There’s a new company taking a different approach to investments.
With apps like Robinhood and stocks like TSLA being so volatile, stock investing is all anyone is talking about, but bond investing is still a thing.
It used to be the case that bond funding was only for large corporations and governments. Maybe you’ve heard of a government treasury bond, for example, also known as T-Bills. Robert Kiyosaki mentioned them in Rich Dad Poor Dad and that’s about the only exposure bonds have got over the last decade or two.
But that doesn’t mean bond investing is dead.
Introducing: The SMBX
Every once in a while I come across an investment company that piques my interest and the SMBX is one of them.
The SMBX is a bond exchange that allows small business to take advantage of business loans through issuing bonds. And we can all buy those bonds. But of course the question is: should we?
I’ve spent some money on the platform and I have a few things to say about it.
First off, the interface is extremely simple. The bonds are listed out with a full company profile and the expected interest rate. So you know exactly what you’re investing in, how long it will take to get your money back, and how much money you will get… all of this is assuming the company is successful.
That’s where the risk comes in.
There’s Risk in Bonds
Any one of these companies could go under before the bond matures, which would mean you’d lose up to 100% of your money.
However, if the company is successful, you can earn up to 9% on these bonds.
While you’re not taking advantage of compound interest in the same way you would with stock and dividend investing, this is a way to diversify your portfolio and/or invest in some small mom-and-pop businesses.
There is a variety of businesses on the SMBX, but not an exhaustive amount, which means your choices are limited, but you have enough choices to pick a company you really support. A lot of the companies are restaurants, and I love food, so that part was fun for me. But again, I only invested a small amount to see how it plays out. I wouldn’t suggest taking a loan out of your 401k to buy some small business bonds, but if you have some extra cash and want something different, the SMBX is a good option.
If you’re interested, you can get started with as low as a $10 investment. Just go to the SMBX, sign up, and look over the companies. If any of them interest you, throw some extra money in. It’s possible you may even know some of the companies. In that case, you’d be investing directly into small businesses you’re familiar with.