Punk Rock Finance: New Year, New Opportunity

It’s exciting to try to pick the next home-run stock like Tesla. But that approach isn’t likely to pay dividends, says financial advisor Spencer Sherman, who recommends a much more straightforward tactic when it comes to selecting your investments. He suggests putting money that you won’t need within the next five years into a globally diversified index fund, such as Vanguard LifeStrategy Growth Fund or another fund made up of index funds, and to avoid active funds. Index funds seek market-average returns, while active mutual funds try to outperform the market.

Many rank-and-file investors remain unaware that they can invest in start-ups right alongside venture capitalists and angel investors.

“The everyday investor can participate in the wealth created by startups,” says Danetha Doe, founder of Money & Mimosas. (Doe is also an OZY contributor.) If you’re interested in providing funding to startups — and potentially sharing in the earnings of a growing enterprise — consider equity crowdfunding, also known as regulation crowdfunding. It’s a way for startups and small businesses to raise capital, and for more people to get in on a game that was previously available only to accredited investors. (Accredited investors are those with a net worth of $1 million or more, or a gross annual income of $200,000+ as an individual.)

The JOBS Act of 2012 changed the regulations to allow non-accredited investors to put a limited amount of money into startups — yet many rank-and-file investors remain unaware that they can invest alongside the venture capitalists and angel investors who bring millions, or billions, of dollars to the table.

Given market volatility and losses in even the most revered stocks, 2023 is a good time to consider new ways to diversify. Doe suggests considering whether you can put 10% of your portfolio into alternative investments such as real estate. Given the state of the climate and environment, she also notes that it’s a good time to consider divesting your 401(k) holdings from fossil fuels, and reinvesting them into green companies. (Stay tuned for next week’s newsletter exploring companies that can be considered “green.”)

Did you know that you can learn to code right now, for free? Udemy.com and codecademy.com can get you started. And when you’re ready to move on to something a little more advanced, try pluralsight.com, which was founded by Stanford professors with a vision to train the next generation of tech workers. Through Pluralsight, you can learn to code a mobile app from scratch, or become an Apple Certified Support Professional and apply for a role with Apple’s all-remote support organization, AppleCare.

Through Pluralsight, you can learn to code a mobile app from scratch.

Well, not exactly, but almost. A little-known fact is that almost all courses at MIT can be viewed for free online. This resource can help anyone who is motivated to learn alongside some of the best and brightest in the world, and while you don’t get a degree in the end, you have access to knowledge that can enrich your understanding of our world and might help you jump-start a new career.