12 Things To Know Before Investing in Rare Books

12 Things to Know Before Investing in Rare Books

Lately, it seems that every time the market takes a dip, there are tons of articles and blogs talking about investing in alternative assets. It makes sense that people would want something tangible when everything else is uncertain. While gold, silver, and collectibles usually top this list, bibliophiles know the value of a rare book. So, why not turn your passion into a way to earn income? Although most people won’t make enough to retire, serious investors know the value of investing in rare books and have been doing so for years.

Why Are People Investing in Rare Books?

When people decide to invest in rare books, it usually stems from a love of the written word. Like most types of alternative assets, people look for tangible assets that can bring both pleasure and financial gain. Whether it’s fine wines, classic cars, art, antiques, or even toys, many investors find ways to incorporate their passion into their portfolios. And with the right pieces, these investments offer high returns when they appreciate.

However, you don’t need to be a bibliophile to start investing in rare books. One thing that makes them an attractive investment is that their value doesn’t depend on the performance of the stock market. Furthermore, the appreciating value tends to be more linear than other types of assets. Based on the returns from well-established collections, a rare book’s value typically doubles in value after 7 years, with normal inflation rates. And as long as it’s well cared for, it will retain its value for years to come

Where Can You Find Rare Books?

Unfortunately, you are not likely to find rare books at your local bookstore. You will have to start searching in more specialized markets such as auctions, estate sales, book fairs, and private dealers.

Auctions

Auction houses have brokered the sales of some of the most valuable books ever sold. The greatest benefits of buying from reputable auction houses are that they often have access to extremely rare items, and their experts are able to authenticate the books. Plus, auctions will usually ensure that the rarest and most valuable books fetch top dollar for the seller.

Dealers

Like art, book dealers can help you locate rare books. Therefore, it’s crucial to find someone you can trust to look out for items suitable to your taste and collection. Paying a dealer may also allow you to jump on opportunities before they become public knowledge.

Online Platforms

Anytime you purchase something online, you should use caution. So to help you find better vendors, search for platforms dedicated to investing in rare books. These are credible platforms that carefully review each book and verify its authenticity. Not only is it convenient, but it also gives you greater access to books from around the world. And if you can’t afford to purchase it outright, you can also buy shares in valuable books.

12 Things to Know Before Investing in Rare Books

Based on the advice from expert collectors, here are 12 things you should know before you start investing in rare books.

1. Know what you are paying for.

With any investment, research everything before you buy. It may take a while to uncover the true origins of a book, which is why the majority of a dealer’s price is for their time to do this for you. However, you must do your research and know what you are paying for. This will help determine if a book is the real deal or prevent you from making an expensive mistake.

2. Only buy from reputable dealers.

The internet has changed many things about investing in books. If you buy online, it is much more difficult to authenticate and judge the quality of items. But generally speaking, a detailed description of the book and its condition are good indications that what they are selling is authentic. And if need be, you can always ask for additional photos of markings for further verification.

3. Condition is key.

Like all collectible items, books never can improve their condition. At best, they stay the same. At worst, they deteriorate with time. Even if you have a rare book, any damage and wear will affect its value.

4. There is no price guide or catalog to track their value.

One of the greatest drawbacks of these investments is the subjectivity of their value. Unfortunately, there is no price guide or catalog to tell you the exact value of the book you have. There is huge variability, even for books within the same edition.

Several factors besides quality also can add value such as age, rarity, desirability, inscriptions from the author, first editions, limited editions, or the inclusion of the dust cover. But ultimately, a book’s value is whatever the buyer is willing to pay.

5. Buy the best books you can afford.

Serious collectors will tell you not to waste time on low-quality books. Instead, buy the best ones that you can afford. Look for the best examples of an edition or title that you are interested in since they are worth significantly more.

6. Invest in books that you have an interest in.

Tracking down titles and research can become tedious. So, invest in books that interest you. If it is a labor of love and not only profit, it makes the task more enjoyable. And, it makes the successes that much sweeter.

7. You need to develop a personal network of people you can trust.

Collecting books can become highly competitive, especially for the most desirable titles and authors. Therefore, you should build a network of people you can trust to help you build your collection. This could include other collectors with different interests or specialized dealers. And, don’t forget to use the digital tools at your disposal to help you expand your network.

8. Don’t buy a valuable book if you aren’t prepared to care for it properly.

If you buy a rare book, it must be stored safely to protect it from fire and water damage. Unfortunately, if it isn’t properly cared for, the value will deteriorate with the condition. So, if you aren’t prepared to store it, don’t waste your money.

9. There are lower transaction costs if you go through a dealer.

Although auction houses handle the rarest and most valuable books, there are lower transaction fees when you use a private dealer. On average, auction houses take a commission of 35-45% which is shared between the buyer and the seller. However, a dealer’s commission is usually 15-30% so you will get a better return on your investment.

10. Like any valuable asset, consider getting insurance.

Any time you purchase an expensive asset, you should insure it. Sometimes, you can include coverage for rare books under your homeowners’ insurance. However, you can also obtain specialist insurance through reputable brokers. And, it’s not as expensive as you might think.

11. You can purchase fractional shares of valuable books.

Even if you don’t have enough funds to purchase a book, you can still purchase fractional shares. Although you won’t be able to display it in your home, this way of investing has less risk, lower costs, and eliminates the expense of storing it. This may be the best option if you are more interested in the financial gains than the asset.

12. Have a strategy before you start buying.

Lastly, have a strategy before you start investing. Don’t just buy books that look old or have a familiar title. There should be some sense of cohesion in your collection. Decide whether you want to focus on the most valuable books you can find, or if you would like to specialize by genre, author, classics, or generational favorites. This will help limit your search and help you find the titles you truly want.

