In recent news, PayPal Holdings, Inc. (PYPL) has experienced a significant decline in its stock price due to a weaker-than-expected outlook. The company’s ongoing transformation to drive future growth has impacted its guidance for the first quarter and full year. Despite surpassing analysts’ expectations with its fourth-quarter earnings, PayPal’s shares have taken a hit. This article will explore the key takeaways from the reference articles and delve into the implications of the company’s transformation on its stock performance. We will also discuss important price levels to watch for potential support or further declines.

Weaker-Than-Expected Guidance

PayPal’s shares faced an 8% drop in after-hours trading after the company issued a weaker-than-expected outlook. The San Jose-based digital payments giant projected mid-single-digit earnings growth for the first quarter, falling short of analysts’ expectations of 8.7%. For the full year, PayPal forecasts earnings of $5.10 per share, which is below the consensus figure of $5.48.

PayPal CEO Alex Chriss acknowledged the company’s ongoing transformation, stating that it is committed to making necessary changes for profitable growth in the coming years. However, Chriss also mentioned that some initiatives may take time to scale and have a significant impact. This cautious tone during the post-earnings call may have contributed to investor concern.

Fourth Quarter Earnings Surpass Expectations

Despite the disappointing guidance, PayPal’s fourth-quarter earnings exceeded Wall Street’s expectations. The strong holiday season played a crucial role in the company’s performance during this period. PayPal reported adjusted earnings of $1.48 per share, surpassing the estimated $1.36 per share. Additionally, its revenue of $8.03 billion marked a 9% increase from the previous year, slightly exceeding the consensus mark of $7.87 billion.

Notably, PayPal’s adjusted operating margin for the quarter stood at 23.3%, representing a 39 basis-point increase from the same period the previous year. This improvement in operating margin reflects the company’s ability to optimize its operations and generate higher profits.

Company Transformation and Workforce Changes

PayPal’s recent announcement of a 9% reduction in its global workforce signifies its commitment to a turnaround plan. This move aligns with other major tech firms that have adjusted their staffing levels following a pandemic-induced hiring spree. The company aims to streamline its operations and achieve greater efficiency as part of its transformation strategy.

Moreover, PayPal introduced six new artificial intelligence (AI) tools designed to enhance the checkout process and provide retailers with innovative promotional options. These AI tools aim to optimize the customer experience and help businesses target consumers more effectively.

Stock Performance and Potential Support Levels

Despite breaking above a 12-month descending channel and the 200-day moving average, PayPal’s shares have failed to gain further upside traction. The recent earnings-driven sell-off has created a potential bull trap pattern, raising concerns among investors.

One key level to watch is the lower trendline of the descending channel, which currently sits around $46.50. If a deeper earnings retracement occurs in the coming weeks, this level could potentially provide support for the stock. Monitoring the price action around this level will be crucial in assessing the stock’s future direction.

Conclusion

PayPal’s weaker-than-expected guidance, despite surpassing earnings expectations, has had a significant impact on its stock performance. The ongoing company transformation and workforce changes reflect its commitment to driving future growth. However, investors remain cautious about the time it will take for these initiatives to scale and generate significant results.

As PayPal navigates its transformation, the stock’s performance will likely be influenced by market sentiment and investor reactions to the company’s strategic decisions. Monitoring key price levels, such as the lower trendline of the descending channel, will provide valuable insights into potential support or further declines.

Overall, PayPal’s journey towards transformation presents both challenges and opportunities. Investors will closely follow its progress and assess the impact of its strategic initiatives on the company’s long-term growth prospects.

Disclaimer: The information provided in this article is for informational purposes only and should not be considered as financial advice. It is always recommended to conduct thorough research and consult with a professional financial advisor before making any investment decisions.

What are alternative investments?

As an investor, I have always believed in the power of diversification to mitigate risk and maximize returns. While traditional investments like stocks and bonds have their place in a well-rounded portfolio, it is also important to consider alternative investments. But what exactly are alternative investments? Alternative investments refer to any asset class that falls outside the realm of traditional investments. This can include real estate, commodities, hedge funds, private equity, and more. The key characteristic of these investments is their low correlation to the stock market, providing investors with an opportunity to further diversify their holdings.

The importance of diversification in investment portfolios

Diversification is often touted as the golden rule of investing, and for good reason. By spreading your investments across different asset classes, you can reduce the risk associated with having all your eggs in one basket. The primary goal of diversification is to build a portfolio that is not overly dependent on the performance of a single investment or asset class. This can help protect your capital during market downturns and enhance returns during upswings. Alternative investments play a crucial role in diversification by offering unique risk and return characteristics that are different from traditional investments.

Advantages and disadvantages of alternative investments

Like any investment, alternative investments come with their own set of advantages and disadvantages. One of the biggest advantages is the potential for higher returns. Alternative investments often have a low correlation to traditional investments, meaning they can perform well even when the stock market is struggling. Additionally, investing in alternative assets can provide exposure to different industries and markets, further diversifying your portfolio. On the flip side, alternative investments can be illiquid and have higher fees compared to traditional investments. Furthermore, they can be more complex and require a higher level of expertise to evaluate and manage effectively.

Different types of alternative investments

There is a wide range of alternative investments available to investors, each with its own unique characteristics and risk profiles. Real estate is one popular alternative investment option, offering potential for both rental income and capital appreciation. Commodities, such as gold and oil, provide a hedge against inflation and can be a diversifier in times of economic uncertainty. Hedge funds and private equity offer opportunities for higher returns through active management and investments in non-publicly traded companies. Other alternative investments include venture capital, art and collectibles, cryptocurrencies, and peer-to-peer lending platforms.

How to research and identify suitable alternative investments

Before diving into the world of alternative investments, it is crucial to conduct thorough research and due diligence. Start by educating yourself about the different types of alternative investments and their risk-return profiles. Understand the market trends and dynamics that affect each specific asset class. Additionally, seek advice from investment professionals or financial advisors who specialize in alternative investments. They can provide invaluable insights and help you identify suitable investment opportunities based on your risk tolerance, investment goals, and time horizon.

When researching alternative investments, pay attention to the track record and reputation of the investment manager or sponsor. Look for transparency in reporting and a clear investment strategy. Assess the level of risk associated with the investment and evaluate the potential returns. It is also important to consider the liquidity of the investment. Some alternative investments, like private equity or direct real estate investments, may have a longer lock-up period, meaning your capital will be tied up for a certain period of time.

Factors to consider when buying alternative investments

When buying alternative investments, there are several factors to consider to ensure you are making informed decisions. First and foremost, assess your risk tolerance and investment objectives. Alternative investments can range from conservative options like real estate investment trusts (REITs) to more aggressive investments like venture capital. Understand the level of risk you are comfortable with and align your investment choices accordingly.

Consider the potential for diversification that the alternative investment offers. Does it provide exposure to a different asset class or industry? Will it help reduce the correlation of your portfolio to traditional investments? Diversification is key in mitigating risk, so make sure the alternative investment you choose aligns with your overall portfolio strategy.

Another important factor to consider is the investment timeline. Some alternative investments require a longer holding period before you can realize returns. If you have a shorter time horizon, you may want to focus on investments that offer more liquidity and shorter lock-up periods.

Steps to buy alternative investments

Now that you have done your research and identified suitable alternative investments, it’s time to take action and make your purchase. The first step is to open an investment account with a reputable brokerage or investment firm that offers access to alternative investments. Ensure that the platform provides the necessary tools and resources to evaluate and monitor your investments effectively.

Next, determine the amount of capital you are willing to invest in alternatives. It is important to allocate a portion of your portfolio to alternative investments, but be mindful of your overall asset allocation and risk tolerance. Consider consulting with a financial advisor to help you determine the appropriate allocation.

Once you have selected the specific alternative investments you wish to buy, follow the instructions provided by your investment platform to place your order. Be sure to review all the relevant documents and disclosures before making your investment. Keep track of your investments and regularly monitor their performance to ensure they align with your investment goals.

Risks and challenges of buying alternative investments

While alternative investments can offer attractive returns and diversification benefits, they also come with their fair share of risks and challenges. One of the main risks is the lack of liquidity. Many alternative investments have longer lock-up periods, meaning your capital may be tied up for several years. This can limit your ability to access your funds when needed.

