Spirit of America Investment Fund Inc – ‘N-1A/A’ on 12/31/97

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Pre-Effective Amendment to Registration Statement of an Open-End Management Investment Company   —   Form N-1A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: N-1A/A      Pre-Effective Amendment No. 2                         62±   257K 
 2: EX-6        Selling Agreement                                      8±    30K 
 3: EX-10       Opinion and Consent of Counsel                         1      7K 
 4: EX-11       Consent of Auditors                                    1      6K 
 5: EX-13       Letter of Understanding                                1      7K 

N-1A/A   —   Pre-Effective Amendment No. 2
Document Table of Contents

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       UNITED STATES              File No. 333-27925

SECURITIES AND EXCHANGE COMMISSION                        
  WASHINGTON, D.C. 20549         File No. 811-8231

FORM N-1A                           

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933     [ X ]               

Pre-Effective Amendment No. 2      [ X ]                              
Post- Effective Amendment No.      [   ]                              

REGISTRATION STATEMENT UNDER THE INVESTMENT                                     
COMPANY ACT OF 1940                                    [ X ]                    

Amendment No.  2                   [ X ]                              

SPIRIT OF AMERICA INVESTMENT FUND, INC.                           
(Exact name of Registrant as specified in charter)                          
477 Jericho Turnpike                          
Syosset, New York 11791                           
(Address of principal executive offices)                          

Registrant's Telephone Number, including Area Code: (516)390-5555               

Mr. David Lerner                          
SSH Securities, Inc.                          
477 Jericho Turnpike                          
Syosset, New York 11791                           
(Name and address of Agent for Service)                           

Copies to:        Ms. Sandra L. Adams                                           
FPS Services, Inc.                        
3200 Horizon Drive                        
P.O. Box 61503                        
King of Prussia, PA 19406-0903                            

Approximate Date of Proposed Public offering: As soon as                        
practicable after the effective date of this Registration                       
Statement.                                                                      

Registrant will file a Notice pursuant to Rule 24f-2 within ninety              
days after its fiscal year end.                                                 

Registrant hereby amends the Registration Statement under the                   
Securities Act of 1933 on such date or dates as may be necessary                
to delay its effective date until Registrant shall file a further               
amendment which specifically states that such Registration                      
Statement shall thereafter become effective in accordance with                  
Section 8(a) of the Securities Act of 1933 or until such                        
Registration Statement shall become effective on such date as the               
Securities and Exchange Commission, acting pursuant to Section                  
8(a), may determine.                                                            

As filed with the U.S. Securities and Exchange Commission on                    
December 31, 1997.                                                              

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TABLE OF CONTENTS                         

Registration Statement of Spirit of America Investment Fund, Inc.               

                            Page

1. Cross Reference Sheet                               4                        

2. Spirit of America Investment Fund, Inc.                                      
Part A - Prospectus                                 6                     

3. Spirit of America Investment Fund, Inc.                                      
Part B - Statement of Additional Information       36                     

4. Spirit of America Investment Fund, Inc.                                      
Part C - Other Information                         56                     

5. Signature Page                                     62                        

6. Index to Exhibits                                  63                        

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SPIRIT OF AMERICA INVESTMENT FUND, INC.                         
CROSS REFERENCE SHEET Pursuant to Rule 481(a)                         

N-1A Item                                                                       
Information Required in Prospectus       Caption in Prospectus                  

Part A                                                                          

1.   Cover Page                            Cover Page                           

2.   Synopsis                              Expense Information                  

3.   Condensed Financial Information       Not Applicable                       

4.   General Description of Registrant     Description of the                   
                   Fund; General
                 Information

5.   Management of the Fund                Management of the                    
                   Fund; General
                       Information; Risk
                    Considerations

5A. Management's Discussion of Fund Per-   Not Applicable                       
formance                                                                

6.   Capital Stock and Other Securities    Dividends,                           
                       Distributions and
                    Taxes; General
                 Information

7.   Purchase of Securities Being Offered  Purchase and Sale of                 
                     Shares; General
                 Information

8.   Redemption or Repurchase              Purchase and Sale of                 
                     Shares; General
                 Information

9.   Legal Proceedings                     Not Applicable                       

                           Location in Statement
                   Of Additional
Part B                                     Information (Caption)                

10.  Cover Page                            Cover Page                           

11.  Table of Contents                     Table of Contents                    

12.  General Information and History       Management of the                    
                   Fund; General
                 Information

13.  Investment Objective and Policies     Description of the                   
          Fund

14.  Management of the Registrant          Management of the                    
          Fund

15.  Control Persons and Principal         Not Applicable                       
Holders of Securities                                                     

16.  Investment Advisory and Other Services  Management of the                  
                               Fund; Expenses of the
                       Fund; General
                     Information

17.  Brokerage Allocation and other                                             
Practices                               Portfolio Transaction             

18.  Capital Stock and Other Securities    General Information                  

19.  Purchase, Redemption, and Pricing     Purchase of Shares;                  
                    Redemption and
                           Repurchase of Shares;
                Dividends,
                       Distributions and
                        Taxes; Shareholder
              Services

20.  Tax Status                            Description of the                   
                      Fund; Dividends,
                       Distributions and
           Taxes

21.  Underwriters                          General Information                  

22.  Calculation of Performance Data       Performance Information              

23.  Financial Statements                  Financial Statements;                
                           Report of Independent
              Auditors

Part C   Other Information                                                      

Information required to be included in Part C is set forth under                
the appropriate Item, so numbered, in Part C of this Registration               
Statement.                                                                      

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SPIRIT OF AMERICA INVESTMENT FUND, INC.                           

477 Jericho Turnpike                          
Syosset, New York 11791                           
(516) 390-5555                          

Prospectus                              January __, 1998                        

Spirit of America Investment Fund, Inc. (the "Fund") is an                      
open-end diversified mutual fund which seeks growth of capital and              
current income.  The Fund seeks to achieve its investment                       
objective by investing in the equity securities of companies in                 
the real estate industry.  The Fund's investment adviser is Spirit              
of America Management Corp. ("Spirit Management").                              

This Prospectus sets forth the information you should know before               
investing in the Fund.  Please read it carefully and keep it for                
future reference.  Additional information about the Fund contained              
in a Statement of Additional Information dated January __, 1998                 
has been filed with the Securities and Exchange Commission (the                 
"SEC"). It may be obtained free of charge by calling the Fund's                 
distributor, SSH Securities, Inc. at (516) 390-5565.                            
Additionally, the SEC maintains a Web site (http://www.sec.gov)                 
that contains the Statement of Additional Information, material                 
incorporated by reference in this Prospectus and other information              
regarding the Fund.  The Statement of Additional Information is                 
incorporated by reference in this Prospectus.                                   

SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR                       
GUARANTEED OR ENDORSED BY, ANY FINANCIAL INSTITUTION, AND THE                   
SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE               
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.                     

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE                   
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND                   
EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS                
PROSPECTUS.  ANY REPRESENTATIONS TO THE                           
CONTRARY IS A CRIMINAL OFFENSE.                           

Table of Contents                           
                            Page

A Brief Summary of the Fund. . . . . . . . . . . . . . .                        
Expense Information. . . . . . . . . . . . . . . . . . .                        
Description of the Fund. . . . . . . . . . . . . . . . .                        
Investment Objective . . . . . . . . . . . . . . . . . .                        
Investment Policies. . . . . . . . . . . . . . . . . . .                        
Investment Practices . . . . . . . . . . . . . . . . . .                        
Risk Considerations. . . . . . . . . . . . . . . . . . .                        
Certain Fundamental Investment Limitations . . . . . . .                        
How to Purchase Shares . . . . . . . . . . . . . . . . .                        
How to Redeem Shares . . . . . . . . . . . . . . . . . .                        
Special Services . . . . . . . . . . . . . . . . . . . .                        
Net Asset Value. . . . . . . . . . . . . . . . . . . . .                        
Management of the Fund . . . . . . . . . . . . . . . . .                        
Dividends, Distributions and Taxes . . . . . . . . . . .                        
Performance Information. . . . . . . . . . . . . . . . .                        
General Information. . . . . . . . . . . . . . . . . . .                        

Distributor                           Investment Adviser                        

SSH Securities, Inc.  Spirit of America Management Corp.                        
477 Jericho Turnpike                477 Jericho Turnpike                        
Syosset, New York 11791          Syosset, New York 11791                        
(516) 390-5565                            (516) 390-5575                        

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A Brief Summary of the Fund                         

What is the Fund's Investment Objective?                                        
The Fund seeks growth of capital and current income by investing                
in the equity securities of companies in the real estate industry.              
There can be no assurance that the Fund will be able to achieve                 
its investment objective.  See "Investment Objective" and                       
"Investment Policies."                                                          

Who is the Investment Adviser?                                                  
The Fund's investment adviser is Spirit of America Management                   
Corp., a recently organized investment manager.  See "Management                
of the Fund" and "Risk Considerations."                                         

Who may want to Invest in the Fund?                                             
The Fund may be appropriate for investors who are willing to ride               
out stock market fluctuations in pursuit of potentially high                    
long-term returns.  The Fund is designed for those looking for                  
income and growth through an investment that focuses on a wide                  
range of equity securities in the real estate industry.                         

What risks are associated with an investment in the Fund?                       
The value of the Fund's investments will be affected by conditions              
in the real estate industry.  Real estate is a cyclical industry                
that is sensitive to interest rates, economic conditions, property              
tax rates and other factors.  The price of shares of the Fund will              
fluctuate as the daily price of the equity securities and debt                  
instruments in which the Fund invests fluctuate, so that your                   
shares, when redeemed, may be worth more or less than their                     
original cost. An investment in the Fund may be suitable for                    
long-term investors who may wish to consider investing a portion                
of their overall equity portfolio in a real estate mutual fund.                 
By itself, the Fund does not constitute a balanced investment                   
plan.  See "Risk Considerations."                                               

Does the Fund pay dividends?                                                    
The Fund intends to make distributions quarterly in March, June,                
September and December. These distributions may include ordinary                
income and capital gains (each of which is taxable) and a return                
of capital (which is generally non-taxable). All dividends and                  
distributions are paid in additional shares (without sales charge)              
unless payment in cash is requested.  See "Dividends,                           
Distributions and Taxes."                                                       

How do I make an investment in the Fund?                                        
Shares of the Fund may be purchased through broker-dealers or                   
directly through SSH Securities, Inc., the Fund's principal                     
distributor.  Shares can be purchased for a minimum initial                     
investment of $1,000 and subsequent investments can be made for as              
little as $50. Purchases of shares are subject to a maximum sales               
charge of 5.25%.  For detailed information about purchasing                     
shares, see "How to Purchase Shares."  In addition, the Fund                    
offers several time and money saving services to investors. Be                  
sure to ask about the Automatic Investment Plan, Retirement Plans               
and the Systematic Withdrawal Plan.                                             

How do I sell my shares?                                                        
Shares of the Fund may be redeemed at the current net asset value               
per share next determined after receipt by the transfer agent of a              
redemption request in proper form.  Signature guarantees may be                 
required for certain redemption requests.  See "How to Redeem                   
Shares."                                                                        

EXPENSE INFORMATION                           

Shareholder Transaction Expenses are one of several factors to                  
consider when you invest in the Fund. The following table                       
summarizes your maximum transaction costs and estimated annual                  
expenses for an investment in the Fund.                                         

Maximum sales charge imposed on purchases                                       
(as a percentage of offering price)(1) . . . . . . . . . . .5.25%               

Maximum sales charge imposed on reinvested                                      
dividends (as a percentage of offering price). . . . . . . . None               

Deferred sales charge (as a percentage of                                       
original purchase price)(2). . . . . . . . . . . . . . . . . None               

Redemption Fees (as a percentage of amount redeemed)(3). . . None               

(1) Reduced for purchases of $100,000 and over, decreasing to zero              
for purchases of $1 million and over.  See "How to Purchase                     
Shares - Sales Charge."                                                         

(2) Investments of $1 million or more are not subject to any sales              
charge at the time of purchase, but a contingent deferred sales                 
charge of 1.00% may be imposed on certain redemptions made                      
within one year of the date of purchase.  See "How to Purchase                  
Shares - Sales Charge."                                                         

(3) The Fund's transfer agent charges $15.00 per redemption for                 
redemptions remitted by wire.  Purchases and redemptions may                    
also be made through broker-dealers and others who may charge a                 
fee for their services.                                                         

Annual Fund Operating Expenses:                                                 
(as a percentage of average net assets)                                         

Management fees(4) . . . . . . . . . . . . . . . .0.97%                       
12b-1 fees(4) . . . . . . . . . . . . . . . . . . 0.30%                       
Other Expenses (4). . . . . . . . . . . . . . . . 0.70%                       

Total Fund operating expenses (after fee waivers)(4)1.97%                     

(4)  The above table reflects Spirit Management's voluntary                     
undertaking to waive all or a portion of its fees and to              
reimburse certain expenses to limit the total operating               
expenses of the Fund for the first year of operations to              
1.97% of the Fund's average daily net assets.  Spirit                 
Management reserves the right to terminate this waiver or any         
reimbursement at any time, in its sole discretion.  Any               
reductions in Spirit Management's fee are subject to                  
reimbursement by the Fund within the following three years,           
to the extent such reimbursement would not cause total                
operating expenses to exceed 1.97%.  Absent such                      
waiver, total operating expenses would be 2.22% of the Fund's         
average daily net assets on an annualized basis. In                   
subsequent years, overall expenses for the Fund may not fall          
below the percentage limitation until the Adviser has been            
fully reimbursed for fees foregone or expenses it paid under          
the Advisory Agreement.  "Other Expenses" are based on                
estimated amounts for the Fund's current fiscal year.  Spirit         
Management has not previously provided investment advisory            
services to registered investment companies.                          

Example                                                                         
Based on the level of expenses listed above, an investor would pay              
the following expenses on a $1,000 investment assuming (i)                      
imposition of the maximum sales charge, (ii) 5% annual return and               
(iii) redemption at the end of each time period:                                

1 year                      3 years                         

$ 71                        $111                            

THE FOREGOING EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF              
PAST OR FUTURE EXPENSES.  ACTUAL EXPENSES MAY BE MORE OR LESS THAN              
THOSE SHOWN.  The purpose of the foregoing table is to assist the               
investor in understanding the various costs and expenses that an                
investor in the Fund will bear directly or indirectly.                          

Long-term shareholders may eventually pay more than the economic                
equivalent of the maximum front-end sales charge permitted by the               
Conduct Rules of the National Association of Securities Dealers,                
Inc. (the "NASD").  See "Management of the Fund."                               

DESCRIPTION OF THE FUND                         

The Fund is a diversified investment company. The Fund's                        
investment objective is fundamental and cannot be changed without               
a shareholder vote.  Except as noted, the Fund's investment                     
policies are not fundamental and can be changed without a                       
shareholder vote. The Fund will not change these policies without               
notifying its shareholders. There is no guarantee that the Fund                 
will achieve its investment objective.                                          

INVESTMENT OBJECTIVE                        

The Fund's investment objective is to seek growth of capital and                
current income by investing in equity securities of companies in                
the real estate industry. To a lesser extent the Fund will invest               
in mortgage-backed securities and taxable debt obligations of                   
municipalities or their affiliates.                                             

INVESTMENT POLICIES                         

Under normal circumstances, at least 60% of the Fund's total                    
assets will be invested in equity securities of real estate                     
investment trusts ("REITs") and other real estate industry                      
companies. For purposes of the Fund's investments, a "real estate               
industry company" is a company that derives at least 50% of its                 
gross revenues or net profits from either (a) the ownership,                    
development, construction, financing, management or sale of                     
commercial, industrial or residential real estate or (b) products               
or services related to the real estate industry, like building                  
supplies or mortgage servicing. The equity securities in which the              
Fund will invest for this purpose consist of common stock, shares               
of beneficial interest of REITs and securities with common stock                
characteristics, such as preferred stock and debt securities                    
convertible into common stock ("Real Estate Equity Securities").                

The Fund may invest up to 40% of its total assets in (a)                        
securities that directly or indirectly represent participations                 
in, or are collateralized by and payable from, mortgage loans                   
secured by real property ("Mortgage-Backed Securities"), such as                
mortgage pass-through certificates, real estate mortgage                        
investment conduit ("REMIC") certificates and collateralized                    
mortgage obligations ("CMOs"), (b) taxable investment grade                     
securities issued by or on behalf of states and municipal                       
governments, other U.S. territories and possessions of the United               
States, and their authorities, agencies, instrumentalities and                  
political subdivisions ("taxable municipal obligations"), and (c)               
short-term investments. These instruments are described below. See              
"Risk Considerations" for a description of the risks associated                 
with the Fund's transactions in REMICs, CMOs, other types of                    
mortgage-backed securities and taxable municipal obligations.                   

The Fund may purchase or sell debt securities on a forward                      
commitment basis or enter into standby commitment agreements and                
engage in portfolio management techniques such as selling short.                
See "Investment Practices."                                                     

As to any investment in Real Estate Equity Securities, Spirit                   
Management's analysis will focus on determining the degree to                   
which the company involved can achieve sustainable growth in cash               
flow and dividend paying capability. Spirit Management believes                 
that the primary determinant of this capability is the economic                 
viability of property markets in which the company operates and                 
that the secondary determinant of this capability is the ability                
of management to add value through strategic focus and operating                
expertise. The Fund will purchase Real Estate Equity Securities                 
when, in the judgment of Spirit Management, their market price                  
does not adequately reflect this potential. In making this                      
determination, Spirit Management will take into account                         
fundamental trends in underlying property markets as determined by              
site visits conducted by individuals knowledgeable in local real                
estate markets, price-earnings ratios (as defined for real estate               
companies), cash flow growth and stability, the relationship                    
between asset value and market price of the securities, dividend                
payment history, and such other factors which Spirit Management                 
may determine from time to time to be relevant.                                 

