We have a job opportunity to share from a member of the GEM, Gemini Ventures, a Venture Studio and Fund that conceives, builds, and scales companies at the intersection of real estate, finance, and technology: Vice President of Growth.
Responsibilities:
Create and implement “0 to 1” go-to-market strategies for each company we launch, ensuring they have a clear path to attracting their first customers, generating revenue, and securing strategic partnerships.
Collaborate closely with our startup founders to develop their “1 to 10” go-to-market strategies, teams, processes, and tooling that will allow them to scale effectively into their Series A round.
Develop and operationalize Gemini’s brand strategy, positioning us as a leading venture studio in terms of equity value creation, technical craft and ecosystem quality.
Help qualify and validate company ideas, systematize and productize our internal processes and tools, and amplify our network with yours.
Required Capabilities & Experience:
10+ years of experience in marketing leadership roles, preferably with diversity of experience across company stage (startup, growth, scale), end customer (B2B, B2C, B2B2C), funnel outcome focus (awareness, consideration, trial, conversion, repeat, loyalty), business model (SaaS, marketplace, D2C) and tactical approach (marketing-driven, sales-driven).
Proven track record of developing and implementing successful go-to-market strategies, ideally in “first marketing/growth hire” and/or “0 to 1” settings, including sales and marketing strategy / development / execution.
Deep and practical understanding of B2B marketing strategies and tactics, including product marketing, content marketing, demand generation, lead generation and conversion, partnerships, and digital marketing. B2C and B2B2C experience is relevant and valued, but secondary to B2B experience.
Hands-on experience using marketing technology and CRM platforms to drive marketing effectiveness and efficiency.
Excellent analytical skills, with the ability to use data to inform marketing strategy and decision-making.
Experience managing and growing high-performing marketing teams, including a deep relationship network.
Strong collaboration and influencing skills, with the ability to interact and work effectively with cross-functional partners, founders and their teams, investors, industry partners and other audiences.
Experience in tech is required; real estate and/or fintech experience and/or knowledge is a bonus but not required.
Required Values & Behaviors:
Entrepreneurial Spirit: You’re comfortable with ambiguity and rapid change; you’re able to take initiative and make things happen in a fast-paced, “0 to 1” startup environment.
Strategic Thinker: You’re able to see the big picture, think long-term, and translate strategic objectives into actionable marketing plans.
Collaborative: You’re a team player who can work effectively with people across the organization. You value diverse perspectives and strive to create an inclusive environment.
Results-Oriented: You’re focused on delivering measurable results and are always looking for ways to improve performance.
Integrity: You conduct yourself with honesty and operate ethically in all aspects of your work. You’re reliable and uphold commitments to the team and the company.
Continuous Learner: You’re always looking to learn and grow, staying current on the latest marketing trends and constantly seeking ways to improve your skills and knowledge.
Comp, benefits, and location:
Gemini Ventures is well funded by a network of top investors, and offer competitive cash comp in addition to equity in their portfolio of startups and comprehensive benefits (including health, vision and dental insurance, generous PTO / sick leave and 401(k)). The majority of their team lives in Boston, with others in New York, Colorado, and California. They work in a hybrid mode, with in-person collaboration when needed – usually a few days a week for the Boston crew and full-team on-sites every 6-8 weeks. While they prefer a Boston-based candidate, they are open to candidates in other locations – ultimately, they’re seeking the best possible person for the role.
Everyone wants to be the next big thing in the mortgage industry, promising a digital experience or even a funded loan in days as opposed to weeks.
We’ve seen signs of this disruption for years now, and while it has improved the customer experience somewhat and shortened turn times, things aren’t much different.
You still have to fill out a loan application, often with the assistance of a human, submit financial documents, and wait for weeks (or over a month) to get your loan funded.
The difference now is you can do some of these tasks remotely, or better yet, authorize your financial accounts to be plugged into the application so you don’t need to track down documents yourself.
But there’s still the usual frustration and timelines that have long plagued the mortgage industry.
While most disruptors have focused on speed and convenience, an emerging company called “LoanSnap” is focused on originating “smart loans” as opposed to “dumb loans” that cost consumers billions annually.
What Is LoanSnap?
A direct mortgage lender and tech company based in Costa Mesa, CA
It was formed after acquiring Irvine, CA-based DLJ Financial
Currently licensed to do business in 19 states including AZ, CA, CO, FL, IL, and TN
Relies on artificial intelligence (AI) to offer a so-called smart home loan to consumers
LoanSnap was formed after acquiring DLJ Financial, a mortgage lender that had been based in Irvine, California for some 21 years.
The company’s current location is in nearby Costa Mesa, CA, with corporate headquarters in tech-rich San Francisco.
It makes sense that they have locations in both cities, as the Bay Area is where startups are born and Orange County has long been mortgage-central.
They offer a so-called “smart loan” that factors in all your monthly bills, such as credit cards and student loans, to ensure you get the best home loan.
In LoanSnap’s own words, it’s a mortgage that relies upon artificial intelligence (AI) “to analyze a consumer’s financial situation instantly and recommend the best options for their unique needs — all while addressing common financial issues like too much debt.”
Put another way, it goes beyond just the lowest mortgage rate or the fastest turn times and considers a customer’s entire financial situation.
After all, the borrower’s home and accompanying mortgage can often serve as their nest egg, dictating other investments and financial decisions.
It can also be leveraged to pay off other high-interest debt, which is where LoanSnap figures in.
At the start of the loan application on their website, they say, “Welcome! Let’s start by identifying where you’re losing money so we can help you own your financial future.”
What they mean by that is you’re probably paying more interest on your credit cards, student loans, and car loans than you are/would be with a low-rate mortgage.
After all, mortgage rates are close to 3%, while credit cards are often 20%+ and auto loans and student loans are maybe 5%+.
They add that most folks “don’t realize they can move their credit cards or loans to their mortgage and save thousands in interest payments.”
So instead of pitching the lowest interest rates, they give you a full view of all your accounts to help their customers avoid losing money.
What Types of Mortgages Does LoanSnap Offer?
Home purchase loans, mortgage refinances, and HELOCs
The cash out refinance appears to be their chief offering
You can get a conventional loan, non-conforming loan, FHA loan, or a VA loan
Available on single-family homes and condos/townhomes
At the moment, they offer home purchase loans, mortgage refinances, and HELOCs.
That includes both rate and term refinances and cash out refinances, the latter of which is utilized to pay off other high-interest bills you may have.
The cash out refinance seems to be their weapon of choice to eliminate other debt, and explains the how and why of analyzing a consumer’s complete financial situation.
Once they know about your other debts, they can instantly recommend the best loan options that consider interest rates on all your outstanding debt, thereby saving you money.
In a sense, it’s marketing the cash out refinance as something unique to the company, while just about every mortgage lenders offers them.
Of course, things are a little less liquid in that department at the moment due to COVID-19, but that will likely change over time as the situation normalize.
It also means larger loan amounts for LoanSnap, which equates to more money for them.
In terms of loan type, they offer FHA loans, VA loans, and non-conforming loans. I assume they offer conforming loans backed by Fannie Mae and Freddie Mac as well.
They also offer second mortgages in the form of a home equity line of credit (HELOC), which can be used to pay off other bills like student loans, auto loans, and credit cards.
You can get a home loan on a single-family residence or a condo/townhouse. It’s unclear if they lend on second homes and investment properties.
In terms of where they’re available, they lend in 19 states with plans to expand to more soon.
At the moment, they’re licensed in Arizona, California, Colorado, Florida, Georgia, Illinois, Iowa, Kansas, Michigan, Nebraska, Ohio, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Washington, and Wisconsin.
LoanSnap Mortgage Rates
While LoanSnap says it looks beyond mortgage rates to help its customers save money, essentially by saving them on other, higher-cost loans, it doesn’t reveal its rates.
Obviously it’d be nice to get an idea of where they stand pricing-wise, but there’s no daily rate section on their website as of now.
So if you want to pricing, you’ll need to either apply or give them a call. My recommendation is to get pricing first before spending time on an application.
Note that cash out refinance rates are often higher than purchase rates, so if you’re comparing rates among lenders, be sure it’s apples-to-apples.
Also take a look at their customer reviews to see what other customers thought about their interest rates and fees for more clues.
With regard to lender fees, they also leave us in the dark, so be sure to inquire about fees and rates when you call and speak with a loan officer.
LoanSnap Reviews
Despite being a relatively young company, they’ve already amassed a decent number of customer reviews.
On LendingTree, they’ve got a 4.6-star rating out of 5 from nearly 300 reviews, with a 92% recommended score.
At Trustpilot, they have a 3.8-star rating, which the site considers “great,” but not quite excellent.
Over at Google, it’s a similar 4.1-star rating, which is certainly good but not the highest customer satisfaction tier.
On Zillow, they have just a dozen or so reviews and a 4.27-star rating.
While they’ve been accredited with the Better Business Bureau since 2009, they aren’t currently rated.
LoanSnap Received an Investment from The Chainsmokers
Company has raised millions of dollars via several funding rounds
Latest investment comes from fund backed by pop group The Chainsmokers
Also supported by True Ventures, group behind Peloton and Fitbit
Expect them to become a household name in the mortgage world with that backing
In a bid to perhaps become the coolest mortgage lender out there, aside from maybe Rocket Mortgage, they announced a new investment round that included pop duo The Chainsmokers.
The popular group that makes electronic music is apparently also interested in making money, as evidenced by their early stage technology investment firm known as MANTIS.
In mid-May, LoanSnap raised an additional $10 million, co-led by True Ventures and MANTIS.
To show just how serious they are, True Ventures is the Silicon Valley-based venture capital firm behind Peloton, Blue Bottle coffee, and Fitbit.
Their backers also include Richard Branson and Joe Montana’s Liquid 2 Ventures, so it appears they came to play.
Expect to hear the name LoanSnap if and when searching for a mortgage in the near future.
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The numbers never cease to amaze me.
In fact, I’ve always been a fan of comparisons because they help us understand how we compare to others and what areas in life are more important.
However, should you compare yourself to those with 10 figures?
I was recently asked the question, “How much is 10 figures salary?” and my first thought was well beyond 99.9% of people’s salary range.
So then I had to ask this person what they meant by “10 Figures.”
This led me on a journey of figuring out exactly what 10 Figures means when it comes to money.
Many people are curious about the value of a 10-figure career. While it is not easy to become a 10-figure earner, there’s no reason you can’t start working toward your goal.
In this article, we’ll look at how much 10 figures really mean and why it’s important to understand this term.
