Although stock markets around the world have taken a dip, other forms of investments — known as alternative investments — are still performing well.
Farmland investing, for instance, has been in the news recently due to the recent purchases by Bill Gates. According to FarmTogether, farmland can act as a hedge against inflation. While inflation hit 9.1% in June 2022, the average value of farmland rose around 14% in the first half of this year.
For those who don’t casually have access to billions of dollars like Bill Gates, there are other ways to invest in farmland. Technology platforms such as AcreTrader and FarmTogether allow users to purchase fractional shares of specific farms or invest in a diversified portfolio fund of farmland. These platforms are available to accredited investors with a minimum investment of $10,000 or greater — which means they are not open to everyone who might be interested in this strategy.
For those who don’t casually have access to billions of dollars like Bill Gates, there are other ways to invest in farmland.
Another farmland technology platform is Steward. Steward connects users with farmers who use only regenerative agricultural practices, and is open to anyone with a minimum investment of $100. Steward acts as a lender to farmers, with individual users providing funds that are then loaned out to farmers who need the cash to support their operations. Users agree to terms specifying when they’ll be repaid and with what return. The minimum return users can expect on this platform is 4.5%.
Real Estate, We’re Looking at You
Real estate investing isn’t for everyone. Even among those who have the cash, there’s often little appetite to get into the business of being a landlord. So, for those who’d like to have the benefits of owning real estate without the risks and responsibilities of directly owning property, there are real estate investment trusts, also known as REITs.
A REIT is a company that owns and operates multiple properties, whether residential or commercial, and collects rent from its tenants. As an investor, you can buy shares of a REIT and receive distribution payments. This is a similar concept to a mutual fund, but instead of owning shares in an array of companies, your shares represent ownership in various physical properties.
The typical U.S. monthly rent increased by 12.3% between August 2021 and August 2022.
Relative to owning real estate directly, the upsides of REITs include liquidity — meaning it’s much easier to convert your investment into cash — and diversification, because rather than having a huge investment in a single property, you invest in a company that owns many different properties.
There’s a downside, however: the fees you’ll need to pay, which cover the costs of property management. Depending on the REIT, these fees could erode up to 15% of your rate of return. Overall, REITs have outperformed the S&P 500 since they were first introduced in 1972. In the last ten years, however, the S&P 500 has generally produced better returns than REITs, even though there are sub-sectors within REITs, such as self-storage and industrial, that have outperformed the S&P 500 over the last decade.
Those with the means and appetite to invest in physical real estate might consider that the typical U.S. monthly rent increased by 12.3% between August 2021 and August 2022, according to Zillow. This is tough news for renters; it has also made some would-be property owners all the more interested in acquiring real estate. Those who are thinking of making such an investment might consider scouting out deals in areas where prices are cooling off rapidly due to rising mortgage rates.
An easy way to tell where home prices are falling in the U.S. is by tracking the economic updates released by Zillow and Redfin. Right now, the ten markets cooling the fastest are Seattle, Las Vegas, San Jose, San Diego, Sacramento, Denver, Phoenix, Oakland, North Port, Florida, and Tacoma, Washington. These markets saw their home prices skyrocket during the real estate frenzy in 2021 and early 2022, and are now dropping back to earth as interest rates rise.
G. Brian Davis, real estate investor and founder of SparkRental, suggests that those considering real estate investment also look into real estate syndications. This is when groups of investors — sometimes friends and family — pool their funds to purchase property with the help of a lead investor, who is known as the syndicator. These investments are not open to everyone, however, as they can require a minimum investment of $25,000 or more.
When the weather cools down and you’re left wondering what to throw on for your seasonal errand run, look no further than Cariuma’s SALVAS sneakers. They’re the perfect companion to the classic blue jeans and sweater look – a staple for the sneaker age.
We love the playful details like subtle perforation and contrasting colors, to their sustainable foundation. Each pair is crafted with premium leather, giving them the chefs kiss you’ve been looking for in your footwear. To top it off, this pair even has a 100% slip-resistant sole, perfect for when the grounds are just a little frosty.