For temporary defensive purposes, the Fund may invest up to 100%                
of its total assets in short-term, liquid, high-grade debt                      
securities, which may include U.S. Government securities, bank                  
deposits, money market instruments, repurchase agreements and                   
short-term debt securities, including notes and bonds (rated A-1,               
AA or better by Standard & Poors Ratings Group ("S&P") or rated                 
Prime-1, Aa or better by Moody's Investors Service, Inc.                        
("Moody's"). The Fund will assume a temporary defensive posture                 
only when economic and other factors affect the real estate                     
industry market to such an extent that Spirit Management believes               
there are extraordinary risks in being invested primarily in Real               
Estate Securities. For a description of the types of securities in              
which the Fund may invest while in a temporary defensive position,              
please see the Statement of Additional Information.                             

INVESTMENT PRACTICES                        

REAL ESTATE INVESTMENT TRUSTS                                                   
The Fund may invest without limitation in shares of REITs. REITs                
are pooled investment vehicles which invest primarily in income                 
producing real estate or real estate related loans or interests.                
REITs are generally classified as equity REITs, mortgage REITs or               
a combination of equity and mortgage REITs. Equity REITs invest                 
the majority of their assets directly in real property and derive               
income primarily from the collection of rents. Equity REITs can                 
also realize capital gains by selling properties that have                      
appreciated in value. Mortgage REITs invest the majority of their               
assets in real estate mortgages and derive income from the                      
collection of interest payments. Similar to investment companies                
such as the Fund, REITs are not taxed on income distributed to                  
shareholders provided they comply with several requirements of the              
Internal Revenue Code of 1986, as amended (the "Code"). The Fund                
will indirectly bear its proportionate share of expenses incurred               
by REITs in which the Fund invests in addition to the expenses                  
incurred directly by the Fund.                                                  

MORTGAGE-BACKED SECURITIES                                                      
The Fund may invest in Mortgage-Backed Securities including                     
mortgage pass-through certificates and multiple-class pass-through              
securities, such as REMIC pass-through certificates, CMOs and                   
stripped mortgage-backed securities ("SMBs"), and other types of                
Mortgage-Backed Securities that may be available in the future.                 

Mortgage-Backed Securities also include CMOs and REMIC                          
pass-through or participation certificates, which may be issued                 
by, among others, U.S. Government agencies and instrumentalities                
as well as private lenders. CMOs and REMIC certificates are issued              
in multiple classes and the principal of and interest on the                    
mortgage assets may be allocated among the several classes of CMOs              
or REMIC certificates in various ways. Each class of CMOs or REMIC              
certificates, often referred to as a "tranche," is issued at a                  
specific adjustable or fixed interest rate and must by fully                    
retired no later than its final distribution date. Generally,                   
interest is paid or accrues on all classes of CMOs or REMIC                     
certificates on a monthly basis.                                                

Typically, CMOs are collateralized by Ginnie Mae or Freddie Mac                 
certificates but also may be collateralized by other mortgage                   
assets such as whole loans or private mortgage pass-through                     
securities. Debt service on CMOs is provided from payments of                   
principal and interest on collateral of mortgaged assets and any                
reinvestment income thereon.                                                    

A REMIC is a CMO that qualifies for special tax treatment under                 
the Code and invests in certain mortgages primarily secured by                  
interests in real property and other permitted investments.                     
Investors may purchase Irregulars and "residual" interest shares                
of beneficial interest in REMIC trusts although the Fund does not               
intend to invest in residual interests.                                         

The Fund may invest in guaranteed mortgage pass-through securities              
which represent participation interests in pools of residential                 
mortgage loans and are issued by U.S. governmental or private                   
agencies or instrumentalities, including but not limited to the                 
Government National Mortgage Association ("Ginnie Mae"), the                    
Federal National Mortgage Association ("Fannie Mae") and the                    
Federal Home Loan Mortgage Corporation ("Freddie Mac"). Ginnie Mae              
certificates are guaranteed by the full faith and credit of the                 
United States Government for timely payment of principal and                    
interest on the certificates. Fannie Mae certificates are                       
guaranteed by Fannie Mae, a federally chartered and                             
privately-owned corporation for full and timely payment of                      
principal and interest on the certificates. Freddie Mac                         
certificates are guaranteed by Freddie Mac, a corporate                         
instrumentality of the United States Government, for timely                     
payment of interest and the ultimate collection of all principal                
of the related mortgage loans.                                                  

TAXABLE MUNICIPAL OBLIGATIONS                                                   
The Fund will invest in taxable municipal securities. These                     
instruments generally include debt obligations issued by                        
municipalities and local agencies within the United States to                   
obtain funds for various public purposes, including construction                
of a wide range of public facilities, refunding outstanding                     
obligations, obtaining funds for community improvement projects                 
and lending such funds to other public institutions and                         
facilities. In addition, certain types of taxable industrial                    
development bonds are issued by or on behalf of public authorities              
to provide for the construction, equipment, repair or improvement               
of certain privately operated or local facilities. These                        
obligations, including those which are guaranteed by state, local               
and municipal agencies or instrumentalities, may or may not be                  
backed by the full faith and credits or the taxing authority of                 
the agency or instrumentality issuing the obligation. Unlike                    
tax-tree municipal securities, the interest on taxable municipal                
securities generally will be included in gross income for federal               
income tax purposes and may be subject to income taxes imposed by               
any state or political subdivision. It is the Fund's current                    
investment strategy, to limit its investments in taxable municipal              
securities to less than 25% of the Fund's net assets.                           

The Fund will only invest in taxable municipal obligations which                
on the date of investment are within the four highest credit                    
ratings of Moody's (Aaa, Aa, A, Baa for bonds; MIG-1, MIG-2,                    
MIG-3, MIG-4 for notes; P-1, Aa or better for commercial paper) or              
S&P (AAA, AA, A, BBB for bonds; SP-1, SP-2 for notes; A-1, AA or                
better for commercial paper) or are comparably rated by another                 
nationally recognized statistical rating organization or, if                    
unrated, determined by Spirit Management to be of comparable                    
quality. Although bonds and notes rated in the fourth credit                    
rating category are commonly referred to as investment grade, they              
may have speculative characteristics.                                           

SHORT SALES                                                                     
The Fund may attempt to limit exposure to a possible decline in                 
the market value of portfolio securities through short sales of                 
securities which Spirit Management believes possess volatility                  
characteristics similar to those being hedged.  The Fund also may               
use short sales in an attempt to realize gain.  To effect a short               
sale, the Fund borrows a security from a brokerage firm to make                 
delivery to the buyer.  The Fund is then obligated to replace the               
borrowed security by purchasing it at the market price at the time              
of replacement.  No short sale will be effected which will, at the              
time of making such short sale transaction, cause the aggregate                 
market value of all securities sold short to exceed 15% of the                  
value of the Fund's net assets.                                                 

SHORT-TERM INVESTMENTS                                                          
The short-term investments in which the Fund may invest are:                    
corporate commercial paper and other short-term commercial                      
obligations, in each case rated or issued by companies with                     
similar securities outstanding that are rated Prime-1, Aa or                    
better by Moody's or A-1, AA or better by S&P; obligations                      
(including certificates of deposit, time deposits, demand deposits              
and bankers' acceptances) of banks with securities outstanding                  
that are rated Prime-1, Aa or better by Moody's or A-1, AA or                   
better by S&P; and obligations issued or guaranteed by the U.S.                 
Government or its agencies or instrumentalities with remaining                  
maturities not exceeding 18 months.                                             

RATINGS ON DEBT SECURITIES                                                      
In addition to the permissible limits on short-term investments                 
with reference to ratings noted above, the Fund may invest in                   
investment grade debt securities (BBB or higher by S&P or Baa or                
higher by Moody's or, if not so rated, are of equivalent credit                 
quality as determined by Spirit Management). Securities rated BBB               
by S&P or Baa by Moody's are considered to have speculative                     
characteristics. Sustained periods of deteriorating economic                    
conditions or rising interest rates are more likely to lead to a                
weakening in the issuer's capacity to pay interest and repay                    
principal than in the case of higher-rated securities. The Fund                 
expects that it will not retain a debt security which is                        
downgraded below BBB or Baa or, if unrated, determined by Spirit                
Management to have undergone similar credit quality deterioration,              
subsequent to purchase by the Fund.                                             

OTHER INVESTMENTS AND LIMITATIONS                                               
While the Fund has no current intention of engaging in any of the               
following investment practices, it may in the future determine to               
do so to the extent indicated: (i) invest up to 15% of its net                  
assets in rights or warrants; (ii) invest up to 15% of its net                  
assets in the convertible securities of companies whose common                  
stocks are eligible for purchase by the Fund; (iii) enter into                  
repurchase agreements of up to seven days' duration; (iv) enter                 
into forward commitment transactions as long as the Fund's                      
aggregate commitments under such transactions are not more than                 
15% of the Fund's total assets; (v) enter into standby commitment               
agreements; and (vi) invest in illiquid securities unless, as a                 
result, more than 15% of its net assets would be so invested.                   

ILLIQUID SECURITIES                                                             
The Fund may invest up to 15% of its net assets in illiquid                     
securities. Illiquid securities will generally include direct                   
placements or other securities that are subject to legal or                     
contractual restrictions on resale or for which there is not                    
readily available market (e.g., when trading in the security is                 
suspended or, in the case of unlisted securities, when market                   
makers do not exist or will not entertain bids or offers) and                   
repurchase agreements not terminable within seven days.                         
Securities that may be resold without registration pursuant to                  
Rule 144A may be treated as liquid for these purposes, subject to               
the supervision and oversight of the Board of Directors.  These                 
securities may include securities issued by certain REITs that are              
not publicly traded.                                                            

REPURCHASE AGREEMENTS                                                           
A repurchase agreement arises when a buyer purchases a security                 
and simultaneously agrees to resell that security to the seller at              
an agreed upon price on an agreed upon date, normally not more                  
than seven days from the date of purchase. The resale price is                  
greater than the purchase price, reflecting an agreed-upon                      
interest rate for the period the buyer's money is invested in the               
security. Such agreements permit the Fund to keep all of its                    
assets at work while retaining overnight flexibility in pursuit of              
investments of a longer-term nature. If a vendor defaults on its                
repurchase obligation, the Fund would suffer a loss to the extent               
that the proceeds from the sale of the collateral were less than                
the repurchase price. If a vendor goes bankrupt, the Fund might be              
delayed in, or prevented from, selling the collateral for its                   
benefit. Spirit Management monitors the creditworthiness of the                 
vendors with which the Fund enters into repurchase agreements.                  

GENERAL                                                                         
The successful use of the foregoing investment practices draws                  
upon Spirit Management's skills and experience with respect to                  
such instruments and usually depends on its ability to forecast                 
price movements correctly. Should prices move unexpectedly, the                 
Fund may not achieve the anticipated benefits of the transactions               
or may realize losses and thus be in a worse position than if such              
strategies had not been used.                                                   

FUTURE DEVELOPMENTS                                                             
The Fund may, following written notice to its shareholders, take                
advantage of other investment practices that are not currently                  
contemplated for use by the fund or are not available but may yet               
be developed, to the extent such investment practices are                       
consistent with the Fund's investment objective and legally                     
permissible for the Fund. Such investment practices, if they                    
arise, may involve risks that exceed those involved in the                      
activities described above.                                                     

PORTFOLIO TURNOVER                                                              
Spirit Management anticipates that the Fund's annual rate of                    
turnover will not exceed 100%. A 100% annual turnover rate would                
occur if all of the securities in the Fund's portfolio are                      
replaced once in a period of one year. A higher rate of portfolio               
turnover (100% or more) involves correspondingly greater brokerage              
and other expenses than a lower rate, which must be borne by the                
Fund and its shareholders. High portfolio turnover also may result              
in the realization of substantial net short-term capital gains.                 
See "Dividends, Distributions and Taxes" in the Fund's Statement                
of Additional Information.                                                      

RISK CONSIDERATIONS                         
GENERAL                                                                         
Investments in common stocks and other equity securities of real                
estate investment trusts and other real estate industry companies               
and the use by the Fund of various investment techniques involve                
risks different from, and, in certain cases, greater than the                   
risks presented by equity securities generally. An investment in                
the Fund is subject to certain risks associated with the direct                 
ownership of real estate and with the real estate industry in                   
general, including possible declines in the value of real estate,               
general and local economic conditions, environmental problems and               
changes in interest rates. To the extent the Fund invests in                    
taxable municipal debt obligations, the credit quality of these                 
instruments will depend upon the financial strength of the issuing              
municipality or other public body. These risks and certain others               
are discussed in this Prospectus. An investment in the Fund is                  
suitable for moderately aggressive, long-term investors who may                 
wish to consider investing a portion of their overall equity                    
portfolio in a real estate mutual fund.                                         

REAL ESTATE INDUSTRY                                                            
Although the Fund does not invest directly in real estate, it does              
invest primarily in Real Estate Equity Securities and does have a               
policy of concentration of its investments in the real estate                   
industry. Therefore, an investment in the Fund is subject to                    
certain risks associated with the direct ownership of real estate               
and with the real estate industry in general. These risks include,              
among others: possible declines in the value of real estate; risks              
related to general and local economic conditions; possible lack of              
availability of mortgage funds; overbuilding; extended vacancies                
of properties; increases in competition, property taxes and                     
operating expenses; changes in zoning laws; costs resulting from                
the clean-up of, and liability to third parties for damages                     
resulting from, environmental problems; casualty or condemnation                
losses; uninsured damages from floods, earthquakes or other                     
natural disasters; limitations on and variations in rents; and                  
changes in interest rates. To the extent that assets underlying                 
the Fund's investments are concentrated geographically, by                      
property type or in certain other respects, the Fund may be                     
subject to certain of the foregoing risks to a greater extent.                  

In addition, if the Fund receives rental income or income from the              
disposition of real property acquired as a result of a default on               
securities the Fund owns, the receipt of such income may adversely              
affect the Fund's ability to retain its tax status as a regulated               
investment company. See "Dividends, Distributions and Taxes" in                 
the Statement of Additional Information. Investments by the Fund                
in securities of companies providing mortgage servicing will be                 
subject to the risks associated with refinancings and their impact              
on servicing rights.                                                            

REITs                                                                           
Investing in REITs involves certain unique risks in addition to                 
those risks associated with investing in the real estate industry               
in general. Equity REITs may be affected by changes in the value                
of the underlying property owned by the REITs, while mortgage                   
REITs may be affected by the quality of any credit extended. REITs              
are dependent upon management skills, are not diversified, are                  
subject to heavy cash flow dependency, default by borrowers and                 
self-liquidation. REITs are also subject to the possibilities of                
failing to qualify for tax free pass-through of income under the                
Internal Revenue Code (the "Code").                                             

REITs (especially mortgage REITs) are also subject to interest                  
rate risks. When interest rates decline, the value of a REIT's                  
investment in fixed rate obligations can be expected to rise.                   
Conversely, when interest rates rise, the value of a REIT's                     
investment in fixed rate obligations can be expected to decline.                
In contrast, as interest rates on adjustable rate mortgage loans                
are reset periodically, yields on a REIT's investments in such                  
loans will gradually align themselves to reflect changes in market              
interest rates, causing the value of such investments to fluctuate              
less dramatically in response to interest rate fluctuations than                
would investments in fixed rate obligations.                                    

Investing in REITs involves risks similar to those associated with              
investing in small capitalization companies. REITs may have                     
limited financial resources, may trade less frequently and in a                 
limited volume and may be subject to more abrupt or erratic price               
movements than larger company securities. Historically, small                   
capitalization stocks, such as REITs, have been more volatile in                
price than the larger capitalization stocks included in the S&P                 
Index of 500 Common Stocks.                                                     

MORTGAGE-BACKED SECURITIES                                                      
Investing in Mortgage-Backed Securities involves certain unique                 
risks in addition to those risks associated with investment in the              
real estate industry in general. These risks include the failure                
of a counterpart to meet its commitments, adverse interest rate                 
changes and the effects of prepayments on mortgage cash flows.                  
When interest rates decline, the value of an investment in fixed                
rate obligations can be expected to rise. Conversely, when                      
interest rates rise, the value of an investment in fixed rate                   
obligations can be expected to decline. In contrast, as interest                
rates on adjustable rate mortgage loans are reset periodically,                 
yields on investments in such loans will gradually align                        
themselves to reflect changes in market interest rates, causing                 
the value of such investments to fluctuate less dramatically in                 
response to interest rate fluctuations than would investments in                
fixed rate obligations.                                                         

Further, the yield characteristics of Mortgage-Backed Securities,               
such as those in which the Fund may invest, differ from those of                
traditional fixed income securities. The major differences                      
typically include more frequent interest and principal payments                 
(usually monthly), the adjustability of interest rates, and the                 
possibility that prepayments of principal may be made                           
substantially earlier than their final distribution dates.                      

Prepayment rates are influenced by changes in current interest                  
rates and a variety of economic, geographic, social and other                   
factors, and cannot be predicted with certainty. Both adjustable                
rate mortgage loans and fixed rate mortgage loans may be subject                
to a greater rate of principal prepayments in a declining interest              
rate environment and to a lesser rate of principal prepayments in               
an increasing interest rate environment. Early payment associated               
with Mortgage-Backed Securities causes these securities to                      
experience significantly greater price and yield volatility than                
that experienced by traditional fixed-income securities. Under                  
certain interest rate and prepayment rate scenarios, the Fund may               
fail to recoup fully its investment in Mortgage-Backed Securities               
notwithstanding any direct or indirect governmental or agency                   
guarantee. When the Fund reinvests amounts representing payments                
and unscheduled prepayments of principal, it may receive a rate of              
interest that is lower than the rate on existing adjustable rate                
mortgage pass-through securities. Thus, Mortgage-Backed                         
Securities, and adjustable rate mortgage pass-through securities                
in particular, may be less effective than other types of U.S.                   
Government securities as a means of locking in interest rates.                  

