46: Our 3 Favorite Investment Categories for 2024 | Rich Habits Podcast

Intro

The “Rich Habits Podcast” is hosted by Austin Hankwitz and Robert Croke, providing unique perspectives on wealth building and business strategies. In this episode, the hosts discuss their three favorite investment categories for 2024. They emphasize the importance of building a strong financial base before diversifying investments and highlight the potential for growth in cybersecurity, artificial intelligence, and cryptocurrency.

Main Takeaways

Investing in Cybersecurity

• Cybersecurity is a decade-long secular growth trend with significant investment opportunities.
• Companies like Palo Alto Networks, CrowdStrike, CloudFlayer, and Sentinel One have shown strong performance in 2023.
• The cybersecurity and risk management industry is projected to grow by 14% in 2024, with an expected expenditure of $215 billion worldwide.
• Investing in cybersecurity can be part of a long-term buy and hold strategy, given the continued expansion of AI and cloud infrastructure.

Artificial Intelligence Investments

• The growth of artificial intelligence is expected to continue, offering investment opportunities in both hardware and companies building new AI products.
• Companies like Nvidia, Broadcom, AMD, Taiwan Semiconductor, Palantir, Salesforce, and Google are expected to see significant revenue and operating cash flow increases.
• Investing in established companies provides stability and long-term growth potential compared to penny stocks and smaller companies.
• Long-term wealth building is prioritized over short-term gains, and thorough research is encouraged before making investment decisions.

Cryptocurrency for 2024

• Bitcoin, Ethereum, Chainlink, Solana, and Fetch AI experienced significant gains in 2023.
• Advocating for dollar-cost averaging into cryptocurrencies with a small portion of investible assets for potential long-term gains.
• Key projects for 2024 include Near Protocol, Injective, Arbitrum, and LCX.
• Cryptocurrency, specifically Bitcoin and Ethereum, can be included in a diversified retirement portfolio.

Building a Nest Egg for Retirement

• Avoid withdrawing money from a Roth IRA and treat it as a nest egg for retirement rather than a savings account.
• Utilize other liquid investment structures like high-yield savings accounts, T-bills, traditional IRAs, or investment brokerage accounts for liquidity while building a nest egg.
• Read prospectuses before investing in ETFs or other investments to understand the investment strategy and assets held.
• S&P 500 index funds and covered call option contract strategies are highlighted for generating yield.

Buying a Small Business

• Successful business acquisition strategies are discussed, including finding cash-flowing businesses and negotiation tactics.
• When negotiating the price for a business, start at the top and negotiate the best possible terms.
• Check the status of licenses, debts owed, and back taxes before buying a business.
• Owner financing can offer great terms and expedite the deal closure process.

Summary

Investing in Cybersecurity

The hosts highlight the potential for investment in the cybersecurity industry, which is experiencing a decade-long secular growth trend. Companies like Palo Alto Networks, CrowdStrike, CloudFlayer, and Sentinel One have shown strong performance in 2023. The cybersecurity and risk management industry is projected to grow by 14% in 2024, with an expected expenditure of $215 billion worldwide. Investing in cybersecurity can be part of a long-term buy and hold strategy, given the continued expansion of AI and cloud infrastructure.

Artificial Intelligence Investments

The growth of artificial intelligence presents investment opportunities in hardware and companies building new AI products. Companies like Nvidia, Broadcom, AMD, Taiwan Semiconductor, Palantir, Salesforce, and Google are expected to experience significant revenue and operating cash flow increases. Investing in established companies provides stability and long-term growth potential compared to penny stocks and smaller companies. Thorough research is encouraged before making investment decisions to avoid falling for hot tips or scams.

Cryptocurrency for 2024

The hosts express excitement about cryptocurrency for 2024 and beyond, citing significant gains in Bitcoin, Ethereum, Chainlink, Solana, and Fetch AI in 2023. They advocate for dollar-cost averaging into cryptocurrencies with a small portion of investible assets for potential long-term gains. Key projects for 2024 include Near Protocol, Injective, Arbitrum, and LCX. They also suggest considering the inclusion of Bitcoin and Ethereum in a diversified retirement portfolio.

Building a Nest Egg for Retirement

The hosts emphasize the importance of not withdrawing money from a Roth IRA and treating it as a nest egg for retirement. They recommend utilizing other liquid investment structures like high-yield savings accounts, T-bills, traditional IRAs, or investment brokerage accounts for liquidity while building a nest egg. Thoroughly reading prospectuses before investing in ETFs or other investments is encouraged to understand the investment strategy and assets held. S&P 500 index funds and covered call option contract strategies are highlighted for generating yield.

Buying a Small Business

The hosts discuss successful business acquisition strategies, including finding cash-flowing businesses and negotiation tactics. They emphasize starting negotiations at the top and checking the status of licenses, debts owed, and back taxes before buying a business. Owner financing is recommended for obtaining great terms and expediting the deal closure process. They also mention an upcoming episode dedicated to walking through buying a business in more detail.

Conclusion

As the hosts discuss their three favorite investment categories for 2024, they provide valuable insights and recommendations for building wealth. Investing in cybersecurity, artificial intelligence, and cryptocurrency are highlighted as promising opportunities. Additionally, they emphasize the importance of building a strong financial base, doing thorough research, and taking calculated risks for potential higher returns. By following these strategies, listeners can work towards achieving their financial goals.