EquityMultiple Through the Lens of a Young Person

By Abby Blumenfeld, EquityMultiple Investor Relations Senior Analyst

When I first embarked on my professional journey, I was eager to take control of my financial future. Fresh out of college and starting my first job in Commercial Real Estate, I decided to dip my toes into the stock market. I sought advice from mentors and financial blogs, invested in a mix of blue-chip stocks and well-rated bonds, and aimed to strike a balance between growth and stability.

The initial steps were both exciting and daunting. I remember the thrill of watching my investments grow, tempered by the occasional market dip that tested my resolve. I spent countless hours reading financial news articles, analyzing stock performance, and refining my investment strategy. My mentors emphasized the importance of a diversified portfolio, and I took this advice to heart, making sure my investments spanned various sectors and asset classes.

Over the next few years, I diligently monitored my investments. I took it upon myself to learn the intricacies of market trends, the importance of diversification, and the value of patience. My investing efforts eventually paid off, with a steadily growing portfolio that boosted my confidence and financial literacy. With regard to long-term financial planning, I felt ahead of my peers, many of whom were just beginning to think about it for themselves. Seeing my hard work and research translate into tangible financial growth was undoubtedly rewarding.

My experiences are a testament to the power of starting early, learning consistently, and making strategic and sophisticated transitions in the investment space. — Abby Blumenfeld

I began my alternative investment journey by purchasing an investment property in Connecticut, which I rented out to my friends. Their rent payments covered the cost of my mortgage, taxes, and even a complete renovation of the kitchen. This experience made me realize the value of investing in physical assets. Unlike stocks and bonds, owning a property provided a tangible sense of security; I could always sell it if needed, or even live there myself. However, I discovered that managing property came with daily headaches and nuisances. I couldn’t see myself continuing it for much longer, and wondered what other options I had.

As my career progressed, so did my income and savings. With each promotion and salary increase, I allocated a portion of my earnings toward my investment portfolio, constantly seeking ways to optimize and expand it. I set a goal of becoming an accredited investor, aware that this status would open up new and exclusive investment opportunities — including private-market alternatives — that may provide a higher level of diversification. My journey toward this goal has been marked by careful financial planning, disciplined saving, and a commitment to continuous learning.

Tips for Young Professionals Growing Their Portfolios

1. Define Your Investment Objectives

• Set clear goals — these could include wealth accumulation, retirement planning, or achieving specific financial milestones.
• Align your investment strategies with your risk tolerance and time horizon.

2. Understand Portfolio Types

• Growth portfolios: These focus on capital appreciation through high-growth stocks.
• Income portfolios: These attempt to generate steady income via dividend-paying stocks and bonds.
• Balanced portfolios: These combine growth and income assets for diversified risk and returns.
• Socially responsible portfolios: These typically include companies with ethical and sustainable practices.

3. Leverage Professional Investment Services

• Make use of skilled financial advisors for personalized portfolio management.
• Gain insights on asset allocation and diversification to optimize investment performance.

4. Start Early

• Take advantage of compound interest and dividend reinvestment for long-term wealth building.
• Regular saving and investing — even in small amounts — can make a sizable impact on your financial future.

5. Consider Retirement Plans

• Maximize contributions to employer-sponsored 401(k) plans and IRAs for tax benefits and matching contributions.
• Opt for Roth IRAs for tax-free growth and withdrawals.

6. Explore Real Estate

• Invest in real property for long-term appreciation and rental income.
• Invest in a syndication like EquityMultiple.
• Understand market conditions and time your purchases to optimize returns.

7. Save for Education

• Use 529 Plans or Coverdell Education Savings Accounts for tax-advantaged education savings.
• Consider U.S. Savings Bonds for conservative, tax-free growth when used for education.

8. Maintain an Emergency Fund

• Keep three to six months’ worth of living expenses in liquid investments like money market funds, EquityMultiple’s Alpine Notes, or short-term CDs.

By maintaining a disciplined attitude when it comes to saving and investing, young professionals like myself can approach the accredited investor threshold and prepare to explore options beyond traditional stocks and bonds. Accredited investor qualification is a significant achievement; it doesn’t just represent financial growth, but also a deeper understanding of the investment world in general.

There are multiple ways to become an accredited investor. One method of getting to accredited investor status is achieving a $200K+ annual salary for several years running. That’s not the only way, however. Building equity in a non-primary residence — as I’ve been fortunate to do — is another viable way of getting beyond the $1M net worth threshold.

Once you do cross the accredited investor threshold, you’ll get access to sophisticated investments, including investments on platforms like EquityMultiple. EquityMultiple offers unique real estate investment opportunities that grant access to further diversification potential. These professionally managed commercial real estate projects that were previously out of reach for individual investors like myself who desired to go beyond stocks and bonds.

With EquityMultiple, you find a streamlined and transparent way to invest in real estate, enjoying the benefits of passive income without the headache of property management. The platform’s thorough vetting process, detailed investment write-ups, and potential for attractive returns all align well with the interests of accredited investors. The ability to invest in high-quality real estate projects without operational burdens traditionally associated with real estate ownership is also a game-changer.

Transitioning from traditional investments to EquityMultiple is a strategic move that allows investors to leverage their accredited investor status effectively. It provides a new avenue for portfolio growth and risk diversification. In addition, the platform’s user-friendly interface, deal analysis, and comprehensive support make the transition smooth.

My experiences are a testament to the power of starting early, learning consistently, and making strategic and sophisticated transitions in the investment space. From the basics of stocks and bonds to the private-market opportunities that EquityMultiple provides, I demonstrate how young professionals can successfully navigate this field while evolving over time as investors.

I hope to inspire other young professionals to take charge of their financial futures, embrace the challenges of the learning process, and explore the myriad of opportunities that await beyond traditional investments. Thank you for reading, and happy investing!

The information contained in this article only represents my personal experience, and does not constitute financial advice. Consult a qualified financial advisor before making investment decisions.