SHORT SALE                                                                      
A short position may be adversely affected by imperfect                         
correlation between movements in the price of the security sold                 
short and the securities being hedged.  The Fund will realize a                 
gain on the security sold short if the security declines in price               
between the date of the short sale and the date on which the Fund               
replaces the borrowed security.  The Fund will incur a loss if the              
price of the security increases between those dates.  The amount                
of any gain will be decreased, and the amount of any loss                       
increased, by the amount of any premium or interest the Fund may                
be required to pay in connection with a short sale.                             

TAXABLE MUNICIPAL OBLIGATIONS                                                   
The principal risk factors associated with ownership by the Fund                
of taxable municipal obligations would be the risk of fluctuations              
in interest rates whereby an increase in interest rates causes a                
decline in the value of the debt obligation and the risk of                     
default among one or more issuers of taxable municipal obligations              
which are held by the Fund. Another risk of the Fund investing in               
taxable municipal obligations would be the inability to readily                 
find a buyer at or near the market price should the Fund need to                
quickly dispose of one or more of its positions in taxable                      
municipal obligations.                                                          

SECURITIES RATINGS                                                              
The ratings of securities by S&P, Moody's, and other ratings                    
services are a generally accepted barometer of credit risk. They                
are, however, subject to certain limitations from an investor's                 
standpoint. The rating of an issuer is heavily weighted by past                 
developments and does not necessarily reflect probable future                   
conditions. There is frequently a lag between the time a rating is              
assigned and the time it is updated. In addition, there may be                  
varying degrees of difference in credit risk of securities within               
each rating category.                                                           

ABSENCE OF OPERATING HISTORY                                                    
While principals of Spirit Management have experience in the                    
purchase and sale of the type of investments permitted by the                   
Fund, neither Spirit Management nor its principals have previously              
served as an adviser to a mutual fund and do not have other                     
advisory clients.                                                               

CERTAIN FUNDAMENTAL INVESTMENT LIMITATIONS                        

In addition to its fundamental investment objective, the Fund has               
adopted the following fundamental investment limitations, which                 
may not be changed without the approval of its shareholders.                    
Additional investment policies and limitations are set forth in                 
the Statement of Additional Information.                                        

The Fund may not: (i) with respect to 75% of its total assets,                  
have such assets represented by other than: (a) cash and cash                   
items, (b) U.S. Government securities, or (c) securities of any                 
one issuer (other than the U.S. Government and its agencies or                  
instrumentalities) not greater in value than 5% of the Fund's                   
total assets, and not more than 10% of the outstanding voting                   
securities of such issuer; (ii) purchase the securities of any one              
issuer, other than the U.S. Government and its agencies or                      
instrumentalities, if as a result (a) the value of the holdings of              
the Fund in the securities of such issuer exceeds 15% of its total              
assets, or (b) the Fund owns more than 25% of the outstanding                   
securities of any one class of securities of such issuer; (iii)                 
invest 25% or more of its total assets in the securities of                     
issuers conducting their principal business activities in any one               
industry, other than the real estate industry in which the Fund                 
will invest at least 25% or more of its total assets, except that               
this restriction does not apply to U.S. Government securities;                  
(iv) purchase or sell real estate, except that it may purchase and              
sell securities of companies which deal in real estate or                       
interests therein, including Real Estate Equity Securities; or (v)              
borrow money except for temporary or emergency purposes or to meet              
redemption requests, in an amount not exceeding 5% of the value of              
its total assets at the time the borrowing is made.                             

HOW TO PURCHASE SHARES                    
General                                                                         
You can purchase shares of the Fund through broker-dealers or                   
directly through SSH Securities, Inc. (the "Distributor"), the                  
Fund's principal distributor.  Shares are sold at the net asset                 
value next determined after receipt by the Fund's transfer agent,               
FPS Services, Inc. (the "Transfer Agent"), plus an initial maximum              
sales charge of up to 5.25% of the offering price (5.54% of the                 
net amount invested) reduced on investments of $100,000 or more.                
The minimum initial investment is $1,000.  Shares of the Fund are               
offered only to residents of states in which the shares are                     
registered or qualified. No share certificates will be issued in                
connection with the purchase of Fund shares.  See "Sales Charge."               

Purchase orders for shares of the Fund that are received by the                 
Transfer Agent in proper form by the close of the New York Stock                
Exchange ("NYSE")(currently 4:00 p.m. Eastern time), on any day                 
that the NYSE is open for trading, will be purchased at the Fund's              
next determined net asset value (plus any applicable sales                      
charge).  Orders for Fund shares received after 4:00 p.m. Eastern               
time will be purchased at the net asset value (plus any applicable              
sales charge) determined on the following business day.                         

The Fund and the Transfer Agent each reserves the right to reject               
any purchase order in whole or in part.  The Fund reserves the                  
right to suspend the offering of shares of the Fund.  The Fund                  
also reserves the right to vary the initial and subsequent                      
investment minimums, or to waive the minimum investment                         
requirements for any investor.  The Fund will not accept as                     
payment for a purchase order a check which has been endorsed by a               
third party.                                                                    

When you sign your account application, you will be asked to                    
certify that your Social Security or taxpayer identification                    
number is correct and that you are not subject to 31% backup                    
withholding for failing to report income to the IRS.  If you                    
violate IRS regulations, the IRS can require the Fund to withhold               
31% of your taxable distributions and redemptions.                              

Purchases by Mail                                                               
Shares may be purchased initially by completing the application                 
accompanying this Prospectus and mailing it to the Transfer Agent,              
together with a check payable to "Spirit of America Investment                  
Fund, Inc."  The check or money order and application should be                 
mailed to FPS Services, Inc., 3200 Horizon Drive, P.O. Box 61503,               
King of Prussia, PA 19406-0903.  If this is an initial purchase,                
please send a minimum of $1,000 (including IRA and SEP accounts).               

Purchases by Wire                                                               
Before making an initial investment by wire, an investor must                   
first telephone the Transfer Agent at (800)452-4892 or (610)                    
239-4600 in order to be assigned an account number.  The                        
investor's name, account number, taxpayer identification number or              
social security number and address must be specified in the wire.               
In addition, an account application should be promptly forwarded                
to: FPS Services, Inc., 3200 Horizon Drive, P.O. Box 61503, King                
of Prussia, PA 19406-0903.                                                      

Shareholders having an account with a commercial bank that is a                 
member firm of the Federal Reserve System may purchase shares of                
the Fund by requesting their bank to transmit funds by wire to:                 
United Missouri Bank K.C. N.A., ABA #10-10-00695/Attention: FPS                 
Services, Inc., A/C 98-7037-071-9/"Spirit of America Investment                 
Fund, Inc.", along with the shareholder's name and account number               
as specified on the shareholder's account registration.                         

Additional investments may be made at any time through the wire                 
procedures described above, which must include a shareholder's                  
name and account number.  The shareholder's bank may impose a fee               
for investments by wire.  The Fund will not be responsible for the              
consequences of delays, including delays in the banking or Federal              
Reserve wire systems.  Shareholders may be subject to 31%                       
withholding if original application is not received.                            

Purchases through Broker-Dealers                                                
The Fund may accept telephone orders only from broker-dealers or                
service organizations that have been previously approved by the                 
Fund.  It is the responsibility of such broker-dealers or service               
organizations to promptly forward purchase orders and payments for              
the same to the Fund.  Brokers, financial institutions, service                 
organizations, banks and bank trust departments through which an                
investor purchases shares of the Fund, may charge the shareholder               
a transaction fee or other fee for their services at the time of                
purchase.  Minimums of broker/dealers or accounts opened through a              
fund network may apply.                                                         

For any order to be confirmed at the current day's offering price,              
it must be received by the Transfer Agent or the selling dealer by              
4:00 p.m. Eastern time on the same day.  For any dealer order to                
be confirmed at the current day's offering price, it not only must              
be received by the dealer prior to 4:00 p.m. Eastern time on that               
day, but it must be communicated to the Transfer Agent by 5:00                  
p.m. Eastern time on that day.  It is the responsibility of that                
dealer to communicate the details of the order to the Transfer                  
Agent. Orders received by dealers after 4:00 p.m. Eastern time are              
confirmed at the public offering price on the following business                
day.                                                                            

Purchases by Telephone                                                          
The Fund only accepts telephone purchases from brokers, financial               
institutions or service organizations.  Individuals are not able                
to make purchases by telephone.                                                 

Subsequent Investments                                                          
Once an account has been opened, subsequent purchases may be made               
by mail, bank wire, automatic investing or direct deposit.  The                 
minimum for subsequent investments is $50 for all accounts.                     

When making subsequent investments by mail, please return the                   
bottom portion of a previous confirmation with your investment in               
the envelope that is provided with each confirmation statement.                 
Your check should be made payable to "Spirit of America Investment              
Fund, Inc." and mailed to FPS Services, Inc., c/o United Missouri               
Bank KC, N.A., P.O. Box 412797, Kansas City, Missouri 64141-2797.               
Orders to purchase shares are effective on the day the Transfer                 
Agent receives your check or money order.                                       

All investments must be made in U.S. dollars and, to avoid fees                 
and delays, checks must be drawn only on banks located in the                   
United States.  A charge (minimum of $20) will be imposed if any                
check used for the purchase of shares is returned.  Investors who               
purchase Fund shares by check or money order may not receive                    
redemption proceeds until there is reasonable belief that the                   
check has cleared, which may take up to fifteen calendar days                   
after the purchase date.                                                        

Sales Charge                                                                    
The sales charge a shareholder pays depends on the dollar amount                
invested, as shown in the table below.                                          

Total Sales Charge          Amount Paid to    
as a Percentage of          Dealer as a       
Offering  Net Amount          Percentage of       
Price     Invested           Offering Price     

Under $100,000    5.25%     5.54%              5.00%                            

$100,000 but less                                                               
than $250,000     4.50%     4.71%              4.25%                            

$250,000 but less                                                               
than $500,000     3.75%     3.90%              3.50%                            

$500,000 but less                                                               
than $1,000,000   3.00%     3.09%              2.75%                            

$1,000,000 or more*   0%       0%                 0%                            

* No sales charge is payable at the time of purchase on                         
investments of $1 million or more, although for such investments                
the Fund imposes a contingent deferred sales charge of 1.00% in                 
the event of certain redemptions within one year of the purchase.               
The contingent deferred sales charge incurred upon redemption is                
paid to the Distributor in reimbursement for distribution-related               
expenses.  A commission will be paid to authorized dealers who                  
initiate and are responsible for purchases of $1 million or more.               

The Distributor will pay the dealer concession to those selected                
dealers who have entered into an agreement with the Distributor.                
The dealer's concession may be changed from time to time.  The                  
Distributor may from time to time offer incentive compensation to               
dealers which sell shares of the Fund subject to sales charges,                 
allowing such dealers to retain an additional portion of the sales              
load.  On some occasions, such cash or incentives will be                       
conditioned upon the sale of a specified minimum dollar amount of               
the shares of the Fund during a specified period of time.  A                    
dealer who receives all or substantially all of the sales load may              
be considered an "underwriter" under the Securities Act of 1933,                
as amended.  All such sales charges are paid to the securities                  
dealer involved in the trade, if any.  No sales charge will be                  
assessed on the reinvestment of dividends or distributions.                     

Reduced Sales Charges                                                           
The sales charge may be reduced through Rights of Accumulation or               
Letter of Intent.  To qualify for a reduced sales charge, an                    
investor must so notify his or her distributor at the time of each              
purchase of shares which qualifies for the reduction.                           

Rights of Accumulation                                                          
For investors who already have an account with the Fund, reduced                
sales charges based upon the sales charge schedule are applicable               
to subsequent purchases.  The sales charge on each additional                   
purchase is determined by adding the current market value of the                
shares the investor currently owns to the amount being invested.                
The reduced sales charge is applicable only to current purchases.               
It is the investor's responsibility to notify the Transfer Agent                
at the time of subsequent purchases that the account is eligible                
for the Right of Accumulation.  The investor must also give the                 
account numbers of his accounts, and those accounts held in the                 
name of his spouse or for minor children, the age of such children              
and the specific relationship of each such person to the investor.              

Letter of Intent                                                                
An investor may qualify for a reduced sales charge immediately by               
signing a non-binding Letter of Intent stating the investor's                   
intention to invest during the next 13 months a specified amount                
which, if made at one time, would qualify for a reduced sales                   
charge.  The first investment cannot be made more than 90 days                  
prior to the date of the Letter of Intent.  Any redemptions made                
during the 13-month period will be subtracted from the amount of                
purchases in determining whether the Letter of Intent has been                  
completed.  During the term of the Letter of Intent, the Transfer               
Agent will hold shares representing 5% of the indicated amount in               
escrow for payment of a higher sales load if the full amount                    
indicated in the Letter of Intent is not purchased.  The escrowed               
shares will be released when the full amount indicated has been                 
purchased.  If the full amount indicated is not purchased within                
the 13-month period, a shareholder's escrowed shares will be                    
redeemed in an amount equal to the difference in the dollar amount              
of sales charge actually paid and the amount of sales charge the                
shareholder would have had to pay on his or her aggregate                       
purchases if the total of such purchases had been made at a single              
time.  It is the shareholder's responsibility to notify the                     
Transfer Agent at the time the Letter of Intent is submitted that               
there are prior purchases that may apply.                                       

The term "single purchaser" refers to (i) an individual, (ii) an                
individual and spouse purchasing shares of the Fund for their own               
account or for trust or custodial accounts of their minor                       
children, or (iii) a fiduciary purchasing for any one trust,                    
estate or fiduciary account, including employee benefit plans                   
created under Sections 401 and 457 of the Code including related                
plans of the same employer.                                                     

Sales at Net Asset Value                                                        
The Fund may sell shares at net asset value (i.e., without any                  
initial sales charge) to certain categories of investors,                       
including: (i) investment advisory clients of the Adviser or its                
affiliates; (ii) officers and present or former Directors of the                
Fund; directors and present and full-time employees of selected                 
dealers or agents; or the spouse, sibling, direct ancestor or                   
direct descendant (collectively "relatives") of any such person;                
or any trust, individual retirement account or retirement plan                  
account for the benefit of any such person or relative; or the                  
estate of any such person or relative, if such shares are                       
purchased for investment purposes (such shares may not be resold                
except to the Fund); (iii) the Adviser, the Distributor, and their              
affiliates; and certain employee benefit plans for employees of                 
the Adviser and the Distributor; (iv) persons who establish to the              
Distributor's satisfaction that they are investing, within such                 
time period as may be designated by the Distributor, proceeds of                
redemption of shares of such other registered investment companies              
as may be designated from time to time by the Distributor; and (v)              
employer-sponsored qualified pension or profit-sharing plans                    
(including Section 401(k) plans), custodial accounts maintained                 
pursuant to Section 403(b)(7) retirement plans and individual                   
retirement accounts (including individual retirement accounts to                
which simplified employee pension ("SEP") contributions are made),              
if such plans or accounts are established or administered under                 
programs sponsored by administrators or other persons that have                 
been approved by the Distributor.                                               

How to Redeem Shares                        

Shareholders may redeem their shares of the Fund on any business                
day that the NYSE is open for business.  Redemptions will be                    
effective at the net asset value next determined after receipt by               
the Transfer Agent of a redemption request meeting the                          
requirements described below.                                                   

Redemption by Mail                                                              
Shareholders may redeem their shares by submitting a written                    
request for redemption to FPS Services, Inc., 3200 Horizon Drive,               
P.O. Box 61503, King of Prussia, PA 19406-0903.                                 

A written redemption request to the Transfer Agent must be in good              
order, which means that it must: (i) identify the shareholder's                 
account name and account number; (ii) state the number of shares                
or dollar amount to be redeemed, and (iii) be signed by each                    
registered owner exactly as the shares are registered.  To prevent              
fraudulent redemptions, a signature guarantee for the signature of              
each person in whose name an account is registered is required for              
all written redemption requests exceeding $10,000 or where                      
proceeds are to be mailed to an address other than the address of               
record.  A guarantee may be obtained from any commercial bank,                  
credit union, member firm of a national securities exchange,                    
registered securities association, clearing agency or savings and               
loan association.  A credit union must be authorized to issue                   
signature guarantees.  Signature guarantees will be accepted from               
any eligible guarantor institution that participates in a                       
signature guarantee program.  Notary public endorsements will not               
be accepted.  The Transfer Agent may require additional supporting              
documents for redemptions made by corporations, executors,                      
administrators, trustees or guardians and retirement plans.                     

A redemption request will not be deemed to be properly received                 
until the Transfer Agent receives all required documents in proper              
form.  Questions with respect to the proper form for redemption                 
requests should be directed to the Transfer Agent at (800)                      
452-4892.                                                                       

Redemption by Telephone                                                         
Shareholders who have so indicated on the application, or have                  
subsequently arranged in writing to do so, may redeem shares by                 
calling the Transfer Agent at (800) 452-4892 or (610) 239-4600                  
during normal business hours.  In order to arrange for redemption               
by wire or telephone after an account has been opened, or to                    
change the bank or account designated to receive redemption                     
proceeds, a written request with a signature guarantee must be                  
sent to the Transfer Agent.                                                     

The Fund reserves the right to refuse a wire or telephone                       
redemption if it is believed advisable to do so.  Procedures for                
redeeming Fund shares by wire or telephone may be modified or                   
terminated at any time.                                                         

During periods of unusual economic or market changes, telephone                 
redemptions may be difficult to implement. In such event,                       
shareholders should follow the procedures for redemption by mail.               

