There’s a reason the rich get richer…
They have access to some of the most lucrative investments in the world…
Classic cars. High-end real estate. Small business loans. Fine art. Private companies.
Yet people who aren’t rich have been barred from these “trophy” assets.
Imagine if you could buy high-value assets just like the ultra-rich… Well, now you can.
Regular readers know I’m on a mission to level the playing field between the rich and the not-yet-rich. And I’ve found the perfect way to do it…
It’s the kind of opportunity you won’t hear about from a broker or investment adviser.
Why?
Simply because most of them don’t know about these unique investments. And even if they did, they wouldn’t want you to know… because they can’t get paid for recommending them to you.
It cuts out the middleman and lets you jump in with an amount as small as the cash in your wallet.
It’s called “fractional ownership,” and it’s a game-changer.
The “Mini” IPO
The Jumpstart Our Business Startups (JOBS) Act paved the way for most of these opportunities. This provision allows small businesses to raise up to $50 million online from the public.
Before the Securities and Exchange Commission (SEC) pushed the final pieces into action in 2015, small businesses could only raise capital from wealthy, “accredited” investors and institutions.
(Accredited investors earn more than $200,000 per year or have a net worth of at least $1 million.)
So, if businesses wanted to raise funds from the public, they went through a lengthy and expensive IPO (initial public offering) process.
But now, small businesses can raise funds from Main Street investors via fractional investments, or “mini-IPOs.”
And these mini-IPOs are kind of like buying stocks…
Let’s say you wanted to buy stock in Amazon… a single share would set you back more than $3,000.
With fractional investing, high-value assets are divvied up based on the dollar amount you’re willing to invest.
So fractional shares (and the perks of owning them) can come with less risk and expense.
Fractional shares in mini-IPOs also offer better returns. Over the last 20 years, the U.S. Venture Capital – Early Stage Index has returned an average of more than 86% per year.
Yet most of the well-known stock indexes – like the S&P 500, Nasdaq, and Russell 2000 – have returned an average of around 10% per year.
That’s not a typo. Early stage, private companies have returned over 8x what public companies have during the past two decades.
Plus, they’re less volatile since they trade outside the stock market. And the investment minimums are low because they’re available to everyday Americans.
Beyond the cheap entry costs, low volatility, and diversification benefits, many fractional assets have outperformed their counterparts.
They’re also easier to get into. You can open and fund an account online. All it takes is a smartphone, laptop, or PC.
If you’re looking for new ways to grow and protect your nest egg outside of the ups and downs of the stock market, you will love fractional investments.
Diversification Against Market Volatility
With all the volatility we’re seeing in the public markets, now’s the time to gain some exposure to private companies.
Remember, these deals don’t trade on a public exchange. So even when wild market volatility hits, the share prices of these private companies stay the same.
Now, you can’t buy private startups from your brokerage account. And your investment adviser will probably never tell you about them.
So if you want to explore private equity investing, consider crowdfunding platforms like SeedInvest and MicroVentures.
They list dozens of startup companies raising money from the general public. In some cases, you can get started with fractions as little as $100.
But remember, “less risk” does not mean “no risk.” For example, private shares can be illiquid – meaning you might not find someone to buy them. And like public companies, private companies can fail – costing you your entire investment.
So do your homework on each deal. And keep your position sizes small… With the potential upside of 10x, 50x, 100x, or more, you only need a small stake to make a lot of money with private equity.
Let the Game Come to You!
Teeka Tiwari
Editor, Palm Beach Daily
P.S. Mini-IPOs aren’t the only investments that can turn tiny grubstakes into life-changing gains …
Right now, one of the biggest opportunities I see for Main Street investors is blockchain projects … And we could see significant gains in the sector as soon as this month.
To help you prepare, I’ve put together a presentation explaining how a major change in our financial system is set to trigger a massive shift of capital to these projects.