Diversifying Your Portfolio

A good collection that is carefully curated by a knowledgeable collector has value in itself. However, rare books provide a low-risk investment that retains its value over time. Since their value is not correlated to the performance of the stock market, it offers greater diversification for your portfolio.

As Ernest Hemingway said, “There is no friend as loyal as a book.” And now, you can turn that loyalty into a valuable asset.

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Is the Housing Boom Over?

Is the Housing Boom Over?

For the last two years, the housing market has been booming. But after going on a tear, there are signs that changes are ahead. Many hopeful people are wondering, is the housing market finally cooling off? This would come as welcome news for prospective buyers who have been priced out of homes or stuck in bidding wars. Based on market analysis and recent trends, there are several indications that the housing boom may be over.

The Housing Market Since Covid-19

There have been drastic fluctuations within the real estate and housing markets over the last few years. Namely, everything has gotten more expensive. The national average price of homes has increased by 30% since the pandemic began. In 2020, the national average was $329,000, but prices peaked in May 2022 at $430,000.While people expect the normal increase between 3-5% each year, prices rose by 12% in 2020, and 15% in 2021.

These figures represent the national average, but home prices vary greatly between states. California, Hawaii, and Washington D.C. have seen the greatest increases with the most expensive average home prices. However, the median cost for a home in Arkansas, Mississippi, and West Virginia is well below the national average.

As the economy rebounded from the impacts of Covid-19, it became a seller’s market. There were growing demands for homes, but only a 1.7% increase in the number of available units. Since the supply couldn’t keep up with the demand, home prices skyrocketed across the country. But now that prices are stagnating, economists believe that there are changes ahead.

8 Signs the Housing Boom is Over

Due to recent trends, some analysts believe that the spike in the housing marketing may be leveling off, with hopeful anticipation that it may even be in decline. Based on recent sales data, there may be some indications that the housing boom is over.

1. Major markets are cooling down.

Cities like Phoenix, San Diego, and Denver saw some of the steepest increases in the real estate market. However, prices have started receding in the last few months.

In August 2021, prices increased by 30.9% in Phoenix. However, a year later there was only a 17.8% increase. In San Diego, prices were up 23.2% in 2021, but only 13.7% for 2022. Additionally, Denver residents saw an 11.4% increase in 2022, down from 19.5% in the previous year. If these trends continue for the next few months, it’s safe to say that some of the hottest markets look to be cooling down.

2. Inventory is increasing.

Of course, available inventory will vary between markets. But generally speaking, there are more homes available on the market today than in the last two years. Based on data compiled by Redfin, there were 1.8 million homes for sale in August while only 1.1 million were listed in January of 2022. And if there is more competition, that usually means lower prices.

3. Prices are falling.

The national average for the price of homes peaked in Q2 of 2022 at nearly $430,000. Since then, median home prices have fallen, now settling around $389,500.

Although this is s positive sign, it should be taken in stride. Sales data can change from month to month, with slight increases in some cases. However, the general trend shows that prices are falling. This comes as a huge relief to potential buyers who have been priced out of purchasing a home or forced into bidding wars. If prices continue to fall, more people may finally be able to afford their own homes, providing further relief in the rental market as well.

4. Houses are selling below the asking price.

During the height of the boom, realtors expected nearly every home to sell above the asking price. In many instances, interested buyers had to incentivize owners to sell to them by waiving inspection fees, writing personal letters, or paying extra to convince them to sell. Now, more homes are selling at or below the original asking price.

5. Homes are staying on the market longer.

Looking back, it was also common for a home to sell the first day it listed, sometimes within hours. People rushed to snatch up listings before the competition had a chance to act. Because of this, homes rarely stayed available for more than a few days and brought dozens of interested buyers.

However, houses have been staying on the market longer. In August 2021, the average number of days on the market was 17; in 2022 it was 26 days. This number is likely to continue growing as the holidays approach and the year comes to a close.

6. Sellers are reducing the asking price.

Sometimes people make mistakes and misprice their homes. This can scare people off, so the seller may reduce the asking price to attract more attention. But, more and more people have had to lower their initial asking price in recent months.

The same figures from August show that 21.7% of listings had to reduce their price, a drop of 9.2% from the year before. If the tide is turning to a buyer’s market, homeowners will have to become more conservative when they set their price point.

7. Mortgage rates are increasing.

The rise in the housing markets hasn’t gone unnoticed by the federal government either. One way national policy can influence the housing market and slow price increases is by increasing interest rates. Since it affects mortgage rates, it often discourages people from buying homes. As a result, buyers become more hesitant to purchase a home, and prices tend to drop.

According to Freddie Mac,  the average 30-year fixed-mortgage rate was at 3.22% at the beginning of 2022. However, it soared to 7.08% by the end of October.  Although experts hope rates won’t continue to increase, the trend is likely to continue until inflation has been curbed.

8. Home construction is also increasing.

The lack of available homes put an enormous amount of pressure on the housing market. Since the cost of construction materials was high, it severely limitd the number of new builds. But, more people are breaking ground and building new homes. THis should help supply issues and help stabilize prices over the next few years.

Getting Down to the Brass Tacks

No one can deny that the market has been on a tear since the pandemic. However, national sales data shows that these drastic increases may be slowing. It could be a sign that the housing boom is over and turning from a seller’s to a buyer’s market. Or, it could just be a slight stagnation as inflation continues to affect prices. We can make educated guesses, but no one can predict what the markets will do.

