Here’s my (non-sophisticated) investing strategy for 2021. It involves real estate investing, stock marketing investing, cryptocurrency (specifically Bitcoin) and my business.
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I’m not a professional investor by any means so this is purely for education / entertainment purposes – but wanted to share what I’m investing in during 2021.
While 2020 was a weird year, I had a great year overall and looking to build on this further in 2021.
My approach has been to not try to do too much – I can’t simultaneously be an expert stock picker, a world class real estate investor, crypto god and savvy businessman – all at the same time.
The approach which has worked well for me has been to focus on one asset class hard, understand it well, then funnel part of that money out into other asset classes to diversify.
I’ve found I make more money when I stay focussed on my business and pay for help in the other areas such as stocks and real estate.
While I’ve learned heaps about the stock market, crypto and the real estate market over the last few years – I know business (especially marketing) better than all those areas – so I know this is where I have an edge.
In this video I go into what my money is invested in at a high level and what my main focusses are and where I see it going in future.
Let me know what you think – plus I’m keen to hear what other people are investing in this year – comment below.
Ray
Related topics: how to invest, investing in bitcoin, investing for beginners, investment portfolio, passive income 2021, investment strategy, how to invest money, stock market, how to invest in stocks, how to invest in real estate, stock market investing for beginners
Transcription:
Good day, Ray Corcoran here. In this weeks video I will be going over my investing strategy for 2021. I’m not a professional investor or anything like that, but I thought I’d just share, nobody’s asking me to do it, but I thought I’d just share what I’m focusing on, and I guess my plan for making more money and investing more money throughout 2021. I know a lot of people didn’t have a great year last year, but financially I had an excellent year, last year. All the stocks, when they all dipped around sort of March, April time, if you were in stocks you would have known this, all the ETFs, they kind of had that big dip and then they had that big surge after and ended up going up higher than it was before all this stuff happened.
Overall, I had a really good year. I’m going to go over it in this video, asset class by asset class. What I’m doing in each area or not doing. And, maybe you can take some learnings from that and I’ll talk about some things I did right and some stuff I did wrong.
So, the first one is stocks. All my stock investments are with a company called Stockspot. I’ll put a referral code down in the description. But basically I’ve put all our money with them since 2017 for when it comes to my stock stuff. Probably at some point I’ll start investing in some ETFs directly and investing in maybe some individual stocks. But for now, one of the things I like about Stockspot is, I’ve got a roughly a 10% return per year. I’ve been a customer of theirs for about four years, and I’ve got pretty steady, decent returns for basically doing nothing. I do nothing. I don’t think about it. I check it regularly, but I don’t have to do anything. And sure, I could’ve made more money with maybe individual stocks or other stuff, but I do like the consistency. And for me across my whole, I guess, investment portfolio, my priority is on low complexity and low BS, even if it does mean slightly lower returns.
For me, my major focus is my business. So, I don’t want to be spending hours and hours picking individual stocks, I don’t want to go searching for all these different little niche funds and stuff like that. I’m sure that stuff’s great and it works for people, but for me, I make majority of my money through my business, and then I funnel that money out to investments.
That’s really important for me to have low complexity and BS. And it’s the same for my properties. My focus is on running the business. So, any of the property stuff, I have a property manager for that. And yes, using other people to sort of help you with your investment management, if you will, does take a tiny bit off the returns. But for me, the lack of time I have to spend on it is invaluable. And also the more time I can spend on the business, I can generate a lot more wealth that way by just doing a good job for my clients and focusing on my customers and bringing in new customers and team members and that sort of stuff.
I was heavily stock focused for a while so I’m not putting that much more money into it for the time being. I will in the future, but for the time being I’m not, because I kind of want to build up other asset classes at the moment and just kind of spread it out and sort of diversify a bit more.
