Alternative Investments to Look Into: Know This

Investing. This has been one of the topics I’ve been most commonly asked about throughout my career. People want to know why I make my decisions and how I decide what to invest in and what not to invest in, but I think there’s a more important conversation that needs to be had first.

The truth is, when it comes to investing, the world is in a very different place today than it was for your parents or even your older siblings. For older generations, investing sat in the context of three main things: stocks, real estate, and just sitting on your actual cash. Anything beyond that meant that you were on a totally different level of ridiculous wealth, and you got into shit like fine art.

Today, things are totally different. Now, 17-year-old kids on TikTok are putting out investment videos. It’s no longer something just for parents or something for the wealthy – investing is part of the culture, and everybody feels like they need a piece. The good news is that it’s possible. The bad news is that there are a lot of mistakes and the potential to lose money if you’re not thoughtful and educated.

Now, 20-something year-old “Tanya” isn’t necessarily thinking about buying apartments and renting them out for passive income. She’s not thinking about buying 1,000 shares of Tesla – or maybe she is, but there are a lot more “Tanyas” out there buying Jordan rookies, or comic books, or CryptoPunks…and I think it’s only going to continue from here. There are a lot of different options when it comes to alternative investments, and I think the ecosystem over the next half-century is going to be staggering as people’s portfolios expand dramatically outside of publicly traded stock and real estate.

I can’t tell you what’s right for you. What I can do, however, is share the alt investment spaces that are exciting to me, and provide some insight into how I think about things. I hope you find it valuable.

Everything written below is just my perspective and opinion, and not investment advice.

What Are Alternative Investments?

First, alternative or alt investments fall outside of conventional investment categories such as stocks and bonds, fixed income, and cash. You can check out this beginner’s guide if you’re completely new to the subject, but I will give you my general breakdown.

With a wider range of asset classes available, today’s alt investing is no longer reserved just for the rich and wealthy. High net worth individuals may invest in real estate, private equity, or venture capital, but there are so many other ways for the average person to invest that excite me so much more. These are non-traditional spaces that are not only seeing major growth, but they’re much more accessible to the average person. More importantly, they’re just fucking fun to get into.

Please note, my bigger concern is that we’re very early in this movement. Even though I’m excited about the overall opportunity of alt investments – and think there’s an incredible opportunity with 5-10% of the individual investments – in my opinion, the hype around the space right now does lead to many of the projects or individual assets declining and losing money.

I think maybe 90% of sports cards are going to end up not being good, but ~10% will be ridiculous. I think, say, 95% of NFTs are going to go to zero, but 5% will change people’s lives. Could you buy a $200 NFT that will sell for $47k in seven years? Sure. It’s crazy…but the problem is, that’s a needle in the haystack and it takes real hours of work.

So, as you read this blog and do your own research on alternative investments, keep that in mind: the macro excitement, but the micro thoughtfulness.

Examples of Alternative Investments

Here are some of my personal favorite alternative investment opportunities:

As you can see, this is not your mom and dad’s investment portfolio…this is – in my opinion – what investments of the future will look like. For any of these spaces, you don’t need to be rich to start. What you do need is the interest to get excited, the hunger to get educated, and the patience to play the long game.

Let’s dive a little deeper into a few of these categories.

Investing in NFTs

By now, all of you know that I’m bullish on NFTs. To understand more about the space and why I’m so excited, check out my article What is NFT? Non-Fungible Token Guide.

Do I believe that NFTs are a worthwhile investment? Of course. Do I believe that the current supply available is so ridiculous that most of today’s projects will flop or go to zero? Absolutely. The question isn’t whether you should invest in non-fungible tokens – whether you decide to get on board or not, I believe NFTs are here to stay as a permanent fixture in society, just like the internet and social media…The real question is: Which projects and which project creators have what it takes to make your investment a good one?

What’s happening with NFTs right now is exactly what happened with the internet in March/April 2000. When the dot-com bubble burst, lots of people lost lots of money as countless internet companies crashed…but you know what remained? Amazon and eBay. So today, a lot of the NFT projects you see popping up will build a lot of hype. Your job is to do your research and determine which projects you think will be the Amazons and the eBays when everything else disappears.

We’ll talk more about how to determine a worthwhile investment later on.

Investing in Sports Cards

If you’re an OG in my community, you already know how I feel about sports cards. From 1986 to 1994, I was deep in the cards game. I did sports card shows most weekends in eighth grade and high school before falling off once I started working in my dad’s store. So much of my business strategies and understandings are built from those days.

Three years ago I tried to tell everyone that sports cards were back big time – my best friends, my brother – but no one believed me. Looking back, I think it’s because they thought I was thinking with my heart. They thought my love and nostalgia for cards were clouding my vision, but I knew something huge was coming, and here’s why.

Around 2018, my son started getting into cards with his friends. Naturally, it was a huge connection point for him and I to bond and for me to teach him what I know. I figured that former card enthusiasts would now be getting back into the game as a way to connect with their kids. On top of that, I knew from VaynerMedia’s strategy work with companies like Hasbro and Mattel that toy franchises tend to loop every 25-30 years when parents get interested in teaching their kids.