What is 10 Figures?
10 figures is a term used to describe the amount of money in a given period of time. It is typically used to describe the amount of revenue that a company makes in a month or the amount of net worth someone has.
A number that is over 1,000,000,000 but less than or equal to 9,999,999,999 is a 10-figure number.
If the number is between those two values then it is a ten-figure number.
What is a Ten Figure Number?
Ten figures refer to any number that has 10 digits.
They are important for many reasons, but some of the most important include being able to easily calculate someone’s wealth or income.
How Much Money is 10 Figures?
Earning 10 figures can mean earning anywhere from $1,000,000,000 to $9,999,999,999.
That number is unfathomable for most people earning six figure salaries, which are often viewed as an income milestone by many people.
Simply put, 10 figures in money equates to a billionaire dollars.
Individuals who earn ten figure salaries are usually uber-successful in their careers.
What is 10 Figures Salary?
A ten figure salary means in one year you make more than $1,000,000,000.
Earning a 10 figure salary does not mean you have to earn all of your income from one job source. You can also earn income from investments, royalties, and other sources.
There are many different jobs that can lead to a 10 figure salary. It is possible for anyone with the right qualifications, dedication, hard work, and skillful negotiation tactics to achieve this level of income.
For the common folk, earning a 10 figure salary is an extremely unlikely event. A more doable amount is a $100k salary.
However, if you want to become a billionaire and earn ten figures, by all means, go ahead.
Even earning six or seven figures in a year is a huge accomplishment.
How Much is Ten Figures a Year?
People will use the phrase “10 figures” when talking about how much someone is worth or how much money a business makes.
Ten figures is any number between 1,000,000,000 and 9,999,999,999 that is earned in a span of 365 days or one year.
10 Figure Salary Jobs
A ten-figure salary is a salary that starts at the first 10 figure value which is $1,000,000,000.
This amount of money is not easily earned and usually takes many years of hard work and dedication. It’s important to remember that while having a high salary is great, it’s not everything.
Most people who earn 10-figure salaries created their own companies as a start-up and grew them into massive empires. These jobs can be found in a variety of industries, including technology, fashion, business, finance, and law.
To earn a ten-figure salary, you need to have an aggressive mindset and excellent skills in your field. With the right combination of talent and ambition, you can definitely achieve this goal.
For these people, a business degree was worth it.
Examples of people who earn 10 figures or more
People who earn 10 figures or more are typically some of the wealthiest and most influential people in the world. They often have a great deal of control over resources and economies.
There are only 724 people in the United States that are billionaires (source) with a collective total of over 2700 billionaires globally.
Here are examples of people who earn 10 figures or more:
Elon Musk
Well known for his social media tweets and swings in TSLA stock.
Elon Musk is the founder and CEO of Tesla Inc, a maker of electric high-end luxury cars.
Elon Musk is the richest person in the world, with a net worth of $223 billion as of February 28, 2022. He made his fortune as the founder of Tesla Inc., SpaceX, and several other startups. He is also known for being an advocate for renewable energy and space exploration.
Jeff Bezos
Jeff Bezos is the founder and CEO of Amazon.com, an online retailer that offers a wide range of products and services to consumers globally. In 1994, he founded the company with a vision to make the world’s largest bookstore and offer low prices for books. Bezos had worked on Wall Street in his twenties.
Jeff Bezos held the title of the richest man in the world with a net worth of about $203 billion until Elon Musk overtook his spot.
From 1998 to 2021, Bezos made $88,840 per year or more with extra compensation bringing the figure to a little over $1.6 million each year.
Bill Gates
Bill Gates is an American business magnate, investor, and philanthropist. He founded Microsoft Corporation with Paul Allen in 1975 in Albuquerque.
His net worth is estimated to be over $122 billion with a salary of $1 million per year.
Bill Gates was the richest person in the world for a number of years. However, he dropped to the second richest person in the world in July 2017 when he was overtaken by Amazon founder Jeff Bezos.
Melanie Perkins
Melanie Perkins is the co-founder and CEO of Canva, a design software company that was valued at $40 billion by private investors in September 2021. Perkins started the company in 2012 with her then-boyfriend and now-husband Cameron Adams. The company has since become a major player in the design world, with over 15 million users and offices in 17 countries.
Though some were skeptical of her idea, Melanie Perkins and her team persevered in the development of their freemium software, Canva. 60 million monthly users later, 500,000 teams from companies like Intel and Zoom are now paying for it. This goes to show that with hard work and a great product, anything is possible.
Her net worth is estimated at $6.5 billion.
Gina Rinehart
Gina Rinehart is an Australian billionaire, businesswoman, and philanthropist. She was the world’s richest woman until her daughter took over in 2018. Rinehart has been involved in the Australian mining industry for decades and was the director of Hancock Prospecting, a company her father founded.
Her net worth is estimated at $31 billion.
Susanne Klatten
Susanne Klatten is an extremely wealthy woman. Aside from her BMW stake, she also has significant ownership in Entrust, a company specializing in digital identity and data security, as well as carbon and graphite producer SGL Group. Additionally, Klatten’s brother Stefan Quandt owns 23.6% of BMW- making the two siblings the automaker’s two largest individual shareholders.
Susanne Klatten is the richest woman in Germany and the third-richest person in Europe.
She has a net worth of $25 billion.
Some of the other Richest People in the world include:
Larry Page
Sergey Brin
Warren Buffett – Check out where he eats for breakfast.
Bernard Arnault
Amancio Ortega
Carlos Slim
Micheal Bloomberg
Larry Ellison
Mukesh Ambani
Alice Walton
Arne Morris Sorenson
Charles Koch
Dara Khosrowshahi
Dustin Moskovitz
Eric Schmidt
Eric Yuan
Francoise Bettencourt Meyers
Oprah Winfrey
Kim Kardashian West
Jacqueline Mars
Abigail Johnson
10 Figures Net Worth
In short, becoming wealthy requires having a net worth of 10 figures. That will give you billionaire status.
To have 10 figures net worth, your net worth is over $1,000,000,000.
Net worth is assets minus any liabilities.
Much of the billionaire’s net worth is made up of high income, stock options, real estate, and diversified portfolios.
Tops Ways to Earn 10 Figures
The following are some of the top ways to earn a billion dollars in a year. Even if you don’t get close, you will still earn way more than a traditional 9-5 job.
There are many ways to become a 10-figure earner, but the most common paths are entrepreneurship, investing, and influencer status.
All of these paths have their own challenges and rewards, but they all provide opportunities for anyone who is willing to work hard and take some risks.
1. Entrepreneurship
Entrepreneurship is the process of developing, launching, and running a new business venture. Entrepreneurs start a business with little or no outside funding in an attempt to generate profit for themselves and their investors.
They are generally risk-takers and may work long hours in pursuit of their vision.
There is no ceiling to how much you can earn as a successful business owner.
You can make a 10 figure salary if you are innovative and work hard. For example, one of the most successful billionaires has made their fortune by starting innovative technology companies. Additionally, there are many other opportunities for entrepreneurs such as franchise restaurants and clothing companies.
2. Investing
Investing is one of the most important aspects of becoming a billionaire.
Most of the net worth of billionaires is made from their stock options from when their company went public. Then, they slowly moved to a more diversified portfolio.
In addition, investing can be used to grow and protect wealth, and there are many different types of investments that can be made.
For the average Joe, investing needs to be crucial for growing your wealth. There are also many different ways to invest, so it is essential to find the right option for each individual.
Learn how to invest in stock for beginners.
3. Influencer Status
Influencer status is a term that refers to the type of person who has an influence on social media, through books, or in fashion.
Typically, influencers are individuals who have a large social media following and have the power to make or break products.
Becoming a media star is the first step, but it’s only likely to make someone a billionaire if they can leverage that star status into building successful businesses. For many celebrities, this means starting their own production companies, launching product lines, or creating exclusive content deals.
At 21 years old, Kylie Jenner is the youngest self-made billionaire in the world due to the success of her company, Kylie Cosmetics. The company was founded in 2015 and has since sold over $630 million worth of products. Jenner’s story is an inspiration to young entrepreneurs who want to make it big.
Now, Take Some Lessons from Billionaires
The chances of you becoming the next billionaire is slim. However, there are plenty of lessons to learn from those earning 10 figures.
There are a lot of lessons that can be learned from billionaires. They have achieved a level of success most people only dream of, and there is a lot to be learned from their stories. One thing that stands out among all billionaires is their resilience in the face of failure. They understand that failures are an important part of the learning process, and they use them to propel themselves forward.
While some people might see billionaires as lucky, the truth is that they have worked hard for their money.
In addition, excellence is a habit for billionaires; it is something that they do on a daily basis. In fact, many have a set billionaire morning routine.
Sure, billionaires have long-term goals, but they also take the time to break these goals into manageable milestones. This allows them to focus on their end goal while ensuring that they don’t become overwhelmed by it. In addition to setting goals, billionaires also know the importance of being decisive and taking calculated risks.
From the 3-comma club members, we can learn a lot about work ethic. Most of these billionaires achieved their wealth through sheer hard work and perseverance. They are not afraid of long hours or tough challenges, and they never give up on their dreams.
Now, the chance is for you to see how many figures you can earn.
Know someone else that needs this, too? Then, please share!!
By Steve Harper and Elizabeth Beasley, Apartment Guide contributor
Renting — while never really out of style — is trendy again!
[find-an-apartment]
The National Association of Home Builders predicts that a preference for renting among young people is driving the building of many more new apartment buildings in the next couple of years. The state of the housing market, among other factors, seems to be leading more people to choose renting in the near future.
Are you ready for a reality check on the state of renting?
Urban upswing Housing trends work hand-in-hand with renting trends, of course. As reported in Forbes, there should be more supply and demand for urban apartments this year. Trulia’s Chief Economist Jed Kolko indicates that, because families are starting to buy homes again, single-family rentals — typically suburban — will be less in demand, accompanied by a rise in rentals in the heart of a city. These urban rentals will be occupied mostly by young adults who are moving out of their parents’ homes, starting careers and renting apartments close to work downtown.
If you are looking for a place in the city, you might run into some competition — or a lot of new friends, depending on how you look at it!
High demand means lower affordability The good news is that comfortable, convenient apartments in cities are on the rise. The bad news: these apartments are becoming more expensive.
Multifamily Executive cites a Harvard report pointing out that demand for rentals is increasing, allowing prices to go up. Downsized incomes are creating slimmer budget margins for many renters. Currently, the average renter is spending somewhere between 30 and 50 percent of his or her income on rent, the report indicates.
