Investments – Alternatives to Stock


Seeing the steep rise and subsequent fall of cryptocurrency such as Bitcoin should have cured everyone of the idea that this is a good investment.

You might have friends or relatives that had invested in the form of cryptocurrency and are now facing a steep loss on investment.

If the cryptocurrency rollercoaster ride has taught us one thing, it will be there is nothing such as a quick rich scheme.

Here are some solid investments that might not promise overnight riches but are low-risk and provide steady rewards.

Peer-to-peer lending

Peer to peer lending has taken a flight in recent years.

These are usually short-term loans with a higher interest rate. The key is to ensure screening is done correctly.

There are many platforms out there that help you do precisely that and spread your risk. Depending on your appetite for risk and how much capital you must invest, you could score some decent returns without the stress that comes with high-risk investments.

The main risk is that you are lending to people who couldn’t get a loan from the bank or any of the more traditional loan outlets.

As with any investment that promises high(er) returns, make sure you know the ins and outs and your risks.

Savings account

If you want to go risk-free, consider a high-interest savings account.

Sure, it doesn’t sound as edgy as ‘investing in p2p lending’, but it is a sure-fire way to grow your money. You can find high yield savings accounts which offer competitive interest rates without charging any fees.

When you choose an account, look for a bank with an excellent reputation for quality customer service, secure online account management, and easy deposits.

Real estate

A little bit more risk, but still a substantial investment is real-estate.

People will always need homes and especially homes in the higher segment of the market can again prove good returns. Your investment can either come from selling up or rental income.

Homes in affluent areas or even ranches with significant acreage can prove a too good investment if you are able to sell up at the right time.

If you have invested in the latter category, consider ranch marketing to get the best value out of your investment.

The risk of getting into real estate is that you become a landlord as well.

That should be your primary consideration before you get into this type of investment. Ask yourself if you want to be a landlord with all the obligations that come with it.

And even if you hire a lettings agency to deal with the nitty gritty, you, as the owner of the property, will be responsible for the safety of your buildings and its residents.

That might not be a responsibility you want to have.

Gold

Maybe go for a more traditional investment: gold. It is a tangible inflation hedge, a liquid asset, and a long-term store of value.

Gold is still a sought-after asset class and a strong alternative to stocks. The stock markets might be up right now, but when it starts getting tough people will turn to gold, which often acts as a rescue asset.

There are several ways to approach getting into gold. You could just buy and keep physical gold in the form of coins or bars. Most likely safely tucked away in a vault.

You can get into gold exchange-traded funds, gold account, or investing indirectly through gold mining stocks, futures, and options.

Most investment advisors would advice putting 5% to 10% of your portfolio in gold.

Fine Art & Wine

If gold is too gaudy for you, maybe consider investing in art?

Art usually does not follow the ups and downs of the stock market. You can buy a work of art, enjoy it for a while, then decide to sell up and get a tidy profit.

The risk, however, is that the value of art is entirely subjective. Sure, there are specific formulas and computations that help you determine the value, and more importantly the increase thereof, but nothing is guaranteed.

And while we are on the topic of fine arts, why not fine wine?

If you have a nose for it, investing in wine can be very lucrative. And all you need is a wine cellar. As with art, value and growth thereof is not guaranteed, but at least with wine, you know that age will equal some form of an increase in value.

And as more bottles of a particular label, of a certain grape, of a certain year, gets consumed, that value will only increase.

But buyer beware, there has been plenty of reports of counterfeit wines. Make sure demand a paper trail for every bottle you buy, so in the case of a sale, you can show your buyers the origin and authenticity of each bottle.

Keep your wine at the right temperature and don’t forget to ensure your collection.

Venture capitalist

Maybe wine is too passive for you.

If a more active approach is for you, becoming a venture capitalist might be on the cards for you. Discover the next Uber, Facebook or PayPal.

Think Shark Tank and you being pitched all sorts of new business ideas and you find a diamond in the rough.

Sure, you might have to get through hundreds of bad ideas until you get to a promising one. And sure, even a good idea can fail due to numerous reasons, poor execution and mismanagement to name a few.

But it sure can be fun?

Business Builder

And if an active approach to growing your money suits you, why not start a new business yourself?

Creating a company from scratch, make it as successful and attractive as you can and then selling up will generate fortunes. Pick an industry where mergers and acquisitions are standard practice and get going.

One market that continuously is on the move is advertising, especially the digital-focused kind.

So, there you go, a few investment options besides the stock market. If none of these interests you, it might not be such a bad thing to get into the stock market.

Shares are soaring at the moment, you might want a piece of that pie.

 

Jeff Campbell

Jeff Campbell is a husband, father, martial artist, budget-master, Disney-addict, musician, and recovering foodie having spent over 2 decades as a leader for Whole Foods Market. Click to learn more about me

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