4 Alternative investments for 2020

We all have to admit. 2020 is turning out to be crazier and crazier. I thought Covid-19 dominating headlines was going to be it. But 2020 kept saying “hold my beer” and coming up with crazier antics like the ongoing police brutality and racism situation unfolding in the US that’s spreading globally, and the stock markets going up regardless. It is exactly during such crazy times that we need to be more mindful about how to safeguard or even make our money work harder for us. So I present you with a round-up of 4 alternative investments to think about in 2020 and beyond.

Partbnb

If you’ve always been interested in investing in property for airbnb and capital appreciation purposes, but find the paperwork too cumbersome, and managing the property for short term rentals too much work, then Partbnb might be for you.

Moreover, Partbnb focuses their properties around the Bahamas area, buying up beachfront houses for their land appreciation, as well as for renting them out for short term vacationers.

How Partbnb works

Each property is divided into 8 parts for ownership. You can buy 1 part, or all 8 if you have the capital, and from there, Partbnb does everything, from buying the property, having the appropriate paperwork to prove your ownership, furnishing the house with furniture and services, listing them on platforms such as Vrbo and Airbnb, and managing rentals for you.

Each part owner is entitled to stay at the home for 45 days a year. If they don’t use it, they can earn an income from short term rentals that Partbnb will manage on their behalf. Rental income is not guaranteed.

My Personal View

It has to be noted that Partbnb made a huge change to their operating model earlier this year. When the Partbnb first launched, they were offering 10,000 parts per property, making each part a super affordable $34 each. this meant that almost anyone could partake in this and become a part owner of a spanking new carribean property.

Unfortunately, with the pivot to 8 parts, each part, based on the above property prices in the picture shown, has ballooned to about $100K per part and above. This makes it beyond the reach of the average retail investor.

My guess as to why they did that is that the lower end retail investor who puts in $34 or even $340 will be a lot more difficult to manage than savvy investors putting in serious money of $100K, and in the end, the effort required to service tens of thousands of small and anxious investors just wouldn’t make sense.

Masterworks

Art can be seen as truly scarce obects. Each artpiece (provided it’s manually created) is unique, and especially if the creator is dead, extremely finite.In fact, in some cases, artists art only came alive and got noticed after their deaths.

One such example was Vincent Van Gogh. He was unsuccessful in his lifetime and was considered a failure. After he committed suicide at the young age of 37, he subsequently became famous, and was labeled a misunderstood genius.

One of his most famous works, The Starry Night, now resides in Museum of Modern Art (MOMA) in New York. They’d acquired it in 1941. I couldn’t find details of the price of that one, but another piece depicting the same scene but set in the day, ‘A Whitfield with Cypresses’ was sold for $57M in 1993.

Common folk like you and I can buy it off Etsy for $50 and hang it up on our walls for a laugh, but what if you could invest in the original, and participate in the appreciation of the arts?

This is where Masterworks comes in. Bringing art to the plebs (tagline from me, not them).

How Masterworks works

You sign up for the platform, and you’ll see the art pieces that Masterworks has currently on offer. You can purchase shares in these artworks. Minimum investment amount of US$1,000, and then in $20 increments.

You can actively trade your shares in a secondary market they’re launching to provide more liquidity for investors, or you can wait for them to sell (which they will actively try to sell for a good price) after a certain holding period for a profit, and you’ll get to profit in an industry we’re normally shut out of.

My personal view

US$1,000 seems like a reasonable price for you to be able to say “I own (part of) a Basquiat”.

Vinovest

Did you know that Screaming Eagle, as one of the smallest wineries with the most sought after cabernets in the world, has an exclusive mailing list where those on the list will be first to get hold of each year’s wine, which naturally sells out faster than you can say “cabernet sauvignon”?

Did you also know that the waitlist to get on that mailing list stretches out over a decade? No kidding. When you can get a bottle of wine for $500 and immediately flip it on the secondary market for 5X or more, there’s no way you’re getting off that mailing list!

How Vinovest works?

So, I get it. Wines get finer the more they age. But, how do we know which wineries are great, and how do we go about procuring storing and then knowing the market price to re-sell it for a profit?

Enter Vinovest: simple, modern wine investing. Perfect.

With Vinovest, you can utilise expert knowledge and invest (actually procure, not just buy into a derivative product) into wines that experts have identified as likely to appreciate in value over time, and manage everything for you, from purchase to storage to selling. (You can also choose to simply purchase it for consumption, you rich douche)

I actually wrote a pretty lengthy post about how they work, the various tiers of investment options they have, historical wine market performance, and the types of wine they recommend to various tiers. Check out the link above for the full review.

My personal view

If you enjoy drinking wine, and we all know that wines generally increase in value as they age, plus based on my research, they do seem to offer their wines at competitive or even under market value prices, so I think the value is there.

Starter investment package of US$1,000 doesn’t seem that steep to get initial exposure.

Crypto.com

Remember the good old days of dial-up internet? Where if we wanted to go onto the “cybernet”, then our parents wouldn’t be able to use the phone?

Remember how downloading an MP3 meant we could probably go take a 15 minute coffee break? Ah… the good old days.

A lot of blockchain and cryptocurrency folks are of the perception that Bitcoin (and blockchain technology in general), even though they’ve been around for 10 years now, are still in that infancy stage of their true potential.

Bitcoin has been heavily compared to gold, and has in fact earned the nickname of Digital Gold. I like that comparison, and am personally very keen, and have gotten into a few cryptocurrencies as a HODLer. Bitcoin was born in 2008 during the last financial crisis, and it will be interesting to see how it will perform in its first real test of the covid pandemic of 2020.

From a use-case point of view, it hasn’t become a digital currency some had envisioned it to be, but a store of value doesn’t have to work as a currency as well. That can, and will be filled by other cryptocurrencies on the network.

However, bitcoin bulls have been touting price predictions of between US$100K to US$1M in the years to come. Given the current price of around US$10K, the upside potential is huge. From a downside perspective, this is my view. Bitcoin has been around for 10 years, and in that time, the network has only grown stronger, and more and more people are getting exposure to it, rather than less. So, I think it’s fair to say that bitcoin is no tulip.

If you would like to dip your toes into the world of crypto, may I recommend you try out crypto.com. They have an easy to use platform for you to buy and hold cryptocurrencies like bitcoin, ethereum, litecoin, and they also offer a debit card product in partnership with VISA, that offers 100% rebate on Spotify (or Spotify and Netflix on a higher tier)

How crypto.com works

Crypto.com has their own currency called MCO. When you sign up on their site, you can choose to stake MCO (it works like a deposit, left untouched for 6 months). In return for staking MCO, you get different tiers of cards with different levels of rewards, based on the amount staked.

I got myself a Ruby Steel card, which was the lowest staked tier. For that, I had to stake 50 MCO (currently about S$373) for 6 months. And in return, the reward was 100% rebate (in MCO) of my Spotify charges in perpetuity.

I had the card since October 2019, and have never had to pay for my Spotify since! It’s a great on-ramp to purchase crypto.

They also have a user custody wallet product where you own your own keys to the wallet, and not have your money held on crypto.com’s exchanges. I personally store mine on a ledger.

My personal view

I’m a crypto believer for the simple reason that digital currencies make so much logical sense, given that everything else is being digitalised. The world always moves in the direction of the younger generation. My parents never understood facebook and google, and never will. Yet these products are so ingrained in our society.

I just don’t see kids in the near future pulling out crumpled bills to pay for things. Digital currencies will be here to stay. Get on board.

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What do you think of these investment ideas? Chime in and discuss below!