Investments

How Does Otis Work

By David Krug David Krug is the CEO & President of Bankovia. He's a lifelong expat who has lived in the Philippines, Mexico, Thailand, and Colombia. When he's not reading about cryptocurrencies, he's researching the latest personal finance software. 5 minute read

If you can’t afford luxury products, high-end footwear, or fine art, Otis Wealth lets you own fractional shares in collectible alternative assets. In some cases, wealthy investors diversify their portfolios by investing in collectibles and other non-traditional assets. The value of some culturally significant collections, such as highly sought-after sports cards and gaming cards, has increased significantly over time.

However, the price tags on these assets are frequently so high that the average person cannot afford to purchase them while still having enough money to build a diverse investment portfolio. Otis Wealth wants to make a difference. Buy shares in modern art, collectibles, and footwear for pennies on the dollar on their website. This Otis Wealth review will tell you all you need to know about this cutting-edge investing platform and if it’s a good fit for your financial goals.

About Otis Wealth

It was launched in 2018 by Skillshare’s CEO Michael Karnjanaprakorn, who also founded Otis Wealth. Investing in culturally significant high-end collectibles became possible for the company’s customers in July 2019. It is Otis Wealth’s primary goal to assist younger investors in acquiring stock in companies that they have a personal connection to.

Drops, which are new collecting offers, may be purchased using the company’s iOS or Android app, or they can be traded on the Otis Wealth trading marketplace.

For the collectibles on Otis Wealth, they sell shares, but they do not act as a broker-dealer for these assets. A brokerage firm, for example, is a type of broker-dealer since it buys and sells securities. For broker-dealer services, Otis oversees investments and works with the Dalmore Group, LLC. Your Otis Wealth investment money goes directly into the LLCs that have been set up for each security. In other words, even if Otis Wealth goes under, you will still own the underlying asset that you invested in.

The Otis Wealth company offers what?

With Otis Wealth, you can invest in culturally significant collectibles instead of just stocks, mutual funds, or ETFs with the best brokerage accounts. Due to the high cost of these high-end collectibles in the past, only the wealthy were able to invest in them.

Otis Wealth’s goal is to make it possible for anybody to invest in these assets, regardless of their financial situation. They achieve this by acquiring assets, dividing them into shares, and then offering those shares to users of their platform as equity investments. Otis Wealth offers a wide range of investment options, some of which are listed below:

Art

  • Police Car by Banksy
  • Greatest Hits, Three Cans of LaCroix, and Sneakers by Otis x fnnch
  • Gone and Beyond by KAWS

Sneakers

  • Dior x Air Jordan 1 Low
  • Nike MAG
  • The Nike x Artist Collection

Comics

  • Daredevil #1
  • X-Men #1
  • Avengers #1

Collectibles

  • 2011 Hermés Birkin 35 So Black handbag
  • 1981 Joe Montana Rookie Card Topps Football #216 PSA 10
  • 1999 Blastoise 1st Edition Holo #2 PSA 10 Pokémon card
  • Super Mario Bros. 3 NES game cartridge

During the initial offering of each investment, you can purchase up to a maximum of 19.99 percent of the stock. Shares may be purchased for as little as $1.00 per share for some of the most recent declines (new assets). Trading in the asset’s shares typically begins two to four weeks after the pre-sale has ended.

There is also a VIP program for those who have invested $10,000 or more with Otis Wealth. Concierge service and private dropping are included in the early access. Otis Wealth’s most active investors are the only ones who may participate in these exclusive drops. If you have access to these prospects, the minimum investment is $1,000.

Pros and Cons

Pros

  • Collect rare and valuable artifacts that you couldn’t otherwise purchase.
  • Utilize Otis Wealth’s in-the-moment trading tool to exchange your collectable shares!
  • If the asset generates revenue as a result of being lent out, you may be eligible to receive dividends.
  • If Otis Wealth decides to raise the price of the item in the future, you may be able to profit from it.

Cons

  • You may not be able to sell your shares if the Otis Wealth trading platform is no longer operational or if there is not enough activity.
  • You have no say in when Otis sells the underlying assets linked to your shares. This implies that Otis may be able to sever your ties to the company.
  • Capital gains tax rates for collectibles may be higher than for other assets if Otis Wealth sells a collectible for a profit.
  • You miss out on the enjoyment of owning the items in your own house.
  • The value of alternative assets can rise or fall quickly depending on market conditions.

Who is eligible to create an Otis Wealth account?

Most people should be able to fulfill Otis Wealth’s requirements to create an account. You need to:

  • Be at least 18 years old
  • Be a legal resident or citizen of the United States.
  • Having a bank account is essential.
  • Have a U.S.-based mobile phone number and a contract with a U.S.-based carrier.
  • Make sure you’re using a phone that can run their app

Also, when you open an account with Otis Wealth, they will inquire as to whether or not you are an accredited investor. For the purposes of this definition, accredited investors have an annual income of at least $200,000 ($300,000 with a spouse) or a net worth of at least $1 million (excluding the value of their principal residence). Even yet, Otis is available to both accredited and non-accredited investors to invest in the company.

Otis Wealth may be a suitable option for those who satisfy the aforementioned requirements and are looking to invest in alternative assets. You may want to think about your overall investment strategy before investing in Otis, as some experts recommend that alternative investments only make up a small portion of your portfolio, such as 10%.

When it comes to Otis Wealth, how much can you make?

How much a person may make from their investments is hard to predict. Investing in any form involves some level of risk. An investor’s return on investment might fluctuate greatly at any one moment. No one can predict how their investments will perform in the future.

Due to the numerous unknowns, investing in alternative assets through Otis Wealth is significantly riskier than investing in traditional assets. Otis Wealth’s illiquid assets may be leased out to shareholders in order to generate revenue, or they may be sold if Otis Wealth accepts an offer they believe to be reasonable.

There is no way for you to affect money generated by loaning out assets. Any asset sold by Otis Wealth does not require your permission. They intend to keep assets for a period of three to seven years on average, although this might vary. Because you can’t decide whether or not to keep the investment if its value drops and Otis Wealth decides to sell, the returns are less predictable.
Ultimately, the value of the item you choose to invest in and how it fluctuates over time will decide your returns. In addition, Otis Wealth charges fees, just like any other investing platform.

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