Thursday, February 26, 2015

Kickfurther: Get $5 to invest in small business inventory (and earn 20-30% APR!)

Get $5 to invest in small companies!

I'm always looking for interesting alternative investments, and I came across a really cool one called Kickfurther. Basically, this is a startup helping small companies bypass traditional funding for purchasing inventory. These companies don't have enough capital to buy new production rounds (e.g., they got funded on kickstarter but now want to sell round 2,3...) so they usually get a bank or factory loan which costs them big $$. With Kickfurther, individual users can contribute $$ to help businesses they like and in return get some interest. Individual offers get you 5-10% interest but you get paid back over 3-6 months, so you can reinvest quickly and get 20-30% APR! That's pretty awesome!

Question: What if the inventory doesn't sell? Well since you are actually purchasing the inventory, so if the business can't sell you can still liquidate. Kickfurther helps you do that (they also sell on their site). More info about how it works at this link.

I like that this is a real investment, allowing you to get a substantial return for helping companies that you believe in. After getting paid back on the first offer I did (an organic body care company, made 10% in 30 days!) I put a lot more in. Here are some tips:
  • You should only put money in an offer if you feel the product and company are a good investment. The interest they're paying you is to compensate for the risk. But note that you can help market the product too! I try to only invest if it looks like they have some established sales.
  • Diversify! Rather than putting it all in the highest-interest offers, spread the risk around into more companies.
  • There is a 1.5% withdrawal fee, but that's only charged when you take the money to your account. I usually reinvest instead though!
Check them out here using my link and you'll get $5 to start investing!

What is the Frugal Octopus?

This a site all about finding interesting non-traditional investing opportunities. I keep most of my investments in index funds, but with about 20% of my money I like looking for new opportunities. Why not just dump it all in the market? Because I like to have more control over my investments, and explore the cool innovations out there! Stay tuned for more interesting investment ideas!