Cow's and Dressage Horses--Great ROI's

Rajeev Kotyan's IRA definitely wasn't bringing home any blue ribbons. So when his friend, who runs a horse farm in New Jersey, described how he travels to Europe to pick out the best horses to bring back to the U.S. for dressage competitions, Kotyan saw an opportunity. He thought he might be able to make a little money by helping to fund the horse acquisitions.

Kotyan used his retirement account to finance the purchase of four horses, all of which turned out to be good picks. When they sold the horses 18 months later, the three split the profits evenly. The return on investment from the four dressage horses ranged from 23% to 76% apiece -- a far cry from the single-digit returns of Kotyan's conventional IRA.

Kotyan's run at alternative investing was so positive that he now works at Nua Advisors helping other investors manage their self-directed IRAs.

Dressage horses weren't Kotyan's only foray into livestock. He also once invested $25,000 into buying 10 dairy cows.

During a layover at an airport in California, Kotyan met a struggling farmer who told him how hard it was to secure agricultural loans to acquire farm animals. Hearing this, Kotyan decided to offer some assistance. "I said, "Listen, I have money just sitting in a retirement account and you know everything there is to know about cows, let's figure out how we can help each other.'"

And they did. Kotyan set up a self-directed IRA so that he could acquire the cows. The farmer agreed to lease the cows for five years, giving him the time to make enough money to then acquire the cows for a fixed price.

From acquisition to sale, Kotyan made a 25% return -- receiving annualized returns of about 12% from what he fondly calls his "cash cows."