A Individual Perspective

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How to Invest?

What does financial products even mean? Am I trying to sell you something? No. I’m simply trying to give back on what my experiences have taught me. Really. Over time, I realized that working a 40 hour work week and for some even more isn’t really living a life. Especially, given that a majority of folks aren’t in the field that truly would love to be in and some of us are simply doing it to make others happy and afford the life we want to maintain. As a result, this got me thinking and I realized if we look at some of the wealthiest people in the world, will start to see what they are doing differently than the middle and lower class of any respective economy. We’ll notice that they don’t just spend but they also reinvest. They reinvest in small businesses, real estate, etc. So why is it that we can’t do the same? Is it because of those investment strategies or platforms require us to be accredited investors. What’s an accredited investor? It can mean one of the following: someone who has an earned individual income exceeding $200,000 per year or joint income of $300,000, in each of the past two years and expects to reasonably maintain the same level of income; someone who has a net worth exceeding $1 million individually or jointly; or someone who is a general partner, executive officer, director, or a combination of roles. Yeah right, like most folks would fall under those categories.

However, there are investments that non-accredited investors can pursue that could hopefully lead to financial freedom one day. Below is a listing:

Fundrise – real estate crowdfunding – in lamen terms – a place where you can invest your money alongside other folks for real estate investment deals to create or operate an existing apartment complex, business, etc. This platform would give you the ability to diversify your investment into multiple investment deals with various levels of risk in play which can then lead to continuous cash flow thru dividend distributions through out the year and/or the sale of the asset or increase in equity to further grow your investment. An investment manager would be the one deciding specifically where to invest the cash with you being a passive investor.

Robinhood – a simple and easy way to invest in stocks, equities, etc. with little to no fees. This gives you more control over what stocks, ETFs, etc. you’d like to invest in and allowing you to create your own portfolio which could yield a return you’re more likely seeking with less involvement from others. Please do keep in mind the more risk, the more return applies here as the decision-making is based on your knowledge and understanding and not of a hedge fund or investment manager.

Value of Money

I think we all know what value of money is worth but sometimes we forget how much it matters. When we look at someone who has financial hardships (foreclosure on a home, business files bankruptcy, car gets totaled, student debt needs to be repaid at a high interest, can’t afford to keep up with healthcare expenses for your grandparents/parents/children, etc.), we start to see how much the value of money is really worth. In all the hardships I listed, I think we can all agree, the level of stress is at all time high which leads to bad habits such as daily drinking, smoking, overeating, etc. Suddenly, the costs look a lot higher because of all this as well. I guess the point you could say I am making is that there requires a certain tolerance level and investment to offset these financial hardships whether or not they actually apply to you – past, present and future.

What I’m trying to get at is that by understanding that you’re working a 40-hour work week to put food on the table and pay the bills is an okay way to look at the value of money, it doesn’t mean that there isn’t additional steps or changes you can make to see the value of money go up in your life. By creating good habits – opening a solid savings account (with a high interest rate – do your research – financial institutions are now offering 1-2% interest, FDIC insured) and/or investing, evaluating your decision-making (everyday is not a day to go out and eat, go out and shop, go out and spend), and looking at other opportunities to build wealth rather than be the average consumer and over spend, your becoming one step further to be financially secure not only for yourself but for others as well.

I think too often or not we don’t expect the worst to happen and so we don’t think about contingencies as much. With the capitalistic world we live where everyone is out to make a profit, it makes it harder to live the bear minimum. We might say we want to save up to go travel for vacation but when we have an unexpected event happen, suddenly we start to realize how much our opportunity cost truly is.