A common trait between seasoned investors is the balanced matrix of their portfolios typically having a blend of short, medium and long-term investments with variable risk profiles across different industries.

If as an investor you are adequately exposed to lower risk assets and looking to venture into medium-to-higher risk long-term investments, Hedonova will provide you with an opportunity to diversify into alternative assets of this type.

Hedonova is an innovative fund that invests in multiple asset classes like art, cryptocurrencies and NFTs, unicorn startups, wine, equipment finance, real estate, music and a few more in different parts of the world.

Hedonova was founded in 2020 in US by Alexander Cavendish and Suman Bannerjee. As CEO, Alexander is an alumni of derivative modeling and investment banking at UBS and Morgan Stanley respectively. Suman, Hedonova’s CIO, has extensive experience in emerging markets and alternative investments. Both co-founders have been investing personal funds since inception, and have now opened up to retail investors. To date the team has grown to 16 members, including investors, economists, researchers, engineers and marketers spread across every continent.

Traditionally retail investors have been unable to tap on alternative investments due to regulation and investment size constraints. Hedonova has identified this niche and developed an investment fund whereby a retail investor can be allocated blocks (similar to shares in companies) in this fund at a low entry point of just $1,000.

With offices in Los Angeles, Paris, France and now in Tallinn, Estonia, Hedonova’s services are available worldwide. Being registered as a Delaware LLC (a structure that is often used by hedge funds) the fund is purposefully structured to be tax-friendly to international investors. In fact profits received from the fund are taxable in the country of the investor and as such Hedonova does not withhold any tax when distributing returns.

Hedonova’s Investment Portfolio

When you invest your money with Hedonova you are essentially receiving units or blocks in a mutual fund. Hedonova invests the funds’ money in 14 different asset classes which are set to increase with time. The below chart illustrates the spread between all the asset classes with cryptos and startups leading the pack at 17%, followed by listed equities and real estate at 12% and 11% respectively.

Hedonova invests in different asset classes through several alternative platforms such as Forge for startups, Masterworks for art and FundRise for real estate. As an investor in Hedonova you would therefore be investing in a fund of funds, as such amplifying your exposure to multiple asset types at a much lower investment than you otherwise would need to invest separately in each of those same investments.

Apart from asset class diversity, the fund consists of a wide geographical and currency spread ranging from commercial real estate in Singapore to unicorn startups in the USA. Hedonova’s assets tend to move independently of the stock markets as well as to each other. For example, art markets tend to perform better than stock markets during times of financial crises. The portfolio also contains stable assets such as farmlands and music royalties that provide cash flow and appreciation irrespective of the underlying macroeconomic climate.

Part of the capital invested is allocated to private and public equity to enhance the liquidity of the fund.

In going after new investments Hedonova first identifies a new asset class that is attracting liquidity and then performs a due diligence on a few selected firms within that class. When investing in listed entities Hedonova tends to go for quality stocks during temporary market crises so as to increase the potential margin for an upward valuation.

Hedonova’s team maintains the prerogative of when assets are bought and sold. With that said, most assets like startups, art and real estate require a long investment horizon. So you would expect that buying and selling in these is not frequent.

Potential Returns and Cash Flow

Since its inception in January 2020 Hedonova has generated a net return of 55.2% IRR, a large part of which came from cryptos, listed equities and the rise in valuation of unicorn startups.

This is an exceptional rate of return given the relatively low level of combined risk achieved through asset diversification. To add context, the performance to date represents an excess of 15.4% over S&P500 in terms of absolute returns.

Hedonova keeps its clients updated through weekly portfolio reports and also circulates regular investment updates via email. Separately, investors can track performance via personal web dashboard where one can view stats relating to returns, past performance and asset allocation.

In addition, given there isn’t always an abundance of insight when it comes to certain asset classes within the pool, Hedonova actively provides resources of information in this regard.

