Nirav Shah, Wealth of Geeks
The United States economy finally appears to be coming out of the inflation fever that has gripped the nation since the latter part of 2021. After inflation peaked at 9% in June 2022, it followed a downward trend. The aggressive interest rate hike by the Federal Reserve was able to curb inflation to some extent.
According to the latest statistics published by Statista Research Development, the year-over-year rate of 3.1% was recorded in November 2023.
The Federal Open Market Committee (FOMC) forecasts that 2024 is likely to witness a drop in core personal consumption expenditures or PCE inflation to a median value of 2.5%. However, inflation should still be factored into planning for a financially sound 2024. For example, paying down high-interest debt or investing in high-yield deposit accounts could benefit any individual’s personal bottom line. There are many other smart financial moves to consider for an improved financial footing.
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Things you can do
Here are some of the most important financial changes to make in 2024.
Opening Certificates of deposit (CDs) can be an effective and low-risk alternative to grow savings in 2024. The interest rate with CDs is generally higher than traditional savings accounts. Therefore, individuals with idle money in their regular savings accounts can move it into a CD account to grow their savings faster. However, money withdrawn before the account’s maturity date could result in a penalty.
The latest data from the FDIC shows savings accounts have an average yield of just 0.46%. However, a high-yield savings account earns a substantially higher rate. On a $1,000 deposit, the best available accounts generated around 4.30% to 4.10% yields in November 2023.
Individuals receiving less than 1% yield from traditional savings accounts should consider opening a high-yield savings account and transferring their funds into it.
Another smart financial move for 2024 is to pay down all high-interest credit card debts. Remember debts can get compounded quickly because of high-interest rates and become extremely difficult to pay off. It’s possible to free up more money for retirement contributions, savings, and other investments by getting rid of this debt.
Life insurance has always been an excellent financial tool and will continue to make a difference in people’s lives in 2024. It can be particularly useful for individuals with dependents, such as non-working spouses, children, or aging parents. Term life insurance policies are typically less expensive and can help cover the bases. Whole-life policies may be ideal for those looking for an additional financial resource at a later stage because they accumulate cash value over time.
Building an emergency fund is also excellent for a financially secure 2024. This rainy day fund can be a lifesaver in case of unforeseen events such as medical emergencies, loss of income, or any other unplanned financial burden. With an emergency fund equivalent to three to six months of living expenses, it is possible to deal with a financial crisis without resorting to high-interest debt or disrupting one’s budget.
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Investment options for 2024
Investments have always been pivotal in building a stable financial future and preserving wealth. In times of market volatility, suitable investments can provide a much-needed cushion for anyone. By balancing income-generating assets with growth-oriented ones, investors can produce a resilient portfolio capable of creating a consistent source of returns while weathering market fluctuations. Worthwhile investments for 2024 include bond and bond ETFs, annuities, precious metals, and high-yield savings accounts.
In addition to the abovementioned, several experts recommend real estate as a resilient asset class that can provide rental income and capital appreciation in 2024 and beyond. The most common ways to invest in real estate include real estate investment trusts (REITs), direct property purchases, or real estate mutual funds. Real estate crowdfunding is another relatively new path for investing in real estate that has recently gathered much momentum.
In real estate crowdfunding, resources are pooled by a large group of investors to fund large real estate projects. Potential investors connect with real estate developers or projects via an online platform. Relatively small amounts contributed by individual investors amount to a considerable investment toward projects. As a result, anyone can participate in real estate deals that are beyond the financial means of common people.
The return from real estate crowdfunding is potentially higher compared to many other investment options. Investors can spread their risk by allocating their funds across different real estate projects, properties, and geographic locations. They can also invest passively, where the properties and the operations are managed entirely by the crowdfunding platform and the project developers. This is an excellent option for new investors because it offers them valuable insights into investing in real estate without committing a lot of capital or money.
