Read time 5 minutes

Welcome back to another week with Renaissance. The newsletter equivalent of Jcal from the All-In podcast, we made one great investment and will never shut up about it again…we hit PEPE for 50x and 25x 😎

Today at a Glance:

Real Estate Realities - What's The Investment Potential Like Right Now

Web3 Bull Market - We've Called Our Shot

Must Know Musk Lessons

But before we get stuck, this week we’re brought to you by Masterworks.

A million dollar Banksy got investors 32% returns?

Mm-hmm, sure. So, what’s the catch?

We know it may sound too good to be true. But it’s not only possible, it’s happening—and thousands of investors are smiling all the way to the bank, thanks to the fine-art investing platform Masterworks.

These results aren’t cherry-picking. This is the whole bushel. Masterworks has built a track record of 8 exits, the last 3 realizing 10.4%, 35%, and 13.9% net returns even while financial markets plummeted.

But art? Really? Okay, skeptics, here are the numbers. Contemporary art prices:

● Outpaced the S&P 500 by 131% over the last 26 years

● Have the lowest correlation to equities of any asset class

● Remained stable through the dot-com bubble and ’08 crisis

Got your attention yet? Offerings can sell out in just minutes but Renaissance readers can skip the waitlist with this exclusive link.

The Renaissance Over-Under

Business, Money Markets & Financial News

Real Estate Reality Breakdown - Good Passive Income Or Money Pit? 🏠

Well let’s frame it to start with. The 30 year treasuries are past 5%..………call your Granny.👀 Interest rates are at record limits and they won’t be moving any time soon.

You know that at Renaissance we have your back, we want to make us all wealthy so you can bully everyone at your high school reunion and ‘show ‘em.’ 👀 But as sophisticated investors (did I just hear a scoff? Hey, we’re accredited, accredited okay!), some of the shit we see out there is troubling…..….and we want to set some things straight for those thinking about focusing on real estate with the market doing EXACTLY WHAT WE PREDICTED FOR THE LAST 6 MONTHS.

⚡ 1) If you listened to every real estate guru out there you’d think, ‘ah any piece of real estate will do, take the interest rate fuck it, and passive income will fall from the sky…….the cup of passive income overfloweth’ - I’ll remind you of a few facts before we begin. 🧐

⚡ 2) Most millionaires come from real estate (saturation of market). Most of them are also over 50 years old (so benefited from the compounded value of an asset over decades). They are also the lowest IQ millionaires and are not equipped to read financial markets - their sentiment is as sophisticated as ‘can I or can’t I pay this mortgage with cashflow.’

⚡ 3) The majority of them bought those assets for under 2x their salary and with lowww interest, they basically bought property for $200, a bag of peanuts, and an old racist jingle about the neighbourhood! 🥜 You cannot do that, average salary to asset ratios are 5-7x now! Very different deals.

⚡ 4) Long term rentals: Okay let’s say you do have rentals, gurus make you believe they are always filled and they are NOT. Not to mention the passive income from rentals is typically from subpar short term rentals or money market funds! For every month you have to make the payment, you erase 3 months of cashflow……🙄You need to understand your specific geography and interest rates. This is the passive option for long term rentals, where the emphasis is on picking well like you’re Ash from Pokémon.

⚡ 5) Phantom costs: Back of the napkin math won’t hear your screams when real life problems happen. Property taxes, stamp duty, rates, toilets, wear and tear, raccoons…homeless people break-in executions…the list goes on! So the idea that landlords always get rich just isn’t true, and it ain’t that passive!

⚡ 6) Appreciation of the assets: ‘but but but, stfu about the financing, you’ll own the asset!’ Well let’s look at a good apartment from a deal we’ve personally come into contact with. In about 10 years it’s gone from $360k to $520k - you made like $150k wowww🙄).

- 20% capital gains please

- 3-6% for your agent

- And that’s assuming these properties sell! Which they did not. The market is not liquid, and we’ve watched many properties get inflated recently and have no buyers. This is where a VC model is more appropriate, mark ‘em down until you sell, paper gains don’t count for shit here!

- Let’s reverse engineer this, the down payment of $60k put into a compounding market fund in the last decade would have easily done $148k with no effort or managing. And it’s liquid, you can have your money the same day.

⚡ 7) What’s the point?

- Real estate can be great and profitable, but you’ll spend a lot of time and money on long term rentals and managing problems for little return, and if you have few units your cashflow can be wiped out by payments that you’re left to make. So for passive income, it’s riskier and more time consuming than money market index funds.

- Anyone can do real estate and as pointed out, for the vast majority they’re idiots. What is your competitive advantage? Do you have better cash reserves? Can you partner and do more deals/units which removes the risk of missed payments on a single unit? Have you studied AirDNA and your city/location for the best performing spots?

- Honestly, at Renaissance we love some real estate…….but we have expensive taste🙄 We don’t do multi-family shit and if we wanted passive income we’d get an index fund. We like short term AirBnb rentals for maximum revenue that’s actually worth the investment that outperforms long term rentals, but hire a manager after the first few units so you’re not working a second job. 🤝

- More than anything - buy unique. That’s what great investments should be. If its a AirBnb or even a normal rental, be so good you can’t be ignored. As most out there half ass it and overcharge - be strategic! That’s our advice if you’re dead set on doing it!

- Don’t believe these idiot gurus spending their days making courses and selling you 150 different products, what’s in it for them? This shit is where idiots go to make money off of beginners.