Additionally, alternative investments can be more complex and require a higher level of expertise to evaluate and manage effectively. Unlike publicly traded stocks and bonds, alternative investments often involve less transparency and require a deeper understanding of the underlying assets and market dynamics.

Another challenge is the potential for higher fees associated with alternative investments. Private equity funds, hedge funds, and other alternative investment vehicles typically charge management fees and performance fees that can eat into your returns. It is important to carefully evaluate these fees and consider their impact on your overall investment performance.

Strategies for managing and monitoring alternative investments

Once you have purchased alternative investments, it is crucial to have a strategy in place for managing and monitoring them. Regularly review the performance of your investments and assess whether they are meeting your expectations. Consider setting specific benchmarks or performance targets to track the progress of your investments.

Stay informed about the market trends and developments that may impact your alternative investments. This can include factors like changes in regulations, economic conditions, or industry-specific events. Being proactive and staying ahead of the curve can help you make informed decisions and adjust your investment strategy as needed.

Lastly, consider diversifying within the alternative investment space itself. Just as you diversify across different asset classes, you can also diversify within alternative investments. This can include investing in different types of real estate properties, allocating capital to different hedge funds, or exploring opportunities in various private equity funds. By diversifying within alternative investments, you can further reduce your risk exposure and increase your chances of finding successful investments.

Resources for further education and information on buying alternative investments

If you are interested in delving deeper into the world of alternative investments, there are several resources available to expand your knowledge. Books like “Alternative Investments: Instruments, Performance, Benchmarks, and Strategies” by H. Kent Baker and Greg Filbeck provide a comprehensive overview of the different types of alternative investments and their characteristics.

Online platforms and websites like Investopedia, Morningstar, and the CFA Institute offer a wealth of information and educational resources on alternative investments. These platforms provide articles, tutorials, and expert insights to help you navigate the complex world of alternative investments.

Additionally, consider attending conferences, seminars, or webinars dedicated to alternative investments. These events often feature industry experts who can provide valuable insights and networking opportunities.

In conclusion, buying alternative investments can be a valuable addition to your investment portfolio. By diversifying beyond traditional investments, you can potentially enhance returns and reduce risk. However, it is important to thoroughly research and evaluate alternative investments before making any purchase. Consider your risk tolerance, investment objectives, and time horizon when selecting suitable alternatives. Additionally, have a strategy in place for managing and monitoring your investments to ensure they align with your overall financial goals. With proper due diligence and careful consideration, alternative investments can play a significant role in your investment journey.

How to Buy Alternative Investments

Investing in the stock market with the expectation of making significant profits in a very short time frame like 7 days is highly risky and not recommended for most investors. The stock market is unpredictable in the short-term, and while it’s possible to make money quickly, it’s equally (if not more) possible to lose a substantial amount.

However, if you are determined to participate in short-term trading, here are some strategies that traders use, but remember, these come with high risk:

1. Day Trading: This involves buying and selling stocks within a single market day. Day traders aim to profit from short-term price fluctuations.
2. Swing Trading: This strategy involves buying and holding a stock for a few days or weeks. The goal is to capture short-term trends.
3. Technical Analysis: This involves analyzing statistical trends gathered from trading activity, such as price movement and volume. Traders use this information to predict future price movements.
4. Momentum Trading: This strategy involves buying stocks that are trending in one direction on high volume.

Remember, these strategies require a deep understanding of the stock market, substantial time for research and monitoring, and a high tolerance for risk. They can result in significant financial losses.

Long-term, diversified investing is generally a more reliable and successful strategy for individual investors. If you’re new to investing, consider seeking advice from a financial advisor before making any decisions. It’s important to understand your risk tolerance and investment goals.

What is the best platform to invest in the stock market?

There are several platforms to invest in the stock market, and the best one for you depends on your preferences, investment goals, and the services you require. Here are some popular platforms to consider:

1. TD Ameritrade: Known for its extensive research tools, user-friendly platform, and excellent customer service, TD Ameritrade is a solid choice for both beginners and experienced traders.
2. ETRADE: ETRADE offers a comprehensive trading platform with a wide range of investment options, including stocks, ETFs, mutual funds, and options. They also provide educational resources and trading tools.
3. Fidelity: Fidelity is known for its research capabilities, low fees, and diverse investment options. It’s a great platform for long-term investors looking to build a diversified portfolio.
4. Charles Schwab: This platform offers a wide range of investment options, including stocks, ETFs, mutual funds, and options. They also provide excellent research tools and customer support.
5. Robinhood: Robinhood is a mobile-first trading platform that offers commission-free trading in stocks, ETFs, and options. It’s popular among younger investors and those new to investing due to its simple, user-friendly interface.
6. Interactive Brokers: This platform is best suited for advanced traders and global investors. They offer a wide range of investment options, including stocks, ETFs, options, futures, and forex. Interactive Brokers also provides powerful trading tools and low fees.

When choosing a platform, consider factors like fees, investment options, research tools, customer support, and ease of use. It’s a good idea to compare multiple platforms and read reviews to find the one that best suits your needs.

Investing in the stock market can be a great way to grow your wealth over time. Here’s a simple guide on how to get started:

1. Educate Yourself: Start by learning the basics about the stock market and individual securities composing the market. There are plenty of free resources online, including articles, courses, and seminars.
2. Set Clear Goals: Before investing, define your financial goals. Are you saving for retirement, to buy a house, or to fund a child’s education? Your goals will influence your investment strategy.
3. Create a Budget: Determine how much money you can afford to invest. Never invest money you can’t afford to lose.
4. Choose a Brokerage Account: You’ll need to open a brokerage account to start investing. Compare fees, benefits, and services of different brokers before making a decision.
5. Learn to Read Stock Tables/Quotes: Stock tables/quotes provide valuable information about the stocks. They tell you everything from what the stock’s daily high and low are, to how much the stock’s value has changed over time.
6. Start with a Diversified Portfolio: Don’t put all your eggs in one basket. Spread your investments across a variety of sectors and companies.
7. Regularly Review your Portfolio: The stock market is dynamic and your portfolio should be too. Regularly review and adjust your investments as needed.
8. Stay Patient and Consistent: Stock market investing is a long-term commitment and requires patience. It’s not about making quick bucks, but about growing your wealth over time.

Remember, it’s always a good idea to seek advice from a financial advisor or do thorough research before making any investment decisions.

Why can we invest in the stock market?

Investing in the stock market offers several benefits and opportunities for individuals and businesses. Here are some reasons why people invest in the stock market:

1. Wealth Growth: Over the long term, investing in stocks has historically provided higher returns compared to other investment options like bonds, real estate, or savings accounts. This can help you grow your wealth and achieve financial goals.
2. Passive Income: Some stocks pay dividends, which provide a regular stream of income for investors. This can be particularly useful for those looking to generate passive income or supplement their earnings.
3. Diversification: Investing in the stock market allows you to diversify your investment portfolio, reducing overall risk. By spreading your investments across various sectors and asset classes, you can better manage potential losses.
4. Inflation Protection: Stocks have the potential to outpace inflation, preserving the purchasing power of your money. This is especially important for long-term investments, such as retirement savings.
5. Ownership in Companies: When you buy stocks, you become a shareholder in the company. This means you have a stake in the company’s success and may have voting rights on certain issues.
6. Liquidity: The stock market offers relatively high liquidity compared to other investment options. This means you can easily buy and sell stocks, making it convenient to access your money when needed.
7. Tax Benefits: In some countries, investing in the stock market can provide tax advantages, such as lower capital gains tax rates or tax-free accounts for retirement savings.

It’s important to keep in mind that investing in the stock market also comes with risks, and there’s no guarantee of returns. Always do thorough research and consider seeking advice from a financial professional before making investment decisions.

Bitcoin, the world’s largest coin by market capitalization, is currently traded on several exchanges across the globe.1

CoinMarketCap. “Bitcoin, BTC.” As an investor, one question always comes to mind and that’s how to buy Bitcoin with a credit card.

