Become So Big You Corner The Market
There was a time when AT&T held all the power in the telecom industry, they were a monopoly, and eventually, the government stepped in, outlawing monopolies and forcing the giant to break into smaller units. There are, however, still situations that allow companies to grandfather their way into holding sway over all, or most of a particular sector.
Leveraged ETFs are similar to, but different than a mutual fund. They are based on underlying stocks but are more liquid than a mutual fund. Often the costs are lower, and since there is leverage involved (as well as risk), the investor is in an excellent position if the stocks appreciate.
Covering the spectrum from sportswear to hotels, software to games, licensing allows an investor to receive an income stream or upfront fee without the need for capital investment.
Life Estates can often be bought at a discount. In these cases, the occupant, often elderly has the right to remain in the home until death. Upon death and the settling of the estate, the property should return to market value, allowing a tidy profit.
Depending on your cash reserves, it’s possible to find lottery winners who will take a lump sum at a discount, in exchange for signing over the long-term payments.
In the case of Marijuana, we’re of course speaking of medical Marijuana. Medical Marijuana is becoming legal state-by-state and provides an excellent investment opportunity. Of course, you need to be a medical professional or partner with one to enjoy the cash flow, which often comes with a steady and loyal customer base. Additionally, the business can use the property or medical practice as collateral.
This investment won’t make millions, but it can produce a nice ROI and is available to small investors via mutual funds. It operates this way, when a company announces a merger, but before it takes place, the mutual fund acquires stock in the company. Usually, the stock will rise a small amount after the merger is complete. In most cases, this is unrelated to the overall markets.
If you’re lucky, you may already own property that’s sitting on oil or gas reserves. If that’s the case, then it’s an easy move to sell the mineral rights to companies in a position to take the next exploration step. Some investors systematically buy property, or simply the mineral rights to potentially profit when oil, gas or other valuable minerals are discovered.
Mortgages and Notes
There is one fact that will never change, the fact that no more land is being made which makes owning property, or the mortgage a valuable investment. With a bit of savvy minded investing, mortgages can be acquired at a discount, then kept long term as a revenue stream.
There are millions of websites online and more being registered every day. Over time and in the right sector/niche a website can be very valuable, particularly if it ranks well in Google and Bing. These websites, which typically focus on narrow but popular activities have the potential to produce a nice monthly income from advertising.
This might be called the perfect real estate investment since there is little work involved. With this type of lease, the tenant does all the work, and the owner simply cashes the checks. Because of this, this type of investment is highly sought after and can be quite pricey.
This isn’t somewhere you’d want to live. Like the name implies, this property is a nuisance to the community and is likely inhabited by undesirables. If the property can be obtained at a reasonable price and the nuisance eliminated relatively easily, the property can then be flipped for a nice profit.
This could be an interesting investment for the adventurous. Airlines, when they have a flight that is overbooked, will offer compensation to those who agree to be bumped from the flight. If no one volunteers, sometimes they’ll up the ante, if there are still no volunteers, someone will get bumped and be paid a government-mandated fee. To make this profitable, you’ll need to book passage on a flight that is likely to be overbooked, then be one of the first to volunteer when the gate agent asks.
This investment only works where the demand for parking is high, cities like New York, Nashville, Atlanta and Dallas come to mind. Assuming you can find a property at the right place in a downtown area, then this could be very profitable and once set up, low maintenance and a great alternative to rental houses.
Running a pawn shop requires a license and they aren’t easy to come by. Investors can apply for one, or partner with an existing pawn shop as a means to increase their revenues.
If you live in a city that thrives on tourism, you’ve likely seen Pedicab furiously peddling as passengers snap pictures to post on Facebook and Instagram. Did you know they need a permit to operate and that cities hand them out very selectively That means owning a transferable and renewable permit is very valuable. IF you already own such a permit, hang onto it or sell for a good profit.
