Creating a surplus of wealth is a goal for a lot of people who struggle to make the ends meet. However, this is definitely not an end goal but merely another checkpoint. Once you get the money, you need to have a plan what to do with it. People who plan to invest usually don’t think past stocks (and nowadays cryptocurrencies) seeing as how this is the best-known investment option. For those who want to do something a bit different, here are five alternative investment options that are more than worth considering.
A stock market, which is the first choice for a lot of people, is a volatile investment option, which is why it’s never recommended that you invest more money than you’re willing to lose. Sure, no one ever starts from such a pessimistic standpoint, yet, investing in a savings account might be a superior idea. For instance, you can use this money as an emergency fund, thus avoiding the need to look for a loan if you ever find yourself in a shortage of cash. Also, if you decide to invest in real estate (something we’ll shortly discuss), you can use this money to make a down payment.
Another thing you need to think about is investing your money in real estate. The first reason why this is such a great idea is due to the fact that you’re buying equity for the future. Should you need a loan, for any reason, you can use this equity as collateral, meaning that, in a way, a real estate can be considered as liquid funds. If you decide to rent out the property that you own, you’ll turn this investment into a passive stream of income. Bear in mind, nonetheless, that if you’re looking for a rental property, you need to find one that returns at least 1 percent of its value on a monthly basis.
The next alternative to stocks is the idea of investing in commodities. What you achieve this way is diversification of your investment portfolio. You see, when people lose trust in currencies, organizations and stocks, they start buying commodities. This allows commodities to abide by different market rules. In other words, if you invest both in stocks and use about 10 percent of your assets to buy commodities, chances are that you’ll have at least a part of your investments safe and sound. The best ideas here are to invest in precious metals or diamonds. The latter is a particularly sound plan but you might need some help with investing in diamonds, in order to get your money’s worth.
A lot of people worry about the fact that their debt will be carried on to their successors, in a scenario where they fail to pay if off before they die. Those who decide to invest in life insurance have no such worries. The wellbeing of your family is always something worth thinking about ahead of time. The peace of mind is alone enough to ensure that your business is off to a great start. Insurance is also a way for you to achieve higher tax savings, which speaks volumes on its own.
Those who have a substantial amount to invest (at least $1 million) might consider going for venture capitalism. The way in which this works is fairly simple, venture capitalists invest in startup businesses in their infancy in order to ensure a high return rate. The thing about this type of investment is that it’s quite risky. This is why you need to spread your money over a large number of smaller investments. Due to the incredible ROI, all it takes is for a couple (amongst a myriad) of startups to actually be successful for you to make money.
At the end of the day, it’s probably the safest course of action for you to combine different types of investment, seeing as how a diverse portfolio is the most reliable one. However, spreading your investments thing might be a problem unless you have a sizable sum to invest, to begin with. In other words, you need to make an investment plan that fits both your budget and your investment objectives.