Buying Bitcoin with a credit card involves entering your credit card number, card verification value (CVV), and expiration date on an exchange’s checkout page to get the value of the Bitcoin you desire. Besides being quick and easy, this process of buying Bitcoin comes with enormous benefits. However, there are things investors must consider before purchasing Bitcoin with credit cards to ensure they are doing it correctly.

How to Buy Bitcoin With a Credit Card

Buying Bitcoin with a credit card can be relatively easy. However, several factors must be considered and this includes the type of credit card and if the exchange of your choice supports it.

Steps Required to Buy Bitcoin With a Credit Card

Purchasing Bitcoin with a credit card follows a particular sequence. Here’s how it works:

Step 1: Research the credit card. Should you plan to purchase Bitcoin with a credit card, the first thing to do is research the card and payment company. This is because not every credit card supports the purchase of Bitcoin.

Credit cards that support Bitcoin purchase include:

• American Express
• Mastercard
• Visa

Each of these cards demands its own unique fees. Researching these cards gives insight into the fees each payment company charges.

Step 2: Research the exchange. While some exchanges support the purchase of Bitcoin using credit cards, others may not allow you to. Even when using an exchange that may allow you to make purchases using credit cards, the process may not be instant due to the validation process used to ensure there is no fraud. Exchanges that don’t accept credit card purchases simply use peer-to-peer (P2P) means for the transfer of Bitcoin. As a result, investors must conduct adequate research to know which exchanges will support their credit cards.

Some popular exchanges that use credit cards in the purchase of Bitcoin include:

• Binance
• Kucoin
• Revolut

Step 3: Link the credit card. Once you’ve researched and found an exchange that meets your requirement, you should verify your account by providing your personal information to meet know-your-customer (KYC) requirements. The next step is to link your credit card to the exchange. To do this, click “add new card” and enter your full name, card number, CVV, expiry date, and billing address.

Once you click on “buy Bitcoin,” enter the amount you desire, and choose the option of paying with a credit card. You will then be redirected to your bank’s one-time password (OTP) transaction page. Follow the instructions and get your Bitcoin deposited into your wallet, provided the transaction is successful.

What You Need to Open an Exchange Account 

There are several requirements needed to open an exchange account. For decentralized exchanges, the process is pretty simple: Download the software or browser extension, set up an account, and store your recovery phase.

For centralized exchanges, you are expected to meet the know-your-customer (KYC) verification requirement before being able to fund your account and trade. Things needed to open an exchange account are explained below.

Personal Information

Exchanges often require customers to provide their personal information to meet KYC requirements as mandated by regulatory authorities. Personal information required includes:

• Full name
• Means of identification such as a passport 
• Proof of address such as utility bills
• Social Security number2
• Others as required by the exchange

Minimum Deposits 

Every exchange has a range of deposits that users must fund their accounts with. For example, Coinbase and Binance require users to deposit a minimum of $50 and $10, respectively, to complete their trades.

Best Bitcoin Exchanges

Company	Transaction Fees	Currencies	Minimum Deposit or Purchase	Trade Limits
Kraken	0.00% to 0.26%	185+	$1	Yes
Coinbase	0.00% to 0.60%	200+	$2	Yes
Crypto.com	0.00% to 0.075%	250+	$1	Yes

Factors to Consider When Purchasing Bitcoin With a Credit Card

Exchange Fees

When swapping dollars for Bitcoin or any other cryptocurrency, it’s important to understand that an exchange may charge a fraction of the transaction cost. In most cases, an additional fee is charged when investors decide to fund their accounts using credit cards. The exchange may also charge extra fees for its services. 

A typical example is Coinmama—every single purchase demands a fee and making payment with a credit card requires an additional fee of 5%.3 This means purchasing $1,000 worth of Bitcoin using credit cards will attract an extra fee of $33.40, excluding platform fees. You, therefore, will need a good return on investment to make up for the fees.

Debt

Bitcoin is volatile and this makes investing quite risky. It’s more risky if you’re using a credit card to go into debt to buy cryptocurrency. This translates into paying exorbitant interest on volatile investments.

Scams

Choosing a currency exchange without any security reputation can be risky. You might have your personal information, including your credit card number, stolen.

Cash Advance Penalties From the Card Issuer

Just like using your credit card to withdraw funds from an ATM, your credit card issuer is likely to view the crypto purchase as a cash advance.4 This isn’t favorable as it has the following downsides:

• Higher interest rate: As with most payment processors, a higher annual percentage rate is charged for cash advances compared to regular purchases.
• Foreign exchange fee: Should an investor use an exchange based outside the U.S., a foreign exchange fee may be incurred if the credit card charges one. This is usually a 3% fee.
• Cash advance fee: Typically 3% to 5% of the amount withdrawn, this is a one-time fee charged when you take your advance. An advance of $100 will likely attract $3 or $5 in fees which will be deducted from your account balance.
• No grace period: Credit card companies usually allow for a 21-day grace period to pay off your purchase before interest is charged. This only works provided you pay your balance in full monthly. This, however, doesn’t rule out the fact that cash advances start to accrue interest from day one.5
• Lower credit limit: While there’s a general credit limit, some credit cards have a separate cash advance credit limit, which is lower than the general one.
• Credit utilization: Using your credit to make small purchases such as groceries doesn’t have much impact. However, big crypto purchases use up your available credit which gravely impacts your credit scores.6
• No credit card rewards: Using your credit card and maintaining a good credit score comes with significant rewards such as cash back, travel points, or miles. However, should the card issuer consider a crypto purchase a cash equivalent, your spending probably won’t qualify for rewards. Overall, this depends on the issuer. As part of your credit card research, you could call the company to ask whether a cryptocurrency purchase is considered a cash advance.

FAQs

How to Buy Bitcoin Anonymously With a Credit Card?

If you want to buy Bitcoin with a credit card without ID verification, you’ll still need a wallet where you can safely store the coins. Wallets such as Exodus, Mycelium, and Ledger Nano X are great choices since they support Bitcoin. 

To buy Bitcoin, you may consider using P2P marketplaces such as Paxful which allow you to trade directly with individuals while eliminating the middleman. Some software wallets such as Lobster allow you to trade seamlessly and anonymously. Exchanges are also great options, but just a handful give room for optional identity verification, hence you may want to choose these.

Overall, the methods itemized above let you buy Bitcoin seamlessly with your credit card.

What Happens If You Buy Bitcoin With a Credit Card?

Buying Bitcoin with a credit card means you’ll have to select a card and exchange that supports Bitcoin purchases and credit cards respectively. Even though the process is seamless, transactions aren’t instant.

The exchange will need to verify to validate that the transaction is real and no fraudulent traces are found.

How Long Does It Take to Buy Bitcoin With a Credit Card?

Since buying Bitcoin with a credit card is convenient, one will expect it to be instant. However, this doesn’t seem to be the case because the exchange must verify the transaction and ensure no scam is involved.

Why Won’t My Credit Card Work for Bitcoin?

There are several credit card processing companies in existence. If you plan to buy Bitcoin with one and notice it doesn’t work, it could be one of two things: The credit card doesn’t support Bitcoin purchase, or the exchange doesn’t support credit cards.

As an investor, research should be paramount. Before using a credit card, you should research to know whether it supports Bitcoin purchases. Also, choose an exchange that supports credit card payment.

Real estate crowdfunding offers a still relatively novel path if you’re a newer investor looking to tap into the real estate market. This approach means you can pool resources with others online, enabling access to projects that typically require a lot of capital. Crowdfunding reduces the high barriers to entry, enabling everyday investors to diversify their portfolios. Access to real estate assets can provide stable cash flows and capital appreciation.1

KEY TAKEAWAYS

• Real estate crowdfunding enables developers to solicit a wide array of potential investors, leveraging social networks on technology platforms.
• New changes to regulations stemming from the 2012 JOBS Act opened up real estate crowdfunding, allowing individuals greater access to the extensive U.S. real estate market.
• One of the biggest advantages of investing in crowdfunding for real estate is that investors can commit far lower amounts of capital, sometimes as low as $500 or $1,000.
• One downside to investing with crowdfunding is that for most of these projects, you have to be an accredited investor.