Person-to-Person Loans (P2P Loans)
Have you ever loaned money to a friend or family member? That’s probably not a good idea, and the ROI is likely to be nil, not to mention whether or not you get your principal back. However, P2P (peer to peer) loan through established companies like Lending Club and Prosper, can be profitable. They work in this fashion, they make small loans to thousands of individual borrowers, instead of one larger loan. This spreads the risk of money, and the investor is much more likely to get their money back, plus interest. Add in the fact you’re not loaning to anyone you know personally, and this could be a winner.
Poker Entry Fees
Like to play Texas Hold ’em? There are countless tournaments around the world, each requiring an entry fees, sometimes in the thousands of dollars. If you back a player who wins and assuming you structured the loan (or partnership) correctly, you might be in for a big payday. Of course, if you back the wrong player, you’re likely to lose it all. This isn’t an investment for everyone, but there are tales of some backers making book on this one.
Pool Service Routes
Imagine this scenario; you own a pool service route in Beverly Hills and each week you’re making a lot of money, particularly since other guys are doing most of the work. It’s possible, assuming the route is a good one, to sell the route for a tidy profit to an up and coming pool service person. If that’s not your cup-of-tea, you might consider partnering with someone who is interested in buying a route.
Permanent Seat Licenses
Sports franchises raise capital for new ventures and stadiums by selling permanent seats at the yet to be built venue. Usually, these are purchased by wealthy individuals who love the game, but it’s not a good investment. That said, if you can find someone who wants out of the deal, it’s possible to buy the permanent seat low enough to make it a great investment.
Ponzi Scheme Claims
No one likes to be taken advantage of, certainly not by a Ponzi scheme. However, it happens more often than you’d think. In some cases, the perpetrator cuts and runs to a country without extradition and that’s the end of the tale. In other cases, they are taken to court and a judgment entered that will eventually pay all or part of the money back to the person(s) who fell, victim. The proceeds may come from selling assets or from a third party who is culpable, that’s a court decision that while valid, could take years to pay out. In many cases, the party may be interested in selling their claim now, for cash and at a discount. Assuming the price is right and there is a likelihood it will eventually pay out, this could be a lucrative investment.
Prize-Linked Savings Accounts
What if you had a savings account that was secure, paid interest, but came with the possibility of winning a prize? That would be pretty nice and guess what, it exists and you can win a few dollars or even a few thousand. This isn’t the lottery since you can’t lose and if it sounds too good to be true, in this case, you’d be wrong, this is a perfect little investment.
It’s been called “The Sport of Kings” and in most situations, owning a racehorse costs a King’s ransom, but that has changed in recent years. While those owning horses with the favored pedigrees dream of winning The Kentucky Derby, there are many other races nation and worldwide. It’s possible for smaller investors to pool their money and each own a fraction of the whole and participating in the winnings if there are any. Investors have an opportunity to play “The Sport of Kings,” but also are responsible for their share of maintaining their horse.
Raw land can be worth a fortune down the road, but that depends on the demand and growth of the area. In the 1950s, had you owned land in the San Fernando Valley in California, which is close to Hollywood, today it would be worth a fortune. Depending on the location and the investor’s plans, raw land can be held for speculation, sub-divided into lots for sale, or sold to others on a note for cash flow. Raw land can have beneficial tax opportunities, but there are also ongoing expenses.
Real Estate Crowdfunding
Crowdfunding, even a few years ago would not have been possible; now it is flourishing. There are several sites dedicated to crowd funding of real estate, particularly commercial real estate, out of reach to many. On these sites, for as little as $5,000, you can own a piece of the commercial real estate pie, without the headaches of being the actual landlord.
Real Estate Options
Optioning a property gives you control for a set period. During that time, you can let the property appreciate in value, sell the option to others (essentially flipping the option), or contract tenants while making improvements.
Odd name, but proven results. When a property is deemed agriculture, taxes are less which is good for the property owner, but what if the property doesn’t match the criteria? Well, that’s where the term Rent-a-cow comes in, the person owning the cows leases them to the person with the property, allowing them to graze. Based on the cows grazing, the property receives the agricultural tax break, it a win-win and you get a glass of milk to boot.
This will likely only work in a big city and a trendy restaurant. Selected eateries have begun charging for reservations. It’s possible, given the right price and circumstance to buy reservations in advance at a good price, then resell them to interested patrons at a profit.