While it’s wise to try and buy when prices are low, you shouldn’t put off a home if you need to buy now. If these trends continue, it may be a good idea to start looking at prospective properties or shop around for mortgage lenders. That way, you’ll be ready and pre-approved for a loan when the right opportunity comes along.

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Terrible Investing Advice You Should Ignore

Terrible Investing Advice You Should Ignore

Taking bad advice usually has negative consequences. However, taking terrible investing advice could cost you your future. If you receive any of the following tips, it may be a red flag that it’s time to start thinking about where you get your financial advice.

10 Pieces of Terrible Investing Advice You Should Ignore

1. You should use the same financial advisor as your family and friends.

Even if the suggestion comes from someone you trust, it doesn’t mean their financial advisor will have the best advice for you. We each have personalized goals, different levels of risk tolerance, and unique financial situations. So, you need to find someone who understands what you need.

You should look for someone who aligns with your goals and explains things in a way you understand. Therefore, you need to do your due diligence and research any new potential candidates. Gather as much information as possible before you make this important decision. Read other client reviews, set up a consultation, and ask how they make a profit.  No matter which route you choose, it’s wise to find out who you are working with before you give them access to your financials.

2. Traditional investment vehicles like IRAs and 401(k)s are outdated.

For some reason, there is a current attitude that long-established strategies for generating wealth, such as traditional retirement accounts, are outdated. To put it bluntly, this is terrible investing advice that you should ignore.

There are reasons why most investors utilize IRAs and 401(k)s. While they may be boring and more lackluster than other, newer investing options, funding these retirement accounts is a tried-and-true strategy to build wealth.

3. Buying a home is always a good investment.

Generally speaking, real estate appreciates over time. This leads many people to believe that buying a home is always a smart investment. While this may be true for many people, there are times it may prove to be bad advice.

For example, if you don’t plan to live there long, the costs for the transaction, maintenance, repairs, taxes, and insurance could undermine your investment. It also doesn’t provide much security through retirement if the value of the home isn’t liquid and you can’t access the equity. I’m not saying that buying a home is a bad decision, but it may not be the best financial move for every situation.

4. When stock prices fall, sell everything to cut your losses.

Markets are constantly in flux, so you shouldn’t get swept away by every rise and fall of the ticker. Watching the market moves can become gut-wrenching, especially when prices are volatile.

If you see the value of your portfolio diving, don’t panic. Many people’s first instinct is to sell everything before they lose more money. However, making impulsive decisions like this are the worst thing you could do. It’s better to trust your strategy, knowing that the markets will eventually stabilize. You should adopt a more long-term view, or you could miss out on the gains when the market rebounds.

5. Investing is too risky; stick to cash.

Investing comes with inherent risks. But, not investing at all is the greatest threat to your long-term goals.

Of course, it’s smart to have some cash stores, but saving and investing serve two different goals. You need to invest so your money earns enough interest to grow your wealth and outpace inflation. Letting money sit idle in a low-yield savings account or under your mattress will reduce your purchasing power. It’s better to mitigate the risk and put your money to work for you.

6. Thousands of people can’t be wrong.

Many amateur investors chase trends because they fear they will miss out on an opportunity. They hear their friends talking or read news articles trying to predict the latest hot stock tip. In their minds, if thousands of people are doing it, then it can’t be wrong.

Unfortunately, many lose money when they follow fleeting trends. You must do your research and evaluate the investment before throwing money at it. Although there may be power in numbers, don’t fall victim to the mob mentality.

7. Create an investment strategy from advice on social media.

There are many financially-savvy influencers on social media that have good advice and strong backgrounds. However, there is also a ton of misinformation and terrible investing advice too. A glance at the loss porn and strategies shared on r/wallstreetbets will make the most experienced investors cringe. While you may be able to find some sound advice on social media, it’s usually not a good idea to take advice from someone who doesn’t know you or your situation.

8. Invest in the latest hot stock if people you know are making a profit.

Another problem with jumping on the latest hot stock bandwagon is that if share prices are up, it’s probably too late to make a profit. Most investors who make a killing during trends held stock prior to the frenzy. Buying it after it becomes buzzworthy won’t bring you big profits.

More conservative investors buy index funds with steady gains rather than trying to get lucky and strike it rich. Picking stocks is a gamble, and there are very few winners.

9. Increase your profits by timing the market.

Even novice investors know to buy low and sell high. However, no one can tell you exactly when that is. There is no crystal ball, and predictions are an educated guess, at best.

Trying to time the market rarely works out in your favor. If you buy too soon, you might pay more than you should. But if you sell too early, you miss out on the gains. It’s enough to drive you crazy. So, it’s probably wiser to invest in assets that provide greater diversity and insulation against market fluctuations.

10. You need to hire a professional to manage your portfolio.

Despite what people say, you don’t need to be an expert to start investing or managing your portfolio. While many feel more comfortable turning it over to a professional, DIY investors prefer to do it themselves to avoid the management fees.

If you aren’t quite ready to go it alone, there are free robo-advisors that can assess your situation and help you create an investment strategy. Once you determine your risk tolerance, it will select investments to match and make suggestions based on your goals.

Where to Get Good Advice

A financial advisor is there to guide you through important financial decisions. However, even experts make mistakes that could cost you money. Some investors find that they do better on their own.

The reality of investing is that many decisions must be made in uncertainty. But make no mistake; there is a distinct difference between losing money from a decision based on sound judgment vs poor counsel.