- Opportunity cost, if you’re going to spend the time to manage, finance, and build a portfolio…be sure you know the returns you can get! You will be much better off with an investment fund, index, crypto, or a business you can start……You know who you are, don’t kid yourself on this passive income shit. 👀 

LITTLE BITS 😎

Incredible. Just incredible. Your enemies won’t see it coming… I’m coming for those VCs with a tonne of granite!

How a tech bro got his salary from $170 to $800k at Meta! Take notes boisss

https://www.businessinsider.com/meta-salary-increase-tips-engineer-2023-10 

If you’ve not seen Jay-Z and Warren Buffet in the same room talking about why they were successful, you’re missing out, what a mix! 😂

Pudgy Penguin NFTs have a brand deal with Walmart, a week after everyone was claiming NFTs are dead. We’re gonna see more and more saying the contrary….

NOSTALGIA OF THE DAY

Crypto Market & NFT News

Next Crypto Bull Market Trends 📈🐂

Okay Renaissance readers, let’s do a review - in the last bull market NFTs got popular for the first time despite their use cases not developing at the same rate. This goes back to 2017 when no one knew what a CryptoPunk was.

- What we’re trying to do as early investors is invest smartly in the down market to ride the next logical wave, Druckenmiller style. And that is with……the Metaverse.🙄

- I know I know, you’re sick of seeing Zuck talk about it after he failed in the Facebook rebrand - thing is, he accelerated the popularity and adoption of the Metaverse wave by years, and around that time all of the market caps for these projects shot up. 🚀

- However….while the market has cooled and most people aren’t interested in the Metaverse right now, it’s hot shit in Asia and has a lot of adoption 👀.

- Patterns repeat, especially after accelerated namespace adoption - the Metaverse will be a narrative play in the upcoming bull market much like Punks coming back to the forefront in 2021.

⚡️ The play is - stack up as much blue chip Metaverse project tokens or strategic NFTs and by the time the bull cycle is playing out they will have exploded.💥💥💥

⚡️ Personally at Renaissance, we have a varied long term portfolio with the trend, we have had strategic Sandbox land parcels for years now, Decentraland tokens, and other NFT projects that are tangential - just remember, blue chip value!!! 🔵

NFT rules apply: Only the best are dramatically undervalued currently and will bounce back the fastest on the up market!

It’s gonna happen, I will die on this hill…I will die on this hill. 👀

SOLANA

This isn’t a long-term bull trend, but its price action right now is crazy interesting

⚡️ We believe it’s because of ole’ SBF’s trial just beginning and the close connection! Over 25% up recently, and there’s probably more ups to come! We would watch closely for another leg up with the news of the trial……

Wealth Building, Personal Finance Hacks & FAT FIRE

Okay Renaissance, we’ve said it before and we’ll say it again. There’s hundreds of generations whose lifetimes of experiences we can learn from. We can learn from their mistakes so we don’t make them. And even better, we can learn from their successes so we can repeat them. 💪

You probably have heard, but Elon Musk’s new autobiography written by Walter Isaacson was recently released. So this week we read this book so you don’t have to (you can thank us later).

And overall…………the book really isn’t that good.🤷‍♂️ But this isn’t the New York Times and we’re not here to discuss writing and narrative critiques. Writing aside there is still plenty of valuable insights and takeaways from the book. So we’ve dug through the shit and delivered the lessons of pure gold you need below. 🥇

⚡ Key Lesson: Never Resting On Your Laurels 💐

One of our key takeaways was Elon’s unmatched drive and ambition. At age 28 he sold his first company Zip2 for $22 million dollars. Enough to FAT FIRE, retire on an island, with easy investment income from stock and property. But of course he didn’t do this……

The same year he sold his company for $22 million dollars he started his next company X.com. A name I’m sure we’re all now familiar with, this was Musk’s initial ambitions to create the Everything App (we wrote an article on this a few issues ago so definitely check it out if you missed it!).

At each success he aimed for more, more areas to conquer and break into. Be it financial payment services, electric vehicles, space, social media. This brings us to our next key takeaway.

⚡ Key Lesson: Advantages Of Extremely High Tolerances For Risk 🚀

He used the money he made from selling Zip2 to fund X.com (later becoming PayPal). He then used the proceeds from this to start and fund both Tesla and SpaceX. Extremely risky industries which from the outset the likelihood of success looked low.

He even thought so himself:

Then after the 2008 recession the Company would’ve collapsed if they weren’t luckily saved by the German automaker Daimler at the last minute with a $50 million investment.

Even after this save, they were scraping by and Musk has reported incredibly close calls, having to work 22 hour days sleeping on the factory floor to prevent collapse.

And SpaceX is a very similar story. They very nearly went under between 2006 and 2008. Elon had invested $100 million of his own money and the first three rocket launches had failed.

He then invested even more of his own money, having just enough to cover the fourth launch, noting that if the fourth failed then SpaceX would be done for good.

Luck would have it, the fourth launch succeeded and this helped SpaceX land a contract worth $1.6 billion with NASA. 🚀 The rest is history, as we know here at Renaissance, scared money don’t make money. 💵

Meme of the Day

That’s a wrap for this week! Meet us on Twitter to talk all about it. Where we’ll send you jokes, tips, and all important news from the world of money, business and crypto and more! (@RenaissanceDly)

“Net Return" refers to the annualized internal rate of return net of all fees and costs, calculated from the offering closing date to the date the sale is consummated. IRR may not be indicative of Masterworks paintings not yet sold and past performance is not indicative of future results. See important Regulation A disclosures at masterworks.com/cd.