According to Research Nester, the real estate crowdfunding industry was worth over $21 billion in 2023. By the end of 2036, this market size will likely reach $2724.7 billion, with a CAGR of 50.1% between 2024 and 2036.
—————
Real estate crowdfunding in 2024
Those looking to earn healthy returns via real estate crowdfunding in 2024 must follow specific steps. They should first gain a basic understanding of real estate and their performance in the current market. Then, they should research different real estate crowdfunding platforms and opt for those with transparency, a good track record, and robust due diligence processes. Based on these points, the top 3 real estate crowdfunding platforms are discussed below.
Crowdstreet is a leading real estate crowdfunding platform connecting accredited investors to a broad spectrum of investment options. Crowdstreet stands apart from similar platforms in terms of the volume and breadth of the deals it delivers. It offers investment opportunities in almost all real estate asset classes, including industrial, office, hospitality, retail, multifamily, single-family, land, storage, data center, and medical offices. The platform is instrumental in funding over 500 projects and invested more than $2.4 billion in different projects.
Fundrise is another passive real estate investment platform offering a diversified portfolio of projects. Unlike many other platforms, it allows non-accredited investors to invest with them. Fundrise, however, doesn’t allow investment in individual projects.
Instead, investors can put their money in eREITs or funds comprising many projects with different return and risk profiles. The company issues monthly dividends, and investors have the option of taking the cash or reinvesting, making it a good option for beginners looking to get a feel of passive real estate investment without putting much money at stake.
EquityMultiple is another popular platform for real estate crowdfunding. Accredited investors can make professionally managed commercial real estate investments through this platform. The minimum amount that one can invest via EquityMultiple is $5,000.
It offers a wide range of specialized investments such as common equity, preferred equity, 1031 exchanges, funds, and senior debt.
The Alpine Note, the Brooklyn Industrial NPL Acquisition, and the Ascent Income Fund are the three different investments through which the company offers these products. The targeted return rates can be high depending on the type of investment. However, investors should be mindful of the fact that many of these investments are complex in nature.
The United States economy finally appears to be coming out of the inflation fever that has gripped the nation since the latter part of 2021. After inflation peaked at 9% in June 2022, it followed a downward trend. The aggressive interest rate hike by the Federal Reserve was able to curb inflation to some extent.
According to the latest statistics published by Statista Research Development, the year-over-year rate of 3.1% was recorded in November 2023.
The Federal Open Market Committee (FOMC) forecasts that 2024 is likely to witness a drop in core personal consumption expenditures or PCE inflation to a median value of 2.5%. However, inflation should still be factored into planning for a financially sound 2024. For example, paying down high-interest debt or investing in high-yield deposit accounts could benefit any individual’s personal bottom line. There are many other smart financial moves to consider for an improved financial footing.
—————
Things you can do
Here are some of the most important financial changes to make in 2024.
Opening Certificates of deposit (CDs) can be an effective and low-risk alternative to grow savings in 2024. The interest rate with CDs is generally higher than traditional savings accounts. Therefore, individuals with idle money in their regular savings accounts can move it into a CD account to grow their savings faster. However, money withdrawn before the account’s maturity date could result in a penalty.
The latest data from the FDIC shows savings accounts have an average yield of just 0.46%. However, a high-yield savings account earns a substantially higher rate. On a $1,000 deposit, the best available accounts generated around 4.30% to 4.10% yields in November 2023.
Individuals receiving less than 1% yield from traditional savings accounts should consider opening a high-yield savings account and transferring their funds into it.
Another smart financial move for 2024 is to pay down all high-interest credit card debts. Remember debts can get compounded quickly because of high-interest rates and become extremely difficult to pay off. It’s possible to free up more money for retirement contributions, savings, and other investments by getting rid of this debt.
Life insurance has always been an excellent financial tool and will continue to make a difference in people’s lives in 2024. It can be particularly useful for individuals with dependents, such as non-working spouses, children, or aging parents. Term life insurance policies are typically less expensive and can help cover the bases. Whole-life policies may be ideal for those looking for an additional financial resource at a later stage because they accumulate cash value over time.
