5 Unique Investments to Pay Attention to RIGHT NOW in 2022
With the exception of 2022, We have been in an unprecedented economic boom since the end of The Great Recession. More Millionaires and Billionaires have been created in the last decade than at any other time in history. In fact… 1 million new millionaires were created in the U.S. just in the last year alone!
The Pandemic further amplified wealth with easy money policies, low interest rates and the fed injecting almost $4.5 Trillion dollars into the economy in a short period of time.
This created an insatiable appetite for risky investments and luxury items. Crypto catapulted, NFTs exploded, property values went up at record pace and luxuries such as watches and boats went up exponentially in price. It was so crazy that a friend had called me one day and told me about this crypto token launching called Saitama… I put in $1,500 just to see what would happen as I had disposable income and in 35 days it went to $112,000. Like with every cycle…. People get caught up in the craze and the bubble and never think it’s going to crash… Until it does…
And then it did.
Supply chain issues, abuse of Gov’t money programs, The War in Ukraine, and several other factors bursted the bubble. 2022 has been a brutal year thus far as I write this in October.
The Stock market has erased $9 Trillion this year.
Inflation has eroded purchasing power.
The legendary unshakable FAANG (Facebook, Apple, Amazon, Netflix, Google) stocks have crumbled with some losing almost 70% of their value.
Crypto has crashed.
And so much more….
But that’s not why I am writing this blog… This blog is to answer a big question I get from so many people… What should I invest in now?
I think the first question I need to answer is Why listen to me? Let me give you a little background.
I have been an entrepreneur for almost 20 years. I also host The Mentor Nation Podcast where I interview unbelievably successful people every week.
My wife and I have created millions in wealth from our businesses and a great majority of our net worth has been from real estate investing. We did get lucky with some of the timing, and I will be the first to admit that. However… In my opinion luck is only preparation mixed with opportunity. We have seen numerous trends and took the right actions at the right time and have gotten a few things right. Most of our luck honestly has been from listening to smart people. We watch trends carefully, and we invest heavily in logical assets that tend to appreciate and withstand market turns. We are aggressive, but we are very cautious.
Right now there is a lot of uncertainty. People that do have money are not sure what to invest in because the conditions are very different than they were a few months ago.
Real estate is difficult because interest rates are now much higher and many sellers still want premium prices for their properties.
Stocks are difficult because there are so many Global problems at the moment affecting the markets.
Crypto is cheap, but as we all know, it could easily drop another 50% or more before rebounding.
Disclaimer: The following is my own opinion and the things I am currently investing in. This is not advice but rather my research based on experience and conversations with experts.
So let’s get started with the list.
- Art:
Crazy enough, Art has outpaced the S&P 500 by 131% from 1995–2021. While everything is crashing in 2022, Fine art is still rising. The scarcity of art is a big reason. Many well known artists who have passed away obviously aren’t producing any more work and so the work that they did create continues to go up in value. Now don’t worry… If you are reading this thinking.. I don’t know shit about art. How the hell can I invest or know what to invest in?
I have good news for you… masterworks.io is a platform where you can invest in world famous pieces of art for as little as $500. I invested tens of thousands into a Picasso and a Basquiat a couple years ago and it has appreciated like crazy. Masterworks is a very large well funded company that buys pieces of art… usually in the millions of dollars. They form a corporation around that single piece, and then offer shares to individual investors. You are the entitled owner to your shares and even if the company goes bankrupt, the art will be sold and you get your investment back. They typically hold on to the art for a few years and then sell it giving you your investment plus a nice return. If for some reason you get in a bind and need to sell early, they have an entire secondary market of people that are willing to buy your shares from you.
2. Wine:
Like Art, Scarcity is a huge factor here. Old wines have very limited quantities and thus tend to increase over time. Unlike art, however.. many wines tend to get better with age making them far more valuable. Wine has outperformed the S&P 500 by 1,000% over the past 20 years. Again… I know what you are thinking….. I don’t know anything about wine! Again, there is a solution for that! I had the founder of vinovest.io on my podcast a couple of years ago, and it was one of my favorite interviews. (Here is that interview! https://youtu.be/SGPrC9UeVww ) He became paralyzed in a freak swimming accident and despite this setback, he went on to create a massively successful business. vinovest.io is much like Masterworks. You can invest as little as a $1,000 and you can choose the level of risk you’d like. Aggressive.. there is an option for you. Moderate or conservative? There is an option for that too! My wife and I have a large wine collection and it’s just amazing to see it appreciate.