• Diversification: You can diversify your portfolio within the amount you allow for crowdfunding by investing in several properties or projects with smaller amounts rather than more considerable sums in a single property.
• Risks: While real estate crowdfunding can offer higher returns than traditional investments, it also has risks. These could include project failures, illiquidity, and the potential for platform failure or fraud.3
• Regulatory environment: The Jumpstart Our Business Startups (JOBS) Act of 2012 significantly affected real estate crowdfunding by easing securities regulations and permitting more people to invest in private real estate transactions.
• Transparency: Crowdfunding platforms should provide transparency into the investment opportunities, including details about the properties, the terms of the investment, projected returns, and the developers’ backgrounds.

Real estate crowdfunding is an evolving field, with new platforms and opportunities emerging regularly. It is important that you conduct thorough due diligence and consider consulting a financial advisor before participating in any crowdfunding ventures.

The Advantages and Disadvantages of Real Estate Crowdfunding

Pros

• Crowdfunding platforms lower the barrier to entry for real estate investments.
• You can spread your risk by allocating funds across different properties, geographic locations, and the types of real estate projects.
• Platforms typically provide detailed information about investment opportunities.
• Real estate crowdfunding could offer higher potential returns than some traditional investments.
• You can choose passive investments where the crowdfunding platform and the project developers manage the properties and the operations.
• For new investors, crowdfunding could be an educational tool, offering insights into real estate investing without requiring a large commitment of capital and time.

Cons

• Real estate investments in general are risky, and crowdfunding is no exception.
• Investments in crowdfunded properties are usually illiquid; there’s typically no secondary market where you sell shares of your crowdfunded investments.
• Investors are typically not involved in the management of the property, making you reliant on the platform and developers to handle the project effectively.
• Crowdfunding platforms charge fees for their services, which could eat into your investment returns.
• The regulatory environment for real estate crowdfunding is still evolving, which could introduce new risks or compliance requirements.
• As more investors turn to real estate crowdfunding, there is a risk of market saturation, potentially leading to lower returns.

You should weigh these advantages and disadvantages carefully, considering your financial goals, risk tolerance, and investment horizon. You should also review the track record of the crowdfunding platform and the specifics of each investment opportunity, including the structure of the deal, the experience of the developers, and the projected returns. Consulting with a financial advisor who understands real estate crowdfunding is always the best course of action.

How to Get Started

Getting started in real estate crowdfunding involves several steps that help ensure you make informed and strategic investment decisions. You should first understand the different real estate types and the differences between equity and debt crowdfunding.

Next, you should research the different crowdfunding platforms. Look for platforms with a good track record, transparency, and strong due diligence processes. Also, review their user interfaces, how well they communicate with investors, and the types of projects the platforms offer.

Then, assess your risk tolerance. Real estate crowdfunding could range from relatively safe debt securities with fixed returns to speculative equity investments in development projects. Your risk tolerance should guide the types of investments you consider.

This should lead to the financial planning stage to determine how much you can put into this kind of venture. Real estate should be a part of a diversified portfolio, meaning you’re not overexposed in any asset class, including real estate.4

In addition, you should get a handle on the legal and tax implications of real estate crowdfunding. This includes understanding the structure of the investment, any liabilities that may be incurred, and how the investment will be taxed.4

Finally, it would be best to consult with a financial advisor or an attorney specializing in real estate to review these details. You can review with the professional any initial investment ideas and the complex legal or tax issues that may arise.4

Real Estate Crowdfunding Regulations

In the U.S., real estate crowdfunding is regulated by several federal laws and regulations, primarily under the Securities and Exchange Commission (SEC). The regulatory framework has evolved to permit this type of investment while protecting the interests of investors.

In 2012, the JOBS Act eased securities regulations to help small businesses and startups raise capital. One significant change came with the formulation of Rule 506(c) under Regulation D by the SEC a year after the law’s passage. In particular, Rule 506(c) allows for advertising securities offerings if all purchasers in the offering are accredited investors and the issuer takes reasonable steps to verify their accredited status.5

Additionally, Title IV, known as Regulation A+ for “mini-IPOs,” lets companies raise up to $75 million from the public during a 12-month period. The regulation has two tiers with different regulatory requirements for the investments that can solicited from accredited and nonaccredited investors.6

Further changes include Regulation Crowdfunding (CF), which came into effect in 2020.7 The regulation permits companies to raise money under a so-called “common owner CF,” which lists investments in real estate development projects, among other small business ventures​​. The most significant change was the increase in the maximum amount that could be raised using Reg CF during any 12-month period. In March 2021, this cap was raised to $5 million from the previous limit of $1.07 million. This increase meant much larger deals could be brought to nonaccredited investors.8

Real Estate Crowdfunding Regulations Outside the U.S.

Real estate crowdfunding regulations outside the U.S. vary significantly from jurisdiction to jurisdiction, reflecting different legal systems, market practices, and investor protections.

In the European Union (EU), the European Crowdfunding Service Providers Regulation (ECSPR) has brought a common legal framework for crowdsourcing in the EU since November 2021. Under ECSPR, platforms can apply for a license to operate across all EU member states. ECSPR also includes investor protection measures, such as clear disclosure requirements, governance and risk management rules, and a mandatory reflection period for investors.9

The Financial Conduct Authority (FCA) regulates crowdfunding platforms in the U.K. The FCA requires due diligence and the proper management of client funds. There are specific regulations for different types of crowdfunding, including peer-to-peer lending. Platforms must first obtain authorization from the FCA to operate.10

Some provinces in Canada have adopted a multilateral instrument (MI 45-108) regulating crowdfunding while enabling startups and early-stage companies to raise capital through crowdfunding portals.11 In Australia, public unlisted companies can raise funds via crowdfunding platforms, with individual investment caps and company fundraising limits in place.12

The regulatory landscape for real estate crowdfunding is complex and can change rapidly. Platforms operating internationally must usually navigate a patchwork of regulations to ensure compliance in each jurisdiction where they operate. If you put money in one of these enterprises, you should also ensure you know the regulations in your own country, since these affect your rights and obligations as an investor.

What To Look For in a Real Estate Crowdfunding Site

When evaluating a real estate crowdfunding site, there are several key factors to review:

• Track record and reputation: Research the platform’s history and the experience of its management team. Also, seek out reviews and testimonials from other investors and check for any previous legal issues and other red flags.
• Transparency: The platform should have detailed information about each investment opportunity, including the risks, the terms of the investment, projected returns, and regular updates on project progress.
• User experience: The website should be easy to use, with a clear process for browsing investments, managing portfolios, and accessing customer support.
• Investment opportunities: Evaluate the types and quality of investment opportunities available. Research how the platform funds projects and what kind they are: residential, commercial, debt, equity, or a balanced allocation. Then, ensure the projects align with your investment strategy and risk tolerance.

Real Estate and Crowdfunding

• Due diligence: Look at the platform’s process for vetting real estate opportunities. Rigorous due diligence is crucial to lower the risk of fraud and ensure the quality of the investments.
• Fees and other costs: Review the fee structure carefully. Some platforms charge based on the investment amount or returns, while others may charge the project sponsors.
• The minimum to invest: What is the minimum investment amount required? This varies significantly from one platform to another.
• Regulatory compliance: The platform should follow all relevant SEC regulations and state laws, which is crucial for protecting your investment.
• Liquidity options: Look at the liquidity options on a platform. Some offer a secondary market or other mechanisms to dispose of investments. However, generally, real estate investments are not very liquid.

Real Estate and Crowdfunding: A New Path for Investors

• Risk management: Try to assess as best you can how the platform manages risk. Is there diversification among the projects? What happens if a project fails? What if a project doesn’t meet its funding goals?
• Communication and reporting: The platform should communicate regularly in detail about the performance of the investments and any new opportunities.
• Educational resources: Especially for new investors, the availability of educational materials to help understand real estate crowdfunding is beneficial.
• Customer service: This is essential. Check whether the platform offers responsive support and resources like FAQs, live chat, or a customer service hotline.
• Security: The platform should have robust security measures to protect personal and financial information.
• Exit strategy: Investors should understand the exit strategy for each investment. Some projects may have a defined term with a clear exit, while others may be more open-ended.