Fast forward… I attended the National Sports Collectors Convention in Cleveland. Afterward, I spent months on eBay, reading forums and blog posts online, and talking to prominent dealers about their take on the sports cards world. After hundreds of hours of research, I put out a blog post on Why I Believe Sports Cards are About to Explode in Culture and Value – be sure to give that a read if you want the nitty-gritty.

Today, everything I said two and three years ago is proving to be true and the crazy part is that we’re just scratching the surface. If you’re interested in getting into cards, here are some things to think about:

Enjoyment and Happiness 

For some people, it’s about flipping and making a profit. For some, it’s about the hobby of opening packs and collecting. For others, sports cards bring an added element of excitement to watching games, and for others, it’s about legacy or teaching their kids about entrepreneurship. Sports cards are about a lot of things – the game, the gamble, the fun, the comradery. Having the self-awareness to know why you’re getting into it will help you decide how you invest.

Whatever your reason, money is not a guarantee and you never want to get overexposed financially. There are enormous amounts of risk in this game, which is why enjoyment and happiness should be at the core of your motivation.

Long-term vs. Short-term plays

Personally, I’m very hot on basketball icons like Dr. J, Kareem Abdul-Jabbar, Oscar Robinson…I think vintage basketball is way underpriced. I’m also huge on LeBron right now, not just because of talent but because he has a cultural relevance that I think is going to make him even more popular in 20 or 30 years.

The point here is not to tell you which cards to invest in but to get you thinking about the long-term. Like anything else, this is about trends – like one decade, it’s all about tight jeans, and the next year, it’s about baggy jeans. Things go up and things go down, which is why I encourage you to invest in things that are evergreen. People like LeBron, Jordan, Brady 🙄…these are the names that are going to carry some weight down the line.

I see a lot of people rush in and throw investments behind the hottest rookies. Yeah, they’re hot right now, but what happens if they get injured? What happens if they don’t become an all-time top 25 player and the market collapses? You might make a nice bag in the short term, but you might also end up being the person that’s holding the bag.

We’re only in the second quarter of demand with sports cards, which means there’s more room to grow. I think if you spend 80% of your time on the classics and all-time players, then you can have a little fun on the side with your prospect bets.

Education

I am petrified that so many people will invest in sports cards – or anything else – without really knowing anything about them. Do you know about the grading companies? Do you know the different companies that make the cards? Do you understand supply and demand and how that’ll affect the market moving forward? Do you know about the sport itself and the players?

The barrier to entry for sports cards is relatively low because you don’t necessarily need thousands of dollars. That being said, you should still do your due diligence before investing in anything. Get educated – spend 30 or 50 or 100 hours searching on eBay, reading articles, reading Twitter threads, talking to people who know the game. Of course, all of this will come easily if you have a genuine interest; in the end, it all goes back to enjoyment.

For an in-depth look at everything I think you should know about investing in sports cards, check out this video:

Investing in Comic Books, Toys, and Video Games

I can’t go super deep into this because even though I’ve collected all these categories in the past, I have not yet put in my 50 hours of homework to be on the record. Hopefully, I’ll find some time to do that soon between VeeFriends, VaynerX (which is now hiring), VaynerNFT, VaynerMedia’s work with DraftKings, VCR Group (where I’m a cofounder), and everything else I’m involved in…But my spidey senses – which have a large track record of being right – tell me that now that NFTs, sports cards, and sneakers are doing and have done their thing over the lasts 3-4 years, you’re going to start seeing comics, toys, and video games have some real upside (because they all play in the same realm).

I find myself gravitating towards wanting to do those 50 hours of homework. That in itself excites me about this category. Go check out completed items on eBay. Go check out articles that are being written…it’s starting to happen, and so I highly recommend people dig into it. I feel like there’s something brewing here, and all three of these categories – comics, toys, and video games – play heavily into popular culture, which is always the bedrock and the foundation.

For example, 30 and 40 year-olds are starting to make money, and some of them want that original Teenage Mutant Ninja Turtle “in-package.” 40 and 50 year-olds are starting to be more “alternative,” and instead of buying 30 shares of GE, they may want to buy an Optimus Prime G1 Transformer in the original package. By the way…if you looked up “Optimus Prime G1 Transformers MIB” – which stands for “mint in box” – you’d shit your pants.

Finally, if a 28-45-year-old who is affected by the Spiderman movies hits it big with an IPO, instead of buying some land or an apartment building to rent out, will they go buy Spiderman’s first appearance in a high-grade comic? 🤔

This is what I see coming.

Pros and Cons of Alternative Investments

My intention is not to persuade or dissuade you to do anything, but I do want to leave you with a cautionary note. Just like entrepreneurship, investing is not for everybody. When society deems something cool or sexy, people rush in without knowing what they’re getting themselves into. When that happens, there are always consequences. That being said, let’s talk about some cons of these different alt investment spaces:

Cons

Probably the biggest mistake I see is people who are not educated just going out and blindly buying. Whether it’s an NFT project, sports cards, comics, or anything else, the number one rule I can give you is to never spend your money on something you don’t understand. You don’t necessarily need to be an expert, but you should have a solid enough understanding of whatever it is you’re investing your money into so that you can make a decision you feel good about.