When choosing a financial advisor, you want someone who isn’t putting their self-interest before the client. Furthermore, you need someone who is knowledgeable and performs their due diligence before making a suggestion. If you disagree with their advice, get a second opinion. And never be afraid to ask questions. You want to be sure you have the right person for the job since you will be entrusting them with your future financial security.

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Can You Buy and Sell Air Rights?

Can You Buy and Sell Air Rights?

When people purchase real estate, most buyers are only interested in the land and buildings. However, many never consider the value of empty space. In large cities where space is limited, the air space above the property may be just as valuable as the lot itself. If you are looking to pull money from thin air, there are potential opportunities for huge profits to buy and sell air rights.

What Are Air Rights?

Since air rights may add value to your property, it’s beneficial to know what they are and how they work. The term “air rights” refers to the legal right to use or develop the space over or near a property. These rights apply to both vacant lots and those with existing structures. The definition is a vague guideline that varies by location, but it can incorporate upper stories of tall buildings, power lines, or coveted views.

Most cities severely restricted air rights, especially in residential zoning areas. However, in places where ground space is limited, the ability to build up becomes more important. Companies and real estate developers pay big bucks for the unused and transferrable development rights for air space.

Unfortunately, calculating air space can be complicated and often requires professional input to “true-up” the numbers. But to give you a basic idea, you have to find the floor area ratio (FAR). To get this number, you take the maximum floor area permitted for the zoning lot and subtract the floor space of the existing structure (if there is one). The remainder is your total amount of air space for a given lot. Once you have a quantifiable amount of space, you can put a value on it to buy and sell.

What Laws Regulate Air Rights?

Like all valuable assets, there are laws that establish and regulate air rights. Generally speaking, you can utilize the air space on your property however you see fit. That is, as long as new development complies with height restrictions, zoning laws, and the city’s building codes. For those who are just learning about them, here are a few of the most important regulations you should be aware of when you buy and sell air rights.

Elevation Restrictions

In most cases, when you buy real estate, you are also purchasing the air rights, unless otherwise specified. However, your air rights aren’t endless. For example, they don’t extend into navigable space. Your air rights include a maximum of 1,000 ft above the highest obstacle. Beyond that, you enter into FAA federally regulated space.

Municipal Zoning Laws

Additionally, air rights depend on the local zoning laws. Cities strictly regulate land use and development. Therefore, all buildings must comply with municipal codes and regulations which determine the reasonable amount of vertical space suitable for development on a given lot. Zoning laws vary by location and district within a municipality as well. 

Furthermore, different zoning laws exist for commercial, industrial, and residential spaces within the same city. Ignorance of the laws could lead to expensive complications. Therefore, it’s best to do your research and seek legal counsel before making any purchases.

Encroachment

Lastly, the boundaries of all structures and new development must remain within the specified property lines. While lots can be strung together to increase the amount of usable air space, it cannot encroach upon the space of properties you do not own.

If any new construction extends into the air space of a neighboring property, you may have to remove it at your own expense.

Can You Buy and Sell Air Rights?

The Cost

While the legalities are important, the most pressing question is “How much will it cost?” Unfortunately, there are no standardized answers. The pricing for air space depends on where you are looking.

Like real estate pricing, air space is more expensive in densely populated urban areas. And people will pay even more for desirable locations with great views or highly sought-after zip codes. So, it’s going to be much more expensive to buy air space in larger cities like New York, Los Angeles, and San Francisco.

Furthermore, you may face additional challenges and fees if you are looking at historical buildings or cities with high taxes. However, you can expect anywhere from $200-$400 per sq. ft. for available air space.

The Gains

Once you understand what they are, you may be asking yourself why people buy and sell air rights. The simple answer is that it can be lucrative for both parties. Property owners who need an influx of cash for repairs, maintenance, or other development get the capital they need. And if they had no plans for the air space, it is pure profit.

On the other hand, the buyer gains more options when they buy air rights. Obviously, they get more space which they can use to build larger structures. However, many developers purchase air rights of surrounding lots to protect views from their building or increase the property value.

The Fine Print

Air rights can get complicated, especially when there are several interested parties. Obtaining them often involves negotiations, legal fees, and an official contract.

In most cases, air rights transfer with a sale agreement. However, you can also gain more air rights through a zoning lot merger as well. Either way, you must purchase the space and secure the Transferable Development Rights from the current owner.

Although it is possible to buy and sell air rights, there are strict limitations. Local zoning laws dictate many of them. However, you should also be aware of any light and air easement provisions that prevent future development as well.

Before you make a financial commitment, you can hire a consultant to review the development rights and city zoning codes. Having an expert on hand can help you identify good investment opportunities and avoid paying more than you should. Not only can you avoid costly mistakes, but you can also ensure you are getting the best value for your money.

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Oddest Collectibles to Invest in 2022

The Oddest Collectibles to Invest in 2021

When it comes to investment strategies, there is no single prescribed way to maximize your returns. While most investors choose to put their money into stocks, bonds, or real estate, they are not the only options out there. Some people seek out more unconventional assets such as collectibles. Although many of us are still holding on to childhood memorabilia in the hopes that someday it may be worth a fortune, chances are slim that you will see five-figure returns. However, some of these may net you better returns than traditional portfolio assets. Here are some of the oddest collectibles to invest in 2022.

The Best Collectibles to Invest in 2022

1. Stamps

As the king of all hobbies, most people know that rare stamps are worth a small fortune. With a quick Google search, you will find dozens of news stories of stamps that sold for millions of dollars. Although experts estimate that only 1% of stamps worldwide will appreciate over time, it is one of the safer options on the list of oddest collectibles to invest in 2021.