Neither the Fund nor any of its service contractors will be liable              
for any loss or expense in acting upon telephone instructions that              
are reasonably believed to be genuine.  In this regard, the Fund                
and the Transfer Agent require personal identification information              
before accepting a telephone redemption.  To the extent that the                
Fund or the Transfer Agent fails to use reasonable procedures to                
verify the genuineness of telephone instructions, the Fund may be               
liable for losses due to fraudulent or unauthorized instructions.               
The Fund reserves the right to refuse a telephone redemption if it              
is believed advisable to do so.  Written confirmation will be                   
provided for all redemption transactions initiated by telephone.                
Proceeds from a telephone redemption shall only be sent to the                  
shareholder's address of record or wired to the shareholder's bank              
account on file with the Transfer Agent.                                        

General Redemption Information                                                  
When a request for redemption is made shortly after the purchase                
of shares, you will not receive the redemption proceeds until the               
check(s) received for the shares purchased has cleared.  Although               
the redemption proceeds may be delayed, the redemption request                  
will be processed at the net asset value next determined after                  
receipt of the redemption request in good order.  The Fund will                 
mail the redemption proceeds as soon as the purchase check clears,              
which may take up to 15 calendar days or more.  You may avoid such              
delays by purchasing shares by federal funds wire.                              

Redemption proceeds may be wired directly to any bank previously                
designated by an investor on his or her new account application.                
There is a $15.00 charge for redemptions made by wire to domestic               
banks.  Wires to foreign or overseas banks may be charged at                    
higher rates.  It should also be noted that banks may impose a fee              
for wire services.  In addition, there may be fees for redemptions              
made through brokers, financial institutions and service                        
organizations.                                                                  

The Fund will satisfy redemption requests for cash to the fullest               
extent feasible, as long as such payments would not, in the                     
opinion of the Board of Directors, result in the need for the Fund              
to sell assets under disadvantageous conditions or to the                       
detriment of the remaining shareholders of the Fund.  Pursuant to               
the Fund's Articles of Incorporation, however, payment for shares               
redeemed may also be made in-kind, or partly in cash and partly                 
in-kind.                                                                        

The Fund has elected, pursuant to Rule 18f-1 under the Investment               
Company Act of 1940, as amended (the "1940 Act"), to redeem its                 
shares solely in cash up to the lesser of $250,000 or 1% of the                 
net asset value of the Fund, during any 90 day period for any one               
shareholder.  Any portfolio securities paid or distributed in-kind              
would be in readily marketable securities and valued in the manner              
described below.  See "Net Asset Value."  In the event that an                  
in-kind distribution is made, a shareholder may incur additional                
expenses, such as brokerage commissions, on the sale or other                   
disposition of the securities received from the Fund.  In-kind                  
payments need not constitute a cross-section of the Fund's                      
portfolio.                                                                      

The Fund may suspend the right of redemption or postpone the date               
of payment for more than seven days during any period when (1)                  
trading on the NYSE is restricted or the NYSE is closed for other               
than customary weekends and holidays, (2) the SEC has by order                  
permitted such suspension for the protection of the Fund's                      
shareholders, or (3) an emergency exists making disposal of                     
portfolio securities or valuation of net assets of the Fund not                 
reasonably practicable.                                                         

Minimum Balances                                                                
Due to the relatively high cost of maintaining smaller accounts,                
the Fund reserves the right to involuntarily redeem shares in any               
account at its then current net asset value if at any time the                  
total investment does not have a value of at least $500 as a                    
result of shareholder redemptions, but not market fluctuations.  A              
shareholder will be notified that the value of his or her account               
is less than the required minimum and will be allowed at least 60               
days to bring the value of the account up to the minimum before                 
the redemption is processed.                                                    

SPECIAL SERVICES                        

Automatic Investment Plan                                                       
Once an account has been opened, a shareholder can make additional              
purchases of shares of the Fund through an automatic investment                 
plan. The automatic investment plan provides a convenient method                
by which investors may have monies deducted directly from their                 
bank account for investment in the Fund. An investor may authorize              
the automatic withdrawal of funds from his or her bank account by               
opening an account with a minimum of $1,000 and completing the                  
automatic investment plan form enclosed with this Prospectus.                   
Subsequent monthly investments are subject to a minimum required                
amount of $50.  The Fund may alter, modify or terminate this plan               
at any time.                                                                    

Systematic Cash Withdrawal Plan                                                 
The Fund offers a Systematic Cash Withdrawal Plan as another                    
option which may be utilized by an investor who wishes to withdraw              
funds from his or her account on a regular basis.  To participate               
in this option, an investor must either own or purchase shares                  
having a value of $10,000 or more.  Automatic payments by check                 
will be mailed to the investor on either a monthly, quarterly,                  
semi-annual or annual basis in amounts of $50 or more.  All                     
withdrawals are processed on the 25th of the month or, if such day              
is not a business day, on the next business day and paid promptly               
thereafter.  For information about starting a systematic cash                   
withdrawal plan, call the Transfer Agent at (800) 452-4892.                     

Retirement Plans                                                                
The Fund is available for investment by pension and profit sharing              
plans including Individual Retirement Accounts, SEP, Keogh, 401(k)              
and 403(b)(7) plans through which an investor may purchase Fund                 
shares.  For details concerning any of these retirement plans,                  
please call the Transfer Agent at (800) 452-4892 or (610)                       
239-4700.                                                                       

Net Asset Value                         

The offering price and net asset value per share is calculated as               
of the close of regular trading on the NYSE, currently 4:00 p.m.,               
Eastern Time.  Currently, the NYSE is closed on the following                   
holidays or days on which the following holidays are observed: New              
Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good                  
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving                 
Day and Christmas.                                                              

The net asset value per share is computed by adding the value of                
all securities and other assets in the portfolio, deducting any                 
liabilities, and dividing by the total number of outstanding                    
shares.  Expenses are accrued daily and applied when determining                
the net asset value.  The Fund's equity securities are valued                   
based on market quotations or, when no market quotations are                    
available, at fair value as determined in good faith by, or under               
direction of, the Board of Directors.  Market quotations are                    
generally the last reported sales price on the principal exchange               
on which the security trades, or if no sale price is reported, the              
mean of the latest bid and asked prices is used.  Securities                    
traded over-the-counter are priced at the mean of the latest bid                
and asked prices.  When market quotations are not readily                       
available, securities and other assets are valued at fair value as              
determined in good faith by the Board of Directors.                             

Securities are valued through valuations obtained from a                        
commercial pricing service or at the most recent mean of the bid                
and asked prices provided by investment dealers in accordance with              
procedures established by the Board of Directors.                               

Short-term investments having a maturity of 60 days or less are                 
valued at amortized cost, which the Board of Directors believes                 
represents fair value.  When a security is valued at amortized                  
cost, it is valued at its cost when purchased, and thereafter by                
assuming a constant amortization to maturity of any discount or                 
premium, regardless of the impact on fluctuating interest rates on              
the market value of the instrument.  All other securities and                   
other assets are valued at their fair value as determined in good               
faith under procedures established by and under the supervision of              
the Board of Directors.                                                         

MANAGEMENT OF THE FUND                        

Board of Directors                                                              
The Fund is managed by its Board of Directors and all powers and                
authorities are exercised by or under the direction of the Board                
of Directors.                                                                   

Investment Adviser                                                              
Subject to the policies of, review by, and overall control of the               
Board of Directors of the Fund, Spirit of America Management Corp.              
("Spirit Management"), 477 Jericho Turnpike, Syosset, New York                  
11791, has been retained to act as the Fund's manager and                       
investment adviser pursuant to an Investment Advisory Agreement                 
(the "Advisory Agreement"). Spirit Management was incorporated in               
1997 and is a registered investment adviser under the Investment                
Advisers Act of 1940, as amended. Spirit Management is engaged in               
the business of managing the investments of the Fund.  Mr. David                
Lerner is the sole shareholder, director and controlling person of              
Spirit Management.                                                              

Spirit Management supervises the management of the Fund including,              
among other things, reporting to the Directors regarding economic               
and statistical information as requested by the Directors.  Spirit              
Management invests the Fund's assets, manages the Fund's business               
affairs and supervises the Fund's day-to-day operations.  Spirit                
Management provides the Fund with advice on buying and selling                  
securities in accordance with the Fund's investment policies and                
limitations.  Spirit Management also furnishes office space and                 
certain administrative and clerical services, and employs the                   
personnel needed with respect to Spirit Management's                            
responsibilities under the Advisory Agreement.                                  

Under the Advisory Agreement, the Fund pays Spirit Management a                 
fee at the annual rate of 0.97% of the Fund's average daily net                 
assets. The fee is higher than the management fees paid by most                 
U.S. registered investment companies, although Spirit Management                
believes that the fee is generally comparable to the management                 
fees paid by other open-end registered investment companies that                
invest in securities similar to the Fund. The fee is accrued daily              
and paid monthly.                                                               

From time to time, Spirit Management may voluntarily waive all or               
a portion of its management fee and/or reimburse the Fund for                   
certain expenses without further notification of the commencement               
or termination of such waiver or reimbursement.  Any such waiver                
or absorption will have the effect of lowering the overall expense              
ratio of the Fund and increasing the Fund's overall return to                   
investors at the time any such amounts are waived and/or absorbed.              
Spirit Management has voluntarily agreed to waive all or a portion              
of its fee, and/or to reimburse expenses of the Fund to the extent              
necessary in order to limit net operating expenses for the first                
year of operations to an annual rate of not more than 1.97% of the              
Fund's average daily net assets.  Any amounts waived or reimbursed              
by Spirit Management are subject to reimbursement by the Fund                   
within the following three years, provided that the Fund is able                
to effect such reimbursement and remain in compliance with the                  
stated expense limitation.                                                      

The person primarily responsible for the day-to-day management of               
the Fund's portfolio since inception is Ronald W. Weiss. Mr. Weiss              
has been associated with Spirit Management since its inception for              
the purpose of advising the Fund with respect to its investments.               
Mr. Weiss has spent over twenty years in the real estate finance                
and investment banking industry, which includes debt and equity                 
financing, real estate investment trusts, asset management, new                 
investment product development and venture capital transactions                 
for financial services firms.  Most recently, Mr. Weiss was Senior              
Vice President of Gilford Securities, Inc., New York, NY from                   
April, 1996 to May, 1997.  Mr. Weiss was Senior Real Estate                     
Investment Trust Analyst and Vice President of First Albany                     
Corporation, New York, NY from 1994 through April of 1996.  Prior               
to that, Mr. Weiss was Managing Director and Real Estate General                
Counsel for Primerica Corporation, New York, NY from 1991 to 1994.              
From 1972 through 1990 he served as founder, Chairman and CEO of                
Shearson Lehman Real Estate Corporation, Executive Vice President               
of Shearson Lehman Brothers, Inc., and an officer and director of               
thirty-five Shearson subsidiary companies.                                      

EXPENSES OF THE FUND                                                            
In addition to the payments to Spirit Management under the                      
Advisory Agreement described above, the Fund pays certain other                 
costs, including, but not limited to: (i) custody, transfer agent               
and administrator expenses, (ii) fees of the Directors who are not              
affiliated with Spirit Management, (iii) legal and auditing                     
expenses, (iv) clerical, accounting and other office costs, (v)                 
costs of printing the Fund's prospectuses and shareholder reports,              
(vi) costs of maintaining the Fund's existence, (vii) interest                  
charges, taxes, brokerage fees and commissions, (viii) costs of                 
stationery and supplies, (ix) expenses and fees related to                      
registration and filing with the SEC and with state regulatory                  
authorities, and (x) such promotional, shareholder servicing and                
other expenses as may be contemplated by the Distribution Services              
Agreement, described below.                                                     

DISTRIBUTION SERVICES AGREEMENT                                                 
Rule 12b-1 adopted by the Commission under the 1940 Act permits an              
investment company to pay expenses associated with the                          
distribution of its shares in accordance with a duly adopted plan.              
The Fund has adopted a Rule 12b-1 plan (the "Plan") and has                     
entered into a Distribution Services Agreement (the "Agreement")                
with SSH Securities, Inc. ("SSH" or the "Distributor").  The Plan               
permits the Fund to pay the Distributor from the assets of the                  
Fund, a monthly fee which may not exceed an annual rate of 0.30%                
of the Fund's aggregate average daily net assets.                               

The Plan provides that SSH will use the distribution services fee               
received from the Fund in its entirety for payments (i) to                      
compensate broker-dealers or other persons for providing                        
distribution assistance, (ii) to otherwise promote the sale of                  
shares of the Fund, and (iii) to compensate broker-dealers,                     
depository institutions and other financial intermediaries for                  
providing administrative, accounting and other services with                    
respect to the Fund's shareholders. Distribution services fees                  
received from the Fund will not be used to pay any interest                     
expenses, carrying charges or other financing costs or allocation               
of overhead of SSH. The Plan also provides that SSH may use its                 
own resources to finance the distribution of the Fund's shares.                 

The Fund is not obligated under the Plan to pay any distribution                
services fee in excess of the amounts set forth above.                          
Distribution expenses accrued by SSH in one fiscal year may not be              
paid from distribution services fees received from the Fund in                  
subsequent fiscal years.  The Fund intends to operate the Plan in               
accordance with its terms and within the rules of the NASD                      
concerning sales charges.                                                       

The fees paid to the Distributor under the Plan are subject to                  
review and approval by the Fund's independent Directors who have                
the authority to reduce the fees or terminate the Plan at any                   
time.  All payments to the Plan shall be made for the purpose of                
selling shares issued by the Fund or servicing shareholder                      
accounts.                                                                       

DIVIDENDS, DISTRIBUTIONS AND TAXES                        

DIVIDENDS AND DISTRIBUTIONS                                                     
The Fund intends to distribute substantially all of its net                     
investment income and capital gains to shareholders each year.                  
Normally, dividends are declared in March, June, September and                  
December.  Capital gains, if any, will normally be distributed in               
December but may be made more frequently as deemed advisable by                 
the Board of Directors.  All such dividends and distributions are               
taxable to the shareholder whether or not reinvested in shares.                 
The Fund will distribute the return of capital it receives from                 
the REITs in which the Fund invests. The REITs pay distributions                
based on cash flow, without regard to depreciation and                          
amortization. As a result, a portion of the distributions paid to               
the Fund and subsequently distributed to shareholders is a return               
of capital. The final determination of the amount of the Fund's                 
return of capital distributions for the period will be made after               
the end of each calendar year.                                                  

Each income dividend and capital gains distribution, if any,                    
declared by the Fund on its outstanding shares will be paid in                  
additional shares of the Fund having an aggregate net asset value               
as of the payment date of such dividend or distribution equal to                
the cash amount of such income dividend or distribution unless                  
payment in cash is specified by the shareholder by written request              
to the Fund. Election to receive income dividends and                           
distributions in cash may be made at the time shares are initially              
purchased or may be changed at any time prior to the record date                
for a particular dividend or distribution. There is no sales or                 
other charge in connection with the reinvestment of dividends and               
capital gains distributions.                                                    

If you buy shares just before the Fund deducts a distribution from              
its net asset value, you will pay the full price for the shares                 
and then receive a portion of the price back as a taxable                       
distribution.                                                                   

Any check tendered in payment of dividends or other distributions               
which cannot be delivered by the post office or which remains                   
uncashed for a period of more than one year may be reinvested in                
the shareholder's account at the then current net asset value, and              
the dividend option may be changed from cash to reinvest.                       

U.S. FEDERAL INCOME TAXES                                                       
The Fund intends to qualify each year as a "regulated investment                
company" under the Code so it will not pay federal taxes on either              
income or capital gains distributed to shareholders, although                   
there can be no assurance that they will so qualify. Dividends                  
representing net investment income and distributions of net                     
short-term capital gains are taxable as ordinary income.                        

The excess of net capital gains over the net capital losses                     
realized and distributed by the Fund to its shareholders as                     
capital gains distributions is expected to be taxable to the                    
shareholders as mid-term or long-term capital gains, irrespective               
of the length of time a shareholder may have held his or her                    
stock. Capital gains distributions are not eligible for the                     
dividends-received deduction referred to above.                                 

Distributions received by a shareholder may include nontaxable                  
returns of capital, which will reduce a shareholder's basis in                  
shares of the Fund. If that basis is reduced to zero (which could               
happen if the shareholder does not reinvest distributions and                   
returns of capital are significant), any further returns of                     
capital will be taxable as capital gain.                                        

Under the current federal tax law, the amount of an income                      
dividend or capital gains distribution declared by the Fund during              
October, November and December of a year to shareholders of record              
as of a specified date in such a month that is paid during January              
of the following year is includable in the prior year's taxable                 
income of shareholders that are calendar year taxpayers.                        

Any dividend or distribution received by a shareholder on shares                
of the Fund will have the effect of reducing the net asset value                
of such shares by the amount of such dividend or distribution.                  
Furthermore, a dividend or distribution made shortly after the                  
purchase of such shares by a shareholder, although in effect a                  
return of capital to that particular shareholder, would be taxable              
to him or her as described above. If a shareholder held shares six              
months or less and during that period received a distribution                   
taxable to such shareholder as long-term capital gain, any loss                 
realized on the sale of such shares during such six-month period                
would be a long-term capital loss to the extent of such                         
distribution.                                                                   

A dividend or capital gains distribution with respect to shares of              
the Fund held by a tax-deferred or qualified plan, such as an                   
individual retirement account, 403(b)(7) retirement plan or                     
corporate pension or profit-sharing plan, will not be taxable to                
the plan. Distributions from such plans will be taxable to                      
individual participants under applicable tax rules without regard               
to the character of the income earned by the qualified plan.                    

The Fund will be required to withhold 31% of any payments made to               
a shareholder if the shareholder has not provided a certified                   
taxpayer identification number to the Fund, or if they are                      
otherwise subject to backup withholding.                                        

Shareholders will be advised annually as to the federal tax status              
of income dividends and capital gain and return of capital                      
distributions made by the Fund for the preceding year.                          
Distributions by the Fund may be subject to state and local taxes.              
Shareholders are urged to consult their tax advisers regarding                  
their own tax situation.                                                        

PERFORMANCE INFORMATION                         

Performance information such as total return for the Fund may be                
quoted in advertisements or in communications to shareholders.                  
Such performance information may be useful in reviewing the                     
performance of the Fund and for providing a basis for comparison                
with other investment alternatives.  However, because the net                   
investment return of the Fund changes in response to fluctuations               
in market conditions, interest rates and Fund expenses, any given               
performance quotation should not be considered representative of                
the Fund's performance for any future period.  The value of an                  
investment in the Fund will fluctuate and an investor's shares,                 
when redeemed, may be worth more or less than their original cost.              

