The Next Tech Trend That Could Make You Rich

Photo (cc) by dmje

If you missed the chance to make ground-floor investments in personal computers, iPods and smartphones, take heart. There may still be time to ride to riches on the coattails of the latest tech innovation.

It’s called the Internet of Things, and it might be the next big cash cow for online investors.

Watch the video below to get the inside scoop from Money Talks News finance expert Stacy Johnson.

Brr-ring, brr-ring: Your refrigerator is calling

The Internet of Things – abbreviated to IoT – has been getting a lot of buzz lately. That said, it’s something of a nebulous term. No one’s going to be slapping boxes emblazoned with “Internet of Things” on the shelves at your local Best Buy.

So what the heck is IoT?

Well, it’s the idea that eventually everything, and we do mean everything, will eventually be plugged into the World Wide Web.

The idea and term were reportedly coined by Kevin Ashton in 1999. You remember 1999, right? It was the year many of us were amusing ourselves with dancing hamsters (might want to turn down your volume before clicking that link).

While we were mesmerized by slightly pixilated rodents, Ashton was co-founding the Auto-ID Center at MIT and thinking about how great it would be if everything were jacked into the virtual world. His original IoT concept involved sensors – such as RFID chips – collecting data and then sending it off to be stored, analyzed or, for the cynics in the crowd, exploited.

In 1999 that may have seemed like a bit of a pipe dream, but it’s not too far-fetched at this point. We already have refrigerators connected to smartphones and thermostats that remind you when to change the filter.

Technology ready to explode

According to Cisco Internet Business Solutions Group, more than 50 billion devices will be connected to the Internet by 2020. Consulting firm Lopez Research estimates that within the next three years we’ll see the majority of devices sold with IoT sensors. Meanwhile, researchers at McKinsey Global Institute say the economic impact of the technology could be as much as $6.2 trillion in 2025.

Some may find it slightly unsettling to live in a world where your car adjusts your morning alarm because it knows the gas tank is empty, but that seems to be the direction we’re heading.

When fully realized, the IoT could make finding your lost cat a snap thanks to the sensor in its collar. Or it could help you detect a leaky pipe before an astronomical utility bill hits the mailbox. In fact, Libelium, an open source platform provider, has a list of 50 ways it thinks the IoT can make for a smarter world.

Of course, consumers aren’t the only ones who will benefit from the IoT. No, there is also a treasure trove of data to be sliced and diced for marketing and research purposes.

And that means there are plenty of bumps to smooth out before IoT reaches its full potential. In addition to working on standard technology and software languages, businesses will need to assure consumers their information is secure and their privacy protected.

Where to invest your money

Despite those unresolved issues, now may be the time to start investing in the IoT. The technology is no longer on the fringe, and it’s become apparent which companies are likely to lead the charge into this brave new world.

Postscapes has a good review of the major players in the IoT, and that may be a good place to start investment research. You may also want to read about which firms were being hyped in advance of the Consumer Electronics Show. Finally, don’t overlook those companies sponsoring the Internet of Things World Forum.

Plus, there are plenty of smaller companies involved in everything from creating the sensors to maintaining the network to manufacturing the goods.

In your zeal to get rich off the IoT, don’t forget the basic rules of investment: moderation and diversification. A lot of people lost a lot of money when the dot-com bubble burst. Rather than focus large quantities of money in a few single stocks, a better strategy may be to invest in tech mutual funds and put a small amount in a couple of individual stocks as well if you’d like.

For more information, your next stop should be Stacy Johnson’s excellent primer on investing smartly.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

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