By carefully evaluating these details, you should be able to choose the best real estate crowdfunding platform, one suited to your investment preferences and risk tolerance. It’s also prudent to begin with a smaller investment and get to know the platform before committing more substantial amounts.

Is Real Estate Crowdfunding a Good Investment?

Real estate crowdfunding could be suitable for certain investors. The answer depends on the investor’s financial situation, investment goals, risk tolerance, and investment horizon. Some considerations to determine the fit of a platform’s options include the ability to diversify, the passive income generation abilities, the potential for higher returns, and the opportunities to learn about the real estate sector.

What Are the Minimum Requirements to Invest in Real Estate Crowdfunding?

The minimum requirements vary depending on the platform and the investment type. Some platforms and investment opportunities are only available to accredited investors, while on other platforms, both accredited and non-accredited investors can participate.

Real estate crowdfunding platforms typically set a minimum investment amount that ranges from about $500 to $25,000. In addition, investors must be of legal age to enter into a binding contract, usually 18 or 21 years old, depending on the state. Some platforms require investors to be U.S. residents, although some accept investments from international clients.

What Are the Types of Crowdfunding?

Crowdfunding can be broadly categorized into four primary types: Reward-based crowdfunding, where backers contribute to a project in exchange for a reward or perk; equity crowdfunding, where investors contribute capital to a business or project in exchange for equity shares; debt crowdfunding, also known as peer-to-peer lending, which enables individuals to lend money to other individuals or businesses in exchange for interest; and donation-based crowdfunding, which is ordinarily used for charitable causes, personal fundraising, or to support individuals undergoing hardship.

What’s the Difference in Risks Between Real Estate Crowdfunding and Traditional Real Estate Investments?

Real estate crowdfunding typically involves lower individual financial risk due to shared investment, while traditional real estate requires much more capital with higher individual risk and management responsibilities. However, crowdfunding investments can be too dependent on one platform and offer less control over property decisions and lower liquidity.

What Are the Tax Implications for Real Estate Crowfunding?

The tax implications depend on whether the investment involves debt or equity, as well as how it’s structured. In equity agreements, investors hold shares in an entity that owns the property, which can yield taxable income or losses and may benefit from long-term capital gains rates and depreciation deductions, reducing taxable income​​. Debt deals typically generate interest income, which is taxed at the rate of income.

The Bottom Line

Real estate crowdfunding offers an accessible avenue for newer investors to enter the property market. By lowering the barriers to entry, such as high initial capital and complex ownership responsibilities, you can enter a domain previously reserved for the affluent or well-connected. This platform-based investment strategy allows individuals to diversify their portfolios, gain exposure to real estate as an asset class, and potentially earn returns that are less correlated with the stock market. However, new investors need to approach this opportunity with due diligence, a clear understanding of the associated risks, and an appreciation for the long-term nature of real estate investments.

Real estate crowdfunding costs can vary depending on the platform and specific investment. Generally, crowdfunding platforms may charge fees such as an origination fee, management fee, or performance fee. These fees can range from 1% to 5% of the total investment amount. It’s important to review the terms and fees specific to each platform before investing.

How Much Does Real Estate Crowdfunding Cost?

The costs associated with real estate crowdfunding can vary depending on the platform and the specific investment opportunity. Typically, crowdfunding platforms charge fees such as an origination fee, management fee, or performance fee. These fees can range from 1% to 5% of the total investment amount. It’s important to review the terms and fees of each crowdfunding platform to understand the specific costs involved.

KEY TAKEAWAYS

• Real estate crowdfunding allows investors to see an inventory of potential real estate investments that they can passively participate in by paying for a small percentage of the overall deal.
• Investments may provide current income and price appreciation, but often require sizable minimum investments, have relatively high fees, and lock up capital for long periods of time.
• Real estate investing, whether done directly or through crowdsourcing, has unique opportunities and risks in each individual investment.

How Much Does It Cost to Invest via Real Estate Crowdfunding? 

While owning real estate has the benefit of generating cash flow, there are also fees that cut into the profitability of that cash flow. Every real estate transaction is unique. Even though the crowdfunding company’s fees may be consistent, there are often different fees that investors pay for owning different property types, so investors need to carefully consider the fee structure to ensure revenues will be enough to provide a good return after all fees.

Compare Real Estate Crowdfunding Platforms
Company	Fees	Minimum Investment	Accredited Investors Only?	Investment Selection
Fundrise	0.15% and 1.85%	$10 (brokerage) or $1,000 (IRA)	No	Equity, debt, and funds
EquityMultiple	0.50%-1.5% + origination fee	$10,000-$30,000	Yes	Equity, debt, and funds
YieldStreet	0.00%-2.00%	$10,000	No	Equity, debt, and funds
Arrived Homes	Long Term Rentals: 3.5% Sourcing Fee, 0.15% AUM. Vacation rentals: 5% Sourcing fee, 5% Gross rents fee, property management fees (third party-pass-through fees): vary	$100	No	Equity, fund
RealtyMogul	Vary per deal; Income REIT caps fees at 4.5%, Apartment Growth REIT caps fees at 4.75%	Varies per project, from $5,000 and up	No	Equity, debt, and funds
CrowdStreet	Vary per investment and are paid to the sponsor	Typically $25,000, but varies per investment	Yes	Debt, equity, funds
DPL Capital	2% (fee rebates for investments greater than $1 million)	$200,000	Yes	Debt, equity, funds

Alternatives to Real Estate Crowdfunding

Besides real estate crowdfunding, there are other alternative investments to be considered. Some are outlined below. Additional information regarding alternative investment types can be found in Investopedia’s article, What Are Alternative Investments?

Fine Art and Collectibles 

• Investing directly in fine art or wine represents the purchase of art, wine, or some other collectible. This type of investing requires a great deal of capital, but also a certain level of expertise that many investors do not have. Further, collectibles are typically illiquid assets that do not generate income, can be volatile in price due to whims of the marketplace, and can’t be converted to cash as quickly as stocks or other investments, so they tie up capital. This type of alternative asset investing has been difficult for individual investors to access in the past, but there are now crowdfunding websites that provide individual investors (typically accredited investors) access to these markets. 

Costs associated with investments in wine, art, and other collectibles beyond the price of the collectible include commissions on purchases at auction, insurance, storage to ensure optimal aging and protection of the asset, and expertise and consulting that may be needed. There are platforms available for both accredited and non-accredited investors, with minimum investment amounts ranging from a low of $10 to as high as four to five figures.

Cryptocurrency

• Cryptocurrencies are digital currencies that are not backed by a sovereign nation, and work via blockchain technology that creates a log of all transactions. Bitcoin is the most commonly known cryptocurrency for transactional use, and the market has matured to where owners can now generate interest on their cryptocurrency holdings through staking. 

Owning cryptocurrency is relatively easy and inexpensive, typically with a fee built into the price of the cryptocurrency by the exchange. It should be noted that while many see cryptocurrency as an important competitor to sovereign currencies in the future, cryptocurrencies are still subject to a great deal of volatility. 

The best cryptocurrency exchanges typically charge transaction fees that range between 0.00% and 1.15% and require minimum investments as low as $1 to get started. This article provides a more detailed overview of investing in cryptocurrencies, including the pros and cons.

Precious Metals 

• Gold and other precious metals have been used as a currency, a symbol of wealth, and as an investment for thousands of years, in large part because precious metals have retained their purchasing power over time. There are many ways to add precious metals exposure to your portfolio, including owning the physical asset, futures contracts on individual metals, and ETFs that track individual metals or a precious metals index. 

Downsides to owning physical metals include not just the cost of the actual metals, but also additional costs for storing and insuring them. There’s also the issue that precious metals do not pay interest or generate revenue. Because of this, some investors choose to gain precious metals exposure indirectly by buying stock in mining companies that may pay dividends as well as rise in value. The best online gold dealers that offer storage for physical gold charge stocking fees of 5% to 10%, and will ship your gold for free on orders as low as $99.  