If you are lucky enough to have one of these in your collection, it could earn a yield between 5% and 20%. However, they also advise that you will need to hold these assets for up to 15 years before you see significant returns.

2. Coins

Collecting coins is a popular pastime that has huge rewards to the most persistent collectors. In fact, rare coins can bring in thousands or even millions of dollars at auction. While your wheat pennies will only sell for a few bucks, coins made from precious metals or featuring mistakes are the most valuable ones. Unfortunately, investing in coins doesn’t earn you any dividends. Therefore, the value depends entirely upon how much someone is willing to pay.

However, gold coins provide a more tangible return for investors. Even after nearly 600% growth in the last two decades, gold prices continue to rise. So, even if these coins hold no value among coin collectors, they will always be worth their weight in gold.

3. Comic Books

In recent years, Hollywood has brought our favorite childhood superheroes back to life. But, it has also made many super-fans rich. With the recent surge in popularity, original comics in mint condition now fetch top dollar at auctions. For example, a 1938 comic featuring Superman’s first appearance sold for over $2.1 million.

If your comic books have been well-loved and show their age, they won’t be worth nearly this much. However, it is possible to find rare issues at conventions that you can sell or trade for a profit. Comic-Con events are a great place to build your comic book collection as well as find some of the oddest collectibles to invest in 2021.

PFadvice.com has a very good series of which comic books are the most valuable, by decade.  The site also provides a useful discussion about what makes comics valuable. Hint: when the comic’s characters get adopted by popular culture, the value of the comic book increases.  Here are the lists of the most valuable comic books of the 1960s, 1970s, 1980s, and 199os.

4. Trading Cards

While this is a broad category, trading cards are a solid choice if you want to invest in collectibles. The most attractive thing about trading cards is that you can personalize them to your own passions or interests. Whether you are into baseball, Pokémon, Yugioh, or Magic the Gathering, rare cards are worth millions.

If you had any trading cards as a child, dust off your collection and check their value. Even if you don’t have a Topps 1952 Mickey Mantle card, your trading cards could still be worth money.

5. Toys

Vintage toys are another good option for collectors. As with comics, vintage toys from the 80s and 90s have seen a huge resurgence in popularity. If you held onto your favorite toys after the various toy crazes subsided, they could fetch a good price, given they are in good condition. Action figures, Beanie Babies, Legos, Barbie dolls, and Hot Wheels are all hot-ticket items right now.

When you are ransacking your home for valuable collectibles, look for items still in the original packaging. However, if you don’t have any toys from your own childhood, you can always begin a new collection.

The Oddest Collectibles to Invest in 2022

Now that we’ve covered the most common and valuable ones, here are some of the oddest trends and collectibles that people are investing in.

1. Sneakers

Any vintage item in good condition will generally bring a good price. However, sneakers are quickly becoming one of the most valuable vintage items on the market. There is a huge demand for first and limited-edition sneakers. In particular, Nike and Adidas sneakers in mint condition regularly sell for thousands of dollars on eBay.

A recent article from the Huffington Post uncovered that vintage sneakers provided better returns than gold. However, be warned that prices and demand are unpredictable. So, it’s a bit of a gamble knowing which shoes to invest in.

2. Electronics

It’s not surprising to learn that vintage electronics fetch high prices at auction. Original Apple products and first-generation devices not only make great conversation pieces, but also sell for millions online.

While you probably don’t have an original Macintosh computer lying around, early generation iPods, Alexas, and Nintendo DS gaming systems are likely to appreciate in value over time. Since most of this technology is still relevant, early editions are relatively easy to find. So, if you have any vintage electronics still in the box, it would be worth your while to hold on to them to see if they increase in value over the next few years.

3. Anthropomorphic Taxidermy

This is by far the oddest collectible to make the list. For those who don’t know what it is, anthropomorphic taxidermy is the art of preserving dead animals and displaying them in human situations. For example, specimens are usually dressed in human clothing or posed into human roles and settings. Although it may seem odd to many people, this type of art is extremely valuable to the right collector.

Investing in Collectibles

If you are looking to invest in less traditional assets, collectibles are a fun and interesting way to diversify your portfolio. However, it always includes greater risk than more traditional options like stocks and bonds. While there are no guarantees that your collectibles will bring high returns, patience is a virtue. Although most collectibles won’t earn a fortune in your lifetime, you never know…your favorite collectibles could bring you more than enjoyment in the years to come.

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7 Passive Income Streams from a $1000 Investment

Passive Income Streams From a $1000 Investment

One of the best ways to generate income and supplement your salary is through passive income streams. Sure, you could make more money by working longer hours, getting a second job, or trying to advance your career. But, there are only so many hours in a day which severely limits your earning potential. Investing your money in passive income streams allows you to put your money to work for you. And, you don’t need a ton of money to get started. Here are 7 ways you can create passive income streams with a $1000 investment.

7 Passive Income Streams from a $1000 Investment

1. Buy Stocks

Many investors will tell you that buying dividend stocks is the simplest and most profitable passive income stream. You can purchase stocks from well-established companies with a history of good returns. Or, you could try your hand at picking your own stocks. While this comes with greater risk, it could also have greater financial rewards.

Those who are more risk-averse can invest in mutual or index funds. These offer you more market exposure and a percentage of the dividends from multiple companies. Another benefit is that the built-in diversification helps protect your assets during market fluctuations.

However, if the idea of choosing your own stocks has you panicking, you can always hire a robo-advisor. Having an automated investment manager that uses your preferences and input to customize your portfolio takes the guesswork out of the equation. It also takes a hands-off approach and avoids the predatory sales tactics of human financial advisors. And, the low fees and lack of account minimums are great for beginning investors.