For those with a knack for teaching, it’s possible to earn $1,500 in extra income each month. One HR professional earned enough spare change teaching English to students in China to pay off her master’s degree.
Today’s tech tools make it easier than ever to generate new income by way of a side hustle.
English teachers are in high demand, as are teachers of many other languages worldwide. You can sign up on platforms such as italki and Preply to get started as a virtual teacher.
Added bonus: You might make a friend on the other side of the globe.
Sell Your Photos Online
Amateur photographers out there might consider posting their photos for sale online. Sites such as Adobe Stock and Shutterstock give photographers a platform to sell their photos as stock images to customers worldwide — who are always in need of images to accompany their web content.
Depending on the type of car you have and how often you rent it out, you could earn a couple hundred to a thousand dollars or more in extra income each month.
If you want to turn your photography hobby into a more formal service, you can also launch a genuine side hustle as a photographer. With any small business, you will need to put in the effort to market and sell your photography services, but it is doable. Websites such as The WeddingWire are a good resource to drum up some business when you sign up as a vendor.
Rent Out Your Car
Similar to renting out a spare room on Airbnb, you can now rent out your car on platforms such as Turo and Getaround. This is especially helpful if you find that your car sits idle for most of the day or over the weekend. I used this service as a customer while on a trip to Portland, Oregon, and it was a fantastic experience. Depending on the type of car you have and how often you rent it out, you could earn a couple hundred to a thousand dollars or more in extra income each month.
If you missed them the last time around, the sneakers we can’t get enough of are back – and just in time for the holiday season! These all-season low tops are OZY’s favorite look for dressing up or down – ideal for hitting the town or for watching Sunday night football.
Cariuma’s Leather low-top shoes offer a broken-in fit, a perfect mirage of colors, and will snag you tons of compliments as you strut your stuff. Don’t wait around, these comfy kicks fly off the shelves and won’t be around for long! Grab a pair with our exclusive code, OZYNOV, landing you an additional 15% off.
We shared ways to up your savings game in the last installment of Punk Rock Finance. Yet, a challenge during high inflationary periods is finding where to stash the cash you’re saving. The current U.S. inflation rate is around 8 to 9%, while the interest on a savings account at a traditional bank will be around 0.06% or less. This means the cash sitting in those accounts is losing value.
Let’s do the math on this. Say you have $5,000, and you put it into a traditional entry-level savings account, such as those available at Bank of America, Chase or Wells Fargo, which are currently offering 0.01% interest per year. After five years, the value of that account will be a whopping $5,003.
Meanwhile, if the annual inflation rate was 8.5% during those years, your $5,000 would only purchase $3,327 worth of today’s goods at the end of the five years — because those same goods are that much more expensive five years down the road. In terms of your real purchasing power, you will have effectively lost $1,673. (Want to do your own calculations? We like this calculator.)
Inflation is unlikely to remain this high for five years, but even if it drops back to the accepted annual level of 2%, your savings of $5,000 will still lose value. At an inflation rate of 2% and an interest rate of 0.01%, your $5,000 will buy $4,531 worth of today’s goods at the end of five years. That’s a loss of $469!
High-Interest Savings and Money Market Accounts
For funds that you want to be able to withdraw at any time, you might consider switching from a traditional savings to high-yield savings or money market accounts. High-yield savings accounts are offered at Ally Savings, Lending Club and other institutions. The interest rate on such accounts is currently over 2% — which means that the value of the cash you save is still losing money relative to inflation, but will do better than in traditional savings.
Treasury I Bonds continue to offer the highest guaranteed return on your savings. For most of 2022, the interest rate was 9.62% and is now set at 6.89% through the first quarter of 2023.
As an individual, you can invest up to $10,000 per year in an I Bond, and if you have children, you can put an additional $10,000 per year into an account under each child’s name. If you get a tax refund, you can put up to $5,000 of that refund into a paper I Bond as well, and later convert it into an electronic I Bond. This is in addition to the $10,000 limit. I Bonds can be purchased at treasurydirect.gov.
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