Fees

While there are no entry fees, the benefit for an investor of tapping into a diverse pool of assets without the need to personally undergo expert due diligence naturally comes at a cost. For this service Hedonova charges an initial 1% management fee on the assets upon initial investment and annually thereafter. In addition there is an annual 10% performance fee on any gains earned by the fund (both on capital gains and dividends) charged at the end of the year. Blocks are allocated after deduction of the initial management fee. According to Investopedia these fees are 60% lower than the industry average. I also noticed that these fees were recently revised down from 2% management fee and 20% performance fee respectively which makes investing in this platform even more attractive.

Any dividends or cash flows received by Hedonova from the various investment platforms are reinvested in the fund. The value of your investment within the fund is readjusted every time it happens. Any increase in value of assets is realised upon withdrawal.

Withdrawing money from the fund is easy and can be done any time. Investors can either request a partial of full redemption by submitting a request by email or via dashboard, subject to allowing at least 30 days notice. Other than that there are no exit fees or minimum lock-in period for an investment.

Risks

Apart from the inherent risk common to all hedge funds, as an investor with Hedonova you need to be mindful of a number of risks as detailed here. The following are what I believe to be the ones to be key:

Forex risk – Hedonova accepts investments in USD but may not necessarily invest using USD. This exposes your investments to currency risk. In order to hedge against this risk Hedonova uses currency derivatives.

Regulatory risk – Alternative assets are subject to regulatory reform. This could impact your investments and even the way Hedonova invests.

Macroeconomic risk – Government policies and social and environmental issues can impact the value of your investments directly or indirectly.

Market risk – Asset classes in emerging markets are riskier due to factors like political and economic uncertainties, inadequate liquidity and often poor disclosures and regulations among others.

Custodial risk – As described earlier, Hedonova invests in different asset classes through custodians or brokers who hold the investments or settle the trades. It is possible that, in the event of the insolvency or bankruptcy of a custodian or broker, the fund would be delayed or prevented from recovering its assets from the custodian or broker. Given these assets are not secured, in the worst-case scenario the money may therefore be non-recoverable.

In addition to this risk one should be aware that there is no secondary market to sell or transfer your investment in the fund. Furthermore, on their website Hedonova state that no such secondary market is expected to be developed. The only way to receive your money is either through the distribution of dividends or interests or by partly or fully withdrawing your investment which may come at a loss should the alternative assets underperform.

Customer Support

Hedonova offers investor support from Monday to Saturday via chat, email, voice and WhatsApp. More specifically, all investors are offered dedicated investment support in terms of taxation, compliance, portfolio and other related support.

I hopped onto TrustPilot to further corroborate the above. Even though there were only 15 reviews since their account was registered in May 2021, the comments had nothing but praise for the platform. In fact the current average rating stands at 4.5. One reviewer even noted that their customer service is what really makes them stand out from other similar platforms, confirming that he has been assigned a dedicated account manager. This opinion was echoed in other comments. Another reviewer indicated that the “investor relations team is exceptional, great for the level of communication and investment advice.”

There was also praise for the platform’s portal which is easy to use an intuitive.

Investing with Hedonova

Investing on this platform is straightforward. The first step requires you to fill a simple form with your name, email and contact number and an indication of how much money you’d like to invest. Once submitted, a Hedenova representative will contact you to explain their investment strategy and answer any questions you may have. you accordingly. This goes to show how Hedonova handles customers with care from the first contact point.

Post the usual KYC checks, you can start investing by adding capital to your account using any major payment gateway or wire transfer.

Conclusions

Hedonova is an investment fund with a portfolio of alternative assets like art, wine, P2P lending, equipment finance and others.  As an investor your holdings will be in the form of blocks, each block representing fractional ownership of the fund. With average returns to date since 2020 being 55.2% IRR, this platform is a great opportunity of trusting your idle money with a team of caring experts who will work towards maximizing your investment in a transparent manner against a reasonable 1% management fee and 10% performance fee. In the process you will be receiving regular updates on the performance of your investment while also being given the facility to monitor same proactively via the platform’s investor dashboard.