The Fund's total return is the change in value of an investment in              
the Fund over a particular period, assuming that all distributions              
have been reinvested.  Thus, total return reflects not only income              
earned, but also variations in share prices at the beginning and                
end of the period.  Average annual return reflects the average                  
percentage change per year in the value of an investment in the                 
Fund.  Aggregate total return reflects the total percentage change              
over the stated period.  Please refer to the Statement of                       
Additional Information for more information on performance.                     

From time to time, the Fund advertises its total return. Such                   
advertisements disclose the Fund's average annual compounded total              
return for the periods prescribed by the SEC. The Fund's total                  
return for each such period is computed by finding, through the                 
use of a formula prescribed by the SEC, the average annual                      
compounded rate of return over the period that would equate an                  
assumed initial amount invested to the value of the investment at               
the end of the period. For purposes of computing total return,                  
income, dividends and capital gains distributions paid on shares                
of the Fund are assumed to have been reinvested when paid and the               
maximum sales charges applicable to purchases and redemptions of                
the Fund's shares are assumed to have been paid. The Fund's                     
advertisements may quote performance rankings or ratings of the                 
Fund by financial publications or independent organizations such                
as Lipper Analytical Services, Inc. and Morningstar, Inc. or                    
compare the Fund's performance to various indices.                              

GENERAL INFORMATION                           

PORTFOLIO TRANSACTIONS                                                          
Consistent with the Conduct Rules of the NASD and subject to                    
seeking best price and execution, the Fund may consider sales of                
its shares as a factor in the selection of dealers to enter into                
portfolio transactions with the Fund.                                           

ORGANIZATION                                                                    
Spirit of America Investment Fund, Inc. is a Maryland corporation               
organized on May 15, 1997. The authorized capital stock of the                  
Fund is one billion (1,000,000,000) shares, par value of $0.001                 
per share.  Under Maryland Law, the Fund's Board of Directors may               
increase the number of authorized shares without approval of the                
shareholders.  All of the shares of the Fund currently outstanding              
and offered by this Prospectus are of a single class.                           

Each share of common stock carries one vote on matters submitted                
to a vote of stockholders. A shareholder in the Fund will be                    
entitled to his or her share pro rata with other holders of the                 
same class of shares of all dividends and distributions arising                 
from the Fund's assets and, upon redeeming shares, will receive                 
the then current net asset value of the Fund represented by the                 
redeemed shares. The Fund is empowered to establish, without                    
shareholder approval, additional portfolios, which may have                     
different investment objectives, and additional classes of shares.              
If an additional portfolio or class were established in the Fund,               
each share of the portfolio or class would normally be entitled to              
one vote for all purposes. Shares are freely transferable, are                  
entitled to dividends as determined by the Directors and, in                    
liquidation of the Fund, are entitled to receive the net assets of              
the Fund. Certain additional matters relating to the Fund's                     
organization are discussed in its Statement of Additional                       
Information.                                                                    

SHAREHOLDER MEETINGS                                                            
Under Maryland law, the Fund is not required and does not intend                
to hold annual meetings of shareholders unless, under certain                   
circumstances, it is required to do so under the 1940 Act.                      
Shareholders of 10% or more of the Fund's outstanding shares may                
request that a special meeting be called to consider the removal                
of any directors.  The Fund will assist in the communication with               
other shareholders.                                                             

THE ADMINISTRATOR                                                               
The Fund has retained FPS Services, Inc. ("FPS"), 3200 Horizon                  
Drive, P.O. Box 61503, King of Prussia, PA 19406-0903, to provide               
administrative services to the Fund. Such services relate to                    
administration, operations and compliance.  For such services, the              
Fund has agreed to pay FPS a fee, subject to a minimum annual fee               
of $55,000, as compared to an asset based fee computed at the                   
annual rate of 0.15% of the first $50 million of total average net              
assets, 0.10% of the next $50 million of total average net assets               
and 0.05% of total average net assets in excess of $100 million.                

TRANSFER AGENT AND FUND ACCOUNTANT                                              
FPS also acts as transfer agent and maintains the records of each               
shareholder's account, answers shareholder inquiries, processes                 
purchases and redemptions and acts as dividend disbursing agent.                
FPS also performs certain accounting and pricing services for the               
Fund, including the daily calculation of the Fund's net asset                   
value per share. The Fund intends to be fully year 2000 compliant               
by December, 1999.                                                              

CUSTODIAN                                                                       
The Bank of New York serves as custodian for the safekeeping of                 
securities, cash and other assets of the Fund.                                  

PRINCIPAL DISTRIBUTOR                                                           
SSH Securities, Inc., located at 477 Jericho Turnpike, Syosset,                 
New York 11791, is the principal distributor of shares of the                   
Fund.                                                                           

SHAREHOLDER REPORTS AND INQUIRIES                                               
The Fund issues unaudited financial information semiannually and                
audited financial statements annually.  Shareholder inquiries                   
should be addressed to the Fund c/o FPS Services, Inc., 3200                    
Horizon Drive, P. O. Box 61503, King of Prussia, PA 19406-0903.                 
Purchase and redemption transactions should be made through FPS                 
Services, Inc. by calling (800) 452-4892.                                       

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[OUTSIDE BACK COVER]                        

INVESTMENT ADVISER                        
Spirit of America Management Corp.                        
477 Jericho Turnpike                        
Syosset, NY 11791                         
(516) 390-5575                            

DISTRIBUTOR                         
SSH Securities, Inc.                        
477 Jericho Turnpike                        
Syosset, NY 11791                         
(516) 390-5565                        

SHAREHOLDER SERVICES/TRANSFER AGENT                         
FPS Services, Inc.                        
3200 Horizon Drive, P. O. Box 61503                         
King of Prussia, PA 19406-0903                        
(800) 452-4892                        
(610) 239-4600                        

CUSTODIAN                         
The Bank of New York                        
48 Wall Street                        
New York, New York 10286                        

LEGAL COUNSEL                         
Ruthann G. Niosi, Esq., P.C.                        
91 East End Avenue                        
New York, New York 10028                        

AUDITORS                        
Tait, Weller & Baker                        
Two Penn Center, Suite 700                        
Philadelphia, PA 19102-1707                         

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SPIRIT OF AMERICA INVESTMENT FUND, INC.                           

477 Jericho Turnpike                          
Syosset, New York 11791                           
(516)390-5555                             

STATEMENT OF ADDITIONAL INFORMATION                           
_________________, 1998                           

This Statement of Additional Information is not a prospectus but                
supplements and should be read in conjunction with the current                  
Prospectus for the Spirit of America Investment Fund, Inc. (the                 
"Fund") dated ______________, 1998. No investment in shares should              
be made without first reading the Prospectus.  This Statement of                
Additional Information is intended to provide additional                        
information regarding activities and operations of the Fund, and                
should be read in conjunction with the Prospectus.  A copy of the               
Prospectus may be obtained without charge by contacting SSH                     
Securities, Inc., 477 Jericho Turnpike, Syosset, New York 11791,                
or calling (516) 390-5565.                                                      

TABLE OF CONTENTS                         

                            Page

Investment Policies and Techniques . . . . . . . . . .                          
Investment Restrictions. . . . . . . . . . . . . . . . .                        
Management of the Fund . . . . . . . . . . . . . . . . .                        
Expenses of the Fund . . . . . . . . . . . . . . . . . .                        
Shareholder Services . . . . . . . . . . . . . . . . . .                        
Retirement Plans . . . . . . . . . . . . . . . . . . . .                        
Net Asset Value. . . . . . . . . . . . . . . . . . . . .                        
Dividends, Distributions and Taxes . . . . . . . . . . .                        
Brokerage and Portfolio Transactions . . . . . . . . . .                        
Performance Information. . . . . . . . . . . . . . . . .                        
General Information. . . . . . . . . . . . . . . . . . .                        
Financial Statements . . . . . . . . . . . . . . . . . .                        

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INVESTMENT POLICIES AND TECHNIQUES                        

The following supplements the information contained in the                      
Prospectus concerning a description of securities and investment                
practices of the Fund.  You should read it together with the                    
sections in the Prospectus entitled "Investment Objective",                     
"Investment Policies" and "Investment Practices."                               

The investment practices described below are not fundamental and                
may be changed by the Board of Directors without the approval of                
the shareholders of the Fund.  Shareholders will, however, be                   
given contemporaneous written notification of any changes in the                
investment policies.                                                            

Convertible Securities                                                          
Although the Fund has no current intention of purchasing                        
convertible securities, the Fund may invest up to 15% of its total              
assets in convertible securities of issuers whose common stocks                 
are eligible for purchase by the Fund. Convertible securities                   
include bonds, debentures, corporate notes and preferred stocks.                
Convertible securities are instruments that are convertible at a                
stated exchange rate into common stock. Prior to their conversion,              
convertible securities have the same general characteristics as                 
nonconvertible securities which provide a stable stream of income               
with generally higher yields than those of equity securities of                 
the same or similar issuers. The market value of convertible                    
securities tends to decline as interest rates increase and,                     
conversely, to increase as interest rates decline. While                        
convertible securities generally offer lower interest yields than               
non-convertible debt securities of similar quality, they do enable              
the investor to benefit from increases in the market price of the               
underlying common stock.                                                        

When the market price of the common stock underlying a convertible              
security increases, the price of the convertible security                       
increasingly reflects the value of the underlying common stock and              
may rise accordingly. As the market price of the underlying common              
stock declines, the convertible security tends to trade                         
increasingly on a yield basis, and thus may not depreciate to the               
same extent as the underlying common stock. Convertible securities              
rank senior to common stocks in an issuer's capital structure.                  
They are consequently of higher quality and entail less risk than               
the issuer's common stock, although the extent to which such risk               
is reduced depends in large measure upon the degree to which the                
convertible security sells above its value as a fixed income                    
security.                                                                       

Forward Commitments, When-Issued Securities and Delayed Delivery                
Transactions                                                                    
Although the Fund may purchase securities on a when-issued basis,               
or purchase or sell securities on a forward commitment basis or                 
purchase securities on a delayed delivery basis, the Fund does not              
have the current intention of doing so in the foreseeable future.               
The Fund will normally realize a capital gain or loss in                        
connection with these transactions.                                             

No forward commitments will be made by the Fund if, as a result,                
the Fund's aggregate commitments under such transactions would be               
more than 15% of the then current value of the Fund's total                     
assets. The Fund's right to receive or deliver a security under a               
forward commitment may be sold prior to the settlement date, but                
the Fund will enter into forward commitments only with the                      
intention of actually receiving or delivering the securities, as                
the case may be. To facilitate such transactions, the Fund's                    
custodian will maintain, in a segregated account of the Fund,                   
liquid assets having value equal to, or greater than, any                       
commitments to purchase securities on a forward commitment basis                
and, with respect to forward commitments to sell portfolio                      
securities of the Fund, the portfolio securities themselves. If                 
the Fund, however, chooses to dispose of the right to receive or                
deliver a security subject to a forward commitment prior to the                 
settlement date of the transaction, it may incur a gain or loss.                
In the event the other party to a forward commitment transaction                
were to default, the Fund might lose the opportunity to invest                  
money at favorable rates or to dispose of securities at favorable               
prices.                                                                         

Standby Commitment Agreements                                                   
Although the Fund has no current intention of entering into                     
standby commitments, the Fund may purchase a security subject to a              
standby commitment agreement.  The related commitment fee will be               
recorded on the date on which the security can reasonably be                    
expected to be issued and the value of the security will                        
thereafter be reflected in the calculation of the Fund's net asset              
value. The cost basis of the security will be adjusted by the                   
amount of the commitment fee. In the event the security is not                  
issued, the commitment fee will be recorded as income on the                    
expiration date of the standby commitment. The Fund will at all                 
times maintain a segregated account with its custodian of liquid                
assets in an aggregate amount equal to the purchase price of the                
securities underlying the commitment.                                           

There can be no assurance that the securities subject to a standby              
commitment will be issued and the value of the security, if                     
issued, on the delivery date may be more or less than its purchase              
price. Since the issuance of the security underlying the                        
commitment is at the option of the issuer, the Fund will bear the               
risk of capital loss in the event the value of the security                     
declines and may not benefit from an appreciation in the value of               
the security during the commitment period if the issuer decides                 
not to issue and sell the security to the Fund.                                 

Short Sales                                                                     
To secure the Fund's obligation to replace any borrowed security,               
it will place in a segregated account, an amount of cash or U.S.                
Government securities equal to the difference between the market                
value of the securities sold short at the time of the short sale,               
and any cash or U.S. Government securities originally deposited                 
with the broker in connection with the short sale (excluding the                
proceeds of the short sale).  The Fund will thereafter maintain                 
daily the segregated amount at such a level that the amount                     
deposited in it plus the amount originally deposited with the                   
broker as collateral will equal the greater of the current market               
value of the securities sold short, or the market value of the                  
securities at the time they were sold short.                                    

Repurchase Agreements                                                           
The Fund may enter into repurchase agreements pertaining to U.S.                
Government Securities with member banks of the Federal Reserve                  
System or Primary dealers (as designated by the Federal Reserve                 
Bank of New York) in such securities. There is no percentage                    
restriction on the Fund's ability to enter into repurchase                      
agreements. Currently, the Fund intends to enter into repurchase                
agreements only with its custodian and such primary dealers. A                  
repurchase agreement arises when a buyer purchases a security and               
simultaneously agrees to resell it to the vendor at an agreed-upon              
future date, normally one day or a few days later. The resale                   
price is greater than the purchase price, reflecting an                         
agreed-upon interest rate which is effective for the period of                  
time the buyer's money is invested in the security and which is                 
related to the current market rate rather than the coupon rate on               
the purchased security. This results in a fixed rate of return                  
insulated from market fluctuations during such period. Such                     
agreements permit the Fund to keep all of its assets at work while              
retaining "overnight" flexibility in pursuit of investments of a                
longer-term nature. The Fund requires continual maintenance by its              
Custodian for its account in the Federal Reserve/Treasury Book                  
Entry System of collateral in an amount equal to, or in excess of,              
the resale price. In the event a vendor defaulted on its                        
repurchase obligation, the Fund might suffer a loss to the extent               
that the proceeds from the sale of the collateral were less than                
the repurchase price. In the event of a vendor's bankruptcy, the                
Fund might be delayed in, or prevented from, selling the                        
collateral for its benefit. The Fund's Board of Directors has                   
established procedures, which are periodically reviewed by the                  
Board, pursuant to which the Adviser monitors the creditworthiness              
of the dealers with which the Fund enters into repurchase                       
agreement transactions.                                                         

Illiquid Securities                                                             
Historically, illiquid securities have included securities subject              
to contractual or legal restrictions on resale because they have                
not been registered under the Securities Act of 1933, as amended                
(the "Securities Act"), securities which are otherwise not readily              
marketable and repurchase agreements having a maturity of longer                
than seven days. Securities which have not been registered under                
the Securities Act are referred to as private placements or                     
restricted securities and are purchased directly from the issuer                
or in the secondary market. Mutual funds do not typically hold a                
significant amount of these restricted or other illiquid                        
securities because of the potential for delays on resale and                    
uncertainty in valuation. Limitations on resale may have an                     
adverse effect on the marketability of portfolio securities and a               
mutual fund might be unable to dispose of restricted or other                   
illiquid securities promptly or at reasonable prices and might                  
thereby experience difficulty satisfying redemptions within seven               
days. A mutual fund might also have to register such restricted                 
securities in order to dispose of them resulting in additional                  
expense and delay. Adverse market conditions could impede such a                
public offering of securities.                                                  

In recent years, however, a large institutional market has                      
developed for certain securities that are not registered under the              
Securities Act, including repurchase agreements, commercial paper,              
foreign securities, municipal securities and corporate bonds and                
notes. Institutional investors depend on an efficient                           
institutional market in which the unregistered security can be                  
readily resold or on an issuer's ability to honor a demand for                  
repayment. The fact that there are contractual or legal                         
restrictions on resale to the general public or to certain                      
institutions may not be indicative of the liquidity of such                     
investments.                                                                    

The Fund may invest in restricted securities issued under Section               
4(2) of the Securities Act, which exempts from registration                     
transactions by an issuer not involving any public offering.                    
Section 4(2) instruments are restricted in the sense that they can              
only be resold through the issuing dealer to institutional                      
investors and in private transactions; they cannot be resold to                 
the general public without registration.                                        

Rule 144A under the Securities Act allows a broader institutional               
trading market for securities otherwise subject to restriction on               
resale to the general public. Rule 144A establishes a safe harbor.              
from the registration requirements of the Securities Act for                    
resales of certain securities to qualified institutional buyers.                
An insufficient number of qualified institutional buyers                        
interested in purchasing certain restricted securities held by the              
Fund, however, could affect adversely the marketability of such                 
portfolio securities and the Fund might be unable to dispose of                 
such securities promptly or at reasonable prices.                               

The Adviser, under the supervision of the Board of Directors, will              
monitor the liquidity of restricted securities in the Fund's                    
portfolio. In reaching liquidity decisions, the Adviser will                    
consider, among other factors, the following: (1) the frequency of              
trades and quotes for the security; (2) the number of dealers                   
making quotations to purchase or sell the security; (3) the number              
of other potential purchasers of the security; (4) the number of                
dealers undertaking to make a market in the security; (5) the                   
nature of the security (including its unregistered nature) and the              
nature of the marketplace for the security (e.g., the time needed               
to dispose of the security, the method of soliciting offers and                 
the mechanics of the transfer); and (6) any applicable Securities               
and Exchange Commission (the "Commission") interpretation or                    
position with respect to such type of security.                                 

