How To Keep & Grow Your Money #16

In this letter, we analyze the Vanguard Real Estate ETF (VNQ).

Ticker: VNQ | Price: $93.11 | Market Cap: $71.5B | Average 10-Year Annual Return: 5.9% (as of October 2024).

What is it (short): Vanguard Real Estate ETF (VNQ) gives investors exposure to the U.S. real estate market by tracking the performance of public companies involved in real estate investments, such as REITs (Real Estate Investment Trusts).

What is it (long): VNQ offers a diversified approach to investing in real estate through an ETF structure, allowing investors to benefit from income-producing real estate assets without direct property ownership. The ETF holds assets in residential, retail, and commercial properties, giving exposure to sectors that typically offer higher yields and can be defensive against inflation. While real estate can enhance portfolio diversification, investors should be aware of its sensitivity to interest rate changes, which can impact returns.

Our thoughts: VNQ is a popular choice for those seeking income from the real estate sector. Its diversified nature makes it suitable for long-term growth, although its returns can fluctuate with interest rate changes. A good pick for moderate- to long-term investors looking for stable income and inflation protection.

Do your own research and if you would like to take our free course to learn how to invest into ETFs and Index Funds at Index Institution™ go here.

Upcoming French Tax Proposal Impacting Expats in Low-Tax Jurisdictions

France is proposing a “targeted universal tax” that could impact citizens residing in low-tax countries without a tax treaty with France (e.g., Bahamas, Cayman Islands). This measure would apply to French citizens who spent three out of the past ten years in France.

Key Details

• Who’s Affected: Expats in non-treaty jurisdictions with tax rates at least 50% below France’s.

• Tax Scope: Could include income, capital gains, and inheritance taxes.

• Protective Measures: Treaty-based residency and awareness of evolving tax policies may help.

Stay informed as this proposal could set a global trend.

If you would like to explore legally paying less taxes and maximizing your freedom check out Global Optimizer™ or click here.

Financial concept to learn in this edition: Venture Capital

What is Venture Capital (VC) and Why is it Important for Investing?

Definition: Venture Capital is a type of private equity that investors provide to young, high-growth companies in return for ownership shares. It’s vital in funding innovative startups that might otherwise lack access to capital.

Types of Funding Rounds: Venture capital funding is structured in rounds (Seed, Series A, B, etc.), each reflecting the company’s stage and financial needs. Seed rounds help establish the business, while later rounds (Series A onward) fuel growth and expansion.

Why Investors Use Venture Capital: VC offers the potential for high returns by supporting new technologies and industries, often targeting sectors like tech, healthcare, and clean energy. While risky, VC investments can yield significant returns if the startup succeeds.

Key Considerations:

• High Risk: Startups face high failure rates, so understanding the business model and market is critical.

• Exit Strategy: VCs seek to exit through acquisitions or IPOs, generating returns through an increase in the startup’s value.

• Market Trends: Knowing trends helps investors identify promising sectors and make informed decisions, as certain industries (like AI or biotech) may present unique growth opportunities.

VC investments are high-risk but can be highly rewarding, attracting investors comfortable with uncertainty and long-term growth.

To learn more about Venture Capital read more on Investopedia here or learn more on how to invest here.