I am a massive fan of stock market investing for the average person. Investing in the stock market for capital gains, dividends, and income are great ways to build and maintain wealth.
However, we shouldn’t tie up all our money in the stock market. When there is a downturn in the stock market, we need other assets and investments to carry our portfolio.
We call this hedging, and it is an excellent way to keep momentum when others struggle to maintain their wealth. Today, I want to talk about two alternative investments to the stock market: Fundrise and USDC.
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Fundrise. Fundrise (affiliate link) is a real estate investment trust that does not trade on the stock market. This means the company is private. As the stock market fluctuates, Fundrise stays consistent. I started investing with Fundrise in September 2019.
USDC. United States Dollar Coin is a cryptocurrency stable coin. I invest in USDC through the Voyager Platform (affiliate link). USDC trades equal to the US dollar but in the world of crypto. This allows investors to quickly transfer assets in and out of crypto like Bitcoin and Ethereum. I started investing in USDC in April 2021.
Benefits of these investments versus the stock market. Let’s look at how each of the investments compares to the stock market. We want to have a good reason to stay investing in these assets, even during a bull market (great stock market days).
Fundrise grows at a steady rate, without any downward movements. You can see from my chart above that I have never had a downward trend on Fundrise.
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This is not to say that real estate assets can never decrease. We saw a massive downturn in real estate during the 2009 crisis. So it can happen, but I am not going to lose any sleep over a potential real estate crisis.
As you can see from my M1 Finance brokerage account, the stock market is much more choppy. Plus, I started this account after March 2020, when there was a massive bear market.
The investing thesis for Fundrise is stable gains and great dividends. Plus, you can ride the rise of home values and rents. Fundrise is a great place to invest if you cannot afford a home yet.
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USDC. I love USDC, but the main selling point is the massive 9% interest I receive from Voyager. As you can see, I receive $12/month from my $1,611 account balance of USDC.
If I didn’t add to my account balance for a year, I would make $144 in interest. That is a massive sum of money. I can easily add ten times (10X) more money to my USDC investments.
With 10X more cash in my USDC account, the numbers look like $16,110 and $1,449 annual interest. Earning $2,000/year in interest is unheard of today. Making 9% is a livable wage, as I worte in “Living Overseas Passively on Cryptocurrencies.”
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Fundrise vs. USDC. Now, how do these alternative investments stack versus each other? I will review a few uses for each portfolio.
Income. You can use both of these assets to produce income. Voyager pays USDC interest every month, and Fundrise pays dividends every quarter (Jan, April, July, Oct). Plus, Voyager will release a crypto debit card at some point. I give the win to USDC.
Retrieving money. How easy is it to remove your money? Fundrise has gotten better at letting you retrieve your principal from your account. However, real estate is an illiquid asset, so I wouldn’t put any money into Fundrise that you will need for five years.
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You can get money into USDC exceptionally quickly. The most considerable wait is for the funds to transfer back to your bank account. This may take 2-3 days, depending on your bank. Also, there is a small fee when removing money from the Voyager app.
The major win for USDC and Voyager is that you can transfer your interest gains into other cryptocurrencies within seconds. For example, if you reach $200/month in USDC interest, you can transfer $100/month to Ethereum if you want. Your USDC will continue to grow, and you can now earn capital gains on other cryptos. USDC wins.
Capital appreciation. USDC does not appreciate in value. You can benefit from compound interest by reinvesting your interest payments, but the value will always equal $1 USD to 1 USDC.
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Your Fundrise account will benefit from capital appreciation of tangible assets, rent increases, and capital gains from selling projects. In short, Fundrise wins hands down.
Peace of mind. This is a huge one, especially for new inventors. Most people cannot get over USDC being a cryptocurrency, and they may never jump into the coin.
Real estate may be a much easier sell to yourself, your spouse, or your partner. Fundrise gives you the option to review all projects where you invest your money. It will be much easier to invest in Fundrise because real estate is widely known as a store of wealth. Fundrise wins.
The winner. It looks to be a tie at 2-2. However, I give Fundrise the win because of the mental barrier of investing in cryptocurrencies for most investors. Most people cannot get over their fear of cryptocurrencies—which leaves more yield for me.
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But why use only one? Of course, you can invest in both. I love having both. I have my Fundrise set to auto-invest $150/month. I add roughly $200/month to my USDC account. Together I am earning dividends and interest while building capital appreciation.
If you do not own a home (I own three), you must get into Fundrise to build up your supply of rental income. I don’t see a downturn in real estate soon. As I wrote in “Rental Takeover,” investors are overtaking your neighborhood.
If there is a dip in real estate, entities like Fundrise will swoop in to buy up entire neighborhoods. When you add in foreign and institutional investors, it has never been more difficult for the average person to buy real estate.
Fundrise is a way to hedge yourself with real estate. While investing in Fundrise, you can use USDC to save for a down payment on a home. At 9%, you can save much quicker than in a savings account.
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Conclusion. I would use both investments in tandem. You need rental income from Fundrise, and you can use USDC in your emergency fund. You can also use USDC to save for a down payment on a home.
I understand that most people will not cross over into cryptocurrencies—but try this. Invest $100 to $200 in USDC and watch your interest arrive every 1st of the month. Slowly add more as you get comfortable. That’s the best way to overcome your fear.
Both Voyager (affiliate link) and Fundrise (affiliate link) offer us rewards for following my affiliate links. So, if you plan on investing in these products, follow my link so we can both earn passive income.
I strongly believe in both of these products. As inflation blazes, we need to keep our money moving upwards and outwards. We need to invest in the stock market and hedge with real estate and cryptocurrencies. Fundrise and USDC can be great additions to your portfolio and peace of mind.
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. All Right Reserved Military Family Investing
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