Rights and Warrants                                                             
The Fund has no current intention to invest in rights and                       
warrants, although the Fund may invest up to 15% of its net assets              
in rights or warrants only if the underlying equity securities are              
themselves deemed appropriate by Spirit of America Management                   
Corp. (the "Adviser") for inclusion in the Fund's portfolio.                    
Rights and warrants entitle the holder to buy equity securities at              
a specific price for a specific period of time. Rights are similar              
to warrants except that they have a substantially shorter                       
duration. Rights and warrants may be considered more speculative                
than certain other types of investments in that they do not                     
entitle a holder to dividends or voting rights with respect to the              
underlying securities nor do they represent any rights in the                   
assets of the issuing company. The value of right or warrant does               
not necessarily change with the value of the underlying security,               
although the value of a right or warrant may decline because of a               
decrease in the value of the underlying security, the passage of                
time or a change in perception as to the potential of the                       
underlying security, or any combination thereof. If the market                  
price of the underlying security is below the exercise price set                
forth in the warrant on the expiration date, the warrant will                   
expire worthless. Moreover, a right or warrant ceases to have                   
value if it is not exercised prior to the expiration date.                      

Portfolio Turnover                                                              
It is the Fund's policy to sell any security whenever, in the                   
judgment of the Adviser, its appreciation possibilities have been               
substantially realized or the business or market prospects for                  
such security have deteriorated, irrespective of the length of                  
time that such security has been held.  The Adviser anticipates                 
that the Fund's annual rate of portfolio turnover will not exceed               
100%. A 100% annual turnover rate would occur if all securities in              
the Fund's portfolio were replaced once within a period of one                  
year.                                                                           

INVESTMENT RESTRICTIONS                         

The following restrictions, which supplement those set forth in                 
the Fund's Prospectus, may not be changed without approval by the               
vote of a majority of the Fund's outstanding voting securities,                 
which means the affirmative vote of the holders of (i) 67% or more              
of the shares represented at a meeting at which more than 50% of                
the outstanding shares are represented, or (ii) more than 50% of                
the outstanding shares, whichever is less.                                      

To reduce investment risk, as a matter of fundamental policy the                
Fund may not:                                                                   

(i)    pledge, hypothecate, mortgage or otherwise encumber            
its assets, except to secure permitted borrowings;      

(ii)   make loans except through (a) the purchase of debt             
obligations in accordance with its investment           
objectives and policies; or (b) the use of              
repurchase agreements;                                  

(iii)  participate on a joint or joint and several basis in           
any securities trading account;                         

(iv)   invest in companies for the purpose of exercising              
control;                                                

(v)    issue any senior security within the meaning of the            
Investment Company Act of 1940 (the "1940 Act");        

(vi)   (a) purchase or sell commodities or commodity                  
contracts including futures contracts; (b) invest in    
interests in oil, gas, or other mineral exploration     
or development programs; (c) purchase securities on     
margin, except for such short-term credits as may be    
necessary for the clearance of transactions; and (d)    
act as an underwriter of securities, except that the    
Fund may acquire restricted securities under            
circumstances in which, if such securities were         
sold, the Fund might be deemed to be an underwriter     
for purposes of the Securities Act.                     

MANAGEMENT OF THE FUND                        

Directors and Officers                                                          
The Directors and principal officers of the Fund, their ages and                
their principal occupations during the past five years are set                  
forth below.  Each Director who is an "interested person" of the                
Fund, as that term is defined in the 1940 Act, is indicated by an               
asterisk.                                                                       

Directors                                                                       
DAVID LERNER*, 61, 477 Jericho Turnpike, Syosset, New York 11791;               
Chairman of the Board of Directors, President and Treasurer of the              
Fund; President and a Director of newly formed Spirit of America                
Management Corp., the Fund's investment adviser, and Director,                  
Chief Executive Officer and President of SSH Securities, Inc., the              
Fund's principal distributor. Mr. Lerner has been associated with               
David Lerner Associates, Inc., a registered broker-dealer, for                  
over twenty-one years as President and founder. Mr. Lerner                      
received his B.A. and  M.B.A degrees from the City University of                
New York, New York, NY.                                                         

STANLEY THUNE, 60, 31 Brearly Road, Princeton, New Jersey 08540;                
Director; President and Chief Executive Officer, Freight                        
Management Systems, Inc., from April 1993 to present.  Mr. Thune                
is also President and CEO of Energy Conservation Management, Inc.               
(July 1995 to present).  Mr. Thune is involved in property                      
development and construction, including the purchase and                        
development of raw land leading to either sale to individual                    
builders or home construction by the development company.                       
Previously, Mr. Thune was President and CEO of Residuals                        
Management Group from September 1989 to April 1993 and of Air &                 
Water Technologies Corporation, Branchburg, New Jersey, from 1986               
to April 1993.  Mr. Thune received his B.S. in Chemical                         
Engineering from The City College of New York and his M.B.A. from               
Baruch School of Business, The City University of New York.                     

HERBERT GRANT, 73, 409 Old Courthouse Road, New Hyde Park, New                  
York  11040; Director; For the past 42 years, Mr. Grant has been                
owned and/or operated various Automobile Dealerships.  He is                    
presently the owner of Central Avenue Chrysler, Plymouth, Jeep,                 
Eagle in Yonkers, New York, which is the fifth largest dealership               
in New York.  Mr. Grant also owns Nanuet Chrysler-Jeep, Mazda,                  
Subaru, located in Nanuet, New York.  Mr. Grant received a B.S.                 
degree from New York University and his J.D. degree from                        
University of Miami Law School.                                                 

ALLEN KAUFMAN, 60, Director; 223 Hamlet Drive, Jericho, New York                
11797; President and Chief Executive Officer of K.G.K. Agency,                  
Inc., a property and casualty insurance agency located in                       
Woodbury, New York, since 1963; Graduate of C.C.N.Y. Baruch School              
of Business Administration (B.B.A. degree).  Mr. Kaufman majored                
in real estate and insurance.                                                   

DANIEL LERNER*, 36, 477 Jericho Turnpike, Syosset, New York                     
11791; Director; Vice President of SSH Securities, the Fund's                   
principal distributor; Senior Vice President - Investment                       
Counselor and Assistant Director of Training for David Lerner                   
Associates, Inc., a registered broker-dealer, Syosset, New York                 
from 1984 to present.  Mr. Lerner received his B.A. from the State              
University of New York at Binghamton.  Daniel Lerner is the son of              
David Lerner.                                                                   

Officers                                                                        
DAVID LERNER, 61, 477 Jericho Turnpike, Syosset, New York 11791;                
President and Treasurer (see biography above).                                  

CONSTANCE FERREIRA, 46, 477 Jericho Turnpike, Syosset, New York                 
11791; Vice President and Secretary; Chief Operating Officer of                 
Spirit of America Management Corp., the Fund's investment adviser,              
and Chief Operating Officer and Chief Financial Officer of SSH                  
Securities, Inc., the Fund's principal distributor; Chief                       
Operating Officer with David Lerner Associates, Inc., a registered              
broker-dealer located in New York.  Ms. Ferreira has been                       
associated with David Lerner Associates, Inc. for over twenty-one               
years.                                                                          

The Fund pays each of its Directors who is not an affiliated                    
person of the Adviser or Distributor an annual retainer of $1,000               
and $250 per Board meeting and committee meeting attended, as well              
as reimbursement for out-of-pocket expenses relating to attendance              
at such meetings.                                                               

COMPENSATION TABLE                        
Directors and Officers                        

                               Estimated total
                                 Compensation from
                    Fund
                            complex paid
     Estimated Aggregate    to Directors
        Compensation from      for Fiscal year
       Fund for fiscal        Ended 10/31/98
Name of Director/        Year ended 10/31/98                                    
Officer                                                                         

David Lerner*            $     0                  $     0                       

Stanley Thune            $ 2,000                  $ 2,000                       

Herbert Grant            $ 2,000                  $ 2,000                       

Allen Kaufman            $ 2,000                  $ 2,000                       

Daniel Lerner*           $     0                  $     0                       

Connie Ferreira          $     0                  $     0                       

The Adviser                                                                     
Spirit of America Management Corp. (the "Spirit Management" or                  
"Adviser"), 477 Jericho Turnpike, Syosset, New York, New York                   
11791, of which Mr. David Lerner is the sole shareholder and                    
director, manages the Fund and provides it with investment advice               
pursuant to an Advisory Agreement. Under the agreement, Spirit                  
Management manages the Fund's investments, including the provision              
of investment advisory services and order placement facilities for              
the Fund (subject to overall control and direction of the Fund's                
Board of Directors) and pays all compensation of Directors and                  
officers of the Fund who are affiliated persons of Spirit                       
Management.  Spirit Management or its affiliates also furnishes                 
the Fund, without charge, with management supervision and                       
assistance and office facilities and provides persons satisfactory              
to the Fund's Board of Directors to serve as the Fund's officers.               

The Advisory Agreement is terminable without penalty by a vote of               
a majority of the Fund's outstanding voting securities or by a                  
vote of majority of the Fund's Directors on 60 days' written                    
notice, or by the Adviser on 60 days' written notice, and will                  
automatically terminate in the event of its assignment. The                     
Advisory Agreement provides that in the absence of willful                      
misfeasance, bad faith or gross negligence on the part of the                   
Adviser, or of reckless disregard of its obligations thereunder,                
the Adviser shall not be liable for any action or failure to act                
in accordance with its duties thereunder.                                       

The Advisory Agreement provides that the Adviser will reimburse                 
the Fund for its expenses (exclusive of interest, taxes,                        
brokerage, expenditures pursuant to the Distribution Services                   
Agreement described below, and extraordinary expenses as to the                 
extent permitted by applicable state securities laws and                        
regulations) which in any year exceed the limits prescribed by any              
state in which the Fund's shares are qualified for sale. The Fund               
may not qualify its shares for sale in every state.  Expense                    
reimbursements, if any, are accrued daily and paid monthly.                     

The Advisory Agreement became effective on ___________, 1998. The               
Advisory Agreement will continue in effect until _______, 2000 and              
thereafter for successive twelve-month periods provided, however,               
that such continuance is specifically approved at least annually                
by a vote of a majority of the Fund's outstanding voting                        
securities or by the Fund's Board of Directors, including in                    
either case approval by a majority of the Directors who are not                 
parties to the Advisory Agreement or interested persons of any                  
such party as defined by the 1940 Act.                                          

Service Provider to the Fund                                                    
FPS Services, Inc. ("FPS"), 3200 Horizon Drive, P.O. Box 61503,                 
King of Prussia, PA 19406-0903 has been engaged by the Fund to                  
provide the back office services on the Fund's behalf.  Pursuant                
to an agreement entitled "Investment Company Services Agreement"                
(the "Agreement"), FPS provides the services commonly and                       
separately referred to as: Fund Administration, Fund Accounting,                
Transfer Agency and Custody Administration.  The Agreement was                  
approved by the Board of Directors at the organizational meeting                
of the Fund which was held on July 9, 1997.  The management of the              
Fund oversees FPS in the fulfillment of its obligations under the               
Agreement and FPS reports to the Board on a quarterly basis with                
regard to those obligations.                                                    

Included among the many tasks which FPS performs on behalf of the               
Fund are: (1) coordination and monitoring, through the Fund                     
Administration function, the activities of any other third party                
service provider providing services to the Fund (e.g. the Fund's                
independent auditors, printers, etc.); (2) providing the Fund with              
necessary office space, telephones and other communications                     
facilities and personnel competent to perform the responsibilities              
under the Agreement; (3) maintenance of such books and records of               
the Fund as may be required by applicable federal or state law;                 
(4) prepares and, after approval by the Fund, files and arranges                
for the distribution of proxy materials and periodic reports to                 
shareholders of the Fund as required by applicable law; (5)                     
prepares and, after approval by the Fund, arranges for the filing               
of such registration statements and other documents with the U.S.               
Securities and Exchange Commission and any other federal or state               
regulatory authorities as may be required by applicable law; (6)                
reviews and submits to the officers of the Fund for their                       
approval, invoices or other requests for payment of the Fund's                  
expenses and instructs the custodian to issue checks in payment                 
thereof; and (7) takes such other action with respect to the Fund               
as may be deemed by FPS to appropriately perform its duties under               
the Agreement.                                                                  

Pursuant to the Agreement, FPS receives a fee for performing                    
Administrative Services at the greater of a flat fee of $55,000 as              
compared to an asset based fee computed at the annual rate of                   
0.15% of the first $50 million of total average net assets, 0.10%               
of the next $50 million of total average net assets and 0.05% of                
total net assets in excess of $100 million.  FPS also receives                  
fees under the Agreement for providing the other services                       
mentioned.                                                                      

EXPENSES OF THE FUND                        

Distribution Plan Pursuant to Rule 12b-1                                        
The Fund has adopted a distribution plan (the "Plan") pursuant to               
Rule 12b-1 under the 1940 Act.  Distribution services fees are                  
accrued daily and paid monthly and are charged as expenses of the               
Fund as accrued. The initial sales charge and distribution                      
services fees provide the financing of the distribution of the                  
Fund's shares.                                                                  

Under the Plan, the principal financial officer of the Fund                     
reports the amounts expended under the Rule 12b-1 Plan and the                  
purposes for which such expenditures were made to the Directors of              
the Fund for their review on a quarterly basis. Also, the Plan                  
provides that the selection and nomination of Directors who are                 
not interested persons of the Fund, as defined in the 1940 Act,                 
are committed to the discretion of such disinterested Directors                 
then in office.                                                                 

The Adviser may from time to time and from its own funds or such                
other resources as may be permitted by rules of the Commission                  
make payments for distribution services to the Distributor; the                 
latter may in turn pay part or all of such compensation to brokers              
or other persons for their distribution assistance.                             

In the event that the Plan is terminated or not continued (i)                   
no distribution services fees (other than current amounts accrued               
but not yet paid) would be owed by the Fund to the Distributor,                 
and (ii) the Fund would not be obligated to pay the Distributor                 
for any amounts expended under the Plan not previously recovered                
by the Distributor from distribution services fees in respect of                
shares or through deferred sales charges.                                       

The Plan provides that it will continue in full force and effect                
from year to year so long as such continuance is specifically                   
approved by a vote of the Directors, including a vote of the                    
disinterested Directors, cast in person at a meeting called for                 
the purpose of voting on the plan.  All material amendments to the              
Plan must be approved by a vote of the Directors or the holders of              
the Fund's outstanding voting securities, and in either case, by a              
majority of the disinterested Directors, cast in person at a                    
meeting called for the purpose of voting on such approval; and the              
Plan may not be amended in order to increase materially the costs               
that shareholders may bear pursuant to the Plan without the                     
approval of a majority of the holders of the outstanding voting                 
shares of the Fund. The Plan may be terminated (a) by the Fund                  
without penalty at any time by a majority vote of the holders of                
the outstanding voting securities of the Fund, or by a majority                 
vote of the Directors who are not "interested persons" as defined               
in the 1940 Act, or (b) by the Distributor. To terminate the Plan,              
any party must give the other parties 60 days' written notice; to               
terminate the Plan only, the Fund need give no notice to the                    
Distributor. The Plan will terminate automatically in the event of              
its assignment.                                                                 

SHAREHOLDER SERVICES                        

The following information supplements that set forth in the Fund's              
Prospectus under the heading "How to Purchase Shares."                          

Automatic Investment Plan                                                       
Investors may purchase shares of the Fund through an automatic                  
investment program utilizing electronic funds transfers drawn on                
the investor's own bank account. Under such a program,                          
pre-authorized monthly drafts for a fixed amount (at least $50)                 
are used to purchase shares through the selected dealer or                      
selected agent designated by the investor at the public offering                
price next determined after the Distributor receives the proceeds               
from the investor's bank. In electronic form, drafts can be made                
on or about a date each month selected by the shareholder.                      
Investors wishing to establish an automatic investment program in               
connection with their initial investment should complete the                    
appropriate portion of the Application Form found in the                        
Prospectus. Current shareholders should contact SSH Securities,                 
Inc. at the address or telephone numbers shown on the cover of                  
this Statement of Additional Information to establish an automatic              
investment program.                                                             

RETIREMENT PLANS                        

The Fund may be a suitable investment vehicle for part or all of                
the assets held in various types of retirement plans, such as                   
those listed below. The Fund has available forms of such plans                  
pursuant to which investments can be made in the Fund. Persons                  
desiring information concerning these plans should contact SSH                  
Securities, Inc. at (516) 390-5565, or write to:                                

SSH Securities, Inc.                          
477 Jericho Turnpike                          
Syosset, New York 11791                           

Traditional Individual Retirement Account ("IRA"). Individuals who              
receive compensation, including earnings from self-employment, may              
be entitled to establish and make contributions to an IRA.                      
Taxation of the income and gains paid to an IRA by the Fund is                  
deferred until distribution from the IRA.                                       

Roth IRAs.  The Taxpayers Relief Act has created the new Roth IRA.              
While contributions to a Roth IRA are not currently deductible,                 
the amounts within the accounts accumulate tax-free and qualified               
distributions will not be included in a shareholder's taxable                   
income.  The contribution limit is $2,000 annually ($4,000 for                  
joint returns) in aggregate with contributions to Traditional                   
IRAs.  Certain income phaseouts apply.                                          

Education IRAs.  The Taxpayers Relief Act has also created the new              
Education IRA.  Like the Roth IRA, contributions are                            
non-deductible, but the investment earnings accumulate tax-free,                
and distributions used for higher education expenses are not                    
taxable.  Contributions limits are $500 per account and certain                 
income phaseouts apply.                                                         

Employer-Sponsored Qualified Retirement Plans. Sole proprietors,                
partnerships and corporations may sponsor qualified money purchase              
pension and profit-sharing plans, including Section 401(k) plans                
("qualified plans"), under which annual tax-deductible                          
contributions are made within prescribed limits based on                        
compensation paid to participating individuals.                                 