Staying aware of lesser affordability is a good thing, so you can make the most of your housing dollar. Aim for paying 30 percent, or less, of your paycheck, and you’ll be better able to stay in budget as rents increase over time.
Second-tier cities are tops For years, the top rental markets were the cities that never sleep, like New York, San Francisco, and Washington, D.C. But 2014 real estate trends show that smaller, savvy cities are becoming popular with real estate developers and investors. Think Portland, Dallas, Austin, San Jose and Houston. Wherever you find startups and new industries thriving, you’ll likely find a second-tier rental market that’s booming.
Move over, Millennials Here’s one of the more surprising projections. Baby Boomers will begin to surpass Millennials in the rental market.
Of course, young adults still account for a large chunk of the renting population. According to renting rates revealed by the 2013 Current Population Survey, 25-34-year-olds will likely make up 31 percent of rental growth over the next ten years. But did you know that renters aged 65 and older might well make up a whopping 52 percent of growth for the same time period?
To understand the findings of this research conducted by the National Multi Housing Council, consider that the sheer size of the Boom generation means that there are more people potentially making a life transition from home ownership to renting — many downsizing to seek an adventurous retirement in the city, rather than the suburbs. There are only slightly more Millennials than Baby Boomers in the U.S. today, but there will be more people over the age of 65 who may, if trends hold, become renters over the next ten years.
While it can be argued that living side by side is a great way for the two generations to grow wise and stay youthful together, this represents a potentially significant change in the rental landscape, nonetheless.
For more on renting trends, take a look at these topical posts:
Which Cities Will See the Greatest Rent Increase in 2014?
What’s the Most Expensive Town in the U.S.? The Answer May Surprise You
With the never-ending changes and challenges affecting the U.S. financial landscape, multiple community development entities are helping to counter some of their adverse effects by fostering community development initiatives.
Some examples include Community Development Financial Institutions (CDFIs) and Community Development (CD) Banks. These play a significant role in promoting economic growth and inclusion for underserved communities.
This article thoroughly explores CDFIs and the institutions that support CDFIs, outlining their significance, objectives, and how they meet capacity building initiative requirements. We also highlight the federal government’s involvement, explaining its role evolution and the numerous related economic development activities available to those who need them.
What is a Community Development Financial Institution (CDFI)?
Community Development Financial Institutions (CDFIs) are a type of financial institution that provides products and services to financially disadvantaged communities for economic development purposes.
They are essential and critical in promoting inclusion and economic growth to marginalized communities in urban and rural communities countrywide. Legislations like the Community Reinvestment Act help encourage these programs. However, the Community Reinvestment Act is not the only reason for their existence.
CDFI Certification
To become a CDFI, a financial institution must apply for a CDFI certification. This certification ensures that the institution can receive the right federal assistance resources and allows people to benefit from the CDFI fund’s programs.
How did the concept of CDFIs start?
The roots of Community Development Financial Institutions (CDFIs) extend to the 1880s, when minority-owned banks began serving economically disadvantaged communities. These organizations provided essential financial services to areas that mainstream financial institutions neglected or could not reach.
As the years progressed, new types of mission-driven financial institutions emerged. For example, the development of credit unions in the 1930s and 1940s offered alternatives to the traditional community bank that had limited services.
Moreover, new community development corporations emerged in the 1960s and 1970s, providing additional resources and support for underserved areas. These institutions gradually paved the way for the rise of nonprofit loan funds in the 1980s, establishing the groundwork for today’s modern CDFI model.
The Riegle Community Development and Regulatory Improvement Act of 1994 recognized the need to support the growing community development finance sector. With that in mind, it established the Community Development Financial Institutions Fund (CDFI Fund). This fund aimed to promote economic revitalization and community development in low-income areas by investing in and providing assistance to CDFIs.
Since its inception, the CDFI Fund played a substantial role in the growth and impact of CDFIs, enabling them to serve the financial needs of economically disadvantaged communities and contribute to their overall development and prosperity.
Types of CDFIs
Currently, multiple types of Community Development Financial Institutions (CDFIs) exist, each catering to the unique needs and challenges economically disadvantaged communities face. We explore their types and roles below.
Community Development Banks
Community Development Banks are for-profit, federal government supported and regulated financial institutions. These institutions have a board of directors that includes community representatives. CD banks provide affordable banking services, loans, and other financial products to economically distressed and underserved communities.
Operating in these communities creates jobs, improves infrastructure, and promotes economic growth. They also help increase access to capital for small businesses, including affordable housing projects and community service facilities.
Community Development Credit Unions
Community Development Credit Unions (CDCUs) are nonprofit financial cooperatives owned and controlled by their members. As is the case with traditional credit unions, they provide financial services such as savings accounts, checking accounts, and loans.
CDCUs only cater to low-income and underserved communities, offering affordable rates and financial education programs to promote inclusion and help people build credit and assets. The National Credit Union Administration (NCUA), an independent federal agency, regulates these credit unions.
Community Development Loan Funds
Community Development Loan Funds, or CDLFs, are nonprofit entities that finance community development projects by offering loans and technical assistance to marginalized communities. They facilitate access to affordable housing, promote small businesses, and help establish community service facilities to sustain growth. They also serve as an alternative source of capital for those who cannot access traditional bank financing services by offering flexible terms and underwriting criteria.
Community Development Venture Capital Funds
Community Development Venture Capital Funds offer equity and debt-with-equity investments to small and medium-sized businesses in economically distressed areas. They can be for-profit corporations or nonprofit entities.
By offering long-term capital, they help businesses grow, create jobs, and foster innovation. They also provide technical assistance, mentoring, and business development support to maintain the long-term success of their portfolio companies.
Microenterprise Development Loan Funds
Microenterprise Development Loan Funds are loan funds that provide small-scale loans, or microloans, to entrepreneurs and small businesses that might not qualify for traditional financing. They offer small capital amounts that range from hundreds to a few thousand. These loan funds help low-income people, women, and minority entrepreneurs who need smaller loan amounts and more flexible terms.
Community Development Financial Institution (CDFI) Consortia
CDFI Consortia are collaborative networks of CDFIs that pool resources, experience, and capital to increase their impact on community development services. They can access larger funding opportunities and share best practices to serve their target communities by working together. They can also provide joint technical assistance and support services, helping to strengthen individual CDFIs that are part of the network.
Understanding Community Development Financial Institutions
The main goal of CDFI fund programs is to provide affordable loans, community development banking services, financial help, and technical assistance to low-income communities. They foster economic development and empower small business owners, minorities, and marginalized communities by offering access to investment capital and other resources with fewer demands than traditional finance institutions.
CDFIs differ from traditional financial institutions because they focus on community development and serving minority communities. They also collaborate with religious institutions, community service organizations, and rely on federal funding and agencies to address the needs of their target populations.
What’s the federal government’s role in CDFIs?
The Federal Reserve Bank supports CDFIs through various initiatives, tax credits, and programs. One such program is the CDFI Fund, which the U.S. Department of the Treasury administers. The CDFI Fund provides financial, technical, and other resources to CDFIs, casting a wider net to help low income people and communities access their services.
In addition to the CDFI Fund, the Federal Reserve Bank supports CDFIs through programs and training initiatives such as:
Bank Enterprise Award Program
Capital Magnet Fund
CDFI Bond Guarantee Program
CDFI Equitable Recovery Program
CDFI Program
Rapid Response Program
Native Initiatives
New Markets Tax Credit Program
Small Dollar Loan Program
These initiatives by the Federal Reserve Bank provide financial incentives and resources for CDFIs and community development entities to invest in eligible community projects, promote economic growth, and create jobs.
How has that federal role changed over time?
The federal government’s role in supporting the CDFI industry changes over time to respond to the changing needs of disadvantaged communities and the growing recognition of the importance of financial inclusion.
Early efforts, for example, provided seed capital and technical assistance to establish and grow CDFIs. With the maturation and evolution of the industry, the government started focusing on building capacity, collaboration, and supporting innovative endeavors.
Recent changes emphasize leveraging private sector investments, regulatory relief, and encouraging partnerships between the CDFI industry and other financial institutions. Examples include minority depository institutions (MDIs) and mainstream banks.
CDFIs’ Role in Financial Inclusion
Financial inclusion is an essential part of CDFI initiatives. Access to affordable financial products and services helps bridge the gap between poor communities and mainstream financial institutions. CDFIs also promote financial knowledge, support small businesses, finance affordable housing activities, and facilitate economic development initiatives.
CDFIs also ensure that economically distressed communities can access essential community services facilities like healthcare centers, schools, and childcare. Their work helps contribute to these communities’ overall well-being and stability. It creates a solid foundation for long-term economic growth.
Business Model
CDFI business models are unique in combining traditional financial services with a strong emphasis on developing and positively impacting the communities they cater to.
They generate revenue by collecting interest and fees on loans, investments, and other financial products. However, they also rely on grants, donations, and especially government funding like the CDFI fund to support their operations.
CDFIs collaborate with organizations like government agencies, nonprofits, and private sector partners to attain their goals. Additionally, they leverage tax credits, guarantees, and other financial tools to attract more investment capital and support their lending activities.
CDFIs Provide Opportunity for All
CDFIs provide real opportunities by addressing the financial needs of underserved communities to help them succeed and promote their economic growth. To do this, they offer access to affordable financial products and services to communities that experienced systematic lockouts from these programs.
By emphasizing their needs and giving them more accessible and affordable ways to prosper, low-income individuals and businesses have access to essential financial tools. These tools were traditionally out of reach for mainstream financial institutions.
Moreover, CDFIs support small businesses owned by women, minorities, and individuals in economically distressed communities. By offering tailored financing solutions, technical assistance, and business planning resources, CDFIs help these entrepreneurs overcome barriers to entry, create jobs, and contribute to local economies.
Another significant aspect of CDFIs’ work is their focus on affordable housing and community development projects. They finance the construction and rehabilitation of affordable housing units and invest in community facilities like schools, healthcare facilities, and childcare. These are essential to the well-being and stability of low-income communities and help them worry less about factors beyond their control or that are too expensive to access otherwise.
CDFIs also promote financial education and empowerment by providing resources and training to help people develop financial literacy skills, manage their finances, and build assets. These initiatives contribute to breaking the cycle of poverty and promoting economic self-sufficiency.
By partnering with various stakeholders, such as government agencies, nonprofit organizations, and private sector partners, CDFIs leverage resources and expertise to maximize their impact. This creates a ripple effect that extends beyond the immediate recipients, fostering inclusive and resilient communities.