When you don’t prioritize education, you leave yourself susceptible to the next con, which is fraudulent activities. From people altering sports cards, to fraudulent plays in coins and art, to people tricking you into giving them your seed phrase in NFTs, there are always vulnerabilities when money is involved.

Lastly, keep in mind that these spaces are very hot right now – and anything that’s hot will eventually cool off. With NFTs, sports cards, etc., it’s about supply and demand. When there’s an overabundance of supply, only time will tell how the market plays out. If and when bubbles burst, your job is to make sure you’ve done your due diligence to end up on the right side of things – and to be okay if you don’t! Remember, any investment comes with risk. Never put in more than you’re willing to lose.

For example, I love the NFT space and believe it will do so much over the next two decades, but what concerns me is people going “all-in” outside of their means. People gamble in new things like NFTs, cannabis, sports betting, altcoins, new areas of real estate, new IPOs/SPACs, etc. with money that they need for their mortgage, food, or life. Please do not do this. High risk or new ventures must always be strategized with dollars you can afford to lose.

Please understand that many of these alt spaces are early days…it’s too soon to tell exactly what will happen. So only put in what you can afford to go to zero.

Pros

Potential profits aside, the main pros of investing for me will always be the thrill, the fun, the game. I don’t get enjoyment in buying Netflix stock and it going through the roof just because I knew Netflix would be a good buy. I get a hell of a lot more enjoyment in buying sports cards and seeing how everything shakes out.

I can’t stress enough how important the enjoyment element is when it comes to investing. Investing is about research, intuition, using discernment, and betting on yourself and others. If you have a true interest, enjoyment is a pro that outweighs a lot of cons.

What You Should Know Before Going Into Alternative Investments

Now for three top pieces of advice for anyone interested in investing. Invest in things you a) understand, b) believe in, and c) can actually afford to lose. It sounds simple, but let’s break it down.

Invest in Things You Understand

The reason so many people lose money in sports cards, comics, NFTs, crypto, cannabis is that they don’t know what the fuck they’re doing, but then they see one person tweet and suddenly they think, “I’ll buy that!” Please, never do this.

Even when it comes to VeeFriends, I say it all the time…please do not invest until you have done your 100 hours and educated yourself on NFTs and why they matter.

Invest in Things You Believe in

When you don’t understand something, you lack conviction. When you lack conviction, you cannot make sound investment decisions and you risk being swayed by the chatter of the crowd or by an “influencer.” The reason I believe in my investments is that I have conviction, not only in the thing itself but in the person or team behind that thing. This is the principle of horses and jockeys.

Let’s take NFTs as an example. The NFT project is the horse but the creator behind the project is the jockey. Where most people mess up is that they get so infatuated with the horse, that they ignore who’s steering it completely. For example, I hear lots of people saying they fell in love with the art…but if the people running the NFT project can’t make the masses care about their art, or you and a small group of people are the only ones that like the art, it’s game fucking over.

Before I invest, I ask myself: Do I like the horse – the app, the idea, the business, the thesis? But then I spend even more time looking at the jockey. Is this just a great student that went to a prestigious university? Is this just a person with a stellar resume? Or is this a true entrepreneur? Does this person understand what it takes to lead a team, build a community? Are they just good at raising capital or are they good at leading men and women? Are they capable of pivoting when an idea isn’t working? Can they take a punch and keep on going?

These are the questions that inform my investment decisions. Why? Because I’ve learned the hard way. In the past, I was right about concepts but very wrong about the people running them. Now I’ve learned to look at the jockey and lean on my own discernment. It doesn’t mean you’ll always get it right, but if you’re wrong, at least you’re wrong on your own terms.

Life is a video game – you die a lot, and that includes business and investment. It’s just a lot more fun to die on your own decisions, so make sure you actually believe in them.

Don’t Invest More Than You Can Afford To Lose

Lastly, I always remind people, don’t be frivolous with your money. Never do things that you can’t afford to lose and understand that very few things are ever completely “sure.” If you want sure money, investing isn’t the way to go – that’s what traditional jobs are for. Before you jump in, be practical about what you want to invest, and don’t romanticize it.

Takeaways

I think what all these alternative investments have in common is that they represent a societal shift in what it means to invest, and who gets to participate. Young people or even 40-something year-olds like me don’t want to buy old, expensive ass art. I don’t want a picture of some random Englishman or a scene of a hillside to hang on my wall. I want to build a case and display my stack of 150 Hakeem Olajuwon rookie cards. I want to show my friends my sports cards and comics, or pull out my crypto wallet and show off my NFTs. The alt space is here and thriving, and it’s changing the way future generations think about investing.

Let’s recap on some important takeaways:

I hope this article was helpful and provided some perspective on how I think about some of my favorite alt investment opportunities. Of course, be sure to do your research before you make any financial moves.

Reprinted by permission.