Beyond Real Estate, Stocks & Bonds: Investing in Assets Online

Disclaimer: This article is informative in purpose and does not constitute financial advice.  The author urges you to obtain professional advice before pursuing any financial investment.

When it comes to buying assets in the real world brick and mortar is often the first port of call. Whether it is an investment home, a small business like a cafe or laundromat – or maybe even a vineyard just outside of town – when looking to invest many look to land and concrete to start. Thereafter, stocks, bonds, and Co are common options.

While these latter assets are intangible – you can’t physically ‘hold’ a stock in a company after all – there are nonetheless real world applications to their purchase and performance; a market spike shall see your real world wealth grow, just as a market fall shall see it decline. With the rise of the online marketplace, eCommerce, and the wider ‘24 hour global economy’ a new dynamic now exists; the opportunity to buy, build, and sell assets online.

Undoubtedly online shall continue to grow the value in the ‘space’ on it. While distinct from the real world online is virtually limitless nonetheless just as a beachfront property is prized so too is a site that bring is the biggest traffic on its industry. So growing wealth and investment online can be wise. Lets look at some now…

 

Bitcoin

Bitcoin

Of all the obvious ways to make money online this is one with the most obvious application to real world investment. While Bitcoin is first and foremost a digital currency, it increasingly has ‘real world’ uses with a number of cafes, restaurants, and other brick and mortar businesses now accepting Bitcoin as a payment currency.

Further, while like stocks and bonds you can make money buying and selling bitcoins day by day, you can also set up your own Bitcoin faucet – and just like turning on a water faucet and seeing water flow throw – you can in effect create your own currency via this stream.

Creating a faucet will likely require a bit of upfront investment to create your faucet (and just like owning 10 laundromats shall yield you more profit than 1 the more technology you have means the more profits you’ll get) for a first time starter to making money online this can be a worthwhile avenue to explore.

Building a Niche Website

Another option is for someone to invest in a website. It may sound strange at first – can a website full of cat pictures really form a credible investment alongside by investment property, stocks, and savings? – but actually; a website just devoted to cat pictures that get millions of hits a day could make a tidy profit from ad revenue.

 

Accountant

‘The other accountants would not believe how much my client makes with these cat pics online.’

Yet, just like a home that you rent and get income from, owning such a website either requires you buying one, or building it yourself over time with ‘sweat equity’. As starting over buying may easier (though its not always) let’s look at that avenue first.

While it varies widely by your topic and audience size – for a specialist website in a small market (e.g. the story of Italian accordions in New Zealand) could get far more traffic than a general website in a big one (e.g hiking in California) – if you start a website that gains big traffic your website can grow into a strong investment. Again, the way in which you do that varies, but just like any investment numerous options exist.

 

Buying an Existing website

 

Just like buying stocks to get a dividend is usually easier than starting a company and getting it listed on the stock exchange, so too can buying a website be easier than starting one. There is a huge variety of ways in which you can obtain a genuine online asset via such a path. Whether you buy a existing website like an eCommerce store and then continue to run the business, whether you buy a website, build it further, and then reap the rewards of your hard work – or even buy a popular site name like food.com and then wait for it to grow in value to then sell off at a profit – just like buying some stocks low and selling high the opportunity is there.

 

On this, it is a reality just like buying a home from a trusted real estate agent is vital – and not ‘Crazy Mac’s Crummy Country Shacks’ – so too is picking up a website with prudence and caution vital. While there are renowned flipping websites online that facilitate a web sale between a buyer and seller, so too are many of the websites listed on these sites artificially pumped up with high traffic before being listed for sale (think of it like a baloon that is inflated but won’t hold its volume low term).

As a result a buyer purchases a website with high traffic, then finds thereafter it drops. This said, there are good websites to buy out there – and if you’ve built one thats valuable but you now wish to sell it can be done – so just like any investment decision, doing your research beforehand and scoping the market widely before making a move is wise.

Video Games

Grandmother was wrong: video games can be a good use of your time. Though you’d be wrong to think your going to be paying off the monthly mortgage payments with a bit of Tetris on your bus ride home, there are a number of games that give players the opportunity in the virtual world to real assets than can them be redeemed for cash in the real world. 

Though the success of online streamers like PewDiePie are often pointed to as success stories in this realm – and certainly he’s enjoyed solid success – gamers are not only alone as those who make money via streaming content online; and for this reason looking deeper into games themselves is often ideal.

Whether it is games like Diablo, Second Life, or even World of Warcraft there are a number of ways for a keen gamer to get busy making some money in the game. While like anything area of life it should be said the competition is real and becoming a world beater at such a game is no easy task; but your grade 2 teacher was surely right when she said everyone has a special talent; and levelling up characters in WOW may be yours.

..But is it worth your time?

Accountant

‘Now I have to do this foreign tax return! I should’ve just stayed in that college ska band I liked’.


An important consideration for anyone who goes down such a path is though you may earn money online via these methods it does not excuse you from real world obligations; namely declaring income and paying tax. Further, even if you primarily reside in one country – and thus mainly pay tax in just that one country – if your online asset has any ongoing association with another country (such as a physical address of a business or a business partner in another nation), then needing to pay tax in that country too many also be on the cards.

While many nations like the USA enjoy tax treaties with other nations that would see a tax payers rate reduced (or outright negated if under a certain minimum threshold), for those who may also need to factor in other taxation matters surrounding a secondary source of working income (aka ‘second job tax’) a foreign tax payment on top of the tax already paid in your resident nation may start to seriously eat into your profits; so seeking an investment that gives you the best returns in light of this could be vital.

Conclusion

Undoubtedly, traditional investments like real estate is good, and there are a number of cities near and far where you can get a great first or investment home. In turn, there is often an emotional attachment to the thought of owning property, whether it is simply to obtain a first home to live in, or a more far reaching realisation of a wider concept, such as the Great Australian Dream.

So, when looking at online versus real world assets,  rather than say to an investor ‘buy one’ you could instead say ‘buy as well’. This would adhere to the tried and true investment strategy where a diversity of assets offers a proven path to building credible returns (while also buffering an investor against market downturn in one part of their portfolio impacting all over).

In turn, just like buying land in a developing part of town, or a packet of stocks at their IPO,  the internet economy is only set to grow further in future; and those who invest early could stand to gain big in the long term. All this requiring just a keyboard, mouse, and perhaps a readiness to found a website that becomes a world authority on pocket squares.

Hipster

‘Ey man, I’m a global expert on pocket squares and your tri-fold is why I got into the business! Nice.’

 

Disclaimer: This article is informative in purpose and does not constitute financial advice.  The author urges you to obtain professional advice before pursuing any financial investment.

 

Ed Kennedy is a journalist and web designer proudly from Melbourne, Australia. Say hi to Ed via enquiries@edkennedy.co or on Twitter @Edkennedy01

#Real Estate and Finance