Apart from the attractive potential returns, my inclination towards Hedonova is fueled by our common mantra that “our ability, as citizens of the world, to invest must not be limited by political borders or hindered by arcane national policies. Assets created by people belong to mankind and anyone willing must have the tools to invest in them”.

Kudos Hedonova!

Over the years I’ve come to realize that my best investments happen during the second wave of the product or industry lifecycle.

The idea is loosely based on the Gartner Hype Cycle curve, the Chasm concept, the Hero’s Journey and the theory of Diffusion of Innovations. Let’s take an abbreviated at these models that have inspired my strategy.

This style of investing is also driven by the fact that by nature I love being somewhat of a contrarian, and am quite unlikely to invest in something when it’s in hype mode and everybody is getting in on it.

Gartner Hype Cycle

The Gartner Hype Cycle aims to visualize the typical path that most new technologies go true until they reach mass adoption.

In the Gartner Hype Cycle, we find 5 main stages for a new technology:

1. Emergence: “The Technology Trigger”
2. Excessive enthusiasm: “The Peak of Inflated Expectations”
3. Excessive disappointment: “The Trough of Disillusionment”
4. Gradual adoption: “The Slope of Enlightenment”
5. Mainstream adoption: “The Plateau of Productivity”

I’m most interested in the 3rd and 4th phases. Let’s see how they’re defined by Gartner:

• Trough of Disillusionment: Interest wanes as experiments and implementations fail to deliver. Producers of the technology shake out or fail. Investments continue only if the surviving providers improve their products to the satisfaction of early adopters.
• Slope of Enlightenment: More instances of how the technology can benefit the enterprise start to crystallize and become more widely understood. Second- and third-generation products appear from technology providers. More enterprises fund pilots; conservative companies remain cautious.

Now let’s take Bitcoin as an example. Perhaps it is a bad example as the whole cycle has not yet played out, but it’s the best example I have right now. After the 2017-2018 peak that crypto went through, there was a bit drop in both asset prices as well as media coverage and public opinion. Clearly we hit the “trough of disillusionment” at that point. In the meantime, nothing changed for the builders in the Bitcoin space, and that was an amazing time to get interested in the technology and educate yourself as well as get invested.

Investing in Amazon after the dot com bubble is another example of second-wave investing in the trough of disillusionment.

Hero’s Journey

This monomyth is not typically used in relation to new technology lifecycles, however, I think it also fits in quite well, especially as I consider my own personal journey with new technologies.

Humans react to great story-telling because we are programmed to respond to an elemental story arc. The Book of Jonah, The Odyssey, Rocky or Star Wars: the details don’t matter because although the contexts are different, the story is the same. They appeal to the masses because of our deep desire to progress from the mundane, fight through challenges and then achieve a great victory.

Taking Bitcoin again as my example, it started its “call to adventure” as a result of the financial crisis of 2007-2008. It then went through its own challenges and temptations, with the scaling wars that lasted a couple of years, as well as the Abyss of 2020 (huge drop in price) and the rebirth and fast adoption by both public corporations, institutional funds and even countries.

The Chasm

The “crossing the chasm” model is based on the theory of diffusion of innovations. This is a theory that seeks to explain how, why, and at what rate new ideas and technology spread. It was Everett Rogers, a professor of communication studies, who popularized the theory in his book “Diffusion of Innovations”. He argues that diffusion is the process by which an innovation is communicated over time among the participants in a social system.

In most product adoption curves, there’s a point that can make or break the success of the product. It’s called the chasm. It’s the point between the early adopter stage and the early majority stage.

As the chart above represents, crossing the chasm means breaking into the mainstream market.

Again, with Bitcoin, I believe that as of 2021 we are just beyond the chasm, or possibly on the way to crossing it the final part of it. I’ve long held the belief that in order for Bitcoin to be successful, it would need to be properly regulated and also adopted by big institutions and possibly even countries.

