Why all the hype around self directed 401k's

[Nicholas Patrick]

I'm not new to real estate investing, but still inexperienced. Why do people fawn over self directed 401k's. I mean, you get to invest in real estate tax free. That's absolutely amazing, BUT you can't start pulling out your money until almost 60. So if you want to retire early, aren't they pretty much useless. Maybe I'm missing something about it. Hope I'm posting this in the right forum. 

[Brian Eastman]

@Nicholas Patrick & @Neil Whitney

It is a very simple analysis.  If you have money in a retirement plan today, what it is earning?  If you understand an asset class such as real estate, notes, or private equity and have opportunities within your network that allow you to get a better rate of return, then your tax-sheltered retirement savings is performing better.

If you grow your retirement plan from $100,000 to $1,000,000 in real estate, you will pay more in taxes on the back end than if you left it in the stock market and only grew it to $500,000 or $800,000.  

The Rich Dad guys are making the wrong argument.  Comparing investing in ANY asset class with tax-deferred retirement savings as compared to after-tax money will have different tax consequences.  Comparing the two is comparing apples and oranges.  

Sure, if you have piles of money in both qualified and non-qualified funds, you may choose to diversify in ways that you put the most tax-favorable investments in the non-qualified bucket.  But at the end of the day if you can get %12 or better investing in a secure asset, that is better than getting 6% in a volatile asset... every day and every way.