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.
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.
Best wishes,
Siddiq
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/).