Types of CDFIs
Many community development financial institutions focus on addressing the needs of economically disadvantaged communities. These include community development banks, credit unions, loan funds, and venture capital funds.
Federal agencies like the Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA) regulate community development banks and credit unions. They offer various banking services, from deposit accounts to loans, catering to low-income communities.
Loan funds make affordable housing possible, support small businesses, and help community facilities. On the other hand, venture capital funds offer equity investments that support small businesses and startups in underserved communities.
“Newer” CDFI Resources
As community development financial institutions evolve, multiple resources and programs are emerging to support their growth and impact. Examples include:
CDFIs as Capital Plus Institutions
Sometimes, community development financial institutions are called “Capital Plus” institutions. This is because they provide investment capital, development services, technical assistance, and financial education to support the long-term success of their clients.
This approach allows community development financial institutions to significantly impact low-income and economically distressed communities, promoting economic opportunity and inclusion.
Emergency Capital Investment Program (ECIP)
The Emergency Capital Investment Program (ECIP) is a federal initiative that provides capital to CDFIs and MDIs to support their lending activities after the economic challenges caused by COVID-19. This program helps ensure that these institutions have the resources to continue providing essential financial services to underserved communities, small businesses, and minority-owned businesses during times of crisis.
Paycheck Protection Program Liquidity Facility (PPPLF)
The Paycheck Protection Program Liquidity Facility (PPPLF) is another federal initiative that supports the lending activities of CDFIs and other financial institutions participating in the Small Business Administration (SBA) Paycheck Protection Program (PPP). By providing liquidity to these institutions, the PPPLF enables them to continue offering loans to small businesses needing financial assistance during challenging economic times.
CDFI Rapid Response Program
The Rapid Response Program from the CDFI Fund provides immediate financial assistance during crises or natural disasters. CDFIs can quickly access funds for disaster recovery, emergency relief efforts, and other needs, serving as “financial first responders” for the communities they support.
These newer resources and programs demonstrate how the federal government, private sector, and other stakeholders support the work of CDFIs and promote financial inclusion and economic opportunity. By leveraging these resources, CDFIs can better address the needs of low-income communities nationwide and foster economic development in urban and rural communities.
In the past 5 years there have been a plethora of startups popping up that offer an easy way to invest for the smaller investor.
As I was doing some research to find my top 5 companies to invest with I found a company that will allow you to invest with as little as $5. That company is called Stash Invest.
Stash not only lets you invest with small amounts and buy fractional shares, but also gives you a variety of interesting portfolios and investments that you can purchase. In fact, Stash offers more choices than many investment companies.
Here’s a review of Stash Invest, and a look at how they can help you to jump start your retirement savings.
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Stash Invest Background
Stash was founded by Brandon Krieg and Ed Robinson as a place for first time investors to invest in a diversified portfolio, without having to have a big bankroll. After receiving all of the regulatory approvals, they launched the iOS app in October 2015. Here are the details from Wikipedia:
Stash was founded in February 2015 by Brandon Krieg and Ed Robinson. Krieg and Robinson had previously worked together at Macquarie Group, an investment banking firm. Stash was launched as an iOS app in October 2015, and was made available on Android in March 2016. Within a year of its launch, Stash had signed up 215,000 users. As of January of 2019 Stash has $530M+ in assets under management. Through January 2019, the app had approximately 3 million users.
So they’re pretty new to the scene having launched in October of 2015, but have quickly added almost 4 million users as of 2019.
Co-founder Brandon Krieg explains the idea behind the company on the company’s about page:
“My co-founder Ed and I left our jobs to start Stash because we believe everyone should have access to financial opportunity. After a combined 30+ years in the business, we saw that Wall Street can be fundamentally unfair to smaller investors as they work to accomplish their goals. Stash will change that. “
Stash should be a pretty attractive option for newer investors, so let’s see what they have to offer.
How Does Stash Work?
Stash is a micro-investing and banking app that is mainly utilized via a mobile phone app for iOS or Android. You can start investing with as little as $5.
Anyone can open an account, you just have to be 18 years old, and live in the United States.
Opening an account with Stash should only take a few minutes, and if you do it now they currently have a bonus offer. You’ll get a $5 account bonus for signing up, which is enough to start investing.
Sign Up For Stash Here – Get A $5 Bonus
To get started, you will need to answer a series of questions and provide your Social Security number, and then link an external bank account.
Based on your level of acceptable risk (conservative, moderate or aggressive) you’ll be given recommendations for portfolios.
Stash Investment Portfolios
Stash’s investments are mainly ETF index funds and they have 250+ETFs and stocks in pre-built investments that you can use to build your portfolio.
When you first open your account, the app will recommend a mix of diversified stocks that suits your level of risk.
In addition to their main 3 portfolios, there are an abundance of other investment options including funds focusing on large blue chip companies, small companies, environmentally friendly investments, technology, health care, banking, entertainment and more.
They talk about “investing in things you believe in”, and if that’s something you’re interested in doing, there are plenty of niche focused investments to partake in.
You can invest in just about anything your heart desires with Stash, just be cognizant of what the “risk level” is for each fund, and what the fund management fees are for the individual ETF funds you’re choosing as they can range from very low cost, to less so.
Stash Online Banking
Stash has an optional online banking account and Visa debit card that you can sign up for with your account. 1.
Some of the features of the account include:
Early payday (Get paid up to 2 days early)
No overdraft fees.
No monthly maintenance fees.
No minimum balance fees.
Access to thousands of fee-free ATMs.
Stock-Back® Rewards for everyday spending.
Setup automatic transfers to keep the account funded.
This account is included in the regular monthly fee, and doesn’t have additional fees.
Stash Stock-Back® Rewards
Stash introduced a cool feature a while back that they call “Stash Stock-Back® Rewards” 2. It’s a rewards program of sorts that works in conjunction with your Stash debit card and your online banking. Instead of getting cash back, however, you’re getting fractional shares of stock where eligible.
Here’s how it works. Make a purchase with your Stash Visa at any of 11 million businesses nationwide, and you’ll get rewards for that purchase in the form of a fractional share of stock for that company (or for a diversified ETF index fund if that company isn’t available).
For example, if you buy something on Amazon with your Stash debit card, you’ll earn AMZN Stock-Back® as a reward.
As soon as you make a purchase using your Stash debit card, you should get a notification of the stock that you’ve earned. You’ll earn 0.125% Stock-Back® rewards on everyday purchases, and up to $5 Stock-Back® rewards at certain merchants. The stock will be added to your taxable brokerage account within your app. 3
Other Features of Stash
Here are some other important features and functionality of the app that are important to know about.
Stash Retire: Stash recently has moved into the retirement investing space and they now offer Traditional and Roth IRA accounts.4 Those accounts have a minimum of $15 to invest.
Smart-Save: Smart-Save functionality studies your spending and income patterns to figure out when you have cash to spare. Then it automatically saves small amounts of extra cash into your Stash account. There, it earns interest, or can be invested.
ASAP Direct Deposit: Get paid up to 2 days early.5
Automated investments: Set up a regular deposit and fund your account on an automated basis.
Fractional shares: You can buy fractional shares – buying a small fractional share of a single stock.
Educational materials: They have a decent array of educational materials available for newer investors in both the app, via email, and on their website.
Tools to forecast: The app has a tool to see the impact your saving and investing might have over time. It gives you insight into how your positive choices are impacting your future.
Security: Stash’s app uses 256-bit bank grade encryption to secure your personal information. Information sent between the app and their servers use SSL encryption, and they don’t store you your bank long information.
SIPC Coverage: Your investments in your account are covered by Securities Investor Protection Corporation (SIPC) through the clearing agency used by Stash, Apex Clearing Corp. The limit of SIPC protection at any brokerage is $500,000, which includes a $250,000 limit for cash.
Stash Service Fees And Minimums
Where the rubber meets the road is just how much you’ll be paying to use Stash. What are the fees and minimums for using the service?
First of all, there is a $5 minimum in order to have an account, and you only need $5 to invest.6 So the service is accessible to just about everyone, especially if you get the $5 bonus mentioned above.
Low Monthly Fees
The service offers three monthly subscription plans. There is the Stash Beginner account for $1/month7 that includes a personal investment account, debit Visa card account access, Stock-Back® rewards program that helps you to earn stock for your normal spending, and free financial education.
The $3/month7 Growth subscription will give you everything in the basic account, but also includes access to retirement accounts.
The $9/month7 plan gives you everything in the above plans but adds in the option of custodial accounts where you can start investing for 2 kids, a metal debit card that also gives you 2x earnings on Stock-Back® rewards, as well as monthly market insights reports.
While $1/month isn’t really that much, the one caveat is that if you have a low balance account and you’re paying $1/month for the service, that fee could be a relatively large percentage of your assets in comparison to some other services. It might be something to consider. Stash becomes more cost effective in my opinion once your account reaches a higher dollar value, and at that point it’s very comparable to other investment sites like Betterment, Wealthfront and others.
Automated Investing With A Low Barrier To Entry
If you’re a newer investor and you don’t have a lot of money to start investing, Stash might be worth your time to get your feet wet. They have a low initial deposit of $5, and from there you can use dollar cost averaging to build your portfolio bit by bit. You can even start a Roth IRA or Traditional IRA and invest for retirement with Stash Growth.
Stash has a wide variety of investment options, and if you’re looking to hold a diversified portfolio, their basic mix portfolios can give you what you’re looking for.
While the fees aren’t the lowest, once the account grows to a reasonable level the fees are very comparable to other players in the space.
Try Stash for free with the currently available $5 account bonus!
Sign Up For Stash Invest Today!
1 Debit Account Services provided by and Stash Visa Debit Card issued by Green Dot Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc. Investment products and services provided by Stash Investments LLC, not Green Dot Bank, and are Not FDIC Insured, Not Bank Guaranteed, and May Lose Value. In order for a user to be eligible for a Stash debit account, they must also have opened a taxable brokerage account on Stash. Account opening of the debit account is subject to Green Dot Bank approval.
2 Stash Stock-Back® is not sponsored or endorsed by Green Dot Bank, Green Dot Corporation, Visa U.S.A., or any of their respective affiliates, and none of the foregoing has any responsibility to fulfill any stock rewards earned through this program.
3 You’ll also bear the standard fees and expenses reflected in the pricing of the ETFs in your account, plus fees for various ancillary services charged by Stash and the custodian.
4 Stash does not monitor whether a customer is eligible for a particular type of IRA, or a tax deduction, or if a reduced contribution limit applies to a customer. These are based on a customer’s individual circumstances. You should consult with a tax advisor.
