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A Comprehensive Guide to Alternative Investments

Investments are the best way that you can watch your money grow with minimal effort. If you’re planning on making a big purchase or you simply want to save for your future, it’s imperative that you consider investing your money.

Savings are useful if you need to accomplish short-term financial goals. However, money that sits in the bank is simply losing its value year after year. Although a majority of saving accounts offer a basic interest rate, it’s not enough to detract from the impact of inflation.

Each year prices for basic commodities rise, which means that we lose out on purchasing power as consumers. If you have $50,000 in your bank account, this will still be there and available to use in 5 or 10 years, but the value of this money will have significantly decreased.

Therefore, it is essential that you invest your money if you hope to grow your wealth. The most common forms of investments include stocks and bonds, but these can be difficult to manage without the proper trading experience. You may choose to put your money into alternative investments.

Here are some of the most common forms of alternative investments and how they work.

 

Real Estate

real estate
Real estate can be a less risky investment option over time.

The real estate is one of the most popular alternative investment strategies out there. You can invest your money in vacation rentals, office spaces, and even something as simple as a storage unit. Unless you choose to rent out the property, this investment won’t provide you with steady cash injections.

Nevertheless, real estate remains a common investment because property prices tend to increase year after year. Purchasing and holding onto an entire property isn’t the only way to invest in real estate. You can also find rundown properties and flip them into more valuable assets by carrying out some renovations.

 

Cryptocurrencies

Investing in cryptocurrency has become increasingly popular and mainstream
Investing in cryptocurrency has become increasingly popular and mainstream resulting in the daily increase in the number of available cryptocurrencies.

Investing in cryptocurrency has become increasingly popular and mainstream. Only a few years ago, people would laugh at the thought of an unregulated online currency. Now, those same people are dying to get into the crypto game and make a sizable return on their investments. If you’re one of those people, it’s not too late to make your mark on the crypto industry.

Bitcoin, Ethereum, and Litecoin remain amongst the most popular coins, however, other, more recent coins, like Dogecoin, Cardana, and Shiba Inu have also made waves in the media. If you’re thinking of investing in this volatile yet lucrative market, make sure you have a reputable bitcoin wallet to store your coins.

 

Peer-to-Peer Lending

p2p lending
P2P lending is becoming extremely popular across the globe.

Briefly speaking, peer-to-peer lending (also known as P2P lending) is a crowdlending way to provide loans and be paid back interest. This is a method that citizens can turn to when they’re not able or willing to go to the bank for a loan. Different crowdlending websites help individuals invest in part of the loan and receive a return on their investment.

For example, if someone needs $10,000 to pay off their outstanding credit card debt, you can help them pay this back with a small investment, let’s say $50 or even $100. Once the borrower begins to pay back their loan each month, you’ll receive a percentage of the interest back as well. Just like any investment, P2P lending comes with a set of risks. You could lose money if the borrower was irresponsible with the money or sick and unable to pay it back. Nevertheless, there are various ways to determine the risk level of your investment, so that you can better assess your financial decisions.

 

Collector’s Items (Wine, Stamps, Coins)

Inverted Jenny Credits: Sotheby's
In 1918, the Curtiss JN-4 aeroplane was accidentally printed upside down on 100 24 cent stamps making the error stamp one of the most expensive collectable items in the world. (Image credits: Sotheby’s)

 Another alternative investment, and perhaps one of the most atypical ones, is collector’s items. This involves all sorts of artefacts, such as wine, stamps, coins, antiques, and even baseball cards. If you have a passion for scouting out and collecting in-demand items, it’s likely that you will be able to turn a hefty profit. However, you must have an eye for detail and truly nail your niche if you hope to succeed in the market of collectable items.

Depending on the popularity of the movie, sports team, or cultural reference, vintage videogames and figurines can also bring in some sizeable cash. A top tip when dealing with collector’s items is to always look for items in pristine condition. Any marks, scratches, or spoiled items and will be worth considerably less. Do your research online as to what has the potential to sell, once you’ve found your nice, make sure to sell items on eBay, as you’ll reach a wider clientele.

Making investments is a wise move, but you should always be wary about where you are investing your funds. Don’t take financial advice from friends, family, or strangers, make sure you do your own research before making an investment. If you’re not too sure where to start, but you would love to see your money grow, it’s advised that you speak to a financial advisor that can help you create a solid investment strategy.

Another golden rule when it comes to investing is to never invest more than you are willing to lose. No matter how large or small, no kind of investment is completely risk free. Typically, higher returns mean higher risk, so make sure you’re confident with your decision before you decide to invest. You never know what could happen in the future, markets can crash, companies can fail, and banking systems can collapse. Be wise and cautious when dealing with your investments, as a wrong decision can cost you a pretty penny.

The Bottom Line

If you’re new to the world of investment and you feel like you are experiencing an information overload, don’t worry, we’ve all had to start somewhere. Start off small and take the time to learn about the type of investment you’re making. Who are the experts in this field? Where can you learn more about the subject? Set yourself some realistic financial goals that you can begin to chip away at. Slowly but surely, you’ll become an alternative investment whizz.

 

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