Peer-to-Peer Lending 

• Peer-to-peer lending is where individuals lend money to other individuals, cutting the bank out of the lending process. Peer-to-peer lending is also known as “social lending,” because individuals often outline the reasons for borrowing, and lenders on these platforms will sometimes choose a borrower to lend to based on their story.

Peer-to-peer lending is facilitated by a platform provider that collects fees from borrowers and lenders on the site. The platform also vets both lenders and borrowers that use the platform and classifies borrowers into risk categories for the lenders to sort and easily review. 

How Does Real Estate Crowdfunding Work?

Real estate crowdfunding works through crowdfunding platforms, which seek to match individual investors with deal sponsors who want funding for their investments. The crowdfunding platform puts together due diligence and other materials for its investors to evaluate deals, and if an investor chooses to move forward, they can invest passively in a portion of the deal, which will commence once the deal has enough investors to raise all the cash needed. 

Is Real Estate Crowdfunding a Good Investment?

Real estate crowdfunding can be a good investment, but the specifics of the deals and the timing of the transaction are critically important to ensure the investment is right for you. Evidence that crowdfunding is a good investment can be seen in the overall results of some of the most popular crowdfunding platforms. 

Of platforms with more than 300,000 investors, overall returns have been strong. CrowdStreet shows a 17.9% realized internal rate of return (IRR) on the $4.2 billion invested in 798 deals;3 YieldStreet real estate deals have a 9% net annualized return;4 Arrived, which focuses on single-family rental homes, shows total returns on its more than 353 properties funded that range from -17.8% to +136%;5 and Fundrise shows an average income return to its customers of 4.81%.6 As you can see, real estate investing can show some very good returns, but each deal is its own individual investment that needs to be considered carefully.

What Is a Good Historical Rate of Return?

Rate of return is a relative measure of an investment’s performance over time. Over the past century, the stock market has performed better than real estate, but periods of corrective price weakness in the stock market have tended to be more extreme than real estate, making real estate a less volatile asset to hold. 

From 1968 to 2009, average annual returns were 7.5% on the S&P 500; 11.5% for small-cap stocks; and 5.4% on existing homes against an average inflation rate of 4.6%. All of these markets outpaced inflation, but it is not easy to compare each investment because of their relative risks, as well as differing tax treatment and the availability of leverage in different markets.7

What Are the Risks of Real Estate Crowdfunding?

Real estate crowdfunding investing entails risks. Each deal is different and has its own risk parameters. Some deals may be mature properties that pay investors income right away, while others are new construction projects that won’t generate passive income for some time. In addition to the types of properties, crowdfunding investors also have the risk of the sponsor of the deal, as that is the manager of the individual deal and the entity they will deal with once they have made their investment. Other risks are similar for all real estate owners, such as the building type, location, and the ability of the property to generate revenue and appreciate over time.

Investing directly in real estate traditionally required an investor to have a large amount of capital available. Real estate investment trusts (REITs) helped to open up real estate to more investors by combining resources via a pooled fund. More recently, crowdfunding has emerged as another way for everyday investors to add real estate to their portfolios. We’ll walk you through how to compare your options, cover your alternatives, and answer your most pressing questions. With an understanding of how to open a real estate crowdfunding account, you can choose the right investments that meet your goals and start investing. 

KEY TAKEAWAYS

• Real estate crowdfunding is a path to raise money online for real estate projects from a large group of investors.
• Direct investing in real estate can provide diversification and solid returns.
• There is a wide range of real estate crowdfunding platforms with different investing requirements and platform fees.
• Even in crowdfunding, accredited investors get access to a wider range of opportunities than non-accredited investors do.
• When investing through a real estate crowdfunding platform, it is critical to understand the due diligence that has been done on the deals that are presented. 

What You Need to Open a Real Estate Crowdfunding Account

Similar to opening any online investing account, obtaining a real estate crowdfunding account requires that you first provide a combination of personal and financial information.

Personal Information

Some platforms allow you to create an account with just an email address and password, but an actual investing account will usually require your basic personal information: 

• Email
• Legal name
• Physical address
• Phone number
• Birth date
• Government-issued ID number may be required for verification

Financial Information

Most platforms will ask you outright whether you are an accredited investor or not, but even the platforms open to non-accredited investors will require the following information: 

• Social Security number (or a tax identification number if using a company structure)
• Your income and net worth for a know your client (KYC) survey

Accredited investors may have to verify their claim with one or more of the following:

• Investment account statements 
• Tax returns
• Third-party confirmation from a financial professional like an accountant
• Proof of financial license
• A signed affidavit  

How to Open a Real Estate Crowdfunding Account

Opening a real estate crowdfunding account is relatively straightforward. That said, it is important to take a few steps back in the process before signing up with the first platform that pops up in your search.

Understand the Real Estate Crowdfunding Market

Real estate can be a great alternative asset for investors, but it is important to know your financial situation and risk tolerance before jumping in. Accreditation is a key difference in the real estate crowdfunding market. Accredited investors will see a wider range of direct investment opportunities in real estate. Non-accredited investors may be limited in the types of deals they can access or the type of investments (REITs and funds only, for example). 

Evaluating your risk tolerance is a trickier task. Many real estate crowdfunding sites trumpet high “targeted” returns in the double digits, but the flipside of that is that equity investments can also fail. In addition, even debt investments can end up going insolvent, placing the investor’s initial investment at risk along with any owed proceeds. While direct real estate investments do provide diversification from the stock market, they come with many of the same sensitivities that affect the general economy. As with any higher-risk investment, real estate crowdfunding is best done with risk capital rather than making up a majority of your financial portfolio. 

Research the Different Platforms

Thorough research of a potential crowdfunding platform is a must, as this is still a relatively new industry where many companies have witnessed very few, if any, recessionary cycles. Some platforms are only open to accredited investors or have high minimum investment requirements that put them practically out of reach for non-accredited investors. Some platforms also charge fees to either the sponsor or the investors, so it is important to be aware of how the company you’re considering makes money. Beyond whether you can afford to invest on the platform or not, the process a platform goes through prior to listing an investment is key. You will want to know how the platform conducts due diligence, what it is analyzing, and how it structures the deals to protect investors. 

Create an Account

The account setup varies by platform. Some just require an email and a password to get into the platform and view investments, allowing you to finish setting up and funding an account when something catches your eye. Other platforms take you through a longer onboarding process that may include confirming accreditation status and linking a bank account prior to getting inside.

Fund the Account

While procedures can vary across platforms, most will accept transfers from a linked bank account, similar to traditional brokerage accounts. However, in some cases, large amounts of money may have to be moved via a different process such as a wire transfer directly to the sponsor or a corporate entity like an LLC.  

Start Investing

While you can start investing as soon as you have a funded account, it is important to do some of your own research on top of the due diligence done by the platform. If you don’t understand the key metrics in the research, like loan-to-value ratio or free cash flow, then start there before you invest. Cross-check the research provided on the platform with other sources, and even consider calling real estate professionals in that area for a second opinion. 

Choosing a Real Estate Crowdfunding Platform

Real estate crowdfunding platforms facilitate investments in private real estate deals. This is important to remember as the terms “fund,” “shares,” or “REIT” mirror the publicly traded assets. Still, these are in fact illiquid private investments where any resale market may be limited to the platform listing them.1 That is why it is critical to choose a platform that is putting in the work to qualify good investments and filter out bad ones. 

• Eligibility requirements: Many platforms are still exclusively for accredited investors and most that allow non-accredited investors limit the investments to funds and REITs. Residency status can also matter, as many real estate crowdfunding platforms are only open to U.S. residents and U.S.-based entities.
• Minimum investments: Minimum investment levels range wildly from platform to platform. The range goes from $10 all the way to $200,000, so you’ll need to see if you have the capital on hand to even access a given platform. There may also be restrictions in the form of investment caps preventing more than a given percentage of net worth on the platform. 
• Fees and penalties: Fees for real estate crowdfunding can be a bit confusing. Some platforms put all the fees on the sponsors, while others charge platform fees and/or management fees on their fund investments. Check any fees as well as the lock-up period rules for any set penalties around early redemptions or exits. 