3. Dividend Stocks:
Like I said above.. there is a lot of uncertainty in the stock market right now, but as I write this on Oct. 7, 2022. I do believe there are a ton of stocks in value territory at the moment. Now that the bubble has burst, fundamentals are back in play and Price/Earnings ratios are very solid for many companies. Stocks like 3M, Amazon, Google, and others are in a very attractive price range. What a lot of people don’t realize however, is that you can invest in stocks for CASHFLOW! Many stable companies take a percentage of their profits and distribute them monthly or quarterly to all shareholders. Yes… this means if you own a dividend stock… you will make money every month or quarter depending on how they pay out. This cashflow is called the dividend yield. You can look at the Dividend yield of any stock. For example.. If the yield is 10%, then you will make a 10% return annually on your shares based on current value. I have been investing in dividend stocks for a very long time and the cashflow from those stocks annually is more than I ever made when I was full time in the Navy. Some strong dividend stocks that I like as of this writing are Banks, (such as Citi, Fifth Third, Truist) Energy companies, ( Antero Midstream, Enterprise Building Products) and large Staples ( Proctor and Gamble, 3M, Johnson and Johnson, Coca Cola).
4. Short Term Rentals:
This one in particular has a very special place in my heart because of how fast it accelerated our own wealth as a family. 2.5 years ago we owned zero real estate and today we own over $4 million worth. Even crazier, other than the home that we live in.. We have never had to pay a mortgage on any of the other 3 properties. These Short term rentals bring in almost $300,000 in income annually. Here are the links to our rentals so you can see for yourself.
I like short term rentals because they generally create much more cash flow than long term rentals, and at first it might seem that it is a lot more work, but honestly when you get the hang of it, it’s pretty easy. We manage ours in less that 3 hours per week. If you want far more detail on this, I actually wrote a separate blog about our Short term rental journey that you can read here(https://johnabbas.medium.com/how-to-buy-and-succeed-with-your-first-short-term-rental-property-19177d2ff51d) … It’s very detailed and will give you the EXACT roadmap we used.
5. Precious Metals:
Metals have stood the test of time and now they are cheap. Silver and Gold have been used for thousands of years and are a very good hedge against inflation. I like metals right now because typically when the markets crash and inflation rises, metals go up. In 2022 however, that has not been the case. The major reason is that inflation this time is rising due to non-monetary reasons. I believe that metals are in value territory right now. Robert Kiyosaki has some incredible books on precious metal investing and he makes a very strong case for Silver in particular. Silver is currently $20 an ounce vs. Gold being $1,700, but many experts believe that sooner or later Silver is going to rise rapidly. With gold, everyone knows it’s valuable so it is hoarded. It is used for coins and jewelry. Silver on the other hand is used in countless industrial applications. Almost every single computer, mobile phone, appliance, and automobile contains silver. There are estimates that say 90% of all silver eventually gets trashed via industrial uses. With silver being in limited supply, the value could possibly rise very quickly as the demand increases and the supply decreases. There are a few ways to buy metals. You can buy the metals directly through different broker sites, or you can invest in mining stocks. A simple google search and you can find brokers such as JM Bullion or Monex. And stocks such as Barrick Gold, First Majestic silver, AngloGold are worth looking at. I personally like to buy silver bars….. Be careful though: Many of the broker sites charge a ridiculous fee and so I have found that I tend to have much more success buying at auctions. I am sure there are dozens of auctions sites but one smaller one I like is Don Ridings auctions. (donridings.hbid.com)
BONUS FOR SEASONED ENTREPRENEURS ONLY!
6. Businesses:
While I write this, I realize that despite all the research available, there is no crystal ball. In times of very extreme uncertainty, I like to devote my time and resources into investments where I have the most control of the outcome. To me, this is owning a business. My wife and I have made a career out of NOT STARTING our own businesses, but rather BUYING existing businesses that we believe we can improve. Currently I own a large Preschool, My wife owns an upscale boutique Medspa, and I am in the middle of MY LARGEST INVESTMENT EVER… The leading Blind, Shutter, and Window Treatment company in Middle TN. All of these were existing businesses. We look for opportunities such as high demand, low supply, and companies that do many things right, but where the current owners weaknesses, are our strengths. Where do I find these businesses? BizBuySell.com and Loopnet.com. I browse these websites often and just look for anything that might meet my criteria. Sometimes it will be months before I find something interesting, but I just keep looking. I don’t recommend this unless you do have a bit of capital and some experience in running a business as this isn’t always for the faint of heart. If you do have the guts however, this can be very rewarding. There are so many businesses where the owner wants to retire or transition and is looking for someone to take the helm and grow the company into the next phase. 10,000 baby boomers retiring every single day is creating massive transfer opportunities.
Conclusion: There is always opportunity if you have the right mindset.
IMPORTANT!!!
The absolute best advice I can ever give you though… is don’t become an investor until you have your foundation set. If you aren’t making decent discretionary income every month outside of everything necessary to pay bills, FIX THAT FIRST! You must get your foundation right. I did not invest a dollar until I had at least $3,000 per month coming in on top of living expenses. The time it takes to be a decent investor is much better spent focusing on that first rather than being all over the place. I could write a whole blog on this, but just trust me….. Nothing is worse than when I meet someone who says they have multiple streams of income, and the reality is they make barely anything from any of them. Investing gets fun when you actually have real money to invest, and in today’s world.. there is big money out there available to anyone who has mastered any type of valuable skill.
Start there first.