Over the past two years, we’ve simultaneously seen governments and regulators all around the world take strong and detailed positions on the crypto space, as well as huge investments by public companies and even countries (El Salvador is the first).

We’ve also seen a tremendous amount of innovation in the crypto space over the past year, with the resurgence of the Ethereum VS Bitcoin debate as well as a ton of DeFi projects, NFTs, and most recently DAOs.

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Having looked at those models and theories, I will come back to my simplified way of describing when I’m most likely to be interested in investing in a product or technology.

Let’s take a look at the first wave first and why I’m rarely that early.

The First Wave

In the very early stages the stakeholders and investors tend to be a mix of the following:

• builders of the technology
• rich people with money to burn on new things (e.g. venture capital and angels)
• those who happen to be in the right place at the right time, or have friends deeply immersed in the technology

If you don’t possess one or more of those characteristics it is very hard to get in on something very early. Chances are you won’t even know the product or niche exists until the first wave has already passed. If you do happen to catch an early glimpse at the new technology, I feel that it will be an extremely time-intensive process to decide whether to invest at that stage, and even then, it would be a very risky investment.

Therefore, at the first stage, the risk-reward-work ratio is not worthwhile for me. To take an example with the internet, this first wave would be the 90s decade. Typical big risks, even though the technology would be wonderful, include:

• not gathering enough traction, or being too early to market
• regulation risks
• scams
• ridiculous valuations

Many products never make it beyond the first wave and there is a very real risk of your investment going to zero. Think ICOs in 2017, and Kozmo.com, Garden.com, Pets.com, Flooz.com, Webvan.com during the Dot Com boom and bust years.

Typically, during the first wave, a subset of people become immensely rich in very short periods, and they make the

The Second Wave

Almost every new product or technology that gathers enough traction to become well-known then experiences a period of hype, and it is usually during this period (typically earlier rather than later since I read a lot) that my interest is piqued. However, rather than rushing in to invest along with the rest, I tend to go deep and isolate myself from the news and hype to truly understand the tech, the main players and ideas behind the technology.

By the time I have developed a decent understanding, the hype is usually gone, prices have plummeted and the technology is bordering scam or trash status in the popular opinion. On the other hand, because I would have invested a lot of time into the subject, provided that I was convinced about the future of the technology, I would be pretty bullish myself.

That means that when there is the next growth phase (growth is much slower and almost imperceptible at first), I am able to go all in and take a sizeable position that looks like madness to most others who didn’t do their homework properly.

While some technologies or products fit this idea perfectly, others share similar properties but are not that easy to explain. For example, I feel that I entered the WordPress space back in 2006 at an excellent time. Rather than the product itself having been through an early hype cycle, however, it was the overall theme of self-publishing, blogs and website creation that had gone through it. WordPress was the phoenix that emerged from the flames produced by the downfall of highly centralized products like Movable Type and the closed-source CMS solutions of the time. I had been creating websites and blogging for a few years already and I remember there being a peak of excitement about the “power to the people” idea of giving a voice to anyone to create a space online and publish their thoughts, closely followed by a deep sense of frustration with the expensive or inadequate tools available at the time. When WordPress came along it ticked all the boxes for me and immediately left everything I was doing at the time to focus on building things within that space.

What’s your take on the above? Let me know in the comments section below.

If you’re looking into buying expensive fashion items as an investment or simply as a hobby, one way of lowering the barrier to entry is to find the items on a used goods website.

There are two main leaders in the used luxury fashion items space in Europe:

• Vestiaire Collective
• TheRealReal

Whenever possible, I buy the best products available on the market, which are normally the most expensive. The reasoning behind that is that you get to actually enjoy an amazing product, plus you know that there is the possibility to resell it at a good price. The latter point is important to me as an investor.

A lot of people just look at the price tags of some luxury designer bags, for example, and can’t believe how any person would buy them. The truth, however, is that some of those same bags can actually increase in price over time, making them a great investment. Handbags are in fact one of the most popular classes of alternative investments worldwide. The same goes for vintage cars and certain prestigious sports cars, for example.

