Eggvesting Archives

Peter Lynch, a multi-hundred millionaire investor and Fidelity investment manager, has been vocal about his leading investment philosophy: Invest in what you know.

Many investors look up to Warren Buffet. He is widely considered one of the greatest investors of all time.

He echos Lynch’s sentiment: ‘Don’t invest in a business you can’t understand.’

Whether that be drawing on your professional experience or your observations as an every day consumer, understanding what companies offer and how they make their revenue is step one in effectively vetting potential investment opportunities.

You’re probably aware that CVS is a shopping center staple with a national presence. You know that FedEx has had tremendous growth over the last decade; perhaps its role within your own life has grown. With the rise of e-commerce, you probably also can understand why the services of shipping companies like FedEx are becoming ever more central to the functioning of our shape-shifting economy.

Think outside of the stocks

Sure, you could invest in these companies by buying shares of them in the stock market.

Or you could leverage their success, stability, and growth prospects by investing in the critical infrastructure these businesses need to operate.

HappyNest is an alternative investment that fits the bill.

We own a portfolio of commercial and industrial properties and lease them out to the likes of CVS and FedEx.

By buying shares of HappyNest, you become a partial owner of these properties. You’ll also become a partial landlord to these Fortune 500 companies. As a shareholder, you’ll get a slice of the rental income and enjoy the value appreciation of our properties.

Best of all, you start building your personal passive income stream.

HappyNest’s portfolio consists of in-demand properties with tenants you know

It’s not hard to see that the demand for the properties in our portfolio is unlikely to wane anytime soon.

Industrial shipping property in Fremont, Indiana

Consider our industrial shipping center based in Fremont, Indiana. With the rise of e-commerce, facilities like these are already rapidly appreciating in value, and are projected to see exponential growth.

And that’s just to support current demand.

But it’s hardly the end of the e-commerce sector’s growth. Current forecasts estimate 30% expansion or more by 2024.

That makes it hard to imagine a property like this will struggle to find tenants or face value depreciation.

Commercial retail property in East Hampton, MA

Our portfolio also has a commercial retail asset. This 8,775 square foot property is located in East Hampton, Massachusetts.

While the commercial retail sector experienced market volatility in recent years due to the pandemic and social distancing, our property is home to a CVS pharmacy.

Because many pharmacy offerings require in-person consultations, business operations in this sector have fared moderately well through lockdowns. We haven’t experienced any interruptions in rent and don’t expect to with this well-established tenant. CVS still has twelve years left on the active lease.

The long-term nature of the lease, and considering our estimations for this property’s value appreciation during the lease period, the rental rate on this property is on a five-year tiered plan.

Every five years, the rental income will increase. CVS has already accepted these future rent raises as part of the contract. These scheduled rent increases amount to approximately a 10% bump every five years.

Those rent increases will be trickle back to HappyNest shareholders in the form of higher rental yields.

Translation: Revenue growth is already in the signed contracts.

HappyNest likes to keep things simple

Here at HappyNest, we strive to streamline our own operational costs so that value add and revenue can be passed right on to our investors.

One advantage we have is that though the properties in our portfolio are high value, they generally require one tenant. That means we don’t have to invest time and resources to continuously fill vacancies as an apartment building or shopping complex might require. It also means less fluctuation in dividend payments based on vacancy rates and overhead.

We prefer to keep things simple and consistent. As we look to add to our portfolio, we consider the property’s long-term prospects, what kind of companies and industries would be interested in that property, and select for the best combination of high value and lowest management overhead possible.

Less paperwork. More dividends.

When you invest in HappyNest, you invest in what you know

HappyNest is a strategic approach to ‘invest in what you know.’ It’s thinking outside of the box and finding ways to invest in valuable, stable companies outside of the stock market.

If you agree that e-commerce will probably continue to see healthy growth in coming years, you can probably see why we think industrial shipping centers won’t fall out of fashion.

If you agree that many pharmacies will continue to require in-person visits for many of their offerings, you’ll probably be on the same page with us regarding reliable demand for properties like ours.

It’s not too hard to understand that managing one or two tenants per property is easier than managing many.

Having tenants like FedEx and CVS is also a major advantage, because the outlook for these major corporations over the next few years suggests they will have no problem making rent. We bet most people never considered that they could become the landlords of Fortune 500 companies. But with HappyNest, they absolutely can.

Grow your yields as we grow our portfolio

As HappyNest’s collective investing base grows, we will use our pooled capital to acquire more properties.

Your principle capital investment is reinvested into more assets, expanding your portfolio, tenants list, and dividend income. Brick by brick, you’ll be steadily building your financial future and making your money work for you.

Warren Buffett, the Oracle of Omaha, says: “If you don’t find a way to make money while you sleep, you will work until you die.”

But as HappyNest’s portfolio grows – and whenever corporate America’s rent comes due – you’ll be sleeping like a baby.

Parents, it’s your responsibility to teach your kids financial literacy or they’ll have to learn the hard – and expensive – way

Parents want what’s best for their kids, especially in regards to their future.