5 Early access to your direct deposit depends on deposit verification and when Green Dot Bank gets notice from your employer, and may vary from pay period to pay period.
6 Other fees apply to the debit account. Please see Deposit Account Agreement for details.
7 You’ll also bear the standard fees and expenses reflected in the pricing of the ETFs in your account, plus fees for various ancillary services charged by Stash and the custodian.
Bible Money Matters is a paid Affiliate/partner of Stash. Investment advisory services offered by Stash Investments LLC, an SEC-registered investment adviser.
Disclaimer: Bible Money Matters has entered into a referral and advertising arrangement with Wealthsimple US, LTD and receives compensation when you open an account or for certain qualifying activity which may include clicking links. You will not be charged a fee for this referral and Wealthsimple and Bible Money Matters are not related entities. It is a requirement to disclose that we earn these fees and also provide you with the latest Wealthsimple ADV brochure so you can learn more about them before opening an account.
In the past couple of years I’ve written about quite a few investing startups that offer easy ways to invest that take the human component out of the equation.
They’re typically simple enough for anyone to understand, low cost and try to capture market returns via low cost ETF index funds. Many people call them robo-advisors.
As I was researching some of the best robo-advisors I came across one that had previously only been available in Canada, Wealthsimple. As of earlier this year they have now crossed the border, and are now available to U.S. users (You can also get up to a $10,000 managed for free as a reader of Bible Money Matters).
Wealthsimple is a hot company, and there is a lot to like about this newer online investment manager.
Today I thought I would take a close look at this automated investment advisor in this Wealthsimple review. How does Wealthsimple work? How do they invest your money? What are the pros/cons of their service?
Wealthsimple Background
Wealthsimple was founded in September of 2014 in Toronto, Ontario Canada. Shortly thereafter it acquired ShareOwner Investments, the country’s first robo-advisor.
Wealthsimple Financial Inc. is an online investment management service focused on making “investing easier for millennials.” The firm was founded in September 2014 by Michael Katchen and is based in Toronto. As of August 2019, the firm had over C$5,000,000,000 in assets under management.
Wealthsimple has over $5 billion Canadian dollars in assets under management ($3.75 million U.S.) and over 175,000 clients as of August 2019. They’re growing at a decent rate, and with the jump to the U.S. market in January 2017, that can only accelerate.
The company has garnered several awards in it’s first few years including:
Fintech 100 – Top 100 Global Financial Technology Companies
2017 Webby Winner – Best Financial Services/Banking Website.
2016 Webby Winner – Best Financial Services/Banking Website.
2016 – Fintech Five – Hottest and most promising financial technology companies.
2015 Product Hunt Toronto – Product of the Year Award.
How Does Wealthsimple Work?
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Wealthsimple was founded on the idea of simplifying and automating investing in order to give newer and experienced investors alike a diversified long term portfolio, without any hassle.
How do they do that? They create diversified stock and bond portfolios that are typically made up of ETF index funds. The funds are low cost and diversify your holdings across different sectors of the global economy to increase your gains, and lower your risk.
When you sign up you’ll be given a personalized portfolio, based on your answers to a survey at the beginning of the process. It will be tailored to your personal level of acceptable risk, be automatically re-balanced (so that your investments stay in line with your goals) and dividends will automatically be reinvested.
In short, it’s a simplified, low cost and automatic investment portfolio that can help you to reach your long term goals.
Opening A Wealthsimple Account (Get Up To $10,000 Managed Free!)
Opening an investing account with Wealthsimple is easy, and users in the USA, Canada and UK are eligible.
To get started, and to get your sign-up bonus, just go through this process:
Go to Wealthsimple.com via this link. (Our link gives you up to a $10,000 managed for free as a bonus.)
Start the online application: From the landing page click “Claim your bonus” and follow the prompts.
Enter basic details: Enter some basic personal information, answer a few questions about your previous investment experience and e-sign one or more Investment Management Agreements.
Bank verification:Verify your banking information via one of the approved methods.
DONE!
No need to worry about providing your banking details as Wealthsimple is fully secure, using 128 bit encryption. They’re also SIPC insured up to $500,000.
After you verify your banking information, your Wealthsimple account should be up and running within 5 business days, according to their FAQ.
Wealthsimple Basic Vs. Wealthsimple Black
When you’re opening your account and making your initial deposits, one thing you may want to consider is just how much your initial deposit is. With a deposit of less than $100,000 you’ll be signed up for a Wealthsimple Basic account, which gives you everything you need to invest in a diversified portfolio, at an annual fee of 0.5%. Signing up for the Basic account will give you a $50 bonus through our link.
If you deposit more than $100,000 in your account you’ll be upgraded to a Wealthsimple Black account, which means you’ll have a lower annual fee of 0.4%, along with the following benefits:
Financial planning with a Wealthsimple advisor
Access to tax-efficiency benefits like tax-loss harvesting and tax efficient funds.
VIP Priority Pass access for you and a guest to more than 1,000 airline lounges in over 400 cities.
If you already have a large amount to transfer in, the added benefits of Wealthsimple Black are nice to have, and in many cases puts Wealthsimple ahead of the competition. In addition to the $50 bonus for opening a new Wealthsimple account, you’ll get an additional $50 bonus if you deposit over $100,000 and open a Wealthsimple Black account.
Wealthsimple Investment Portfolios
The Wealthsimple portfolios mainly invest in diversified ETF index funds and are based on Nobel Prize winning ideas behind Modern Portfolio Theory. Here’s how they explain it:
Our approach is based on Modern Portfolio Theory, introduced by the Nobel Prize-winning economist Harry Markowitz, who proved you can minimize volatility (risk) and maximize reward (money!) by diversifying your investments. We invest your money across thousands of companies using Exchange Traded Funds (ETFs) that track different sectors of the global economy. This way, you bet on bigger slices of the economy while taking advantage of market diversification, without being impacted by the growth or loss of one company. In a few easy steps, we’ll determine the right mix of investments you should have based on your personal goals. We also designed a socially-responsible portfolio that prioritizes low carbon emissions, advances cleantech innovation, and promotes sustainable growth in emerging markets.
So their portfolios are based on a proven investment strategy, and are designed to maximize reward while minimizing risk. It’s a strategy similar to the ones used by other robo-advisors, although the details are a bit different.
Available Portfolios
When signing up there are 3 main portfolios that you can choose from:
Conservative: 65% Stocks, 35% Bonds
Balanced: 50% Stocks, 50% Bonds
Growth: 80% Stocks, 20% Bonds
As of 2017, the following low cost investments are in the portfolios:
Vanguard US Total Stock Market ETF (VTI)
Vanguard Mid-Cap Value ETF (VOE)
Vanguard Small-Cap Value ETF (VBR)
Vanguard FTSE Europe ETF (VGK)
WisdomTree Japan Hedged Equity Fund (DXJ)
Vanguard FTSE Emerging Markets ETF (VWO)
iShares National Muni Bond ETF (MUB)
iShares TIPS Bond (TIP)
Vanguard Total Bond Market ETF (BND)
VanEck Vectors Fallen Angel High Yield Bond ETF (ANGL)
Socially Responsible Investing
Wealthsimple recently released socially responsible investing options for investors who want to invest with their values. Those investments include:
iShares MSCI ACWI Low Carbon Target (CRBN)
PowerShares Cleantech Portfolio (PZD)
iShares MSCI KLD 400 Social ETF (DSI)
SPDR® SSGA Gender Diversity Index ETF (SHE)
PowerShares Build America Bond Portfolio (BAB)
iShares GNMA Bond ETF (GNMA)
Socially responsible investing options will carry a slightly higher fund cost associated with managing the funds to keep the investments “socially responsible”. Keep that in mind when choosing this option.
Investments in all of the portfolios can change over time, so check for current investment mix when you sign up.
Wealthsimple Roundup
Wealthsimple added a new feature in October of 2018 called Wealthsimple Roundup that helps you to save and invest in small increments, based on your daily spending in a linked account.
Spend $4.50 at Starbucks? The amount will get rounded up to the nearest dollar, $5 in this case, and once a week your combined roundups will be invested.
How can you take advantage? From their FAQ:
If you’re already a Wealthsimple client, open your mobile app and click on “Add funds.” There will be an option to turn on Roundup. Then just select the credit and debit cards you want to connect, and the Wealthsimple account you want your roundups to go to. Bingo, you’re done. Every time you spend money with one of your linked debit or credit cards, the amount gets rounded up to the nearest dollar, and once a week that money gets invested.
Investing 50 cents at a pop may not seem like much, but when the roundups are added together it can be a surprisingly significant amount of money.
In the past when I’ve used a roundup feature it can lead to saving $100-200 in a single month if I’ve spent enough. Definitely a cool feature and one to take advantage of.
Wealthsimple Mobile Apps
Wealthsimple has beautiful mobile apps for both iOS and Android. The apps were redesigned from the ground up at the end of 2016, and are now even more beautiful and functional.
Some of the functions you can perform in the app:
View your portfolio.
Track account activity.
Setup auto deposits, or make one time deposits.
Access educational content.
Update your profile information.
Wealthsimple Service Fees And Minimums
So how much will you be paying to use Wealthsimple? What are the fees and minimums for using the service?
Wealthsimple currently has no minimums on an account, and there are no trading, account transferring or rebalancing fees either. You can start investing when you deposit $500.
Low Annual Management Fees
The account management fees with Wealthsimple are pretty easy to break down.
While the fees for the service aren’t the lowest in the industry, they are often much lower than going with a traditional human advisor or a large mutual fund company. They are very much in line with much of the industry on pricing, especially if you’re investing more than $100,000 where they include meetings with advisors, lower fees and other perks.
Simplified & Automated Investing
Wealthsimple was launched in the U.S. market in January 2017, and has quickly become one of the premier options for people looking to have a simple, effective and automated investment portfolio. (If you’re a Canadian, check out this Wealthsimple review that was written specifically for a Canadian audience.)
Their portfolios are created and based on the ideas of Modern Portfolio Theory, and those proven strategies are the sound basis for a good long term investing portfolio for anyone.
Their fees are lower than you’d likely see when using a traditonal financial advisor, and are in the range of what other providers charge (although some are lower). The fact that they’re offering a $100 sign-up bonus through our link should give you plenty of time to test the service out, before deciding if you want to use them for the long term.
I think their service is top notch, and I’d recommend giving them a try.
Sign Up For Wealthsimple, Get Up To A $10,000 Managed Free!