Next one’s a bit of a fun one in terms of cryptocurrency. I’ve kind of been getting into Bitcoin lately. I don’t know much about it, I guess, compared to some of these Bitcoin gurus, but I pretty much got this because, and for me, it’s not a big portion of my net worth but I did get a chunk of it, just basically so I could have some exposure to that in my portfolio. I do think it in terms of technology, I think it is the future. Bitcoin is the dominant player at this time, and it’s really getting some more mainstream adoption at the moment. So, don’t take my advice in terms of Bitcoin, but it is something that I’m becoming more and more interested in. And I do think it does have a very early internet sort of feel to it. And I think that whether Bitcoin ends up being the number one dominant player, I do think that’s going to be a big part of the future so I’m kind of bullish on it, just generally.
The way I also see it is, if I make 10% with property a year or with stocks a year. With some of the stuff with Bitcoin, it’s pretty crazy, and I could go to zero, which the others probably won’t. Some of the returns for Bitcoin, obviously if you look at the yearly returns for Bitcoin, one year was like, I think it was like 1700%, another year was 300%, another year was down 70%. So, it was pretty wild fluctuations, but it generally seems to be trending upwards. I don’t know if it’s going to keep going up, but I’m willing to put a bet on it and find out. I could be totally wrong, so we’ll see how that pans out.
But the way I see it is, if it even makes 50% in a year or even 30% in a year, to be honest, which I think is quite conservative, that’s three years of returns at 10% in one year. So, we’ll see how that pans out. I kind of see that becoming a bigger part of my portfolio over time, but I’ve kind of just putting in gradual sort of chunks of 10K and then kind of seeing how it plays out.
So, the next one is property. Property is a big focus at the moment. Probably the main focus. I would say about my second focus after the business. It is an area that I’ve been working on building up over the last couple of years. So, I’m about to be buying our third investment property at the moment. Me and my wife have been focusing on regional areas. So, regional areas with a lot of the obvious stuff. They’ve got population growth, big enough population for a regional town to sort of sustain itself, it’s not too small. It’s got low housing supply. It’s got a lot of job listings. It’s got a diverse economy. All that kind of stuff you would expect to see. A nice lifestyle, generally. They are all the things, the obvious things, you kind of expect to see. So, we’re about to get our third at the moment. So, it’s nice to sort of build that up on the side and between the stocks and the small amount of crypto stuff and the property stuff. And obviously I still have the business.
So, it’s nice to start seeing that each of the streams really picking up momentum now, and it’s just going to keep compounding. For me, my goal is to kind of keep making enough money and have a big enough asset base where I can basically make a very large income every year before I’ve even lifted a finger. I love working, so I can’t see myself stopping working, but I definitely want to have the option as soon as possible.
And like a lot of these FIRE people, which is for those that don’t know, Financial Independence, Retire Early community, a lot of those people want to live quite lean in retirement. For me, I would like to have a very, it’s called Fat FIRE, where it’s a bit more of a fancy or luxury retirement. So to do that, I do need a lot more assets invested. So, big focus for the rest of my thirties is really making sure that I build a really, really large asset base, and then that will kind of put me in good stead, ongoing. And obviously we’ll still have some fun along the way.
So, with the property stuff, once this third property is closed, we will start saving for, I have a wife and a kid and it’s kind of natural that we will look to get a family home at some point. I do live in Sydney, which is the most expensive city in the country. So, house prices are pretty ridiculous and unless you want to live really far away from the city and sort of out in whoop whoop, it’s very expensive and you kind of have to compromise on something and I don’t really want to compromise on anything to be honest so that means you’ve got to kind of pay more.
So, I’ll be kind of looking to get a family home, hopefully in the next couple of years. And the fourth house that we’ll get, will be our family home. And probably what we’ll end up doing is, ideally buying a house maybe in the 1.8 to two mil range, and then doing a renovation or potentially a knockdown rebuild, if that makes sense, but it’s kind of still in the future. So, we’ll work out what we’re going to do there, but that’s roughly what I see happening.