Simplified Employee Pension Plan ("SEP"). Sole proprietors,                     
partnerships and corporations may sponsor a SEP under which they                
make annual tax-deductible contributions to an IRA established by               
each eligible employee within prescribed limits based on employee               
compensation.                                                                   

403(b)(7) Retirement Plan. Certain tax-exempt organizations and                 
public educational institutions may sponsor retirements plans                   
under which an employee may agree that monies deducted from his or              
her compensation (minimum $25 per pay period) may be contributed                
by the employer to a custodial account established for the                      
employee under the plan.                                                        

Distributions from retirement plans are subject to certain Code                 
requirements in addition to normal redemption procedures. For                   
additional information please contact SSH Securities, Inc.                      

Systematic Withdrawal Plan                                                      
Any shareholder who owns or purchases shares of the Fund having a               
current net asset value of at least $10,000 may establish a                     
systematic withdrawal plan under which the shareholder will                     
receive payments from his or her account on a regular basis.                    
Systematic withdrawal plan participants must elect to have their                
dividends and distributions from the Fund automatically reinvested              
in additional shares of the Fund.                                               

Shares of the Fund owned by a participant in the Fund's systematic              
withdrawal plan will be redeemed as necessary to meet withdrawal                
payments and such withdrawal payments will be subject to any taxes              
applicable to redemptions. Shares acquired with reinvested                      
dividends and distributions will be liquidated first to provide                 
such withdrawal payments and thereafter other shares will be                    
liquidated to the extent necessary, and depending upon the amount               
withdrawn, the investor's principal may be depleted. A systematic               
withdrawal plan may be terminated at any time by the shareholder                
or the Fund.                                                                    

Withdrawal payments will not automatically end when a                           
shareholder's account reaches a certain minimum level. Therefore,               
redemptions of shares under the plan may reduce or even liquidate               
a shareholder's account and may subject the shareholder to the                  
Fund's involuntary redemption provisions.                                       

Statements and Reports                                                          
Each shareholder of the Fund receives semi-annual and annual                    
reports which include a portfolio of investments, financial                     
statements and, in the case of the annual report, the report of                 
the Fund's independent auditors, as well as confirmation of each                
purchase and redemption. By contacting his or her broker, a                     
shareholder can arrange for copies of his or her account                        
statements to be sent to another person.                                        

NET ASSET VALUE                           

A more complete discussion of the Fund's determination of net                   
asset value is contained in the Prospectus.  The net asset value                
per share is computed by dividing the value of the assets of the                
Fund, less its liabilities, by the number of shares outstanding.                

The net asset value of all outstanding shares will be computed on               
a pro-rata basis for each outstanding share based on the                        
proportionate participation in the Fund represented by the value                
of shares.  All income earned and expenses incurred by the Fund                 
will be borne on a pro-rata basis by each outstanding share.                    

Portfolio securities are valued and net asset value per share is                
determined as of the close of regular trading on the New York                   
Stock Exchange ("NYSE") which currently is 4:00 p.m. (Eastern                   
Time), on each day the NYSE is open for trading.                                

DIVIDENDS, DISTRIBUTIONS AND TAXES                          

Federal Income Taxes                                                            
The Fund intends to qualify and elect to be treated as a                        
"regulated investment company" under sections 851 through 855 of                
the Code. To so qualify, the Fund must, among other things, (i)                 
derive at least 90% of its gross income in each taxable year from               
dividends, interest, payments with respect to securities loans,                 
gains from sale or other disposition of stock or securities or                  
foreign currency, or certain other income (including, but not                   
limited to, gains from options, futures and forward contracts)                  
derived with respect to its business of investing in stock,                     
securities or currency; and (ii) diversify its holdings so that,                
at the end of each quarter of its taxable year, the following two               
conditions are met: (a) at least 50% of the value of the Fund's                 
assets is represented by cash, U.S. government securities,                      
securities of other regulated investment companies and other                    
securities with respect to which the Fund's investment is limited,              
in respect of any one issuer, to an amount not greater than 5% of               
the Fund's assets and 10% of the outstanding voting securities of               
such issuer, and (b) not more than 25% of the value of the Fund's               
assets is invested in securities of any one issuer (other than                  
U.S. government securities or securities of other regulated                     
investment companies).                                                          

If the Fund qualifies as a regulated investment company for any                 
taxable year and makes timely distributions to its shareholders of              
90% or more of its net investment income for that year, it will                 
not be subject to federal income tax on the portion of its taxable              
income for the year (including any net capital gain) that it                    
distributes to shareholders.                                                    

The Fund intends to also avoid the 4% federal excise tax that                   
would otherwise apply to certain undistributed income for a given               
calendar year if it makes timely distributions to the shareholders              
equal to the sum of (i) 98% of its ordinary income for that year;               
(ii) 98% of its capital gain net income and foreign currency gains              
for the twelve month period ending on October 31 of that year; and              
(iii) any ordinary income or capital gain net income from the                   
preceding calendar year that was not distributed during that year.              
For this purpose, income and gain retained by the Fund that is                  
subject to corporate income tax will be considered to have been                 
distributed by the Fund by year-end. For federal income and excise              
tax purposes, dividends declared and payable to shareholders of                 
record as of a date in October, November or December of a given                 
year but actually paid during the immediately following January                 
will be treated as if paid by the fund on December 31 of that                   
calendar year, and will be taxable to these shareholders for the                
year declared, and not for the year in which the shareholders                   
actually receive the dividend.                                                  

The Fund intends to make timely distributions of the Fund's                     
taxable income (including any net capital gain) so that the Fund                
will not be subject to federal income or excise taxes. However,                 
exchange control or other regulations on the repatriation of                    
investment income, capital or the proceeds of securities sales, if              
any exist or are enacted in the future, may limit the Fund's                    
ability to make distributions sufficient in amount to avoid being               
subject to one or both of such federal taxes.                                   

Dividends and Distributions                                                     
The Fund intends to make timely distributions of the Fund's                     
taxable income (including any net capital gain) so that the Fund                
will not be subject to federal income and excise taxes. The excess              
of net capital gains over the net capital losses realized and                   
distributed by the Fund to its shareholders is expected to be                   
taxable to the shareholders as mid-term or long-term capital                    
gains, irrespective of the length of time a shareholder may have                
held his Fund shares. Dividends of the Fund's net ordinary income               
and distributions of any net realized short-term capital gain are               
taxable to shareholders as ordinary income. Due to distributions                
of amounts representing a return of capital the Fund will receive               
from REITs in which the Fund is invested, distributions made by                 
the Fund may also include nontaxable returns of capital, which                  
will reduce a shareholder's basis in shares of the Fund. If a                   
shareholder's basis is reduced to zero (which could happen if                   
shareholder does not reinvest distributions and returns of capital              
are significant), any further returns of capital will be taxable                
as capital gain.                                                                

After the end of the taxable year, the Fund will notify                         
shareholders of the federal income tax status of any distributions              
made by the Fund to shareholders during such year.                              

It is the present policy of the Fund to distribute to shareholders              
all net investment income quarterly and to distribute realized                  
capital gains, if any, annually. There is no fixed dividend rate                
and there can be no assurance that the Fund will pay any                        
dividends. The amount of any dividend or distribution paid on                   
shares of the Fund must necessarily depend upon the realization of              
income and capital gains from the Fund's investments.                           

Sales and Redemptions                                                           
Any gain or loss arising from a sale or redemption of Fund shares               
generally will be capital gain or loss except in the case of a                  
dealer or a financial institution, and will be long-term capital                
gain or loss if such shareholder has held such shares for more                  
than one year at the time of the sale or redemption; otherwise it               
will be short-term capital gain or loss. However, if a shareholder              
has held shares in the Fund for six months or less and during that              
period has received a distribution taxable to the shareholder as a              
long-term capital gain, any loss recognized by the shareholder on               
the sale of those shares during the six-month period will be                    
treated as a long-term capital loss to the extent of the dividend.              
In determining the holding period of such shares for this purpose,              
any period during which a shareholders risk of loss is offset by                
means of options, short sales or similar transactions is not                    
counted.                                                                        

Backup Withholding                                                              
The Fund may be required to withhold United States federal income               
tax at the rate of 31% of all taxable distributions payable to                  
shareholders who fail to provide the Fund with their correct                    
taxpayer identification numbers or to make required                             
certifications, or who have been notified by the Internal Revenue               
Service that they are subject to backup withholding. Corporate                  
shareholders and certain other shareholders specified in the Code               
are exempt from such backup withholding. Backup withholding is not              
an additional tax; any amounts so withheld may be credited against              
a United States shareholder's United States federal income tax                  
liability or refunded.                                                          

BROKERAGE AND PORTFOLIO TRANSACTION                           

The management of the Fund has the responsibility for allocating                
its brokerage orders and may direct orders to any broker. It is                 
the Fund's general policy to seek favorable net prices and prompt               
reliable execution in connection with the purchase or sale of all               
portfolio securities. In the purchase and sale of over-the-counter              
securities, it is the Fund's policy to use the primary market                   
makers except when a better price can be obtained by using a                    
broker. The Board of Directors has approved, as in the best                     
interests of the Fund and the shareholders, a policy of                         
considering, among other factors, sales of the Fund's shares as a               
factor in selection of broker-dealers to execute portfolio                      
transactions, subject to best execution. The Adviser is authorized              
under the Advisory Agreement to place brokerage business with such              
brokers and dealers. The use of brokers who supply supplemental                 
research and analysis and other services may result in the payment              
of higher commissions than those available from other brokers and               
dealers who provide only the execution of portfolio transactions.               
In addition, the supplemental research and analysis and other                   
services that may be obtained from brokers and dealers through                  
which brokerage transactions are affected may be useful to the                  
Adviser in connection with advisory clients other than the Fund.                

Investment decisions for the Fund are expected to be made                       
independently from those for other advisory accounts managed by                 
the Adviser. It may happen, on occasion, that the same security is              
held in the portfolio of the Fund and one or more of such                       
accounts. Simultaneous transactions are likely when several                     
accounts are managed by the same Adviser, particularly when a                   
security is suitable for the investment objectives of more than                 
one of such accounts. If two or more accounts managed by the                    
Adviser are simultaneously engaged in the purchase or sale of the               
same security, the transactions will be allocated to the                        
respective accounts both as to amount and price, in accordance                  
with a method deemed equitable to each account. In some cases this              
system may adversely affect the price paid or received by the Fund              
or the size of the position obtainable for the Fund.                            

Allocations are made by the officers of the Fund or of the                      
Adviser. Purchases and sales of portfolio securities are                        
determined by the Adviser and are placed with broker dealers by                 
the Adviser.                                                                    

The extent to which commissions that will be charged by                         
broker-dealers selected by the Fund may reflect an element of                   
value for research cannot presently be determined. To the extent                
that research services of value are provided by broker-dealers                  
with or through whom the Fund places portfolio transactions, the                
Adviser may be relieved of expenses which it might otherwise bear.              
Research services furnished by broker-dealers could be useful and               
of value to the Adviser in servicing its other clients as well as               
the Fund. Consistent with the Conduct Rules of the National                     
Association of Securities Dealers, Inc. and subject to seeking                  
best execution, the Fund may consider sales of shares of the Fund               
as a factor in the selection of brokers to execute portfolio                    
transactions for the Fund.                                                      

PERFORMANCE INFORMATION                         

General                                                                         
From time to time, advertisements quoting performance rankings of               
the Fund as measured by financial publications or by independent                
organizations such as Lipper Analytical Services, Inc. and                      
Morningstar, Inc., and advertisements presenting the historical                 
record of payments of income dividends by the Fund may also from                
time to time be sent to investors or placed in newspapers and/or                
magazines such as The Wall Street Journal, The New York Times,                  
Barrons, Investor's Daily, Money Magazine, Changing Times,                      
Business Week and Forbes or other media on behalf of the Fund.                  

Total return may be used to compare the performance of the Fund                 
against certain widely acknowledged standards or indices for stock              
and bond market performance such as the Standard & Poor's 500                   
Composite Index and the Dow Jones Industrial Average.  The Fund                 
may compare its total return to that of the National Association                
of Real Estate Investment Trusts (NAREIT) Equity REIT Index.                    

Average Annual Total Return                                                     
From time to time the Fund may advertise its total return for                   
prior periods. The Fund's total return is its average annual                    
compounded total return for its most recently completed one, five,              
and ten-year periods (or the period since the Fund's inception).                
The Fund's total return for such a period is computed by finding,               
through the use of a formula prescribed by the Commission below,                
the average annual compounded rate of return over the period that               
would equate an assumed initial amount invested to the value of                 
such investment at the end of the period. For purposes of                       
computing total return, income dividends and capital gains                      
distributions paid on shares of the Fund are assumed to have been               
reinvested when paid and the maximum sales charge applicable to                 
purchase of Fund shares is assumed to have been paid.  This                     
calculation can be expressed as follows:                                        

P(1 + T)n = ERV                         

Where:                                                      

ERV = ending redeemable value at the end of the period      
covered by the computation of a hypothetical $1,000         
payment made at the beginning of the period                 

P = hypothetical investment payment of $1,000               

n = period covered by the computation, expressed in         
terms of years.                                             

T = average annual total return                             

Cumulative Total Return                                                         
The Fund may also quote the cumulative total return in addition to              
the average annual total return.  These quotations are computed                 
the same way, except the cumulative total return will be based on               
the actual return for a specified period rather than on the                     
average return over one-,five- and ten year periods, or fractional              
portion thereof.                                                                

GENERAL INFORMATION                           

Capitalization                                                                  
The authorized capital stock of the Fund currently consists of                  
1,000,000,000 shares of Common Stock each having a par value of                 
$.001 per share. All shares of the Fund, when issued, are fully                 
paid and non-assessable. The Directors are authorized to                        
reclassify and issue any unissued shares to any number of                       
additional series and classes without shareholder approval.                     
Accordingly, the Directors in the future, for reasons such as the               
desire to establish one or more additional portfolios with                      
different investment objectives, policies or restrictions, may                  
create additional classes or series of shares. Any issuance of                  
shares of another class or series would be governed by the 1940                 
Act and the law of the State of Maryland. If shares of another                  
series were issued in connection with the creation of a second                  
portfolio, each share of either portfolio would normally be                     
entitled to one vote for all purposes. Generally, shares of both                
portfolios would vote as a single series on matters, such as the                
election of Directors, that affected both portfolios in                         
substantially the same manner. As to matters affecting each                     
portfolio differently, such as approval of the Advisory Agreement               
and changes in investment policy, shares of each portfolio would                
vote as a separate series.                                                      

Procedures for calling a shareholders' meeting for the removal of               
Directors of the Fund, similar to those set forth in Section 16(c)              
of the 1940 Act, will be available to shareholders of the Fund.                 

Custodian                                                                       
The Bank of New York, New York, NY will act as the Fund's                       
custodian.                                                                      
The Fund's securities and cash are held under a custodian                       
agreement by rules adopted under the 1940 Act which permit the                  
Fund to maintain its securities and cash in the custody of certain              
eligible banks and securities depositories.                                     

Principal Distributor                                                           
SSH Securities, Inc., 477 Jericho Turnpike, Syosset, New York                   
11791, serves as the Fund's principal Distributor, and as such may              
solicit orders from the public to purchase shares of the Fund.                  
Under the Underwriting Agreement, the Fund has agreed to indemnify              
the  Distributor, in the absence of its willful misfeasance, bad                
faith, gross negligence or reckless disregard of its obligations                
thereunder, against certain civil liabilities, including                        
liabilities under the Securities Act of 1933, as amended.                       

Independent Auditors                                                            
Tait Weller & Baker, have been appointed as independent auditors                
for the Fund.                                                                   

Additional Information                                                          
Any shareholder inquiries may be directed to the shareholder's                  
broker or to SSH Securities, Inc. at the address or telephone                   
number shown on the front cover of this Statement of Additional                 
Information. This Statement of Additional Information does not                  
contain all the information set forth in the Registration                       
Statement filed by the Fund with the Securities and Exchange                    
Commission under the Securities Act of 1933. Copies of the                      
Registration Statement may be obtained at a reasonable charge from              
the Securities and Exchange Commission or may be examined, without              
charge, at the offices of the Securities and Exchange Commission                
in Washington, D.C.                                                             

Spirit of America Investment Fund, Inc.                                 
Statement of Assets and Liabilities                                       

December 19, 1997                                           

Assets                                              

Cash                             $100,000                                       

Deferred Organization Costs       121,404                                       
________      

Total Assets:                    $221,404                                       

Liabilities                                     

Accrued Expenses                 $121,404                                       

Net Assets                       $100,000                                       

Net Assets consist of:                                                          
Capital stock of the Fund currently consists of                                 
1,000,000,000 shares of common stock each having                                
a par value of $.001 per share.                                                 

Net asset value, offering                                                       
and redemption price             $ 10.00                                        

Maximum offering price per                                                      
share; net asset value per                                                      
share/94.75%                     $ 10.55                                        

The accompanying notes are an integral part of this                             
financial statement.                                                            

SPIRIT OF AMERICA INVESTMENT FUND, INC.                                         
Statement of Assets and Liabilities                                             
December 19, 1997                                                               

1.  Organization                                                                
Spirit of America Investment Fund, Inc. (the "Fund") is                 
an open-end diversified mutual fund which seeks growth of capital               
and current income and is a Maryland corporation organized on                   
May 15, 1997.  The Fund seeks to achieve its investment objective               
by investing in the equity securities of companies in the real                  
estate industry.  The Fund's investment adviser is Spirit of                    
America Management Corp. ("Spirit Management").                                 

The Fund is organized to qualify as a "regulated investment company"            
for purposes of the Internal Revenue Code, which will relieve the               
Fund of any liability for federalincome tax to the extent that its              
earnings and net realized capital gains are distributed to shareholders.        