Applications are open for the 2023 iOi Pitch Battle! It will take place at the fifth annual iOi Summit on August 29-30 in Miami, Florida. The winner will be awarded $15k, a booth at NAR’s annual conference in November, a meeting with the Second Century Ventures executive team, have their company featured in an upcoming edition of REALTOR® Magazine, and will present the winner of the 2024 iOi Pitch Battle.
Each entrant in the Pitch Battle will conduct a live, 4-minute pitch on their product or service, followed by a 4-minute rapid-fire question-and-answer session from a panel of judges. Entrants must explain how their new tech solution/service works to improve the real estate industry (commercial, residential, or both).
[Note from editor: The “Mastermind Showcase” highlights companies and news from members of the GEM. Today’s showcase: Prisidio]
A cloud-based vault to securely store, organize, and share all life’s essential documents and information, Prisidio provides cybersecurity and data protection solutions that protect users’ sensitive data and digital assets. Its software is used to store birth certificates and IDs, wills, the location of important physical and digital spaces like safe deposit boxes, or a digital inventory of financial and sentimental valuables. This protected data can then be accessed by the vault owner, via mobile or web, or by those invited to access the specific items in the vault, like a family member, lawyer, or financial advisor. The vault owner can keep track of all activity occurring within their vault through instant mobile notifications or the vault’s action log.
What we like: A digital version of a safe deposit box, built for the mobile and cloud world we now live in. Real estate and finance documents are a critical piece of virtually every family estate, and Prisidio makes them findable and shareable among families and other trusted connections.
In Best Low-Risk Investments for 2023, I provided a comprehensive list of low-risk investments with predictable returns. But it’s precisely because those returns are low-risk that they also provide relatively low returns.
In this article, we’re going to look at high-yield investments, many of which involve a higher degree of risk but are also likely to provide higher returns.
True enough, low-risk investments are the right investment solution for anyone who’s looking to preserve capital and still earn some income.
But if you’re more interested in the income side of an investment, accepting a bit of risk can produce significantly higher returns. And at the same time, these investments will generally be less risky than growth stocks and other high-risk/high-reward investments.
Ads by Money. We may be compensated if you click this ad.Ad
Determine How Much Risk You’re Willing to Take On
The risk we’re talking about with these high-yield investments is the potential for you to lose money. As is true when investing in any asset, you need to begin by determining how much you’re willing to risk in the pursuit of higher returns.
Chasing “high-yield returns” will make you broke if you don’t have clear financial goals you’re working towards.
I’m going to present a large number of high-yield investments, each with its own degree of risk. The purpose is to help you evaluate the risk/reward potential of these investments when selecting the ones that will be right for you.
If you’re looking for investments that are completely safe, you should favor one or more of the highly liquid, low-yield vehicles covered in Best Low-Risk Investments for 2023. In this article, we’re going to be going for something a little bit different. As such, please note that this is not in any way a blanket recommendation of any particular investment.
Best High-Yield Investments for 2023
Table of Contents
Below is my list of the 18 best high-yield investments for 2023. They’re not ranked or listed in order of importance. That’s because each is a unique investment class that you will need to carefully evaluate for suitability within your own portfolio.
Be sure that any investment you do choose will be likely to provide the return you expect at an acceptable risk level for your own personal risk tolerance.
1. Treasury Inflation-Protected Securities (TIPS)
Let’s start with this one, if only because it’s on just about every list of high-yield investments, especially in the current environment of rising inflation. It may not actually be the best high-yield investment, but it does have its virtues and shouldn’t be overlooked.
Basically, TIPS are securities issued by the U.S. Treasury that are designed to accommodate inflation. They do pay regular interest, though it’s typically lower than the rate paid on ordinary Treasury securities of similar terms. The bonds are available with a minimum investment of $100, in terms of five, 10, and 30 years. And since they’re fully backed by the U.S. government, you are assured of receiving the full principal value if you hold a security until maturity.
But the real benefit—and the primary advantage—of these securities is the inflation principal additions. Each year, the Treasury will add an amount to the bond principal that’s commensurate with changes in the Consumer Price Index (CPI).
Fortunately, while the principal will be added when the CPI rises (as it nearly always does), none will be deducted if the index goes negative.
You can purchase TIPS through the U.S. Treasury’s investment portal, Treasury Direct. You can also hold the securities as well as redeem them on the same platform. There are no commissions or fees when buying securities.
On the downside, TIPS are purely a play on inflation since the base rates are fairly low. And while the principal additions will keep you even with inflation, you should know that they are taxable in the year received.
Still, TIPS are an excellent low-risk, high-yield investment during times of rising inflation—like now.
2. I Bonds
If you’re looking for a true low-risk, high-yield investment, look no further than Series I bonds. With the current surge in inflation, these bonds have become incredibly popular, though they are limited.
I bonds are currently paying 6.89%. They can be purchased electronically in denominations as little as $25. However, you are limited to purchasing no more than $10,000 in I bonds per calendar year. Since they are issued by the U.S. Treasury, they’re fully protected by the U.S. government. You can purchase them through the Treasury Department’s investment portal, TreasuryDirect.gov.
“The cash in my savings account is on fire,” groans Scott Lieberman, Founder of Touchdown Money. “Inflation has my money in flames, each month incinerating more and more. To defend against this, I purchased an I bond. When I decide to get my money back, the I bond will have been protected against inflation by being worth more than what I bought it for. I highly recommend getting yourself a super safe Series I bond with money you can stash away for at least one year.”
You may not be able to put your entire bond portfolio into Series I bonds. But just a small investment, at nearly 10%, can increase the overall return on your bond allocation.
3. Corporate Bonds
The average rate of return on a bank savings account is 0.33%. The average rate on a money market account is 0.09%, and 0.25% on a 12-month CD.
Now, there are some banks paying higher rates, but generally only in the 1%-plus range.
If you want higher returns on your fixed income portfolio, and you’re willing to accept a moderate level of risk, you can invest in corporate bonds. Not only do they pay higher rates than banks, but you can lock in those higher rates for many years.
For example, the average current yield on a AAA-rated corporate bond is 4.55%. Now that’s the rate for AAA bonds, which are the highest-rated securities. You can get even higher rates on bonds with lower ratings, which we will cover in the next section.
Corporate bonds sell in face amounts of $1,000, though the price may be higher or lower depending on where interest rates are. If you choose to buy individual corporate bonds, expect to buy them in lots of ten. That means you’ll likely need to invest $10,000 in a single issue. Brokers will typically charge a small per-bond fee on purchase and sale.
An alternative may be to take advantage of corporate bond funds. That will give you an opportunity to invest in a portfolio of bonds for as little as the price of one share of an ETF. And because they are ETFs, they can usually be bought and sold commission free.
You can typically purchase corporate bonds and bond funds through popular stock brokers, like Zacks Trade, TD Ameritrade.
Corporate Bond Risk
Be aware that the value of corporate bonds, particularly those with maturities greater than 10 years, can fall if interest rates rise. Conversely, the value of the bonds can rise if interest rates fall.
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4. High-Yield Bonds
In the previous section we talked about how interest rates on corporate bonds vary based on each bond issue’s rating. A AAA bond, being the safest, has the lowest yield. But a riskier bond, such as one rated BBB, will provide a higher rate of return.
If you’re looking to earn higher interest than you can with investment-grade corporate bonds, you can get those returns with so-called high-yield bonds. Because they have a lower rating, they pay higher interest, sometimes much higher.
The average yield on high-yield bonds is 8.29%. But that’s just an average. The yield on a bond rated B will be higher than one rated BB.
You should also be aware that, in addition to potential market value declines due to rising interest rates, high-yield bonds are more likely to default than investment-grade bonds. That’s why they pay higher interest rates. (They used to call these bonds “junk bonds,” but that kind of description is a marketing disaster.) Because of those twin risks, junk bonds should occupy only a small corner of your fixed-income portfolio.
High Yield Bond Risk
In a rapidly rising interest rate environment, high-yield bonds are more likely to default.
High-yield bonds can be purchased under similar terms and in the same places where you can trade corporate bonds. There are also ETFs that specialize in high-yield bonds and will be a better choice for most investors, since they will include diversification across many different bond issues.
5. Municipal Bonds
Just as corporations and the U.S. Treasury issue bonds, so do state and local governments. These are referred to as municipal bonds. They work much like other bond types, particularly corporates. They can be purchased in similar denominations through online brokers.
The main advantage enjoyed by municipal bonds is their tax-exempt status for federal income tax purposes. And if you purchase a municipal bond issued by your home state, or a municipality within that state, the interest will also be tax-exempt for state income tax purposes.
That makes municipal bonds an excellent source of tax-exempt income in a nonretirement account. (Because retirement accounts are tax-sheltered, it makes little sense to include municipal bonds in those accounts.)
Municipal bond rates are currently hovering just above 3% for AAA-rated bonds. And while that’s an impressive return by itself, it masks an even higher yield.
Because of their tax-exempt status, the effective yield on municipal bonds will be higher than the note rate. For example, if your combined federal and state marginal income tax rates are 25%, the effective yield on a municipal bond paying 3% will be 4%. That gives an effective rate comparable with AAA-rated corporate bonds.
Municipal bonds, like other bonds, are subject to market value fluctuations due to interest rate changes. And while it’s rare, there have been occasional defaults on these bonds.
Like corporate bonds, municipal bonds carry ratings that affect the interest rates they pay. You can investigate bond ratings through sources like Standard & Poor’s, Moody’s, and Fitch.
Fund
Symbol
Type
Current Yield
5 Average Annual Return
Vanguard Inflation-Protected Securities Fund
VIPSX
TIPS
0.06%
3.02%
SPDR® Portfolio Interm Term Corp Bond ETF
SPIB
Corporate
4.38%
1.44%
iShares Interest Rate Hedged High Yield Bond ETF
HYGH
High-Yield
5.19%
2.02%
Invesco VRDO Tax-Free ETF (PVI)
PVI
Municipal
0.53%
0.56%
6. Longer Term Certificates of Deposit (CDs)
This is another investment that falls under the low risk/relatively high return classification. As interest rates have risen in recent months, rates have crept up on certificates of deposit. Unlike just one year ago, CDs now merit consideration.
But the key is to invest in certificates with longer terms.
“Another lower-risk option is to consider a Certificate of Deposit (CD),” advises Lance C. Steiner, CFP at Buckingham Advisors. “Banks, credit unions, and many other financial institutions offer CDs with maturities ranging from 6 months to 60 months. Currently, a 6-month CD may pay between 0.75% and 1.25% where a 24-month CD may pay between 2.20% and 3.00%. We suggest considering a short-term ladder since interest rates are expected to continue rising.” (Stated interest rates for the high-yield savings and CDs were obtained at bankrate.com.)
