Closing the Wealth Gap through Real Estate Crowdfunding
This is a guest post from Scott Picken , CEO and founder of Wealth Migrate
From spurring innovation to building knowledge on increasing personal wealth, there’s no denying that crowdfunding platforms have had a significant and positive impact on the economy. Prior to the advent of crowdfunding, most people lacked the resources to participate in established investment markets which only contributed to the cyclical nature of income inequality. In fact, the stark disparity between the “haves” and the “have-nots” was the number one global risk according to the World Economic Forum 2014 meeting in Davos Switzerland.
The top 1 percent of the world’s population owns 46 percent of all global assets.
The top 85 wealthiest people on the planet have the same wealth as the bottom 3.5 billion put together.
Though 49 percent of the world’s wealth is held in real estate, only 12.9 percent of the world’s population can actually tap into the real estate market. The majority of the world’s overall wealth is created through capital gains and appreciating assets like real estate, but the middle class has been historically shut out of these opportunities due to lacking the adequate funds or information. Clearly, it was only a matter of time before alternative investing routes for the masses, like crowdfunding, were invented.
Once the only path to economic growth, traditional investing is quickly being replaced in the digital age with new platforms entering the market weekly. Through the use of crowdfunding portals on their mobile phones, the majority of the population can now invest in quality opportunities that had been strictly exclusive to the top 1 percent of wealthy individuals in the past. They’re also helping many different industries overcome challenges by cutting out the middleman and reducing costs. And in doing so, platforms have democratized access to wealth by opening the doors for lower-income investors from across the world.
In fact, combatting financial disparity was the core cause that initially inspired many entrepreneurs to get involved in crowdfunding. For example, the real estate crowdfunding platform, Wealth Migrate, strives to achieve their “Wealth Movement” mission to empower a billion people with the wealth effect of real estate by 2020. Platforms are also fueling the entrepreneurial spirits of those who were previously barred from raising the investor capital to grow their inventions.
Elon Musk, the CEO of the renowned auto company Tesla, is an example of an entrepreneur who has positively impacted our society, thanks to non-traditional investing methods. Musk, who grew up in my home country of South Africa, is a disruptive innovator for the betterment of society, and is revered in industries like transportation, space and energy.
Richard Branson is another example of someone who has overcome obstacles to grow his personal wealth. He has over 400 companies in different sectors where he has purposely disrupted the markets in an attempt to provide better solutions to current problems. I have had the opportunity to spend some time with Branson, and learned first-hand that it is his “screw it, let’s do it,” attitude that has led to successes such as creating eight separate billion-dollar companies in different sectors. Richard envisions what the top of the mountain looks like, and then he focuses on nothing but getting there.
No amount of objections, “no’s” or obstacles stop entrepreneurs like Branson or Musk from impacting society and investing in their future. It is this kind of attitude that crowdfunding can now inspire for lower and middle income investors. And crowdfunding has begun to allow lower and middle income households the opportunity to invest in innovative concepts similar to those ideated by billionaires like Branson and Musk.
Like many entrepreneurs, those who lack capital but need it the most are often the ones who have the greatest potential to better our world. But with its ability to close the ever-increasing wealth gap, crowdfunding’s effects on our economy could reach further than we ever imagined.
Scott Picken is the CEO and founder of Wealth Migrate, the premier global real estate investment marketplace. A technologist at heart, Scott married his lifelong passion for IT with his 16 years of international real estate investment experience to actualize the dream of Wealth Migrate as a crowdfunding platform. Wealth Migrate’s leadership team has been a part of $1.34 billion in real estate transactions worldwide.
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