Reward Checking Accounts
If you want to make a few extra points on your checking account balance, then look for Rewards Checking Accounts. These are premium checking accounts that pays a bit of interest on your balance. Some investors using this strategy open multiple accounts across several banks to maximize returns.
This will take some thought and good shopping, but if that’s your passion, then FBA (fulfillment by Amazon) could net you a tidy profit. The idea is to find a hot product, buy a quantity, then resell them at a profit on Amazon, with them doing the shipping and handling.
Assuming you can sub-lease to a second party, then this may be worth considering. You’d find a property, negotiate a good lease price, then sub-lease to another party at a profit. This could also work for residential properties, particularly with the rise of Airbnb and HomeAway.
When you think of whiskey, most would think of a night out on the town or share drinks with friends. However, for good Scotch whiskey, it can also be an investment. Assuming you have the right brand, you might consider a bottle or cask, then storing it till the value increases. There are also funds centered on that very practice.
Shared Appreciation Investment
This might happen with a family member, friend, or simply someone who needs money for a down payment. The investor, you, loans a portion of the down payment in exchange for an equity share in the home, or if the owner needs cash and has equity, the investor could pay cash for a share of the home. When the home is sold or refinanced, the investor gets his money back plus interest, plus shares in any appreciated value of the home.
Slot Machine Royalties
This one won’t be likely to happen unless you or someone you know is famous. The TV show “Wheel of Fortune”, made a deal to license their name and logo for a series of slot machines. Customers coming into the casino are attracted to the machines based on their knowledge of the TV show and the hope of winning. The company or investor receives a royalty for allowing the use of their name and logo on the slot machines.
Social Media Accounts
Social media is big business and people who have large followings on Facebook, Twitter, Instagram and YouTube can make a fortune. While not officially endorsed, channels can be sold to others allowing the new owner to market their brand to the audience.
If you buy a pair of sneakers are you planning to wear them? Well, consider that mint condition branded sneakers like those endorsed by basketball stars could be worth a small fortune. The trick is purchasing a limited edition pair, then flipping them for a profit.
We’re playing with the mega-rich here, no room for the small investor unless you can find a consortium of investors with a like mind. The owners of famous sports teams make their money when they sell the team, not necessarily from gate receipts and team memorabilia. Remember, if the team is famous, particularly in the NFL, there are players commanding high salaries, and that’s where most of the money goes.
Quick, if you need a photo of a teenager riding a motorcycle, where can you find it? The answer is a stock photo website. If you have enough pictures, and if they are eye-catching, it’s possible to have a good stream of income from this endeavor. If you have a passion for photography, this one is worth looking into.
What happens when someone has a storage locker full of their stuff but doesn’t pay the bill? Well, when that happens the owner of the facility (after a period) is allowed to put the locker up for auction. The bidder may or may not know what’s inside, but sometimes when luck favors them, they might find a treasure for the very low price.
Can you copyright a tattoo? Well, that’s being decided in the court system right now, but it is possible to make money with licensing the art for advertising. If you have a particularly interesting design and can prove ownership, it’s possible to license the tattoo art to movies and television. This isn’t an investment for everyone, but if tattoo art is your forte, it’s worth taking a look.
This may or may not be available in your state; you’ll need to do your due diligence to find out. It works this way, should a property owner become delinquent, a tax lien is placed on their property. Investors have the right to step in and pay the taxes, taxing possession of the lien. The property owner must pay the investor the principal and interest to satisfy the lien. If, after an amount of time set by law, if the lien is not paid, the investor could take possession of the property for resale.
There is one thing certain in the world of investment, things change. Nowhere is that truer than in the world of Taxi Medallions. These medallions, in some cities, were a required in order to operate a taxi and were both difficult and expensive to obtain. In fact, they were so valuable; bank loans were made using these medallions as collateral. All that changed when Uber and Lyft entered the market changing the taxi marketplace forever.
We’ll continue to add unusual ways to invest as they are brought to our attention. Be sure and read part one.