Most banks offer certificates of deposit with terms as long as five years. Those typically have the highest yields.
But the longer term does involve at least a moderate level of risk. If you invest in a CD for five years that’s currently paying 3%, the risk is that interest rates will continue rising. If they do, you’ll miss out on the higher returns available on newer certificates. But the risk is still low overall since the bank guarantees to repay 100% of your principle upon certificate maturity.
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7. Peer-to-Peer (P2P) Lending
Do you know how banks borrow from you—at 1% interest—then loan the same money to your neighbor at rates sometimes as high as 20%? It’s quite a racket, and a profitable one at that.
But do you also know that you have the same opportunity as a bank? It’s an investing process known as peer-to-peer lending, or P2P for short.
P2P lending essentially eliminates the bank. As an investor, you’ll provide the funds for borrowers on a P2P platform. Most of these loans will be in the form of personal loans for a variety of purposes. But some can also be business loans, medical loans, and for other more specific purposes.
As an investor/lender, you get to keep more of the interest rate return on those loans. You can invest easily through online P2P platforms.
One popular example is Prosper. They offer primarily personal loans in amounts ranging between $2,000 and $40,000. You can invest in small slivers of these loans, referred to as “notes.” Notes can be purchased for as little as $25.
That small denomination will make it possible to diversify your investment across many different loans. You can even choose the loans you will invest in based on borrower credit scores, income, loan terms, and purposes.
Prosper, which has managed $20 billion in P2P loans since 2005, claims a historical average return of 5.7%. That’s a high rate of return on what is essentially a fixed-income investment. But that’s because there exists the possibility of loss due to borrower default.
However, you can minimize the likelihood of default by carefully choosing borrower loan quality. That means focusing on borrowers with higher credit scores, incomes, and more conservative loan purposes (like debt consolidation).
8. Real Estate Investment Trusts (REITs)
REITs are an excellent way to participate in real estate investment, and the return it provides, without large amounts of capital or the need to manage properties. They’re publicly traded, closed-end investment funds that can be bought and sold on major stock exchanges. They invest primarily in commercial real estate, like office buildings, retail space, and large apartment complexes.
If you’re planning to invest in a REIT, you should be aware that there are three different types.
“Equity REITs purchase commercial, industrial, or residential real estate properties,” reports Robert R. Johnson, PhD, CFA, CAIA, Professor of Finance, Heider College of Business, Creighton University and co-author of several books, including The Tools and Techniques Of Investment Planning, Strategic Value Investing and Investment Banking for Dummies. “Income is derived primarily from the rental on the properties, as well as from the sale of properties that have increased in value. Mortgage REITs invest in property mortgages. The income is primarily from the interest they earn on the mortgage loans. Hybrid REITs invest both directly in property and in mortgages on properties.”
Johnson also cautions:
“Investors should understand that equity REITs are more like stocks and mortgage REITs are more like bonds. Hybrid REITs are like a mix of stocks and bonds.”
Mortgage REITs, in particular, are an excellent way to earn steady dividend income without being closely tied to the stock market.
Examples of specific REITs are listed in the table below (source: Kiplinger):
REIT
Equity or Mortgage
Property Type
Dividend Yield
12 Month Return
Rexford Industrial Realty
REXR
Industrial warehouse space
2.02%
2.21%
Sun Communities
SUI
Manufactured housing, RVs, resorts, marinas
2.19%
-14.71%
American Tower
AMT
Multi-tenant cell towers
2.13%
-9.00%
Prologis
PLD
Industrial real estate
2.49%
-0.77%
Camden Property Trust
CPT
Apartment complexes
2.77%
-7.74%
Alexandria Real Estate Equities
ARE
Research Properties
3.14%
-23.72%
Digital Realty Trust
DLR
Data centers
3.83%
-17.72%
9. Real Estate Crowdfunding
If you prefer direct investment in a property of your choice, rather than a portfolio, you can invest in real estate crowdfunding. You invest your money, but management of the property will be handled by professionals. With real estate crowdfunding, you can pick out individual properties, or invest in nonpublic REITs that invest in very specific portfolios.
One of the best examples of real estate crowdfunding is Fundrise. That’s because you can invest with as little as $500 or create a customized portfolio with no more than $1,000. Not only does Fundrise charge low fees, but they also have multiple investment options. You can start small in managed investments, and eventually trade up to investing in individual deals.
One thing to be aware of with real estate crowdfunding is that many require accredited investor status. That means being high income, high net worth, or both. If you are an accredited investor, you’ll have many more choices in the real estate crowdfunding space.
If you are not an accredited investor, that doesn’t mean you’ll be prevented from investing in this asset class. Part of the reason why Fundrise is so popular is that they don’t require accredited investor status. There are other real estate crowdfunding platforms that do the same.
Just be careful if you want to invest in real estate through real estate crowdfunding platforms. You will be expected to tie your money up for several years, and early redemption is often not possible. And like most investments, there is the possibility of losing some or all your investment principal.
Low minimum investment – $10
Diversified real estate portfolio
Portfolio Transparency
10. Physical Real Estate
We’ve talked about investing in real estate through REITs and real estate crowdfunding. But you can also invest directly in physical property, including residential property or even commercial.
Owning real estate outright means you have complete control over the investment. And since real estate is a large-dollar investment, the potential returns are also large.
For starters, average annual returns on real estate are impressive. They’re even comparable to stocks. Residential real estate has generated average returns of 10.6%, while commercial property has returned an average of 9.5%.
Next, real estate has the potential to generate income from two directions, from rental income and capital gains. But because of high property values in many markets around the country, it will be difficult to purchase real estate that will produce a positive cash flow, at least in the first few years.
Generally speaking, capital gains are where the richest returns come from. Property purchased today could double or even triple in 20 years, creating a huge windfall. And this will be a long-term capital gain, to get the benefit of a lower tax bite.
Finally, there’s the leverage factor. You can typically purchase an investment property with a 20% down payment. That means you can purchase a $500,000 property with $100,000 out-of-pocket.
By calculating your capital gains on your upfront investment, the returns are truly staggering. If the $500,000 property doubles to $1 million in 20 years, the $500,000 profit generated will produce a 500% gain on your $100,000 investment.
On the negative side, real estate is certainly a very long-term investment. It also comes with high transaction fees, often as high as 10% of the sale price. And not only will it require a large down payment up front, but also substantial investment of time managing the property.
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11. High Dividend Stocks
“The best high-yield investment is dividend stocks,” declares Harry Turner, Founder at The Sovereign Investor. “While there is no guaranteed return with stocks, over the long term stocks have outperformed other investments such as bonds and real estate. Among stocks, dividend-paying stocks have outperformed non-dividend paying stocks by more than 2 percentage points per year on average over the last century. In addition, dividend stocks tend to be less volatile than non-dividend paying stocks, meaning they are less likely to lose value in downturns.”
You can certainly invest in individual stocks that pay high dividends. But a less risky way to do it, and one that will avoid individual stock selection, is to invest through a fund.
One of the most popular is the ProShares S&P 500 Dividend Aristocrat ETF (NOBL). It has provided a return of 1.67% in the 12 months ending May 31, and an average of 12.33% per year since the fund began in October 2013. The fund currently has a 1.92% dividend yield.
The so-called Dividend Aristocrats are popular because they represent 60+ S&P 500 companies, with a history of increasing their dividends for at least the past 25 years.
“Dividend Stocks are an excellent way to earn some quality yield on your investments while simultaneously keeping inflation at bay,” advises Lyle Solomon, Principal Attorney at Oak View Law Group, one of the largest law firms in America. “Dividends are usually paid out by well-established and successful companies that no longer need to reinvest all of the profits back into the business.”
It gets better. “These companies and their stocks are safer to invest in owing to their stature, large customer base, and hold over the markets,” adds Solomon. “The best part about dividend stocks is that many of these companies increase dividends year on year.”
The table below shows some popular dividend-paying stocks. Each is a so-called “Dividend Aristocrat”, which means it’s part of the S&P 500 and has increased its dividend in each of at least the past 25 years.
Company
Symbol
Dividend
Dividend Yield
AbbVie
ABBV
$5.64
3.80%
Armcor PLC
AMCR
$0.48
3.81%
Chevron
CVX
$5.68
3.94%
ExxonMobil
XOM
$3.52
4.04%
IBM
IBM
$6.60
5.15%
Realty Income Corp
O
$2.97
4.16%
Walgreen Boots Alliance
WBA
$1.92
4.97%
12. Preferred Stocks
Preferred stocks are a very specific type of dividend stock. Just like common stock, preferred stock represents an interest in a publicly traded company. They’re often thought of as something of a hybrid between stocks and bonds because they contain elements of both.
Though common stocks can pay dividends, they don’t always. Preferred stocks on the other hand, always pay dividends. Those dividends can be either a fixed amount or based on a variable dividend formula. For example, a company can base the dividend payout on a recognized index, like the LIBOR (London Inter-Bank Offered Rate). The percentage of dividend payout will then change as the index rate does.
Preferred stocks have two major advantages over common stock. First, as “preferred” securities, they have a priority on dividend payments. A company is required to pay their preferred shareholders dividends ahead of common stockholders. Second, preferred stocks have higher dividend yields than common stocks in the same company.
You can purchase preferred stock through online brokers, some of which are listed under “Growth Stocks” below.
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Preferred Stock Caveats
The disadvantage of preferred stocks is that they don’t entitle the holder to vote in corporate elections. But some preferred stocks offer a conversion option. You can exchange your preferred shares for a specific number of common stock shares in the company. Since the conversion will likely be exercised when the price of the common shares takes a big jump, there’s the potential for large capital gains—in addition to the higher dividend.
Be aware that preferred stocks can also be callable. That means the company can authorize the repurchase of the stock at its discretion. Most will likely do that at a time when interest rates are falling, and they no longer want to pay a higher dividend on the preferred stock.
Preferred stock may also have a maturity date, which is typically 30–40 years after its original issuance. The company will typically redeem the shares at the original issue price, eliminating the possibility of capital gains.
Not all companies issue preferred stock. If you choose this investment, be sure it’s with a company that’s well-established and has strong financials. You should also pay close attention to the details of the issuance, including and especially any callability provisions, dividend formulas, and maturity dates.
13. Growth Stocks
This sector is likely the highest risk investment on this list. But it also may be the one with the highest yield, at least over the long term. That’s why we’re including it on this list.
