| |  | | Thursday, January 23, 2020 |  | | | Dear Startup Investor,
Three weeks into January, I'm finally starting to recover from the holidays.
It's pretty much a universal truth that we spend way too much money in November and December. Every year I try to keep it under control - but things just seem to happen that time of year. Travel, gifts, unexpected visitors, holiday parties, office events... it's enough to empty your pockets, that's for sure.
And when you're an angel investor, you never know for sure when that next windfall is coming. It could be months or even years before I have the opportunity to cash out on one of my portfolio companies.
Granted, I invest in enough companies that it shouldn't be too long - but still, sometimes it's nice to know exactly when you can expect to refill your coffers, so to speak.
That's why diversification is so important. Angel investing is, needless to say, my favorite way to make money. It's an exciting adventure that has the potential to produce unbelievable returns in just a few years. But it's not the only way to make money - nor should it be.
Personally, I like to supplement my angel investments - which are, by definition, unpredictable - with asset classes I know I can count on. Here are three of my favorites.
1. Business Development Companies (BDCs)
A Business Development Company is a publicly-traded business that invests capital into dozens - if not hundreds - of late-stage, cash flow-positive startups. Their portfolios can include everything from tiny companies you've never heard of to giant household name brands. What I love about BDCs is that their share price is typically pretty stable. Plus, they pay monthly or quarterly dividends... which makes them a reliable way to bring in regular influxes of cash.
2. REITs
A REIT, or real estate investment trust, is a company that owns and operates real estate assets - office buildings, hotels, apartments, malls, and much more. They're a great way to share part of the income that's generated by these huge commercial properties. Depending on the type of REIT you're interested in, you can invest either via the stock exchange or through a broker. Much like BDCs, REITs pay dividends on a regular basis. I like to have some of each in my portfolio - after all, these markets are prone to irregular changes. When the private equity market is down, the housing market may be up, and vice versa. That's why getting dividends from a variety of sources is a smart way to keep the money coming in.
3. Pattern Trading
You already know I'm not a huge stock market guy. But if you're not doing at least a little bit of trading, you're missing out on an extremely important asset class. The only problem is that the stock market is dangerous. If you don't know what you're doing - if you don't have a system to follow - you can lose everything in the blink of an eye. That's why I love pattern trading so much. You can literally look at years, even decades, of historical patterns and make informed decisions based on things that have happened predictably in the past. But it's far from easy to do... which is why I always follow Tom Gentile's lead. He's a close friend of mine, and he may just be the best pattern trader in the entire world. Tom's spent more than six years developing the most sophisticated pattern trading system I've ever seen - and next week, he's going to share some brand-new information about it with us. Keep an eye on your inbox - missing this one would be a big mistake.
What are some of your favorite ways to pad your monthly or quarterly income? Share them in the comments section - I want to hear from you!
And don't forget to keep an eye out for that exciting announcement next week. It could completely change the way you look at your monthly income - I know it did for me.
Until next time,
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