Building an emergency fund is also excellent for a financially secure 2024. This rainy day fund can be a lifesaver in case of unforeseen events such as medical emergencies, loss of income, or any other unplanned financial burden. With an emergency fund equivalent to three to six months of living expenses, it is possible to deal with a financial crisis without resorting to high-interest debt or disrupting one’s budget.
—————
Investment options for 2024
Investments have always been pivotal in building a stable financial future and preserving wealth. In times of market volatility, suitable investments can provide a much-needed cushion for anyone. By balancing income-generating assets with growth-oriented ones, investors can produce a resilient portfolio capable of creating a consistent source of returns while weathering market fluctuations. Worthwhile investments for 2024 include bond and bond ETFs, annuities, precious metals, and high-yield savings accounts.
In addition to the abovementioned, several experts recommend real estate as a resilient asset class that can provide rental income and capital appreciation in 2024 and beyond. The most common ways to invest in real estate include real estate investment trusts (REITs), direct property purchases, or real estate mutual funds. Real estate crowdfunding is another relatively new path for investing in real estate that has recently gathered much momentum.
In real estate crowdfunding, resources are pooled by a large group of investors to fund large real estate projects. Potential investors connect with real estate developers or projects via an online platform. Relatively small amounts contributed by individual investors amount to a considerable investment toward projects. As a result, anyone can participate in real estate deals that are beyond the financial means of common people.
The return from real estate crowdfunding is potentially higher compared to many other investment options. Investors can spread their risk by allocating their funds across different real estate projects, properties, and geographic locations. They can also invest passively, where the properties and the operations are managed entirely by the crowdfunding platform and the project developers. This is an excellent option for new investors because it offers them valuable insights into investing in real estate without committing a lot of capital or money.
According to Research Nester, the real estate crowdfunding industry was worth over $21 billion in 2023. By the end of 2036, this market size will likely reach $2724.7 billion, with a CAGR of 50.1% between 2024 and 2036.
—————
Real estate crowdfunding in 2024
Those looking to earn healthy returns via real estate crowdfunding in 2024 must follow specific steps. They should first gain a basic understanding of real estate and their performance in the current market. Then, they should research different real estate crowdfunding platforms and opt for those with transparency, a good track record, and robust due diligence processes. Based on these points, the top 3 real estate crowdfunding platforms are discussed below.
Crowdstreet is a leading real estate crowdfunding platform connecting accredited investors to a broad spectrum of investment options. Crowdstreet stands apart from similar platforms in terms of the volume and breadth of the deals it delivers. It offers investment opportunities in almost all real estate asset classes, including industrial, office, hospitality, retail, multifamily, single-family, land, storage, data center, and medical offices. The platform is instrumental in funding over 500 projects and invested more than $2.4 billion in different projects.
Fundrise is another passive real estate investment platform offering a diversified portfolio of projects. Unlike many other platforms, it allows non-accredited investors to invest with them. Fundrise, however, doesn’t allow investment in individual projects.
Instead, investors can put their money in eREITs or funds comprising many projects with different return and risk profiles. The company issues monthly dividends, and investors have the option of taking the cash or reinvesting, making it a good option for beginners looking to get a feel of passive real estate investment without putting much money at stake.
EquityMultiple is another popular platform for real estate crowdfunding. Accredited investors can make professionally managed commercial real estate investments through this platform. The minimum amount that one can invest via EquityMultiple is $5,000.
It offers a wide range of specialized investments such as common equity, preferred equity, 1031 exchanges, funds, and senior debt.
The Alpine Note, the Brooklyn Industrial NPL Acquisition, and the Ascent Income Fund are the three different investments through which the company offers these products. The targeted return rates can be high depending on the type of investment. However, investors should be mindful of the fact that many of these investments are complex in nature.
