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Author: Jeffrey Carter, compiled by: Shaw bitchain vision
Trump has signed an executive order that allows people to put 401(k) account funds into alternative assets.This can be a direct investment or a fund investing in these alternative assets.
Previously, you must have some special self-managed retirement account to do so and must meet the IRS’ qualifications to invest in such assets.
I support capital democratization.I firmly believe that people should be free to control the money they earn.When crowdfunding came out, people thought I wouldn’t support it because it would compete with the angel investment group I founded.But I fully support it.
Frankly, the overall return of just putting money into the S&P 500 fund has been pretty good since the end of the Great Depression.This is the best choice for investment.Most of my assets are invested in index funds.The $100 invested in 1940 is now worth nearly $900,000.
Over the years, I have heard advertisements selling gold and silver on many news channels and radios.Stay away from them.Useless.
That being said, we should also strengthen transparency and information disclosure regulations so that people can invest with caution.Many times, funds hide their returns.Funds will also try their best to exaggerate investment returns, but never reduce returns.They also try to cover up the losses.
Some fund managers are not afraid of the complete transparency of their performance.But I found that there were very few such people.
Perhaps some kind of standardized audit process should be set up, through which funds must pass to get funds from people’s 401(k) plans?
Some funds are not doing well in reporting on continued performance, issues with the companies they invest in or assets.And in our fund, we report all the good things, bad things and ugly things truthfully.We even wrote a company at zero valuation, even though it is still operating.We are almost certain that we can’t get the money back, so why should we hide it?Yes, this will affect our performance, but it’s no big deal.
Some historical companies will be born in the next decade.I think the general public should be able to participate.
There may be many twists and turns in the company’s development process.Some are unexpected, some are expected.For example, in our venture capital funds, we have always believed that from the first investment, our equity dilution rate will be between 60% and 70%.This helps us conduct overall statistical analysis and earnings forecasts.
If you want to invest in private equity or real estate, you will most likely have to go the fund path.You need so much money.Private equity funds are often billions of dollars.If you do not belong to a similar entity, you will not be able to obtain investment opportunities.It’s like taking a slingshot to participate in a gun battle.
However, the performance of funds depends entirely on the managers who manage them.Bad managers can make bad funds, and even great managers can make mistakes or have bad investments.
Hedge funds are another matter.I’ve never made money in a hedge fund.
Full disclosure: I have an investment in MLTech.ai.ML matches the fund pool with the algorithmic strategies of the cryptocurrency market.The return after deducting the fees is pretty good.The minimum investment is $100,000, which is worth a look.They review fund managers and strategies and continue to review to ensure everything is compliant.They manage millions of assets and are a real company.
Although angel investment is similar to venture capital, it is different.If you want to invest in venture capital, fund paths may be the best choice.
I don’t know any great bloggers in real estate, cryptocurrency or private equity.Often, these bloggers are just speaking out for their own interests or hyping something.This is no different from horse racing guide or some low-priced stock recommendations.I found that even some well-known venture capital companies are nothing like this.
Cryptocurrencies are a whole new field and are very unique.I thought I knew it, so I invested some money in cryptocurrency, but found that I didn’t understand at all.I have a company that might make a difference, but my investment in Helium exploded like a hydrogen bomb.Bitcoin or Ethereum is similar, and maybe Solana is similar.Instead of joining the fund and paying fees, it’s better to buy a certain percentage of real cryptocurrency directly.Coinbase can help you do this.
There are some rules of thumb for venture capital.For example, if you invest in the field of artificial intelligence now, be careful.Those great investment opportunities may have passed.You must never use a rearview mirror to invest.You have to conceive an argument for the future, think carefully, and then think about the companies that do not exist in the moment, and which ones will flourish in that future.
Another rule of thumb is to take all the winners.A company will eventually win, depending on its operator, not the creativity itself.In a startup, you invest in talent.
You have to invest in the early stages of the capital chain to get a return.This means you take a lot of risks.Investing is a bit like playing poker. You invest some money and see some progress, you invest more, see progress, and then invest more.But this strategy has a problem for small investors, that is, in the next round or several rounds, they may not be in their place.
Establishing an investment pace is crucial.All good teams and ideas usually don’t come at the same time, but if you know what you’re doing and have the right connections, it’s possible.
The return on investment usually takes ten years.If it is a company that loses a lot, it will take longer.Of all your investments, it’s lucky to have a company worth a billion or billion dollars.I’m still waiting for my family, but I’ve made enough money to retire.
Your target returns are not like returns on stocks or other assets.You need at least 30 times the reward.I will explain the reason below.
It should be remembered that some companies do not have the ability to become multi-billion-dollar companies.Entrepreneurs will try to sell you this, but it is simply impossible.This doesn’t mean you shouldn’t invest, just understanding this difference helps to set expectations, investment amounts and pace.If you invest $25,000 in a company that has a pre-seeded valuation of $7 million, and the company raises little subsequent funds and eventually exits for $100 million, you will also get good returns.
The winners may come from areas outside of the San Francisco Bay Area, New York City, or Boston, but are more likely to come from these three places.If you don’t have connections in these places and want to reach startups, find a good fund.
There are some readers in my blog that are pretty good entrepreneurial investors.They either invest themselves or invest their money in funds.
In investing in this game, your chances of making money are very low.David Rose of New York Angel Investments calculated the investments he has made over the years.The general situation is as follows.
Suppose you have $1 million invested in 10 startups, each investing $100,000 in the pre-seed stage.For simplicity, we assume that all of these companies either go bankrupt or exit within a decade.This restriction for ten years is artificial, but it can make the following calculations hold.
Of those companies, 1 to 5 will return to zero.That was a waste of 500,000.However, you still have a chance, and there are 5 other companies.
Of these five, 1 to 4 will return 1 to 4 times respectively.
Then there is only one company left.You need to get 30 times the return at that company.
This way, you get three times or more for a million dollars, and the internal rate of return (IRR) is quite considerable, reaching 27%.
If you can do this, this is successful startup investment.
Sometimes, the companies I invest in look great.However, the good times don’t last long, the building collapses and you get nothing.And sometimes, unexpected things happen, and they will come back to life.Sometimes, no matter how good the idea is, it will be a mess to execute, making you miss the opportunity.
When you find a great start-up entrepreneur, you need to provide them with financial support.Such people are rarer than diamonds.
After the executive order was signed, a large number of funds and investment banks were waiting to sell their junk assets on the open market.When someone comes to sell you investment, don’t be confused by their sweet words.Stay awake, keep your eyes open and be alert at all times.
You can use alternative assets to increase your earnings.But they are very risky and you may lose all your money.
