How “Alternative” Can You Get?

How “Alternative” Can You Get?

Blockchain Technology

Have you ever reached into a coat packet to find that a $20 bill you lost a few years ago had turned into a $50 bill? Or, you hadn’t driven your car for a few months and the gas tank went from half full to completely full while just sitting in your driveway? It happens to me all the time . . . in my “alternative” world. When it comes to investments, wouldn’t it be nice just to write a check, and let those dollars grow without doing anything? The world of alternative investments can do just that and may be something you’re missing out on!

The one thing I have learned in my 30 years of investing is that if I want exposure to alternative assets, I leave it to the professionals who make it their business to master the art of these asset domains every day. Here are some examples of investments to help you get “Alternative”!

Secondary Investments

Secondary investment funds such as Akkadian, High Gear and Ion Pacific offer the accredited investor the ability to invest in late stage, pre-IPO companies such as Uber, DocuSign and Boom Supersonic. Essentially, these companies approach founders and early employees with the opportunity to sell some of their shares at a discount to realize a liquidity event. This allows them to enjoy some cash now for all their hard work, while the remainder of their shares await a major liquidation event such as a SPAC buyout or an initial public offering. The multiples on these investments can be tremendous with very controlled and mitigated risk.

Private Equity Investments

Private equity real estate firms such as our company, Recentric, offers accredited investors the opportunity to invest directly into medical office buildings in the Western region of the United States. We offer units of investment directly into the Limited Liability Company that acquires such medical office buildings. This investment vehicle offers exposure to one of the safest sectors of commercial real estate, with a 7–10 year horizon. This provides plenty of time to create equity for our investors that can hedge inflation and generate exceptional returns.

Blockchain Technology

Now, you may have read my newsletter Today’s Peacock is Tomorrow’s Feather Duster from July 2021. While cryptocurrency is still relatively new and no one knows its future as an accepted currency in the global economy, an indisputable fact is that Blockchain technology will transform the world in ways we never imagined with technology such as Web 3.0, MachineFI, GameFI, and DeFI. Since I started Winebid.com back in 1997, I have not had this overwhelming feeling of intrigue, excitement, and fascination with a disruption in our economy and literally the way we all function in a society. Fortunes will be made, and sovereign countries will be forever changed, and may even dissolve as a result. While the alternative investment options in this space are limited, I am committed to sourcing a reliable expert in the space to invest. Stay tuned on this topic in future newsletters.

Alternative investments can be very risky. I encourage everyone to consult with experts, do your own homework, and trust your instinct. If it’s too good to be true, it probably is. Having part of your portfolio exposed to unique investment offerings with competent and trusted sponsors may find you waking up one day, living out your dreams because you made the right choices earlier, than later. And if you ever want to grab a cup of coffee and talk alternative investments, I am always ready for that conversation!

Your Most Powerful Currency: Positivity Currency

Your Most Powerful Currency: Positivity Currency

Darren Nakos Owner of Recentric in Cabo

As we push hard to get through a challenging year, there is one common thread we all share. We are all trying to be more resilient in our lives whether it’s our personal net worth and investments, or our business vitality and meeting growth expectations. We pour over quantitive and qualitative research and analysis to allow us to make the right decisions and cannot just print more dollars to meet our goals, like a country with a fiat currency.  However, you can print your own Positivity Currency. This is your own personal currency that can be printed and stored as an asset. 

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darren & amy
My wife, Amy and I recently in Cabo, where we are building a second home.

Here are three ways to build your Positivity Currency:

Keep Good Records

When you write down your positive thoughts and moments, they register higher value than non-written forms of positivity, according to research by the founding father of Positive Psychology, Dr. Martin Seligman of the University of Pennsylvania.  Record your positive currency transactions and keep a written tally with categories such Family, Friends, Work, etc. 

Create Your Own Bull Market

Financial markets boom when more and more people want in.  Likewise, positivity is socially contagious and can compound.  In the research behind their book Connected: The Surprising Power of Our Social Networks and How They Shape Our Lives, Harvard’s Nicholas Christakis and the University of California, San Diego’s James Fowler explains how happiness depends not just on our own choices and actions, but also on those of people who are two or even three degrees removed from us. Share your Positivity Currency with others. 

Portfolio Perspective

Resilient individuals diversify their risk and their positivity currency.  Try evaluating what provides the highest returns across your entire “life portfolio” and then invest more in those areas.  In a 2015 report entitled “The Happiness Study” from Blackhawk Engagement Solutions, respondents ranked their jobs eighth out of a list of 12 contributors to overall happiness. Ranking in the top spots were their family, friends, health, hobbies, and community. By creating more positivity currency in those areas, you will increase the ability to bring your best self to work.

In order to reinforce your Positivity Currency balance, it is important to consistency review your written notes. So, in the spirit of Thanksgiving at a time when gratitude is at the top of the menu, I implore you to start printing your own Positivity Currency. This is a great time to spend quiet time building your portfolio of your own currency that will pay dividends for the rest of your life. 

Equity Happens!

Equity Happens!

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Image Credit: bisnow.com

I have long been a fan of the wealth accumulating effects of investing in real estate. If you have the patience and the wherewithal to invest dollars in commercial real estate, only to let it grow and compound, you will likely wake up one day with the pleasant surprise of having amassed large amounts of equity. When you compare real estate as an asset class in the capital markets world (stocks and bonds), commercial real estate has certain advantages over its competition for investment dollars. Here are a few simple reasons why we love investing in real estate and the incredible wealth effects they can have:

Inflation + Real Estate Debt = Your Best Friend

If you have turned on the news lately, or purchased food, gas, or building products, you are aware that inflation has become a reality for Americans, and is looking more to be secular than transitory (meaning it’s here to stay). The recent CPI numbers came out this week and on average, through August 2021, we have hit 5.3% inflation for the past 12 months. How is inflation good for your commercial real estate debt? Let me explain: Most interest payments are fixed in nominal or unadjusted terms. Inflation makes this kind of debt less important in real terms. Raising the inflation target to 6% would substantially increase the rate at which the debt effectively vanishes over time. History has shown US central banks have used inflation to reduce its national debt. Therefore, holding on to cash is a losing proposition in an inflationary environment.

Tax Advantages Are Unmatched

We all know the largest expense we have is taxes. No other investment vehicle offers as many tax benefits as real estate, period. First, you can deduct expenses before you pay yourself a dividend. Secondly, you can depreciate your building in many ways, which is in effect an interest free loan from the federal government. Thirdly, you can utilize the 1031 exchange to trade up to a bigger and better property, while deferring those taxes down the road.

No Such Thing As Impulse Decisions

Your average human being cannot control themselves when it comes to the stock market. According to this CNBC report, “Investing based on emotion has consequences: Over the last three decades, U.S. stock investors have lagged the S&P 500 by more than 7 percentage points annually. Instead of holding on to earn market returns, investors shortchange themselves by trading in and out — at exactly the wrong times.”

Commercial real estate has its challenges; however, if you are invested with an expert in the market, and specific real estate product type, chances are you are going to win more than you lose. The long game of real estate provides security for you and your family. Schedule an initial call with us today to ask any questions learn more about what we do.