Real Estate Crowdfunding Account

• Transparency: You’ll want to see a clear explanation of how a platform vets sponsor deals and what steps it takes to support investors in the event of a default. Does the platform clearly explain how deals are structured? Is there a set process for unexpected events like additional capital calls on a project? If you can’t easily find this information, it is likely a bad sign.
• Investment selection: The investment selection will interest accredited investors more than non-accredited ones. In many cases, non-accredited investors are limited to the private REITs or funds offered through the platform. For accredited investors, a wide selection of commercial real estate and multi-family units is a base-level offering. Some platforms spread the net more widely to include industrial real estate, marine investments, storage, and so on.  

Compare the Best Real Estate Crowdfunding Platforms

Company	Fees	Minimum Investment	Accredited Investors Only?	Investment Selection
Fundrise	0.15% and 1.85%	$10 (brokerage) or $1,000 (IRA)	No	Equity, debt, and funds
EquityMultiple	0.50%-1.5% + origination fee	$20,000	Yes	Equity, debt, and funds
YieldStreet	0.00%-2.00%	$10,000	No	Equity, debt, and funds
Arrived Homes	Long Term Rentals: 3.5% Sourcing Fee, 0.15% AUM. Vacation rentals: 5% Sourcing fee, 5% Gross rents fee, property management fees (third party-pass-through fees): vary	$100	No	Equity, fund
RealtyMogul	Vary per deal; Income REIT caps fees at 4.5%, Apartment Growth REIT caps fees at 4.75%	Varies per project, from $5,000 and up	No	Equity, debt, and funds
CrowdStreet	Vary per investment and are paid to the sponsor	Typically $25,000, but varies per investment	Yes	Debt, equity, funds
DPL Capital	2% (fee rebates for investments greater than $1 million)	$200,000	Yes	Debt, equity, funds

Alternatives to Real Estate Crowdfunding

Direct investments in real estate via private equity arrangements are considered a type of alternative investment. These are generally considered to be more illiquid and therefore higher-risk than publicly traded investment options. Crowdfunded real estate is not the only alternative investment, of course. Here are a few other alternatives that offer similar diversification away from the traditional market.  

Fine Art and Collectibles

Fine art, antiques, wine, and other physical property that gain value over time based on rarity and popularity are broadly categorized as collectibles. To invest successfully in collectibles, you need to understand the market for various items and be able to assess quality and authenticity quickly. Investors in collectibles need to plan for things like secure storage and insurance for their investments. 

Cryptocurrency

Cryptocurrency uses blockchain technology to create a virtual currency that doesn’t derive its value from a national government. Instead, these digital currencies are traded on a market maintained through cryptocurrency exchanges. Cryptocurrency is arguably on its way to becoming just another asset class but even then it is on the higher-risk, speculative side, similar to real estate crowdfunding. Cryptocurrency investments can be done directly through exchanges or an investor can take the more diversified approach of gaining exposure through an exchange-traded fund (ETF). 

Precious Metals

Precious metals like gold, silver, and platinum are also considered alternative investments. Gold and silver come in a collectible form as with coins and jewelry that sell above the melt price. Some physical forms, like bullion bars, trade closer to the spot price of gold and silver as a commodity. Investors can also get access to precious metals through ETFs, futures, options, and even shares of the mining companies pulling them out of the ground. 

Peer-to-Peer Lending

Peer-to-peer (P2P) lending is very similar to real estate crowdfunding in that it is a private capital market outside of traditional bank financing. Investors can become lenders on the platform and provide loans to other individuals. The borrower may not be able to secure traditional financing, so the rates on the loans may be higher to accommodate the higher risk of default. As with real estate crowdfunding, platforms play the key role in creating the market with providers like Prosper and Lending Club—although the latter has moved to institutional investment with no replacement for its individual investment option as of yet.23 The requirements vary state by state, but the income and net-worth requirements are generally not as onerous as they are to be an accredited investor.

How Does Real Estate Crowdfunding Work?

Investors pool their money to acquire equity or debt stakes in private real estate projects or operations. In exchange for the capital, the sponsor of the deal will either pay investors out of the rent income and proceeds of an eventual sale or via regular interest payments if it is a debt investment. The platforms that list opportunities play a critical role in vetting the investment and structuring it. 

Is Real Estate Crowdfunding Worth It?

Real estate crowdfunding is a higher-risk, higher-return investment. It is also less correlated with the financial markets, although it is still sensitive to the economic conditions where the properties are located. Real estate crowdfunding can provide investors with above-average returns and portfolio diversification, but it is best done with risk capital rather than making it a majority of any average investor’s portfolio. 

What Are the Disadvantages of Real Estate Crowdfunding? 

Real estate crowdfunding investments are higher-risk private investments. This means that in addition to the regular risks of total loss, if an investment fails, you may have issues around liquidity, fraud, and potential platform failure to consider. Investors in private projects also do not have the same guaranteed disclosures that more regulated investments have, making due diligence more difficult. Lastly, real estate crowdfunding projects face the same economic pressures as regular real estate investing. The cost of capital can go up in the form of interest rates, or inflation can drive up construction costs and suddenly a project costs more than planned. This can result in a capital call to existing investors or even dilution of equity via a secondary call for investment. 

Can You Invest in Real Estate Crowdfunding With a 401(k)?

A traditional 401(k) through a brokerage or bank is unlikely to allow you to invest in crowdfunded real estate deals. To use retirement funds to invest in this type of alternative asset, you’ll need to go the self-directed 401(k) route. While this is possible, it is recommended that you limit your exposure to alternative investments by only using risk capital. Putting all of your retirement savings into crowdfunded real estate is not part of a sound investment strategy. 

Coming off a red-hot year for Meta stock, it appears the social media giant has again delivered what investors are looking for. Shares of Meta Platforms (META) surged late Thursday after the company reported better-than-expected fourth-quarter earnings and announced plans for its first-ever dividend.

The Facebook and Instagram parent company said it earned $5.33 per share on sales of $40.1 billion for the December-ending quarter. Analysts projected the company would post earnings of $4.82 per share on $39.1 billion in sales, according to FactSet.

Sales for the quarter increased 25% year over year, while earnings increased 203%. 

Further, Meta said it is initiating a dividend of 50 cents per share of common stock, payable on March 26 to shareholders on record as of Feb. 22.

For the current quarter, Meta projected sales between $34.5 billion and $37 billion. Heading into the report, analysts were looking for $33.9 billion in Meta sales for the March quarter, according to FactSet.

On the stock market today, Meta stock rocketed more than 14% higher to 450.42 in after-hours trading.

“We had a good quarter as our community and business continue to grow,” Meta Chief Executive Mark Zuckerberg said in a news release. “We’ve made a lot of progress on our vision for advancing AI and the metaverse.”

Meta Q4 By The Numbers

Monthly active users for Facebook grew 3% year over year to 3.07 billion, Meta said.

As is typical, digital advertising sales drove nearly all of Meta’s revenue. The company recorded $38.7 billion in ad sales for the quarter, up 24% from the same period last year.

However, the metaverse-focused Reality Labs division surpassed $1 billion in quarterly revenue for the first time. Meta launched sales for its latest virtual-reality headset last fall. Still, the division posted a loss of $4.6 billion, adding to the huge losses from the company’s metaverse bets. On the other hand, Meta’s Family of Apps generated a $21 billion income in the quarter, compared to $10.7 billion in the fourth quarter of 2022. The Family of Apps includes Facebook, Instagram, WhatsApp, Reels and Threads.

Meta ended 2023 with 67,317 employees, the company said, down 22% from the start of the year. Meta made significant cuts as part of what Zuckerberg called a “Year of Efficiency.”

Meta Stock: Up 14% This Year

Prior to the report, Meta stock gained 1.2% in Thursday trading to close at 394.78. Meta shares have gained 14% since the start of the year, not counting Thursday’s after-hours movement. That has helped build off a 194% surge last year.

In January, Meta reached a market capitalization over $1 trillion, rejoining an exclusive club of tech giants.

Meanwhile, Meta Platforms is on the IBD 50 list of top growth stocks. It’s also on the leaders list of the IBD Leaderboard premium stock-ideas service. IBD Stock Checkup shows Meta with a Relative Strength Rating of 96 as of Thursday, indicating it has outperformed 96% of all stocks in the past 12 months.

