Last Thursday, we held a 2-hour session introducing cryptocurrency and the world of web3 to attendees.
One thing that came out of the session is that for many people, cryptocurrency, the blockchain, and even non-fungible tokens (NFTs) at first glance are not investments.
I beg to differ.
A couple of years ago, I coined the phrase 3-Legged Investor(TM), sharing it with our ITB family.
Today, I’d like to return to this term and share how investing in the blockchain: web3 and the cryptocurrency fit into that framework.
What’s a Three-legged investor?
A 3-Legged Investor takes a strategic and holistic approach to their investing. They focus on three types of investing 1) investing in the stock market — the foundation 2) investing in real estate and businesses. 3) investing in cryptocurrency.
1. INVEST IN THE MARKETS
Let’s start with the first leg: Investing in the stock market.
Investing in the stock market serves as the foundation of your investing strategy.
What do I mean by investing in the stock market? It means buying stocks, buying bonds, buying mutual funds.
Investing in the stock market is a great way to get your toes wet in the investing pool. It can be as simple as enrolling in your company’s retirement plan and putting money in a target-date fund or setting up an account with one of the invest your spare change apps.
2. INVEST IN REAL ESTATE & BUSINESSES
The second leg is investing in real estate and businesses.
There are two ways to invest in real estate: direct and indirect investing. Direct real estate investing is buying property (residential or commercial), being the landlord and managing it yourself, or having a property manager (that you’re in constant contact with) manage the properties.
This type of real estate investing is not for everyone. When you engage in direct real estate investing, you are signing up to run a business. So know what you’re getting into.
The other type of real estate investing is indirect real estate investing. This is co-investing with other investors in professionally managed properties by a team. You create a diversified portfolio. This type of investing is often reserved for accredited investors only because the minimum investment is usually $50,000.
What do we mean by investing in businesses? It means direct and indirectly investing in a company. Directly investing in business doesn’t always require money. For example, if you start your business, you invest your time and sometimes money into growing that company. That’s directly investing in a business.
Indirect investing in a company provides capital (funding) to either begin or grow (i.e., angel investing). Angel investing is an opportunity to add another slice to your investment pie.
In the past, angel investing was only permitted if you were an accredited investor (read high net worth individual), but today you can do mini-angel investing.
Mini-angel investing can be done through equity crowdfunding platforms. You don’t need a ton of money; some platforms have minimums as low as $100.
THE NEW LAST LEG: INVESTING IN THE BLOCKCHAIN
When you hear the phrase “the blockchain,” is the first thing that comes to mind “invest?” No? It should be. Digital assets such as cryptocurrency are here to stay.
In a recent report by Crypto.com & Worldpay, 60% of vendors and merchants would like to begin accepting cryptocurrency within the following year. That’s a whole lot of companies.
The more businesses adopt cryptocurrency as a valid form of payment, the more likely the price of crypto will increase. An opportunity every investor loves.
If you are still unsure about the space, come to our next Crypto, Web3 webinar and get all of your questions answered or contact us to create a diversified portfolio worthy of a 3-Legged Investor.