We are experiencing unprecedented times.
For far too long I’ve been vocal about the fact that the global financial system is broken, favouring those who have already amassed a lot of wealth. With what’s ensuing, the reality is that the income inequality gap is widening, and the average person is getting left behind. So much so, the middle-class (the backbone of healthy economies) is dwindling.
I started SmartCrowd to tackle this problem – a problem that now consumes each member of our team and gives us a collective purpose. As events unfold around us, let me tell you what I told my team this morning: “My convictions and reasons for starting this firm have only strengthened especially in the wake of current events.”
So, what happened?
The financial system was over leveraged and due for a reset – COVID-19 just accelerated the process and made it a reality today, that’s all. Trust me, this was inevitable (no one saw it coming like this, but make no mistake, it was going to happen). Global markets lost billions from peaks in the not too distant past. 30-40% wiped out, eroded, gone, ‘poof’. Many of us with our savings invested in the stock markets via mutual funds, direct shares or some other investment vehicles offered through financial institutions were left standing.
It perplexes me and sometimes even angers me why people don’t heed to good advice when it’s given. It’s a horrible way to learn – but if there’s anything we must all learn it’s that a diversified investment portfolio isn’t just for a conservative investor, it’s for a smart investor. Let me say that again: a diversified investment portfolio isn’t just for a conservative investor, it’s for a smart investor.
Note: I am not against the equity markets at all – I’m simply against having overexposure to anything.
To add to those woes, many of us rely on only one source of income: our salaries. In current events, with businesses under pressure and some due to close, we run the risk of losing the one income source we have, making us vulnerable.
On the other end, you’ve got the wealthy who have diversified portfolios with ample allocation in alternative assets such real estate. They protect themselves by having multiple sources of income, whether that’s through rental income or income from other businesses. If one class of assets perform poorly, they’re hurt – but they hurt less because they’ve got many trees that bear fruit, not just one.
Again – this is only possible if we’re smart with our investments and diversify accordingly.
In times like these, capital preservation takes a front seat, understandably so. Having said that, there are and there will be good opportunities more than ever. Tread with caution, but don’t let your fears paralyze you.
Because guess what?
If you won’t act, Mr. Smith who’s made his millions will. And the cycle will continue.
The stock market crashed in a week; residential real estate hasn’t – it’s simply not as volatile of an asset class. Why? Because in tough times people may cut back on discretionary spending such as dining out, leisure activities, entertainment – but, they’re not going to cut out on necessities. People still need to eat and sleep (i.e., they need a roof over their heads).
With the way things stand, you want to hold some cash, invest in tangible assets to preserve wealth like gold, and consider direct real estate because of the simple reason that it generates a second source of income. It also cannot be taken from you.
The power of secondary or multiple sources of income is phenomenal when you experience it – we have a lot to learn from the Mr. (and Ms.) Smiths of the world. We created SmartCrowd to give people the power to create multiple sources of income in a safer, easier, and hassle-free way. With our method of real estate investing, people can withstand market shocks and be in positions to take advantages of lucrative opportunities when they arise.
However, we are not naïve to think current economic shocks wont impact real estate at all. They certainly will – some of the tenants will lose their jobs and will struggle to make rent. But this is why investing in real estate with SmartCrowd is far more sensible option than anything else on the market.
With SmartCrowd you can be patient and invest in multiple properties with small amounts of capital. Without concentrated risk, the chances of you losing out income from all your investments becomes unlikely. The great aspect is that there’s no need to borrow to invest with SmartCrowd. There is no additional risk.
We view the current landscape as a great opportunity to put capital to work. However, our approach will be more meticulous than ever. We take our work very seriously and feel as though we have a fiduciary duty to our users. After all, we’ve been trusted with people’s hard-earned money. We don’t take that responsibility lightly.
From day one we have cautiously selected investment opportunities (more on that in a subsequent post). In current times, we’re even more diligent in our process. We don’t “do” a transaction just for the sake of “doing” a transaction. We only complete a transaction if we believe in it. There’s one overarching principle at the firm which is “Do things with sincerity and success will follow”. Success is not our north star. We know we’ll get there if we serve you. Simple.
When I founded SmartCrowd I wanted to prove to the world that you can run a successful and profitable business while doing good. I still stand by that thought today. In fact, I stand by if even more so now. We won’t be stopping our activities. In fact, we’ll do more to bring you better investment opportunities. We will increase our return expectations to compensate for the increases risk. We will also start looking at international properties to take advantage of the stronger AED vis-à-vis stronger USD.
And so, in these times we want to make it possible for as many people to take advantage of what we have built. Therefore, we have decided to lower our minimum investment amount to AED 2,500 so that more people can experience the SmartCrowd way.
We want to build something unique. But we can only do that together. Put your trust with us; we won’t let you down. Spread the word – get your friends, family, colleagues to join our movement. Let’s make this world a little bit better and a little more equal.
Thank you for allowing us to live our purpose by serving you. We are honoured to do so.
P.S. For those interested to know my views in 2017, you may read this article I wrote in October 2017 titled “Our Purpose” (https://www.linkedin.com/pulse/our-purpose-siddiq-farid-cpa-ca-cfa/).