What a shame then, that one of the most highly correlated predictors of success in adulthood is one of the least talked about topics in the world of parenting – financial literacy for kids.

Financial literacy is on the decline

Financial literacy in the U.S. has been on the decline for the better part of two decades. The consequences of that have been the stuff of headlines.

The problem is likely to get worse: A study released earlier this year by the TIAA found that only 16% of Millennials qualify as financially literate.

And it costs them dearly….literally. On average, millions over the course of their lifetime.

But where there is a problem, there is an opportunity. In this case, that opportunity is that a comprehensive financial education becomes a strategic advantage in life.

After all, who wouldn’t want to give their sons and daughters a leg up over 84% of the population?

We all know things aren’t getting any easier – let alone what the future holds.

Don’t rely on school to teach kids about financial literacy

Only 21 states in the U.S. require personal finance coursework in public schools. Believe it or not, that’s actually a significant improvement from just two years ago.

Still, most requirements are minimal. A majority of states have no curriculum in financial literacy at all.

Like it or not, the reality is that the responsibility of financial literacy for kids falls squarely on their parents.

Financial education in the school of hard knocks

Most people earn their financial education the hard way: A slow, painful process in the strict and unforgiving classroom of the real world.

Lessons here come at a hefty price: deflated credit scores that haunt for seven years, debt that seems to never go down despite monthly payments (that aren’t always easy to make, especially in early adulthood), and tricky ‘offers’ that are essentially financial booby traps.

But in the depths of the convoluted fine print, most of these ‘offers’ capitalize on money management blindspots.

In recent years, the world of finance has grown even more labyrinthian – predatory even. Many products are specifically designed to exploit (and profit) from widespread gaps in financial literacy.

It’s a cruel and costly learning curve.

But parents who understand the importance of financial literacy for kids can flatten that curve. They can introduce basics on how to manage money at an early age. Then they can build on that foundation with more sophisticated concepts over time.

Financial literacy during the Wonder Years

Explaining how indexed annuities work to a 2nd grader will unsurprisingly be met with blank stares. But there’s no reason we shouldn’t expect the same from a young adult who hasn’t learned foundational concepts like investing, compound interest, and the importance of taxation timing.

Of course, not all at once. But the earlier a financial education framework is introduced, the more time the investment will have to mature.

Elementary years

As with all things in life, the basics come first and early.

That aforementioned 2nd grader probably can grasp the Bank of Mom and Dad depositing an allowance into an account.

Over time, an allowance account offers many learning opportunities on managing money – from delayed gratification (‘you can get the NERF ball now, or wait another 2 weeks to get that bike we saw’) to basic principles of fixed income.

Early adolescence

Parents can share visibility into an investment account as children enter early adolescence, such as a college savings account. That way, their preteen can see first-hand how small investments can lead to big payoffs.

Calibrate your expectations: Though they might not seem especially interested at first, once that investment grows into real money, they’ll likely change their tune.

This is also a great time to start familiarizing them with things such as personal credit scores.

High school

By the time they’re in high school, they will have witnessed what Einstein called the ‘eighth wonder of the world’: The power of compound interest.

From there, it is only a small logical step to understanding how compound interest can work against them in the context of debt.

But nothing quite beats the real thing. High school is also a time where kids start wanting big-ticket items, such as a car or a trip with friends. These wish list items can serve as the basis for the mechanics and implications of debt.

Their financial education can mature in tandem with them.

Parents bridge the classroom and the real world

What makes early exposure to financial literacy for kids so vital is the bridge it creates between the math they learn in school and how it applies in the real world.

Consider compound interest – arguably one of the most important engines in finance – is taught in 7th grade. It is not easy to recall when they’re applying for a credit card or deciding how much to contribute to their 401k.

But with first-hand experience watching an investment account grow over time, they’re more inclined to make financially savvy choices while time is on their side.

The idea is to find teachable moments along the way – life is chock full of opportunities to deepen your child’s financial literacy skills.

Financial literacy isn’t just math, it’s mindset

Understanding the numbers and math that go into financial products on the market today is an integral part of financial education. The more elusive piece of the puzzle is often the psychology around money management and growing wealth.

Financial philosophies, such as “pay yourself first” and “being poor is expensive,” aren’t taught in schools, even those that offer personal finance coursework.

But mindset, attitude, and strategy all impact wealth accumulation outcomes. Parents can help their children to see money as a tool, not a master.

Early bird gets the worm

Parents who want to see their children succeed shouldn’t rely on the school to teach them financial literacy. Instead, they have to take a proactive approach in their child’s financial education.

Perhaps the most important role a parent can play in their child’s financial literacy is helping their children bridge the conceptual to real-world application.

As with most investments, time is a variable. But kids have the benefit of time on their sides.

Early investment in financial literacy for kids ensures that when the time comes for them to fly the nest, they’ll have a little more lift under their wings.

Category: Eggvesting

HappyNest is an alternative way to ‘invest in what you know’