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This article will be your ultimate guide for buying websites. This will include some of the top places where you can buy a site right now. This will also include some tips and tricks for anyone who recently bought a site or is thinking about diving in!

Why Buy A Website?

The biggest reason why someone would buy a website is because of the potential profit that can be made. There are a lot of success stories out there of people who have flipped websites for a significant profit. This means that they bought a website at a lower price and eventually sold it for a lot more money.

Think of it like buying a cheap stock and then cashing out after the share price increases. Like the stock market, there is plenty of money to be made if you choose the right stock (or website in this case).

How To Make Money From Buying Websites

In this section, I will provide you with some specific examples of how you can make money in this space. This will give you a better understanding of how it can be done and will maybe even inspire you to get started.

A Hypothetical Example

Let’s just say that you purchase a website for $1,600, and it was earning around $50 per month when you bought it. This means that you purchased the site at a 32x multiple of the monthly income average ($50 x 32 = $1,600).

Let’s say that you then spend a year working on the site and it continues to grow in both earnings and traffic. If things go really well, your monthly income average could grow from $50 a month to something like $300 a month.

With the site now earning $300 a month (on average), you could then flip it for a nice profit. Using the same 32x multiple that you bought the site for, you could then sell the site for $9,600+. It could even sell for more than that as 32x is being conservative. In just one year, you were able to make a profit of $8,000+. Not bad for a website that you only spent $1,600 on!

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First, some personal history for context…

At present day, after about 20 years of working online and never having a 9-5 job, I am in the privileged position of being able to live a comfortable life while working less than four hours a week.

That’s all great, but let’s see how I got here…

When I first started out designing websites, doing affiliate marketing, and myriad other little enterprises one can do online, I was overjoyed to see some money pouring in. Soon enough, instead of just pocket money, I was making a full-time living from my online work, and I was euphoric about the whole thing.

Coming from a tiny island where working online was unheard of at the time (and thus a very risky thing for me to try out) I was so happy to have my ideas and dreams validated.

Prior to embarking on my online journey, I had followed the path that all parents in my country want their children to follow; study hard and obtain a university degree. In fact, I had obtained not only one but 3 University degrees by the age of 23. At that point, however, after having spent thousands of dollars on my education, I flew off on a tangent and instead of getting a job at a local company, I decided that I’d rather do my own thing.

For a long time, my parents and friends thought I was crazy for doing so. In the end, however, it all paid off and I am where I am today only because I had the courage to take that decision back then.

Is it so easy to make money online?

As soon as I started seeing some success with my online ventures, the basic human instinct of sharing knowledge made me start trying to persuade everyone around me to do the same thing that I was doing. I couldn’t believe why my friends complained about their low salaries, terrible bosses, etc, but then wouldn’t even consider putting in some effort to try and earn some money online with the hope of leaving that dreaded job they complained so much about. Heck, they didn’t even seem one bit interested in how I made money online.

This doomed exercise of evangelization continued for several years. I thought that everyone could make money online, that it’s simple and so much better than working a 9-5 job for someone else.

In retrospect though, and after having met many other successful online workers and entrepreneurs, I’ve realized that making money online is not for everyone. It’s just as difficult (if not more so) than getting any other skilled job. It is one of the most accessible ways to generate money, as it doesn’t matter where you are, who you know, etc. All you need is your own knowledge and an internet connection. While it is definitely a very accessible path, it is not easier than the alternatives.

There are so many factors that come into play and affect whether you are successful or not in making money online. I estimate that more than 90% of those who actually try to make a living through any type of online venture actually fail. Of those who do manage to earn some money, only a fraction eventually get to the point that they can earn enough to justify doing that full time instead of having a 9-5 job.