Meta also boasts a highest-possible 99 IBD Composite Rating, which reflects strength across a number of technical and fundamental metrics linked to strong stock performance.

In our pursuit of success, we often look for external factors that can propel us forward. We seek opportunities, resources, and mentors to guide us on our journey. However, what we often overlook is the most valuable investment we can make: ourselves. Investing in oneself is the foundation for reaching our ambitions and turning our dreams into reality.

When we invest in ourselves, we are acknowledging our worth and potential. We are recognizing that we have the ability to grow, learn, and evolve. Investing in ourselves encompasses various aspects of personal development, including setting ambitious goals, overcoming self-doubt and fear, and nurturing our physical and mental well-being. By prioritizing self-investment, we unlock the power to create a future that aligns with our aspirations.

The Importance of Setting Ambitious Goals

Setting ambitious goals is the first step towards reaching our ambitions. Ambitious goals push us beyond our comfort zones and inspire us to strive for greatness. When we set ambitious goals, we challenge ourselves to expand our capabilities and tap into our full potential.

To set ambitious goals, we must envision the future we desire and break it down into actionable steps. It’s crucial to set goals that are both challenging and attainable, as this balance keeps us motivated and focused. By setting ambitious goals, we create a roadmap for success and give ourselves something tangible to work towards.

Overcoming Self-Doubt and Fear

Self-doubt and fear can be formidable barriers on the path to reaching our ambitions. They can hold us back, making us question our abilities and preventing us from taking risks. However, investing in ourselves means developing the confidence and resilience to overcome these obstacles.

To overcome self-doubt and fear, we must cultivate a growth mindset. We need to reframe our negative thoughts and replace them with positive affirmations. Surrounding ourselves with a supportive network of like-minded individuals can also provide encouragement and motivation. Additionally, embracing failure as a learning opportunity and celebrating our successes along the way can help build our confidence and fuel our determination.

The Benefits of Investing in Your Personal Growth

Investing in our personal growth yields numerous benefits that extend beyond reaching our ambitions. When we invest in ourselves, we acquire new skills, expand our knowledge, and enhance our potential for success. Personal growth also boosts our self-confidence, improves our decision-making abilities, and strengthens our resilience.

Furthermore, investing in our personal growth allows us to become more adaptable in an ever-changing world. As we continually learn and develop, we increase our capacity to navigate challenges and seize opportunities. Ultimately, investing in ourselves empowers us to lead fulfilling lives and make a positive impact on those around us.

Strategies for Investing in Yourself: Education and Skill Development

One of the most effective strategies for investing in ourselves is through education and skill development. Continuous learning enables us to stay relevant in our chosen field and enhances our ability to adapt to new technologies and trends. It equips us with the knowledge and expertise needed to excel in our ambitions.

To invest in our education and skill development, we can pursue formal education, attend workshops and seminars, or engage in online courses. We can also seek out mentors who can provide guidance and share their expertise. By dedicating time and resources to acquiring new knowledge and honing our skills, we invest in our future success.

Strategies for Investing in Yourself: Health and Well-being

Investing in our health and well-being is equally important in our journey to reaching our ambitions. Our physical and mental well-being form the foundation upon which our aspirations are built. When we prioritize our health, we increase our energy levels, improve our focus, and enhance our overall productivity.

To invest in our health and well-being, we must prioritize self-care. This includes adopting a balanced and nutritious diet, engaging in regular physical exercise, and getting sufficient rest and relaxation. Additionally, practicing mindfulness and managing stress are crucial for maintaining a healthy mind and body. By investing in our well-being, we empower ourselves to perform at our best and overcome any obstacles that come our way.

Strategies for Investing in Yourself: Networking and Relationships

Investing in our personal and professional relationships is another key strategy for reaching our ambitions. Building a strong network allows us to connect with like-minded individuals, learn from their experiences, and gain valuable insights. Our relationships can open doors to new opportunities, provide support during challenging times, and offer guidance as we navigate our chosen path.

To invest in our networking and relationships, we must actively seek out opportunities to connect with others. This can include attending industry events, joining professional organizations, or utilizing online networking platforms. By nurturing meaningful relationships and fostering genuine connections, we create a support system that propels us towards our ambitions.

The Role of Mentorship in Reaching Your Ambitions

Mentorship plays a crucial role in our journey to reaching our ambitions. A mentor provides guidance, wisdom, and support as we navigate the challenges and uncertainties of our chosen path. They offer valuable insights based on their own experiences and can help us avoid common pitfalls.

To find a mentor, we must be proactive and seek out individuals who inspire us and align with our aspirations. We can approach them with genuine curiosity and a willingness to learn. Building a relationship with a mentor requires open communication, trust, and a mutual commitment to growth. By embracing mentorship, we gain access to invaluable guidance and accelerate our progress towards our ambitions.

The Financial Aspect of Investing in Yourself

Investing in ourselves often comes with a financial aspect. While some investments may require monetary resources, it’s important to view these expenses as an investment rather than a cost. The financial aspect of investing in ourselves encompasses various areas, including education, skill development, personal coaching, and self-improvement resources.

To manage the financial aspect of investing in ourselves, we must prioritize and budget accordingly. We can explore scholarship opportunities, seek financial assistance, or consider alternative options such as online resources or self-study. It’s essential to weigh the long-term benefits against the short-term costs and make informed decisions that align with our ambitions and financial capabilities.

Taking Action: Steps to Start Investing in Yourself Today

Investing in ourselves is not a one-time event but a lifelong journey. To start investing in ourselves today, we must take action and commit to our personal growth. Here are some steps to get started:

1. Reflect on your aspirations and identify areas for improvement.
2. Set ambitious goals that align with your vision of success.
3. Seek out learning opportunities, whether through formal education or self-study.
4. Prioritize self-care and make your health and well-being a priority.
5. Build a network of supportive individuals who share your ambitions.
6. Identify potential mentors and seek their guidance and expertise.
7. Allocate resources and budget for your personal development.
8. Embrace failure as a stepping stone towards growth and celebrate your successes along the way.

Remember, investing in yourself is a continuous process, and each step you take brings you closer to reaching your ambitions.

The Journey to Success: Stories of Individuals Who Have Reached Their Ambitions

Throughout history, countless individuals have embarked on the path of self-investment and reached their ambitions. Their stories serve as inspiration and proof that investing in oneself is the key to unlocking one’s full potential.

Take, for example, Oprah Winfrey, who invested in her personal growth and became one of the most influential media moguls of our time. Through her determination, resilience, and commitment to continuous learning, she overcame adversity and built an empire that has left an indelible mark on society.

Similarly, Elon Musk, the visionary entrepreneur behind Tesla and SpaceX, is a testament to the power of investing in oneself. Musk’s relentless pursuit of knowledge and his unwavering belief in his abilities have propelled him to achieve remarkable feats that seemed impossible to many.

These stories remind us that investing in ourselves is not only a means to reach our ambitions but also a catalyst for personal transformation and societal impact.

Embracing the Path of Self-Investment

Investing in ourselves is the most powerful investment we can make. It is the path to reaching our ambitions and turning our dreams into reality. By setting ambitious goals, overcoming self-doubt and fear, and nurturing our personal growth, we unlock our full potential and create a future that aligns with our aspirations.

Through education and skill development, prioritizing our health and well-being, and building strong relationships, we equip ourselves with the tools needed to navigate the challenges and seize the opportunities that come our way. Mentorship provides guidance and accelerates our progress, while managing the financial aspect ensures that we make informed decisions that support our ambitions.

So, let us embrace the path of self-investment and commit to investing in ourselves today. Let us recognize our worth, believe in our potential, and take the necessary steps to reach our ambitions. The journey may be challenging, but the rewards are immeasurable. Invest in yourself, and watch as your dreams transform into reality.

Start your journey of self-investment today and take the first step towards reaching your ambitions. Set ambitious goals, prioritize your personal growth, and surround yourself with a supportive network. Remember, investing in yourself is the key to unlocking your full potential and creating a future that aligns with your aspirations.