued via self-directed ROTHs and LLCs owned by them. Real estate (financing, bridge financing, rental ownership, distressed property flipping, etc...) is probably the most commonly used one I've seen IRL but I've still seen it used for investing in friends and family rounds of startups, etc...

It's certainly not a "yolo do whatever you want, the IRS won't care" fund but it is still available to the non-wealthy. I know many people who have been making use of it for years without any unfair government characterization or attention. The best I've personally seen is a couple in their early 30s with ~$7 million (real estate related dealings) in their self-directed roth which is a far cry from $5 billion, obviously, but pretty amazing nonetheless.