You see, as I came to realize, the vast majority of successful online workers, far from being the average Joe, are highly talented people. Building an online business requires an entrepreneurial spirit, lots of patience, an incredible amount of motivation, support from the people closest to you, and a fair amount of luck to boot. That’s only mentioning the few first factors that come to mind. There are many more.

Most people don’t and won’t ever have the right combination that enables them to go down this route in life. Clearly, for many people, their job is their vocation, and although they complain about their workplace, salary or colleagues, in the end, that’s what they are most suitable for and that’s how they can best give service to the rest of society.

So I’ve stopped trying to persuade everyone and their dog to start an online business and live the life of their dreams. Of course, if someone I know is really motivated to do so and asks me for help and advice, I’d more than gladly share all I know about it, but it’s not for everyone.

At the start of this post, I said that I am lucky enough to have to work very little to make a living. I am by no means rich and don’t own any real estate, but I can live anywhere I want in the world and have the liberty of doing what I want with my time while having enough income to support myself and my family from month to month.

The truth however is that I work way more than 4 hours a week. I do that because I love what I do, I don’t consider it to be work but play.

Think about your typical kid, what would he like to do on a perfect day. Play video games, soccer with friends?

That’s the way I feel about working online most days. I wake up with a lot of energy to chase a new idea, or fine-tune an existing business. And all the successful online workers I know have that same feeling about the work they do. They’re definitely not lazing about on a beach for the rest of their lives while their websites deposit money into their accounts as they sleep.

So that doubt in me remains, are these Internet marketing blogs promoting a big lie? Are they making a ton of money off people who can never really make a living online? Are we online workers really being truthful when we say that anyone can earn money on the web? Is it time for a more mature breed of Internet marketing blog, targeted at people who already have established online businesses? What do you think?

Here are some blogs that speak the truth about making money online and don’t try to sell dreams:

• The Truth About Making Money Blogging – TrafficGenerationCafe.com
• A Reality Check about Blogging for Money – Problogger.net
• Is Blogging a Good Way to Make Money? – ChrisG.com
• The Truth About Making Money While You Sleep – Copyblogger.com
• Reality check: You’re not going to make money from your blog – PenelopeTrunk.com
• The History of My First Online Business – SmartPassiveIncome.com
• Harsh Truths To Why You Won’t Make Money Blogging – JohnPaulAguiar.com

What any serious online marketer or blogger will tell you, is that it takes a lot of work and commitment to succeed online. No one can give you a shortcut to earning thousands or millions without any knowledge, simply because there is no shortcut to online success.

Online success = Hard work and commitment + Constant learning + Right timing + Networking

That success is the result of hard work and commitment is probably common knowledge, but I also like to add in the other three less-mentioned factors. Dedicating a lot of hours to something does not equal success unless you know what you are doing, are doing it at the right time and you’re making the effort to network with your peers.

 

Why Publishers Prefer to Work with Affiliate Networks

Web publishers such as news media outlets, bloggers and affiliate marketers, all need a way of partnering up with advertisers and track commissions due to them.

As a publisher, you are usually working with either of the following:

• Affiliate networks
• In-house affiliate programs

In this article, I will list several reasons why you should always try to partner up with advertisers through an affiliate network and not through in-house affiliate programs.

Before we start, to make sure everyone is on the same page, let’s define what’s an affiliate network and what’s an in-house affiliate program.

Let’s start with a diagram of how affiliate marketing works.

The diagram should be pretty self-explanatory. Note that publishers are also referred to as partners or affiliates. Advertisers are also known as merchants.

Here’s an even simpler way of looking at it.

Or perhaps you can relate more to this next diagram which lists the typical personas involved in an affiliate marketing transaction.

What is an affiliate network?

Affiliate networks congregate many advertisers under one platform and simplify things for both the advertisers and the publishers. They use their reach to link the two parties and propose partnerships both ways. They also handle all transaction tracking and billing, as well as other essentials such as reporting.

As a publisher, you have one platform that you can login at any time, and you will see all the commissions generated from all the advertisers you have partnered with.

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