2. Invest in REITs

Investing in REITs is another great option for those with a specific interest in real estate. These trusts pool money to buy and manage residential, commercial, and industrial properties, then pass a percentage of the earnings to their shareholders.

You have over 200 publicly-traded REITs to choose from. But, a handful stand out from the competition. The ones that are making the most recent headlines include AvalonBay Communities, Realty Income, W.P. Carey, and SL Green Realty.

There are also new crowdsourcing platforms such as Fundrise, CrowdStreet, and DiversyFund where you can buy a percentage of properties. These are great options for people with little cash since you only need $10 to buy-in. And, most earn an average of 8-12% returns on their investments. If you were to reinvest your dividends, it could turn into one of the most lucrative passive income streams from only a $1000 investment.

3. Purchase Bonds

Now that the stock market isn’t performing as well, there is more focus on purchasing bonds. There are various types to choose from including bonds issued by a company, the state, or the federal government.

When you purchase bonds, you are essentially loaning money with the expectation that they repay the loan plus interest. And, you can choose terms and timelines that best suit your goals. In general, bonds are a low-risk investment that helps offset the equity in your portfolio. Furthermore, since their value is indirectly correlated to the stock market, they perform better when stock prices are down. So if you want to hedge against inflation and market fluctuations, bonds are a safe bet.

4. Open a High-Yield Savings Account

If you aren’t looking for ways to expand your portfolio, there are smaller changes you can make to generate passive income streams. For example, choosing accounts that offer better interest rates will earn you money. Rather than letting your money accrue minimal interest in your checking or savings account, you can transfer it to a high-yield savings account.

It’s easy to set up and transfer funds, especially if you already hold other accounts with the bank. However, you can earn even better rates if you choose an online bank. By opening a high-yield savings account with interest rates of around 0.6%, you earn more money with minimal effort.

5. Rent Out Your Spare Room

Another trend that has gained popularity is renting out personal property for travel accommodations. If you have an extra room in your house or a vacation rental that you don’t use, why not make some extra cash?

With all the different sites out there, there are endless ways to attract potential guests. And when you cross-list the rental space on the most popular sites such as Airbnb, VRBO, Flipkey, and Homestay, you’re more likely to get bookings. By using your money to spruce up the place to make it more appealing, you could create passive income streams with only a $1000 investment.

6. Sell Your Spare Bandwidth

If you don’t want to use your home to generate more income, you could consider selling your bandwidth instead. Many people pay for unlimited data. However, you could sell what you aren’t using to earn money.

Although they function in different ways, you can start generating passive income by installing an app on your phone or PC that runs in the background. People pay to utilize your bandwidth, bringing you more monthly income. Packetstream pays you $0.10 for every GB shared while others such as EarnApp can give you about 30$ a month selling 1GB of bandwidth a day.

Your location, network speed, and the number of IP addresses affect how much you can earn. The more traffic, devices, and IP address you use, the more you earn. However, safety is always a consideration since there are no guarantees of who will be using your bandwidth.

7. Own Royalties

Another alternative asset that is gaining traction among alternative investors is owning royalties. With partial shares and online marketplaces, it’s becoming easier to invest in creative assets. Although you wouldn’t own the copyrights, you could earn a portion of future revenue. When you buy royalties, you earn money every time your intellectual property gets used.

To attract new types of investors, sites such as Royalty Exchange package them into familiar investment vehicles with term-based yields. They perform independently from the stock and bond markets, have a history of strong returns, and have the potential to outperform traditional assets. And now you don’t need to be an industry insider to get in on the ground floor.

Using Time to Your Advantage

Even if you feel you don’t have enough money to start investing, it doesn’t require a fortune to get started. Additionally, the sooner you start investing, the greater advantage you gain. Time and compounding interest are your greatest assets if you’re low on capital. So, you can start making small, steady contributions now that will exponentially increase your initial investment.

There is no “right time” to start investing, so don’t use a low bank balance as an excuse to get started today. Rather than letting your money sit idle, you can use it to help build your retirement savings, protect your family against income loss, and reach your financial goals faster.

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10 Things to Know When Investing in a Gumball Machine

Things to Know Before Investing in a Gumball Machine

Nowadays, everyone is looking for new ways to earn passive income. For those looking for new opportunities, have you ever considered vending or gumball machines? With low overhead costs and maintenance, they can provide easy side income each month. However, before you jump in, here are a few things you should know when investing in a gumball machine.

The Financial Benefits of Investing in a Gumball Machine

While it may seem unconventional to some, there are several financial benefits to consider when investing in a gumball machine.

Passive Income

First and foremost, buying a gumball machine is an easy way to generate passive income to supplement your monthly earnings. Some owners report that they earn up to $350 a month for a single machine. However, Vending Times magazine gives a more reasonable expectation with the national average of about $1 a day.

Steady Demand

Another reason that a gumball machine is a good investment is due to the steady demand. According to this Statista survey, 173.4 Americans responded that they chew gum. And, 23 million indicated they were habitual chewers (more than 16 pieces a week).

You should also consider that people will always need food and snacks. Therefore, gumball machines offer a cheap option when you need something small.

Low Maintenance and Overhead Costs

Lastly, gumball machines have low maintenance and overhead costs. Once you purchase the machine and products, you only need to refill it. Depending on sales, it could be once a week or once a month. Be sure to track your quarters so you can set a consistent schedule.

The Initial Cost of Investing in a Gumball Machine

So, the big question…how much does it cost to get started? As with most things in life, the answer varies.

