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Investing Trends in Alternative Assets 💸

Investing Trends in Alternative Assets 💸

In partnership with our friends at FranShares.

August 22, 2023

Hey fam!

Have any of you noticed that prices are getting a little out of control? Like seriously — why is rent in New York $5k/month on average now…? It’s getting crazy. So naturally, we're thinking about how to make our money work for us, and that's why we're excited to do a deep dive into the world of alternative investing in partnership with our friends at FranShares. FranShares recently conducted a survey to see how different generations are thinking about their investing options. We’ll do a deep dive on FraShares’ business in a bit, but first let’s dive into these insights that definitely raised our eyebrows 👀

Alternative Investing 101 💲

When people think about investing, a few asset classes quickly come to mind: stocks, bonds, and cash. But that's not the only option for investing. With all the new technologies, markets, and generations, the investment landscape is changing with the quickness.

Introducing alternative investing. Alternative assets are investments that fall outside of the traditional asset classes we just talked about, to a much broader range of options. This can include, but is not limited to:

Business alternative assets (e.g., real estate, private, equity, venture capital, franchise investing)
Collectibles (e.g., art, wine, trading cards)
Cryptocurrencies (e.g., Bitcoin, Ethereum)

And right now, alternative investing is becoming extremely popular. With all these options readily accessible, investors who are looking to diversify their portfolio are turning to these assets without having to go through expensive financial advisors or difficult-to-obtain relationships with fund managers. In fact, 53% of all investors have increased their allocations into alternative investments in the past 12 months!

The TLDR of Franshare’s “The State of Alternative Assets” Report 💰

One of our favorite things about the community of subscribers we've built over the past year and half is hearing about all of the dope work you all are doing in your professional (and even personal!) lives and having conversations on how it all ties into what we’re building with our platform. Our mission is to provide you with enough information and education to be dangerous -- and if it's of interest, to help you make decisions on where to invest based on where the industry is headed.

So, when we got our hands on Franshare’s “The State of Alternative Assets” report, we knew we wanted to read it, digest it, and bring the most important insights directly to you.

In May 2023, FranShares and YouGov partnered up to survey over 1,000 retail investors with >$10,000 in investable assets (excluding 401Ks). Now, let’s get into what they found. ⚡

“We want our money and we want it now!” - said every Gen Z investor ever.

Let’s just say the younger generation is shaking the table a bit, with their actions, on average, pretty starkly different from the way their parents and grandparents viewed investing. Also, not us speaking about the “younger generation” as if we don’t fit into that category too LOL. Here’s what you need to know regarding Gen Z and millennials investing:

Only 24% of Millennials and 25% of Gen Z investors claim to have a long-term investment perspective, compared to over half (53%) of Baby Boomers and nearly two-thirds (64%) of Gen X investors who adopt a longer-term stance on their investments.

This generation has seen some crazy technological advancements in their lifetime, especially in the finance sector – from seeing the value of crypto surge overnight, to meme stocks gaining quick value, to creating millionaires practically overnight. This all contributes to their desire for wanting their returns quickly!
Influencers and social media personalities are becoming the prime source of information for this generation to know what might make a good investment. From TikToks to tweets, the way information is disseminated and consumed is changing, therefore impacting the type of investments this generation is making.

“Lemme buy a share of this business and some ETH”, added Millennials and GenZ investors.

Alternative assets are the future of investing for the new generation. The risk appetite is changing and people want to invest in things that they actually understand, whether that’s an upcoming company or even a sports team. Here are a few more details about what alternative assets are leading the way:

Business-related investments (e.g., real estate, farmland, franchising, and venture capital) are the leading category, with interest from 84% of participants across all age groups.

More than 80% of millennials and Gen Zs are drawn to alternative business assets, but Gen Zs have the same level of interest in cryptocurrencies too. Can’t say the same for Gen X - they’re a little split with about half focusing on business assets and a bit more than a quarter considering cryptocurrencies.
People like crypto investments because of their liquidity, but because they move and shake pretty closely to traditional markets, some investors might not feel like they’ve diversified away enough from stocks.

There’s a generational divide in how we approach investments, but this may be good news for the younger generation.

While the younger generation is more likely to invest more of their portfolio into alternative assets, some Baby Boomers and Gen X are also taking advantage of the opportunity to diversify their investments.

On average, 34% of Millennials and 41% of Gen Z allocate 10% of their portfolio to alternative investments, whereas only 14% of Baby Boomers and 27% of Gen X allocate 10%.

However, there’s a plot twist. When we look at allocations that are more than 25% of someone’s portfolio, Baby Boomers and Gen X come out on top. 20% of Baby Boomers and 25% of Gen X allocate over 25% of their portfolio to alternative assets, likely because they have more wealth which gives them more money to invest outside of traditional public markets.
The impending wealth transfer, estimated to be $68 trillion, that will mainly be driven by Baby Boomers to the younger generation, could mean considerable buying opportunities for operating businesses and real estate investments for the younger generation over the next decade.

Whew, what a report. Such great insights that hopefully give you perspective on how the investment landscape is changing and how alternative assets are democratizing access to wealth – whether through crypto, real estate, or collectibles. If you’re interested in the full report, be sure to check it out here.

Company Spotlight: FranShares 💸

If you loved the findings from this survey, you are going to love the company behind the insights: FranShares.

Back in the day, it was nearly impossible to invest in a franchise like McDonald’s or Crumbl Cookies without having to actually OWN one of their franchises. But with FranShares, that’s actually possible.

Founded in 2020 by Kenny Rose, FranShares is a franchise investment platform that makes fully passive income a more accessible reality – giving investors the ability to purchase shares in franchises with the potential to earn returns that are 100% passive.

When you use FranShares, you can invest in diversified portfolios of franchises. Your investment can both yield distributions and increase in value over time. Combine that with their potential as a hedge against inflation and diversification tool, and you get one seriously smart investment

Sounds great right? You’re not alone - 42k people are on FranShares’ waitlist. But you already know Web3 for the Culture has the hook up so - join our waitlist link here.

Jobs in Web3: Bag Talk 💰

We’re back at it with another round up of jobs in the deep tech space that might peak your interest if you’re on the market! Check them out below:

What’s Happening in the News 🗞️

Here’s what caught our attention over the past two weeks –

Thanks for tapping in with us this week!

— Chad & Kendall