Based on the S&P 500 index, stocks have returned an average of 10% per year for the past 50 years. But it is important to realize that’s only an average. The market may rise 40% one year, then fall 20% the next. To be successful with this investment, you must be committed for the long haul, up to and including several decades.
And because of the potential wide swings, growth stocks are not recommended for funds that will be needed within the next few years. In general, growth stocks work best for retirement plans. That’s where they’ll have the necessary decades to build and compound.
Since most of the return on growth stocks is from capital gains, you’ll get the benefit of lower long-term capital gains tax rates, at least with securities held in a taxable account. (The better news is capital gains on investments held in retirement accounts are tax-deferred until retirement.)
You can choose to invest in individual stocks, but that’s a fairly high-maintenance undertaking. A better way may be to simply invest in ETFs tied to popular indexes. For example, ETFs based on the S&P 500 are very popular among investors.
You can purchase growth stocks and growth stock ETFs commission free with brokers like M1 Finance, Zacks Trade, Wealthsimple.
14. Annuities
Annuities are something like creating your own private pension. It’s an investment contract you take with an insurance company, in which you invest a certain amount of money in exchange for a specific income stream. They can be an excellent source of high yields because the return is locked in by the contract.
Annuities come in many different varieties. Two major classifications are immediate and deferred annuities. As the name implies, immediate annuities begin paying an income stream shortly after the contract begins.
Deferred annuities work something like retirement plans. You may deposit a fixed amount of money with the insurance company upfront or make regular installments. In either case, income payments will begin at a specified point in the future.
With deferred annuities, the income earned within the plan is tax-deferred and paid upon withdrawal. But unlike retirement accounts, annuity contributions are not tax-deductible. Investment returns can either be fixed-rate or variable-rate, depending on the specific annuity setup.
While annuities are an excellent idea and concept, the wide variety of plans as well as the many insurance companies and agents offering them, make them a potential minefield. For example, many annuities are riddled with high fees and are subject to limited withdrawal options.
Because they contain so many moving parts, any annuity contracts you plan to enter into should be carefully reviewed. Pay close attention to all the details, including the small ones. It is, after all, a contract, and therefore legally binding. For that reason, you may want to have a potential annuity reviewed by an attorney before finalizing the deal.
15. Alternative Investments
Alternative investments cover a lot of territory. Examples include precious metals, commodities, private equity, art and collectibles, and digital assets. These fall more in the category of high risk/potential high reward, and you should proceed very carefully and with only the smallest slice of your portfolio.
To simplify the process of selecting alternative assets, you can invest through platforms such as Yieldstreet. With a single cash investment, you can invest in multiple alternatives.
“Investors can purchase real estate directly on Yieldstreet, through fractionalized investments in single deals,” offers Milind Mehere, Founder & Chief Executive Officer at Yieldstreet. “Investors can access private equity and private credit at high minimums by investing in a private market fund (think Blackstone or KKR, for instance). On Yieldstreet, they can have access to third-party funds at a fraction of the previously required minimums. Yieldstreet also offers venture capital (fractionalized) exposure directly. Buying a piece of blue-chip art can be expensive, and prohibitive for most investors, which is why Yieldstreet offers fractionalized assets to diversified art portfolios.”
Yieldstreet also provides access to digital asset investments, with the benefit of allocating to established professional funds, such as Pantera or Osprey Fund. The platform does not currently offer commodities but plans to do so in the future.
Access to wide array of alternative asset classes
Access to ultra-wealthy investments
Can invest for income or growth
Learn More Now
Alternative investments largely require thinking out-of-the-box. Some of the best investment opportunities are also the most unusual.
“The price of meat continues to rise, while agriculture remains a recession-proof investment as consumer demand for food is largely inelastic,” reports Chris Rawley, CEO of Harvest Returns, a platform for investing in private agriculture companies. “Consequently, investors are seeing solid returns from high-yield, grass-fed cattle notes.”
16. Interest Bearing Crypto Accounts
Though the primary appeal of investing in cryptocurrency has been the meteoric rises in price, now that the trend seems to be in reverse, the better play may be in interest-bearing crypto accounts. A select group of crypto exchanges pays high interest on your crypto balance.
One example is Gemini. Not only do they provide an opportunity to buy, sell, and store more than 100 cryptocurrencies—plus non-fungible tokens (NFTs)—but they are currently paying 8.05% APY on your crypto balance through Gemini Earn.
In another variation of being able to earn money on crypto, Crypto.com pays rewards of up to 14.5% on crypto held on the platform. That’s the maximum rate, as rewards vary by crypto. For example, rewards on Bitcoin and Ethereum are paid at 6%, while stablecoins can earn 8.5%.
It’s important to be aware that when investing in cryptocurrency, you will not enjoy the benefit of FDIC insurance. That means you can lose money on your investment. But that’s why crypto exchanges pay such high rates of return, whether it’s in the form of interest or rewards.
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17. Crypto Staking
Another way to play cryptocurrency is a process known as crypto staking. This is where the crypto exchange pays you a certain percentage as compensation or rewards for monitoring a specific cryptocurrency. This is not like crypto mining, which brings crypto into existence. Instead, you’ll participate in writing that particular blockchain and monitoring its security.
“Crypto staking is a concept wherein you can buy and lock a cryptocurrency in a protocol, and you will earn rewards for the amount and time you have locked the cryptocurrency,” reports Oak View Law Group’s Lyle Solomon.
“The big downside to staking crypto is the value of cryptocurrencies, in general, is extremely volatile, and the value of your staked crypto may reduce drastically,” Solomon continues, “However, you can stake stable currencies like USDC, which have their value pegged to the U.S. dollar, and would imply you earn staked rewards without a massive decrease in the value of your investment.”
Much like earning interest and rewards on crypto, staking takes place on crypto exchanges. Two exchanges that feature staking include Coinbase and Kraken. These are two of the largest crypto exchanges in the industry, and they provide a wide range of crypto opportunities, in addition to staking.
Invest in Startup Businesses and Companies
Have you ever heard the term “angel investor”? That’s a private investor, usually, a high net worth individual, who provides capital to small businesses, often startups. That capital is in the form of equity. The angel investor invests money in a small business, becomes a part owner of the company, and is entitled to a share of the company’s earnings.
In most cases, the angel investor acts as a silent partner. That means he or she receives dividend distributions on the equity invested but doesn’t actually get involved in the management of the company.
It’s a potentially lucrative investment opportunity because small businesses have a way of becoming big businesses. As they grow, both your equity and your income from the business also grow. And if the business ever goes public, you could be looking at a life-changing windfall!
Easy Ways to Invest in Startup Businesses
Mainvest is a simple, easy way to invest in small businesses. It’s an online investment platform where you can get access to returns as high as 25%, with an investment of just $100. Mainvest offers vetted businesses (the acceptance rate is just 5% of business that apply) for you to invest in.
It collects revenue, which will be paid to you quarterly. And because the minimum required investment is so small, you can invest in several small businesses at the same time. One of the big advantages with Mainvest is that you are not required to be an accredited investor.
Still another opportunity is through Fundrise Innovation Fund. I’ve already covered how Fundrise is an excellent real estate crowdfunding platform. But through their recently launched Innovaton Fund, you’ll have opportunity to invest in high-growth private technology companies. As a fund, you’ll invest in a portfolio of late-stage tech companies, as well as some public equities.
The purpose of the fund is to provide high growth, and the fund is currently offering shares with a net asset value of $10. These are long-term investments, so you should expect to remain invested for at least five years. But you may receive dividends in the meantime.
Like Mainvest, the Fundrise Innovation Fund does not require you to be an accredited investor.
Low minimum investment – $10
Diversified real estate portfolio
Portfolio Transparency
Final Thoughts on High Yield Investing
Notice that I’ve included a mix of investments based on a combination of risk and return. The greater the risk associated with the investment, the higher the stated or expected return will be.
It’s important when choosing any of these investments that you thoroughly assess the risk involved with each, and not focus primarily on return. These are not 100% safe investments, like short-term CDs, short-term Treasury securities, savings accounts, or bank money market accounts.
Because there is risk associated with each, most are not suitable as short-term investments. They make most sense for long-term investment accounts, particularly retirement accounts.
For example, growth stocks—and most stocks, for that matter—should generally be in a retirement account. While there will be years when you will suffer losses in your position, you’ll have enough years to offset those losses between now and retirement.
Also, if you don’t understand any of the above investments, it will be best to avoid making them. And for more complicated investments, like annuities, you should consult with a professional to evaluate the suitability and all the provisions it contains.
FAQ’s on High Yield Investment Options
What investment has the highest yield?
The investment with the highest yield will vary depending on a number of factors, including current market conditions and the amount of risk an investor is willing to take on. Generally speaking, investments with the potential for high yields also come with a higher level of risk, so it’s important for investors to carefully consider their options and choose investments that align with their financial goals and risk tolerance.
Some examples of high-yield investments include:
1. Stocks: Some stocks may offer high dividend yields, which is the annual dividend payment a company makes to its shareholders, expressed as a percentage of the stock’s current market price.
2. Real estate: Investing in real estate, either directly by purchasing property or indirectly through a real estate investment trust (REIT), can potentially generate high returns in the form of rental income and appreciation of the property value.
3. High-yield bonds: High-yield bonds, also known as junk bonds, are bonds that are issued by companies with lower credit ratings and thus offer higher yields to compensate for the added risk.
4. Private lending: Investing in private loans, such as through peer-to-peer lending platforms, can potentially offer high yields, but it also carries a higher level of risk.
5. Commodities: Investing in commodities, such as precious metals or oil, can potentially generate high returns if the prices of those commodities rise. However, the prices of commodities can also be volatile and subject to market fluctuations.
It’s important to note that these are just examples and not recommendations. As with any investment, it’s crucial to carefully research and consider all the potential risks and rewards before making a decision.
Where can I invest my money to get high returns?
There are a number of places you can invest your money to get high returns. One option is to invest in stocks, which typically offer higher returns than other investment options. Another option is to invest in bonds, which are considered a relatively safe investment option.
You could also invest in real estate, which has the potential to provide high returns if done correctly. Finally, you could also invest in commodities, such as gold or silver, which can be a risky investment but can also offer high returns.
What investments can I make a 10% return?
It’s difficult to predict exactly what investments will generate a 10% return, as investment returns can vary depending on a number of factors, including market conditions and the performance of the specific investment. Some investments, such as stocks and real estate, have the potential to generate returns in excess of 10%, but they also come with a higher level of risk. It’s important to remember that past performance is not necessarily indicative of future results, and that all investments carry some degree of risk