What money moves are experienced investors making now?
It’s been a pretty interesting year so far. It’s probably only going to be more of the same until 2021. So, what are the sound moves to make?
- Increasing Liquid Net Worth
Cash trapped in your own residence that you can’t tap, private equity stocks in volatile tech starts that you can’t sell, and heavy commercial leases can all be cramping liquid net worth. Don’t count on credit cards or home equity lines of credit to continue to be there when you need them either. It is those who have the liquidity to cover the cash flow gaps and that can make it through 12-18 months without a job that are going to come out on the other side of this the best. Not this does not mean just stashing hard currency under your mattress. There may be other ways of enhancing these financial dynamics, like increasing revenue sources, and contracts for income which can be sold and traded if needed.
- Investing In Things Backed By Tangible Assets
Many of the multi-billion dollar startups and companies built in the past decade have prided themselves on owning nothing. Yet, most have big leases for office space they can no longer use, in buildings no one else wants to rent as offices either. If these companies go broke, there may be nothing for their shareholders. Even Zillow, which was still losing millions every quarter in the best years, has now seemed to stop reporting any real estate data on its website.
In contrast, smart investors are investing in hard assets, or at least vehicles backed by tangible assets and which are over-collateralized. Their investments can never go to zero. They’ll always have an asset which can bounce back in value quickly.
- Cash Flow
Business and investing is not only about cash flow. Yet, right now, a lack of cash flow is what is bankrupting even the biggest and oldest corporations again. The size of your nest egg may not be nearly as important as the cash flow your investments can generate over the next 24 months. Even more important is passive income. It’s never been more clear that the majority of individuals have no guarantee they’ll be healthy enough to work tomorrow, or can get to their jobs through the mayhem.
- Staying Consistent
The most successful investors of all time are transparent in that not even they can perfectly time the markets. Instead, they rely on consistently investing every month, every quarter and every year.
That doesn’t mean they are careless. They look at the individual investment opportunities. They make sure the numbers work. They put great management in place.
They aren’t afraid to take advantage of the many great opportunities in the market right now. Yet, they are also thinking long term. For many, this year will be the one that really generates most of their long term wealth and solidifies their financial position.
Just stay consistent. It is what earns you real rewards, and respect and reputation in the community. That’s not going to happen is you are disappearing and hiding under a rock in trying times, and only popping up when even complete novices can make easy money.
Find out more about investing in secured debt and real estate, go to NNG Capital Fund