Alternative Investing

AltoIRA is a technology platform that simplifies and streamlines the process for investors to add alternative assets to their IRAs.

Meet Tara Fung, Chief Revenue Officer at AltoIRA - Tara graduated from Harvard Business School and now drives AltoIRA's overall growth strategy, accelerates investor adoption, and expands private market issuers on the platform. Alto is a Nashville-based financial technology company that launched its next-generation self-directed IRA platform in 2018 to make it easy for individuals to access and invest in alternative assets using their retirement funds. The first of its kind, Alto's platform streamlines the process for investors, investment funding portals, and investment sponsors alike.?

AltoIRA recently launched the Alto CryptoIRA, which enables AltoIRA platform investors to buy and sell cryptocurrencies 24/7 through the Coinbase exchange with their tax-advantaged retirement dollars. The growth in these platform partnerships is fueled by the fact that AltoIRA investors typically invest four times as much as non-Alto investors per deal and participate in twice as many offerings on a given platform.

We dive into the power of alternative investing in private markets like high-end art, unlocking your largest investing account you may not even be considering, and taking time to dive deep in the areas that interest you so your diligence doesn’t feel like work.?

Eve #WealthWednesday Highlight #24: Tara Fung, Chief Revenue Officer - AltaIRA

What was your first investment?

My mom was so good at stretching every dollar and worked at a nonprofit to support my sister and me. There was never a lot of money to go around, so saving and budgeting was so core to how she raised the two of us. She made sure we talked about those things and were aware of them. We never talked specifically about investing, but being able to talk to her about finance from a young age was such a key experience for me. When I started working as an adult, I got a 401k plan and I was invested in a fund that I was auto enrolled in without really thinking about it. Since then a lot has definitely changed, but that was my starting point. I know the whole world of IRAs can seem confusing, but Alto is doing a lot to demystify that and also expand what's possible. I'm now the Chief Revenue Officer at AltoIRA, and we enable folks to use retirement accounts, to invest into private markets and alternative assets.?

How/why did you get into your space?

My journey is pretty atypical. I come from a small town in rural North Carolina and was raised by a single mom. I think what I've been able to learn along the way might be helpful for other people who are thinking about getting started in investing and how to approach investing in general. From an education standpoint, I studied economics because I wanted to figure out how the world works. I decided to get into FinTech because I think money touches everyone and by diving into the space I felt like I could make a difference in other people's lives.

I'm working in a very avant garde space at this point by helping people invest not only in alternative investments and private markets, but by investing with their retirement funds. I actually became a customer of Alto before I became an employee. After business school, I joined a FinTech firm out in New York. As I started to go on my own wealth and investing journey, I became really excited about alternative assets. I realized there was this whole world of interesting things that you could put your money into that, from a portfolio standpoint, made a lot of sense coming together.

I actually started by investing into some securitized high-end art through a platform called Masterworks. Art as an asset class was something that made a lot of sense to me. I did my research, I chose my painting, and I went to go make an investment. I remember getting prompted to either invest and pay with my bank account, or I had the option to invest out of my retirement account. That blew my mind. I realized I could use my retirement account to invest into things I found exciting and meaningful. Once you go down the world of private markets, it’s like a deep well, and there's a lot to learn. I'm still learning, but it's a lot of fun.

What role do you play in the wealth space and why is it important?

At Alto, we help unlock an individual’s largest investing account so they can use those funds to invest into anything they want. If you look at households here in the US, about 70% of the dollars they have available to invest are locked in their retirement accounts. Almost everyone has a retirement account, but if you go to Fidelity, Vanguard, or Schwab, and you say, “Hey, I want to invest in a Basquiat painting” or “I want to invest into a private company or private real estate” they will say, “No.” And that is assuming you can even get in touch with someone because they just don't support that kind of way to invest. They have a menu of options for people, but they don't support private markets and alternative investments

We help individuals invest into private markets. The reason we think this is so important is that when you look at the professional investor, the institutional investor, somewhere between 20-50% of their portfolio is invested in alternative assets. When you look at the individual investor in comparison, it's about 1-5% and 1% might even be an overstatement.?

As public markets become less diverse, companies wait longer to go public due to this burgeoning private market landscape that's constantly growing. If people aren't able to participate now, they are going to be at a disadvantage later on down the road. They're not going to be able to achieve the financial futures that they hope to reach for themselves. If people are going to participate in a wealth of opportunities in the private market, they’ll need to be able to access their largest source of funds, which is their retirement accounts.

What do you believe is the most exciting thing you’ve learned and want others to know?

I think “alternative investments” can be a term that is really intimidating. What does that even mean? It's an umbrella term that can encompass everything from investing in a startup, to crypto, to private real estate, to private credit, to private equity. There's so many things that it entails. And oftentimes, once you start saying a lot of those things, people automatically assume, “Oh, well I need to be really rich to be able to even play that game, right? I’ll need to be investing $100-250K into any given deal to even be able to participate!” However, in the last six years, the alternative investing landscape has changed drastically. You can invest in private companies for as little as $10 in certain places--and you don't even have to be an accredited investor to do it.

What I really want to impart on people is that it's never too early to get started. There is an option open to everyone that will let them dip their toes in the water and become more comfortable as you become more educated. You don’t have to wait until you've got millions in the bank.

Who is a person or company that inspires you in the space and why?

The one person that I actively follow on Twitter is Maya Bittner who is currently at Chime but she’s also founded other companies which were acquired. What I just love about Maya is that she's a total feminist and such a truth teller. She calls it like she sees it and she's not afraid to use whatever expletive is needed to describe what she's observing. She's such a consumer-focused product visionary. I really appreciate her take on things and love that she's an active angel investor. I'm a total fangirl and I find it highly entertaining to follow her tweets.?

What advice would you give to someone getting started?

I think it's really important to not give into the hype and pause to reflect if you're actually going to make an investment. You need to take time to educate yourself and diligence each opportunity. Whether that's crypto, whether that's startups, whether it's private credit, it's really important to understand what you're investing into. That also lends itself to starting small. You don't have to do everything at once.?

As I mentioned earlier, my private market investing journey started with high-end art. I took a month to just read about it, understand it, and understand why a 1-2% portfolio allocation to high-end art made sense as a part of a diversified portfolio. Art reacts very differently to market swings than other asset classes, so it's a meaningful diversifier.?

Don't be afraid to start small and take the time to educate yourself so that you feel confident in your investment decisions versus just saying, “Well, I hear everyone's doing this, so I'm going to do it too!” For me, starting with high end art honestly stemmed from my own curiosity and interest, so all the research didn't feel like work.

In terms of resources to get started, you can find more information along with a list of all the alternative investment providers and platforms that accept Alto as a funding source on our website. You can see what the landscape looks like and think about what’s most interesting to you. As I mentioned, Masterworks is great for art, Percent is a private credit platform that I think has some really good opportunities, and AngeList is great for investing into startups but I encourage everyone to check out AltoIRA.com and the list of providers as a starting point to do your own diligence.

Anything else we should know?

Follow me on Twitter and LinkedIn! You can reach out to me at [email protected]. I'm hoping that what people take away from this interview is that anyone can get started. What we're doing at AltoIRA is very mission driven and we believe more people should be utilizing alternatives and be able to participate in private markets. We're trying to help you unlock your largest wallet! If we can be helpful to you, please reach out to us and we hope to hear from you.

#wealthwednesday #altinvesting #fintech #womenswealth #futureoffinance #investing #investment

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Have thoughts on this week’s topic or questions for me or Tara Fung? Post your thoughts in the comment section. Until next week. ??

You can connect with Tara on LINKEDIN

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