The initial cost largely depends on the machine you choose. While basic gumball machines start around $100, they can run well over $1,000. However, this should be the largest expense and a one-time fee since these machines are built to last.

Then, you have to factor in the cost to fill the machine. Candy is relatively cheap, especially when you can buy it in bulk. And, it has a long shelf life (about a year) which gives you more breathing room to sell your inventory.

The price for your inventory varies as well by size, brand, and supplier. But to give you an idea of these costs when investing in a gumball machine, let’s look at traditional gumballs.

One of the most common selections is Dubble Bubble one-inch gumballs. You can purchase 850 of them through Amazon for $40-$50. This gives you a profit of $0.17 per gumball, for a total of $212.50 per box sold. With this profit margin, the machine should pay for itself after selling approximately 600 gumballs.

Even if you don’t choose the most profitable location, you should at least cover the investment costs with enough time. And, the more machines you have, the more you can make.

10 Tips to Maximize Your Gumball Game

If you think that investing in a gumball machine is the right move for you, here are 10 tips to help you maximize your profits and success.

1. Don’t skimp on the machine.

When investing in a gumball machine, don’t be cheap. If you buy a cheaper model or second-hand machine, there’s no way to verify its maintenance history. If they are more prone to jam or break, you may have to invest more money to fix them.

2. The amount you can make all comes down to location.

Remember…location, location, location! If you want to make money, you need visibility. High-traffic locations can bring up to $350 a month while others may not even break $3. But, you are bound to have some level of success as long as it is well placed and people pass by it frequently.

3. Pick a location where people are likely to have change.

Besides location, you need to think like your customers. Which places give coins as change? They need coins to operate the machine, so think of locations where people are more likely to have change on them. Scope out local gas stations, arcades, laundromats, and retail stores for potential placement.

4. Choose the placement based on foot traffic.

Once you have a location, look for places people spend the most time. Try to place your machine near doors, lines, and other places people wait. On the other hand, your inventory is less likely to sell if you put it near restrooms or in a remote corner.

5. Keep the machine well-stocked.

You will also want to make sure your machine is well-stocked. A full machine is much more appealing than one that looks half-empty.

6. Use plastic capsules.

If you use plastic capsules, you can expand your offerings to sell candy as well as small toys. Did you know that some toys are cheaper per unit than gumballs or candy? Not only will it help you capture more profits, but it also gives customers more options and broader appeal.

7. Choose the right product.

You should also pick products people like. If the employees at the location use the machine, get their opinions too. You want to choose things that people want to buy. Don’t waste money ordering products that don’t sell.

8. Partner with a charity.

Partnering with a charity is a great way to garner greater support from location owners. In addition to attracting more business from people who want to support the cause, it could help cover overhead costs.

9. Put your profits back into the business.

If you have one gumball machine that is successful, why not purchase a second one? If you put your profits back into your business, you increase your earning potential. Buying more machines will increase revenue and allow you to scale your business.

10. Hire a locating service.

If all else fails and you are struggling to find a location, you can use a locating service. However, make sure it is a reputable provider. Go online and check customer reviews or ask other business owners for references.

Do you own a vending or gumball machine? What challenges have you come across? Share in the comments below!

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What Are the Downsides of Investing in Collectibles?

The Downsides of Investing in Collectibles

Fans of TV shows like Antiques Roadshow or American Pickers may talk about getting rich from their collectibles. But if we’re being honest, you’re probably not going to make a million bucks from the junk you have been holding onto in your attic. While there are a few people who have gotten lucky and made a small fortune, it isn’t the typical outcome. Investing in collectibles requires a considerable amount of time, knowledge, and money before you ever see returns. There are several downsides of investing in collectibles that people overlook. And as with all investments, you should be aware of the inherent risks of alternative assets before buying anything.

What Are Collectibles?

If you are thinking about investing in collectibles, it’s best to start with an understanding of what they are and are not. Collectibles are an alternative type of investment that does not include stocks, bonds, cash, or real estate. It refers to any item that is far more valuable than the initial sale price because of its popularity or rarity.

The word “antique” and “collectible” are often used interchangeably. However, there is a distinct difference. While antiques can be collectibles, not all collectibles are old. A collectible could include just about anything from antiques and coins to toys and comic books. Because of the detailed knowledge and wide variation, it makes it much more difficult to assess the value of these types of assets.

Why Are People Investing in Collectibles?

Many investors choose to put their money into collectibles because they already do it as a hobby. Ambitious collectors hope to turn their interests into income by investing in super-rare and valuable items. These items offer greater diversification in your portfolio and generational wealth that can be passed on.

There are also tons of people who hear news reports of yard sale treasures and thrift store finds that turn out to be worth a fortune. These stories cause people to flood the market and drive up prices. While this can be great if you are already collecting, it also makes it difficult to find items worth investing in. Those who are looking at saturated markets aren’t likely to find rare collectibles that will fetch a high price at auction. However, it doesn’t stop opportunists from trying.

What Are the Downsides of Investing in Collectibles?

Although many tout the benefits, there are several downsides of investing in collectibles you should consider before you do anything.

1. The Financial Investment

First, there is the initial cost to buy the collectibles. You will rarely find cheap deals. True collectors know you must spend money for quality items. Then, there are the costs of handling, storage, maintenance, restoration, insurance, shipping…the list goes on. You may actually lose money in the beginning.

And, let’s not forget you also have to pay 28% in capital gains tax for the sale of collectibles you have owned for more than a year. That alone could undercut any returns on your collectibles.

2. The Time Investment

From my experiences, the greatest deterrent is the time factor. Unlike other investments, there are no returns until you sell the item. And, you may have to wait several years for it to appreciate in value.

