When it comes to investing in alternate asses, low stock market correlation is the name of the game. The reason that you’d invest in startups, real estate or debt would be to diversify, and limit your downside risk in the event of a stock market recession.
In the past, investing in these types of assets would be limited to high net worth investors who had connections on wall street. For the average investor, it was simply impossible to access these markets. Now, with the internet, new regulations and crowdfunding, these markets are accessible to you from the comfort of your laptop. Here are four different alternate asset offerings to invest in, and how to go about doing it.
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Fundrise.com allows you to invest in a portfolio filled with dozens of real estate projects. The service boasts 8.7 – 12.4% in historical annual returns.
Here’s an example investment opportunity:
Fundrise provides you with the capital breakdown of each project. Typically you’re investing in one of several funding methods for the developer. In this case, you invest in an Income eREIT – meaning that you buy in expecting to receive a portion of each months rent. Like debt, the service also rates each project, based on risk and returns. This example project is rated B3.
Normally, developers use Fundrise to fund a portion of the project, not the entire thing. By analyzing the other lenders, you can get a better understanding of the deal. In this example, Freddie Mac provided a loan covering around 63% of the project, and Coastal Ridge Real Estate funded another 21% in equity.
You can get started investing in 5-10 projects with a minimum of only $500 by navigating to this link: https://fundrise.com/start-investing. For those on the journey to Millionaire By 25 who are still minors, you too can invest in Fundrise assets via a custodial account provided by Millennium Trust Company. Click here for more info.
Lending club is one of the better known alternate asset investment providers. They offer a P2P platform that allows you to invest in other people’s debt with higher possible returns than traditional fixed-income investments. While they have potentially lower returns than the stock market, they offer the security of fixed-income investments, with a higher return than normal. This is great for diversification.
99% of portfolios with 100+ Notes have seen positive returns, and you can expect 3% – 8% returns, based on historical data.
To get started, you’ll need a minimum of $1000 to fund the account. Lending Club does offer custodial accounts, so minors, you’re in luck. Click here for more info.
Seedinvest is a very interesting alternate asset investment provider. They allow you to invest into startup companies, like a large venture capital firm does. By buying in, you own equity in the company.
Here’s an example offering that you could invest in:
What’s great about this platform is that you can invest in potentially explosive startup company with massive growth for small minimums of $500-$1000.
There’s one drawback. Your investments are not liquid, meaning that it’s difficult to exit a position. You’ll need to wait until the company goes public or gets acquired to exit. If you can wait that long, there’s a great possibility that you could see major returns, as venture capital firms see on the daily.
YieldStreet is a platform that allows you to invest in many types of alternate assets. For example, you can buy real estate, finance companies, own portions of tanker ships and more.
Here are some previous investment opportunities.
Normally you’ll be expected to invest $1000-$10000 in these investments. True to it’s name, YieldStreet has very high yields.
You can get started on this platform by clicking here.
For the average investor, looking into the more conservative alternate assets (like the four listed above,) offers diversification away from stocks. In the event of a stock market centered recession, you would massively limit risk by having your money spread around the economy. Even better, it only takes around 30 minutes to fund and open an account with these companies – all from the comfort of your house, and most are government regulated, FDIC insured entities.