Historically, people depended on gold mainly for business trades. Today, apart from its aesthetic appeal, gold continues to be a prized asset as this is used in a wide array of industries and purposes. This includes, but is not limited to, creating jewelry, filling tooth crowns, assembling electronics, producing architectural structures, and the like. Continue reading
I value supporting local businesses. Additionally, I love to “shop small” whether that’s local or during my travels. This value has heightened during the COVID-19 pandemic. After all, so many local businesses are in danger of shutdown due to prolonged closures. Therefore, I was excited to learn about The Small Business Bond (SMBX). This is a way that I can earn money while also supporting small, local businesses. It’s right up my alley.
Why Shop Small and Support Local Businesses
I’ve been a “shop small” person for almost as long as I can remember. My father is a custom woodworker who has always done local business. Local stores have charm, closeness, and unique items that you just can’t find in big box stores. Yes, the big bookstore will always have (or order) the book you want. However, the small bookstore has the best recommendations, the shelf of books by local authors, and staff that know your taste in reading and can recommend the perfect book at the perfect time. Local stores promote community.
One of the things that I loved about San Francisco when I first moved here was the limitations on large chain businesses. Although that’s changed some over the years, San Francisco is still a city vibrant with small local businesses of all kinds. I support them through purchases, social media promotion, and word of mouth. San Francisco shut down earlier and longer than most other cities during the COVID-19 pandemic. As a result, many small businesses have suffered. So, the opportunity to support them in a new way – while also earning money myself – really excites me. That’s what The Small Business Bond (SMBX) is all about.
What Is The Small Business Bond (SMBX)?
The Small Business Bond (SMBX) is a platform to invest in local small businesses. Small businesses borrow money through bonds that you invest in.
If you’re not familiar with bonds, then think of them as loans. However, instead of going to a big bank to get that loan, the small business owner gets it from everyday investors. You, should you choose to try a platform like The Small Business Bond, are one of those everyday investors.
How SMBX Works
The process is relatively simple:
- Sign up as an investor on the SMBX platform. There’s no charge to create an account.
- Browse through the available small businesses. Choose which ones you want to invest in. You can start investing with as little as $10.
- The small business that you support will receive that loan money to help stabilize or grow their businesses.
- Each month, you’ll receive a payment. The payment includes your monthly principal repayment as well as interest payments. Interest payments vary; they may be as high as 9%.
Here’s a closer look at what the experience of investing in local businesses through SMBX has been like for me so far:
Signing Up as a New SMBX Investor
I went to the website and clicked the “start investing” button. A new window opened up and showcased some of the most recent bonds along with the time remaining for funding and how much has been raised to date. On one hand, this seems like an extra page because I clicked “sign up.” However, the pause to glance over this page and see the businesses getting help right now was inspiring. It reminded me why I was doing this.
Upon clicking signup, a popup window opened. It asked me to choose whether I was investing as an individual or on behalf of an organization. I love that both options are available. I selected “individual.”
The next popup window let me know that there are three steps to investing in the local business through SMBX:
- Create a profile.
- Establish limits on investments.
- Link a bank account or credit card to the profile.
Step One: Create a Profile on SMBX
Easy peasy. So I did those things. I entered a username, email, and password. Next, I gave my legal name, birth date, and address. The site let me know that FINRA requires a U.S. address for all investors on the site.
Step Two: Set Investment Limits
This quick pop-up window asks four questions:
- Approximate annual income
- Approximate net worth
- If you’re an accredited investor (which I am not)
- Amount invested in crowdfunding in the past year
This established my investment limits. Next, I agreed to the various terms and risks. I received an email that I clicked on to confirm my email address. My account was all set up and ready for investing.
Step Three: Payment
After clicking on my email, I went to a new page of bonds. At the top of the page was a profile option, which I visited to set up my payment. I assume if I hadn’t done so then at some point I would have been prompted to add that.
The entire sign-up process took less than fifteen minutes.
Choosing Local Businesses to Support
On the bonds page, I chose from the available local businesses to support. SMBX is a new platform. Therefore, I only had a handful of options for supporting local businesses. I’m excited for more businesses to join. On the other hand, I’m also excited to be getting in on the ground floor of helping small businesses.
When you click on a small business from the bonds page, it opens to that business’s page on the site. Here you see the financials on the right side of the screen. This shows the minimum and maximum amounts to raise, the bond duration, yield, unit par value, and total unit value. For example, clicking on ChildWise, I see that they’re raising between $50,000 and $100,000. The bond duration is 60 months, the yield is 8%, the unit par value is $10 and the total unit value is $12.17. In other words, if I invest in one unit at $10 and get repaid with 8% interest then I’ll receive $12.17.
Although there were only a handful of businesses to choose from, I still wanted to be discerning about where to invest my money. It’s important to me that the companies share my ethics. Therefore, although I appreciate the important financial information, I looked most carefully at “our story”. This, along with supporting documents, shows what the company is all about. It covers how they want to use their money. This is what matters to me.
I invested $50 to start. You’re allowed to invest in $10 increments. I chose to invest:
- $10 in vegan cheese company Jule’s Foods
- $10 in San Francisco ice cream shop Humphry Slocombe
- $30 in childhood education business ChildWise
When I entered how much I wanted to invest in any given company, a pop-up window reminded me of the terms I saw on the company’s business page. Upon agreeing, a page pops up reminding me when my companies will fund. At that time, if their funding minimum has been met, my payment will get processed.
Risks and Rewards
Should all three companies receive funding and successfully return their bond money, my $50 will become $60.69. Each transaction has a 4% transaction fee. So, I’ll only earn a little bit of money. But I’ve also only invested a small amount. I’m testing out the waters, and if it goes well then I’d love to invest more. It could be a great source of passive income. More importantly, either way, I’ve supported local businesses that I believe in, so the money isn’t wasted.
You’ve already upgraded your home with the latest and greatest gadgets out there. Why not do the same with your investment portfolio? You’ll find plenty of stocks in the tech sector that can give your portfolio a serious near-term boost. While you want to maximize investment returns with lower-risk long-term investment choices, you can complement the investments you make for the long haul with stocks that have the potential to enjoy a big (and relatively quick) price increase. You’ll typically hold short-term stocks for just a few years, often much less, before selling and making a profit.
The 2020 market has experienced extreme volatility, but tech stocks have come out as winners overall, making them great choices for savvy investors. Read on for some of the best short-term stocks in the tech sector to invest in today.