It also takes time to research and become an expert on your collectibles. You’ll need to learn how to recognize them, assess their rarity and condition, and locate buyers willing to pay top dollar. This adds up to a considerable amount of time. If you aren’t seeing high returns, it may not be worth your time.

3. The Learning Curve

In the same vein, there is also the learning curve to consider. Unfortunately. you’ll have to educate yourself. While there is a wealth of information for investors trading in stocks, bonds, and more common commodities, it’s harder to find similar resources for collectibles.

You can still find tons of information. But, you have to cultivate an intimate and detailed knowledge about your collectibles. And, you must also understand how their condition and rarity affect their value. For extremely scarce items, it is also difficult to find comps and make a fair assessment.

It takes longer for some to learn these things. However, experience is the best teacher. Many people who become successful collectors simply learn through trial and error.

4. Counterfeits

Another of the downsides of investing in collectibles is the risk of buying counterfeits. There will always be people out there trying to scam people out of their money. Unfortunately, collectibles are no exception. There are many convincing counterfeits that could cost you a lot of money.

5. No Guarantees

Although some become more valuable over time, there is no sure-fire guarantee with collectibles. Furthermore, many items are marketed as collectibles, but that doesn’t necessarily mean they will appreciate in value. It’s possible that you may spend a lot of money for no return on your investment. Or, if the assets are damaged or destroyed, they become worthless.

The truth is that no one can guess what the next high-dollar collectible will be. And, collectibles are notoriously volatile since it is a highly specialized market. Demands change, causing some markets to crash as quickly as they rose. While some types are more stable than others, you never really know.

Tips for Investing in Collectibles

There are many downsides of investing in collectibles. But if it’s something you love, it can still bring you joy even if it doesn’t bring you profits.

  • Learn as much as you can. It will serve you well to know what’s worth buying and what’s not. And, it will also make it harder for people to take advantage of you.
  • Be cautious. There’s no regulating body for this type of asset and many sales are private. So, there’s no one to complain to or help you seek justice if you get the raw end of a bad deal.
  • Be patient. Collectibles are illiquid assets. It takes time to connect with someone who knows their value and is willing to pay it.
  • Take care of your collectibles. The condition is a huge factor in an item’s value. So, you’ll want to insure them against damage, properly store them, and do what you can to repair/restore them to their original condition.
  • Know your limits. Collecting can quickly turn into hoarding if you are trying to collect anything that might hold value someday. These items will overrun your home, so choose something to narrow your focus.

Do you invest in collectibles? Share your experiences with us!

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Should You Invest in the Manufacturing Industry This Year?

Where are you investing your money in 2022? A lot of people are making decisions about where they should invest their money this year, and some are wondering if manufacturing is a place they should be considering investing some cash. The answer is not quite as simple as a yes or no answer. Learn more about investing in manufacturing below.

The Good News

The COVID-19 pandemic certainly has taken a toll on the world. However, things are revving back up nicely, including the manufacturing industry. The manufacturing industry in the United States is expected to meet record growth between 2022 and 2023. As a matter of fact, it is not one specific manufacturing industry that is expected to see tremendous growth; it is all sectors of manufacturing expected to enjoy some growth.

The Bureau of Labor Statistics projected that metal fabrication manufacturing will grow at least 9% by 2026. Other industries are also expected to enjoy between 10% and 25% growth over the next five years. Manufacturing is making its way back to the United States, and the orders are coming. The left and right, and the outlook is sunny that manufacturing will continue to blossom. However, it is not all good news.

Labor Shortages

Some experts are concerned over the positive predictions when it comes to manufacturing investments because of the labor shortage. There was already a labor shortage before the pandemic and now that shortage has reached crisis levels. Some sectors have been crippled by the labor shortage, while others seem to not feel the pinch at all. What can you do as an investor to ensure that you are choosing the latter business to invest your money in? Do your research.

Whenever you are investing money, you should do your due diligence and get to know the company. Read the news that is relevant to the industry, do a deep dive into what is happening in the business as far as employee retention. See if you can dig up information about how many employees the company has and whether that has increased or decreased over the last couple of years. A little information can go a long way in helping you to make the right choice.

Supply Chain Issues

There are still some bumps in the supply chain because of the pandemic. Some of the bumps are simple obstacles that most manufacturers are able to deal with, but some of the bumps are gaping holes that are not easy to deal with. As an investor, you have to be able to look afield sometimes to see the long-term picture. For example, if you are considering an electrochemical fatigue crack sensor manufacturer (they are used in detecting cracks as minimal as .01 inches in a structure) and that manufacturer is having issues getting the chips they need, you might want to pass. Electronic chips typically come from China, and it may take quite a few months for backorders to be filled, which of course will affect revenue.

Again, do your due diligence to ensure you make an informed decision. The supply chain issues will not go on indefinitely. There is an end in sight. When investing your money in manufacturing, you should ask yourself how long you want to park that money before you see some real growth. If you can go for the long haul, then the supply issues right now will not be a long-term problem.

Automation Is a Big Deal

Manufacturing companies that invest in their business by keeping up with state-of-the-art automation are the companies that are going to see the most growth. Automation is here to stay and it is the future of manufacturing. Consider investing your money in manufacturers that are already ahead of the automation power curve. Those manufacturers that have largely automated have been unscathed by the labor shortage.

Is manufacturing a good place to put some money this year? Yes, as long as you take the time to do the research. There is always risk in investing money, but it feels good to take that risk for something you believe in. Invest in American manufacturing and feel good about your investment.