The preparation of the accompanying financial statement in conformity           
with the generally accepted accounting principles requires management           
to make estimates and assumptions that affect the reported amount of            
assets and liabilities at the date of the financial statement.  Actual          
results could differ from the estimate.                                         

2.  Investment Advisory, Management, Distribution and Shareholder               
Servicing Agreements                                                            

The Fund has entered into the following service agreements:                     

Under the Investment Advisory Agreement with the Fund, Spirit Management        
will act as the investment adviser to the Fund.  For providing                  
investment advisory services, the Fund pays the Adviser, a monthly fee          
which is calculated daily at an annual rate of 0.97% of the Fund's              
average daily net assets.                                                       

Under the Investment Company Services Agreement with the Fund, FPS              
Services, Inc.("FPS") will provide administrative services to the Fund.         
The Fund agrees to pay FPS a fee, subject to a minimum annual fee of            
$55,000, as compared to an asset based fee computed at the annual               
rate of 0.15% on the first $50 million of total average net assets,             
0.10% on the next $50 million of total average net assets and 0.05%             
of total average net assets in excess of $100 million.  FPS has                 
also been engaged as the transfer agent and fund accounting service             
provider for the Fund under the Investment Company Services Agreement.          

The Fund has adopted a Distribution Plan pursuant to Rule 12b-1                 
(the "Plan") under the Investment Company Act of 1940, as amended.              
The Plan permits the Fund to pay SSH Securities, Inc. (the "Distributor")       
from the assets of the Fund, a monthly fee which may not exceed an              
annual rate of 0.30% of the Fund's aggregate average daily net assets.          
The Fund intends to operate the Plan in accordance with its terms               
and within NASD rules concerning sales charges.                                 

3.  Deferred Organizational Costs                                               

Organizational costs have been capitalized by the Fund and are being            
amortized over 60 months commencing with operations.  In the event              
any of the initial shares are redeemed by the holder thereof during the         
period that the Fund is amortizing its organizational costs, the                
redemption proceeds payable to the holder thereof by the Fund will be           
reduced by the unamortized organizational costs in the same ratio as            
the number of initial shares being redeemed bears to the number of              
initial shares outstanding at the time of the redemption.                       

4.  Transactions with Affiliates                                                

A company affiliated with the Adviser, on behalf of the Adviser, paid           
$121,404 of organizational costs on behalf of the Fund.                         

Certain officers and/or directors of the Fund are also officers of the          
Adviser.  The Fund pays each unaffiliated director a fee for attendance         
at quarterly, interim and committee meetings.  Compensation of officers         
and affiliated directors of the Fund is paid by the Adviser.                    

5.  Disclosure of Credit Risk                                                   

Cash is held at The Bank of New York.  The Fund has a policy of reviewing,      
as considered necessary, the credit standing of each bank with which it         
conducts business.                                                              

Independent Auditor's Report                                            

To the Shareholders and Board of Directors of Spirit of America                 
Investment Fund, Inc.                                                           

We have audited the accompanying statement of assets and liabilities            
of Spirit of America Investment Fund, Inc. (the "Fund") as of December 19,      
1997.  This financial statement is the responsibility of the Fund's             
management.  Our responsibility is to express an opinion on this                
financial statement based on our audit.                                         

We conducted our audit in accordance with generally accepted auditing           
standards.  Those standards require that we plan and perform the audit          
to obtain reasonable assurance about whether the financial statement is         
free of material misstatement.  An audit includes examining, on a test          
basis, evidence supporting the amounts and disclosures in the financial         
statement.  An audit also includes assessing the accounting principles          
used and significant estimates made by management, as well as                   
evaluating the overall financial statement presentation.  We believe            
that our audit provides a reasonable basis for our opinion.                     

In our opinion, the financial statement referred to above presents              
fairly, in all material respects, the financial position of                     
Spirit of America Investment Fund, Inc. as of December 19, 1997, in             
conformity with generally accepted accounting principles.                       

December 30, 1997                                                               

Tait, Weller & Baker                                                            

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SPIRIT OF AMERICA INVESTMENT FUND, INC.                           

Form N-1A                           

Part C  -- Other Information                          

Part C.  Other Information                                                      

Item 24.   Financial Statements and Exhibits.                                   

(a)   Financial Statements.                                     
 Included in Part A: (To be filed by amendment.)

Included in Part B:                                     
1)   Independent Auditors Report relating to      
statement of assets and liabilities at  
December 19, 1997.                      
2)   Statement of Assets and Liabilities and      
related notes as of December 19, 1997.  

(b)   Exhibits:                                                 

Exhibits filed pursuant to Form N-1A:               

(1)    Articles of Incorporation are incorporated by      
  reference to Registrant's initial Registration
 Statement on Form N-1A, File number 333-27925
filed May 28, 1997.                         

(2)    By-Laws are incorporated by reference              
  to Registrant's initial Registration Statement
 on Form N-1A, File number 333-27925 filed May
28, 1997.                                   

(3)  Voting Trust Agreement -- None                       

(4)  All Instruments Defining the Rights of Holders       
-- None                                     

(5)    Investment Advisory Contracts -- Investment        
Advisory Agreement between Spirit of America
  Management Corp. is incorporated by referenced
 to Registrant's Pre-Effective Amendment No. 1
filed December 18, 1997.                    

(6)   (a)     Underwriting Agreement --Underwriting       
            Agreement between SSH Securities, Inc. and
the Registrant is incorporated by       
reference to Registrant's Pre-Effective 
Amendment No. 1 filed December 18, 1997.

(b) Distribution Services Agreement --          
Distribution Services Agreement between 
  SSH Securities, Inc. and the Registrant is
 incorporated by reference to Registrant's
Pre-Effective Amendment No. 1 filed     
December 18, 1997.                      

   (c) Master Selling Group Agreement -- filed herewith.

(7)    Bonus, Profit Sharing, Pension or Other            
Similar Contracts -- None                   

(8) Custodian Agreements -- Custodian Agreement           
between The Bank of New York and Registrant is    
     incorporated by reference to Registrant's Pre-Effective
Amendment No. 1 filed December 18, 1997.          

(9) Investment Company Services Agreement --              
Investment Company Services Agreement is          
     incorporated by reference to Registrant's Pre-Effective
Amendment No. 1 filed December 18, 1997.          

(10)     Opinion and Consent of Ruthann G. Niosi, Esq.,   
     P.C. regarding the legality of the securities
being issued -- filed herewith.         

(11)   Consent of Independent Auditors -- filed herewith. 

(12)   Financial Statements Omitted from Item 23. --      
None                                        

(13)     Agreements or Understandings Made in             
       Consideration for Providing the Initial Capital
-- filed herewith.                      

(14)   Model Plan -- None                                 

(15)     Plan of Distribution pursuant to Rule 12b-1 -    
       Distribution and Services Plan pursuant to Rule
12b-1 is incorporated by reference to   
        Registrant's Pre-Effective Amendment No. 1 filed
December 18, 1997.                      

(16)     Schedule for Computation of Performance          
      Quotations -- (To be filed in a Post-Effective
Amendment.)                             

(17)   Financial Data Schedule -- None.                   

(18)     Plan of Distribution pursuant to Rule 18f-3 with 
respect to Multiple Class Shares -- not 
applicable                              

(19)     Director's Powers of Attorney -- Powers of       
        Attorneys for David Lerner, Herbert Grant, Allen
     Kaufman and Daniel Lerner are incorporated by
reference to Registrant's Pre-Effective 
Amendment No. 1 filed December 18,1 997.

Item 25.   Persons Controlled by or Under Common Control with                   
Registrant.                                               

The Registrant is a recently organized corporation and    
David Lerner owns 100% of its issued and outstanding      
stock.                                                    

Item 26.   Number of Holders of Securities.                                     

None.                                                     

Item 27.   Indemnification.                                                     

It is the Registrant's policy to indemnify its            
directors and officers, employees and other agents to     
the maximum extent permitted by Section 2-418 of the      
General Corporation Law of the State of Maryland,         
which is incorporated by reference herein, and as set     
forth in Article EIGHT of Registrant's Articles of        
Incorporation, filed as Exhibit 1 hereto, Article VII     
and Article VIII of Registrant's By-Laws, filed as        
Exhibit 2 hereto, and Section 10 of the proposed          
Distribution Services Agreement, to be filed by           
amendment.  The Adviser's liability for any loss          
suffered by the Registrant or its shareholders is set     
forth in Section 4 of the proposed Advisory Agreement,    
filed as Exhibit 5 hereto.                                

Insofar as indemnification for liabilities arising        
under the Securities Act may be permitted to              
directors, officers and controlling persons of the        
Registrant pursuant to the foregoing provisions, or       
otherwise, the Registrant has been advised that, in       
the opinion of the Securities and Exchange Commission,    
such indemnification is against public policy as          
expressed in the Securities Act and is, therefore,        
unenforceable.  In the event that a claim for             
indemnification against such liabilities (other than      
the payment by the Registrant of expenses incurred or     
paid by a director, officer or controlling person of      
the Registrant in the successful defense of any           
action, suit or proceeding) is asserted by such           
director, officer or controlling person in connection     
with the securities being registered, the Registrant      
will, unless in the opinion of its counsel the matter     
has been settled by controlling precedent, submit to a    
court of appropriate jurisdiction the question of         
whether such indemnification by it is against public      
policy as expressed in the Securities Act and will be     
governed by the final adjudication of such issue.         

In accordance with Release No. IC-11330 (September 2,     
1980), the Registrant will indemnify its directors,       
officers, investment manager and principal                
underwriters only if (1) a final decision on the          
merits was issued by the court or other body before       
whom the proceeding was brought that the person to be     
indemnified (the "indemnitee") was not liable by          
reason of willful misfeasance, bad faith, gross           
negligence or reckless disregard of the duties            
involved in the conduct of his office ("disabling         
conduct") or (2) a reasonable determination is made,      
based upon a review of the facts, that the indemnitee     
was not liable by reason of disabling conduct, by (a)     
the vote of a majority of a quorum of the directors       
who are neither "interested persons" of the Registrant    
as defined in section 2(a)(19) of the Investment          
Company Act of 1940, as amended, nor parties to the       
proceeding ("disinterested, non-party directors"), or     
(b) an independent legal counsel in a written opinion.    
The Registrant will advance attorneys fees or other       
expenses incurred by its directors, officers,             
investment adviser or principal underwriters in           
defending a proceeding, upon the undertaking by or on     
behalf of the indemnitee to repay the advance unless      
it is ultimately determined that he is entitled to        
indemnification and, as a condition to the advance,       
(1) the indemnitee shall provide a security for his       
undertaking, (2) the Registrant shall be insured          
against losses arising by reason of any lawful            
advances, or (3) a majority of a quorum of                
disinterested, non-party directors of the Registrant,     
or an independent legal counsel in a written opinion,     
shall determine, based on a review of readily             
available facts (as opposed to a full trial-type          
inquiry), that there is reason to believe that the        
indemnitee ultimately will be found entitled to           
indemnification.                                          

Item 28.   Business and Other Connections of Investment Adviser.                

Since the date of its incorporation on April 24, 1997,    
Spirit of America Management Corp. has not been           
engaged in any other business other than acting as        
adviser to Registrant.                                    

During the past twenty-one years, David Lerner, a         
director and officer of the Adviser, has served as the    
Chief Executive Officer and Director of David Lerner      
Associates, Inc. (and David Lerner Government             
Securities Associates, Inc., a government securities      
dealer).  The business address of such companies is       
477 Jericho Turnpike, Syosset, New York 11791.            

For information as to any other business, vocation or     
employment of a substantial nature in which each          
Director or officer of the Registrant's investment        
adviser has been engaged for his own account or in the    
capacity of Director, officer, employee, partner or       
director, reference is made to Form ADV (File             
#801-54782) filed by it under the Investment Advisers     
Act of 1940.                                              

Item 29.   Principal Underwriter.                                               

(a)   SSH Securities, Inc., the Registrant's                    
distributor, does not act as principal              
underwriter, depositor or investment adviser for    
any other investment company.                       

(b)   The table below sets forth certain information            
with respect to each director, officer and control  
person of SSH Securities, Inc.                      

    Position                  Position and
Name and Principal     and Offices               Offices with                   
Business Address       with Underwriter          Registrant                     

David Lerner           Director,              Chairman of the                   
   Chief Executive          Board, Director,
477 Jericho Turnpike    Officer and           President and                     
Syosset, NY 11791      President              Treasurer                         

Constance Ferreira      Vice President,       Vice President and                
477 Jericho Turnpike    Chief Operating       Secretary                         
Syosset, NY 11791       Officer and Chief                                       
Financial Officer               

Daniel E. Chafetz       Chief Compliance       None                             
477 Jericho Turnpike    Officer                                                 
Syosset, NY 11791                                                               

Daniel Lerner            Vice President        Director                         
477 Jericho Turnpike                                                            
Syosset, NY 11791                                                               

(c)   Not Applicable.                                           

Item 30. Location of Accounts and Records.                                      

All records described in Section 31(a) of the 1940 Act    
and the Rules 17 CFR 270.31a-1 to 31a-3 promulgated       
thereunder, are maintained by the Fund's Investment       
Adviser, Spirit of America Management, Inc., 477          
Jericho Turnpike, Syosset, New York 11791, except for     
those maintained by the Fund's Custodian, The Bank of     
New York, 48 Wall Street, New York, New York 10172 and    
the Fund's Administrator, Transfer Agent and Fund         
Accounting Services Agent, FPS Services Inc., 3200        
Horizon Drive, P.O. Box 61503, King of Prussia, PA        
19406-0903.                                               

Item 31.   Management Services.                                                 

There are no management-related service contracts not     
discussed in Part A or Part B.                            

Item 32.   Undertakings.                                                        

(a)  Registrant hereby undertakes to file a                     
post-effective amendment within four to six months    
from the effective date of this Registration          
Statement under the Securities Act of 1933.           
Registrant understands that such post-effective       
amendment will contain reasonably current             
financial statements which need not be certified      
by independent public accountants.                    

(b)   Registrant hereby undertakes to furnish each              
person to whom a prospectus is delivered with a     
copy of the Registrant's latest Annual Report to    
Shareholders upon request and without charge.       

(c)   The Registrant hereby undertakes to promptly call         
a meeting of shareholders for the purpose of        
voting upon the question of removal of any          
director or directors when requested in writing to  
do so by the record holders of not less than 10     
percent of the Registrant's outstanding shares and  
to assist its shareholders in accordance with the   
requirements of Section 16(c) of the Investment     
Company Act of 1940 relating to shareholder         
communications.                                     

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SIGNATURES                        

Pursuant to the requirements of the Securities Act of 1933            
and the Investment Company Act of 1940, as amended, the Registrant              
has duly caused this Registration Statement to be signed on its                 
behalf by the undersigned, thereunto duly authorized, in the City               
of Syosset, and State of New York on the 31st day of December,                  
1997.                                                                           

     Spirit of America Investment Fund, Inc.
Registrant  

By /s/ David Lerner*                  
David Lerner, President         

Pursuant to the requirements of the Securities Act of 1933,           
as amended, this Registration Statement has been signed below by                
the following persons in the capacities and on the date indicated.              

Signature                   Capacity                     Date                   

/s/ David Lerner*         Chairman of the Board     12/31/97                    
David Lerner              President & Director                                  

/s/ Herbert Grant*        Director                  12/31/97                    
Herbert Grant                                                                   

/s/ Allen Kaufman*        Director                  12/31/97                    
Allen Kaufman                                                                   

/s/ Daniel Lerner*        Director                  12/31/97                    
Daniel Lerner                                                                   

Stanley Thune           Director                   12/31/97               
Stanley Thune                                                                   

/s/ Constance Ferreira*   Principal Financial and     12/31/97                  
Constance Ferreira        Accounting Officer                                    

/s/ Sandra L. Adams                                                             
* By Sandra L. Adams, as                                                        
Attorney-in-Fact and Agent                                                      
pursuant to Power of Attorney                                                   

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Spirit of America Investment Fund, Inc.                             

Index to Exhibits to Form N-1A                        

Exhibit No.                                                                     

EX-99.B(6)(c)       Selling Agreement                                           

EX-99.B(10)         Opinion and Consent of Ruthann G. Niosi, Esq., P.C.         

EX-99.B(11)         Consent of Independent Auditors                             

EX-99.B(13)         Letter of Understanding regarding the initial               
capital                                 

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘N-1A/A’ Filing		Date		First		Last			Other Filings
Filed on:		12/31/97		1
		12/30/97		8
		12/19/97		8		9
		12/18/97		9					N-1A/A
		7/9/97		8
		5/28/97		9					N-1A EL,  N-8A
		5/15/97		5		8
		4/24/97		9
									List all Filings

9 Subsequent Filings that Reference this Filing

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 3/28/24  Spirit of America Inv Fund Inc.   485BPOS     3/29/24   15:3M                                     Blu Giant, LLC/FA
 4/28/23  Spirit of America Inv Fund Inc.   485BPOS     5/01/23   13:4.5M                                   Blu Giant, LLC/FA
 3/30/23  Spirit of America Inv Fund Inc.   485BPOS     3/30/23   14:3M                                     Blu Giant, LLC/FA
 1/27/23  Spirit of America Inv Fund Inc.   485BPOS     1/29/23   24:2.2M                                   Blu Giant, LLC/FA
11/15/22  Spirit of America Inv Fund Inc.   485APOS                2:692K                                   Blu Giant, LLC/FA
 4/28/22  Spirit of America Inv Fund Inc.   485BPOS     4/29/22   14:5.5M                                   Blu Giant, LLC/FA
 3/30/22  Spirit of America Inv Fund Inc.   485BPOS     3/30/22   13:2.4M                                   Blu Giant, LLC/FA
 4/29/21  Spirit of America Inv Fund Inc.   485BPOS     4/30/21    3:1.6M                                   Blu Giant, LLC/FA
 3/29/21  Spirit of America Inv Fund Inc.   485BPOS     3/30/21    2:997K                                   Blu Giant, LLC/FA