Building Startups vs. Income Investments
Is the Startup Trend Coming to an End?
Outrageous startup valuations where $1B seems to be the arbitrary number given to any new business dream, even if it is bleeding millions in losses, along with a scary stock market, has many investors looking for new alternatives.
The trendiness of launching startups has certainly helped fuel North American economies over the last few years. If it weren’t for all the investment dollars being lured in, the economy would be in much worse shape, however, the startup balloon may be on the verge of reaching its breaking point.
A few great startups will always be needed to pioneer progress. If you are lucky enough to create the next Facebook, the years spent coding and raising capital can result in some seriously significant paydays. Still, the data shows that for most, launching a startup ends in bankruptcy and heartbreak.
Startups vs. Income Producing Investments
Author, serial entrepreneur and more recently an investment guru, Tim Ferriss recently posed the question whether it was more important for individuals to seek income versus chasing the big jackpots some startups may offer. In a recent podcast episode, Ferriss states that the question have become under-examined.
Almost everyone wants to win the lottery, yet of the few that do win, most go broke very quickly because their expenses exceed their income.
What is most important for maintaining your lifestyle design and maintaining financial solvency regardless of what comes is not the size of the stacks of cash under your mattress, but your passive income.
The Advantages of Real Estate Investing
Few know that Tim Ferriss also has an expansive real estate portfolio. Real estate offers many advantages. There is great security and tax benefits. Real estate is also an incredible income producing machine. Canadians can still put in sweat equity to remodeling homes as a way of generating money if they like, but there are hands-free passive income options. Those investing in office buildings and shopping plazas can even benefit from the success of others’ successful startups, without the risk of directly betting on those ventures. Then there is appreciation potential. Equity appreciation means that over time Canadian investors can enjoy wealth building in addition to ongoing income.
Startups are inspirational, but when it comes down to making real money and enjoying a great lifestyle many are waking up to the fact that focusing on building income streams first may be the smartest and soundest financial move. For those ready to amp up their income, real estate appears to offer many of the attractions of startup investment, but with a lot more consistency and upside potential.