Remember the 1990s? There were no dividend-reinvestment programs, day traders, automated trading, and few ways for everyday folks to earn a return on their money outside the traditional stock and real estate markets. Unless you had millions of dollars to spend and could rate as an accredited investor, your choices were few, and boring. In the 2020s, everything is different.
Not only can you set your brokerage account to auto-invest with the click of a mouse, but it’s possible to day trade from home, reinvest all your dividends instantly, purchase fractional shares, take a chance on bullion, collect fine wines for profit, and become an art collector without being a millionaire. In terms of how much things have changed, the 1990s might as well have been ancient. Here are some of the highlights of what the 2020s holds for everyday investors who want to earn a profit without dying of boredom.
Day Trading
There’s no faster, higher-octane way to earn a living. If you have the disposition to deal with in-and-out buying and selling from the opening to closing bell, Monday through Friday, then day trading might be for you. There’s a rule that keeps some people away, but it’s easy to get around it. The pattern day trading rule only lets you make three trades per week unless your margin account has $25,000 in it. So, why is it that pattern day traders are becoming more common? They use numerous brokerage accounts and do three trades in each one. Or, they simply use an off-shore platform that doesn’t enforce the rule. Some use cash to avoid the rule, which only applies to margin accounts.
DRIPs and Aristocrats
Dividend reinvestment programs are ideal ways to automatically put dividend income right back into your account. Many DRIPs are set up so you own fractional shares, don’t pay commissions on the reinvestment, and only hold what are called aristocrat stocks. Aristocrats are companies that have paid a quarterly dividend, without interruption, for 15 years or more. If you are a buy and hold type, DRIPs can be the perfect way to take part in the long-term growth of the securities markets.
Bullion, Wine, and Art
Forget the stock market if you want to park your money in gold, silver, fine wines, and collectible works of art. The three are among the hottest asset-based investing strategies of the decade. In addition to being relatively inflation-proof, all three-offer excellent long-term returns.
Real Estate the New Way
It’s not about flipping and rentals anymore, though people still get into real estate for those purposes. The new face of real estate is crowd-investing. For as little as $5, you can buy a piece of the action on any of the crowdfunding sites that specialize in real property. The beauty of this technique is that you don’t have to plunk down huge sums, fix up old homes, or worry about the daily ups and downs of the real estate market. You simply buy into as many or as few different deals as you like, for whatever amount you choose. That means you can even spread your risk across commercial buildings, residential homes, hotels, municipal projects, and more.