We definitely want something with enough space. I’d love to have a separate room for an office and a YouTube studio and enough for two kids. So, looking to have like a four, maybe five bedroom place, ideally. So, we’ll see how that all pans out, but obviously for a house that costs that much, then there’s going to be a deposit of about 360K to maybe 450 ish.
If this is assuming a 20% deposit, what we need to do is also say for stamp duty and that sort of stuff. So, all those other costs, that’s another 80 grand, 90 grand or whatever it is. So, I’m probably going to have to save 500K to 600K to get that across the line. And I personally prefer doing 20% deposits and not paying lenders mortgage insurance. I know that some people prefer to get low deposit and just pay the fee. But to get appreciation, I think that does make sense in some situations. For me, I’ll also consider that, but my general preference is to have more equity in the property rather than less. I don’t really like as much risk. I don’t want to have 10 properties that I have 10% share in or something like that. I’d rather have more equity in each property and know that my outgoings are not as high every month because my repayments are lower. That’s just something that I have as a personal preference thing.
So, I’m pretty excited about that. So, that’s kind of what we’re focusing on. Finish this third property and then start saving for the fourth. I could get the fourth property a lot sooner if I just took equity from the other properties and took some money from my stock account, and then maybe some more from the business. However, I would need to pay tax on anything that I’m selling or some of the gains. And also if I took more money out of the company that would raise my, put me into another, obviously the tax rate at the top is high, so it’s going to be taxed pretty heavily so I don’t really want to do that either.
So, we’ll see sort of how it all pans out, but I kind of expect to, if possible, I want to keep all my investments as is and not sell anything. And also maybe, I may need to change my salary in the business because I don’t really pay myself a great deal because I don’t really need much to live off, but I may just end up increasing the salary. So, then I can pull money out of the company or pay myself a dividend at the end of the financial year to help sort of speed that process along. But once we’ve kind of got those four properties, I’ll probably ease off for a bit. And then just focus on maybe getting ahead with that, with the family home, and paying, not all of it off obviously, it would take time, but paying a good chunk and getting that quite a good chunk of that paid off early. And then I’ll probably ease up on some of the investments for now.
And the final part for me is the business. So, this is probably my biggest focus. This is where I generate the most wealth and this is what pretty much pays for the other investments so it always has been a big focus for me. With my marketing agency and serving my clients, it’s always my number one priority, work wise anyways. And growing that is probably one of the best investments actually for me to make. So, whether it’s investing in ads, whether it’s investing in team members, so we’re in the process of hiring some more people to help run our paid ads for our clients. So, we do Google ads and Facebook ads, and we do some consulting as well. Consulting is mostly done by me, pretty much all done by me, sorry. And then the other services, the done for you services, they’re sort of done by the team.
So, a big focus is getting some senior people. I don’t really want sort of juniors for the time being. So, basically building out that team to allow us to deliver services to more people, but keep that high standard. If you invested a hundred K into property, for example, you might make, say 10% give or take. If you took the money in your business and took that a hundred K and put it into more staff to deliver more services or to free up your time or to invest in software that could help speed things up for you, or free up time again, or into ads to acquire more customers, you’ll make significantly more than 10%. So, it’s one of those things to think, I always think about how can I multiply my money the fastest and send the money out like soldiers and bring them back and multiply them as rapidly as possible.
Sometimes you can get on the slow path and some of the property stuff and the stock stuff. Over time it compounds like crazy but for me, I’m trying to build wealth faster than that. So, while I do do it, I know that for me to multiply my wealth the fastest it’s going to be through business, which may be a little bit more, an active income source, of course, but for me, I just know that if I can get that initial capital multiplied as fast as possible, the investments will always be there, I can always take that money and then put that into houses and stocks and that sort of stuff.
I want to throw it back on you now. So, what are you doing this year? What’s some stuff that you’re focusing on? Is there anything that you think I’m missing or any critiques on the approach? Do you think I should be doing more of this verse more of that? I would love to hear about it and I’ll see you in the next video.