You Invest In Besides Stocks And Real Estate Real estate or stocks pay you a good return. This is a narrative that cannot be undone. It is true that real estate investing and investing in stocks are the two most popular and rewarding investing activities, and it actually produced millionaires. But, apart from these two investments, there are so many other channels where you can invest your money and believe it or not, they sometimes offer even higher returns. Some of them are highly reliable modes, while others may include a high amount of risk. But, there is a unanimously accepted saying which is quoted as “higher the risks, higher the reward”.
Well, if you are looking to diversify your investment portfolio and you are looking for options other than stocks and real estate, then, here are some options where you can channelize your investments.
P2P lending: If you are looking to earn a handsome amount of money without any active participation, then peer-to-peer lending can be a good option for you. It is a platform which provides a higher rate on your investment while a borrower can get a loan at lower interest rates. These transactions are made without using the services of any banker etc. but, there are peer-to-peer lending companies that act as a middle man.
These companies mostly operate through the internet or online channels, and their services come at cheaper rates as compared to other orthodox financial bodies. This is one of the main reasons that they offer higher returns to lenders and charge lower rates to borrowers. As far as peer-to-peer lending is concerned. There are two types of loans:
- Unsecured loans: Although these companies do their research and investigate the credit history of the borrowers, yet, there is a risk of the borrower defaulting in some cases, and there is nothing as collateral in such cases. It sounds harsh and risky, but it is what it is.
- Secured loans: Secured loans are usually huge amounts, and they are secured against some tangible assets such as jewellery or gold, business assets, automobiles, buildings, and other similar items of good market value. These loans are mostly given to businesses.
Although this investment brings risk to your investment, it also brings “big bucks”. If you are an investor of strong tolerance, this might be a good option for you. However, keep in mind that this lending option is not available in all states of the US.
Precious stones or metals:This may sound strange, but there are stones which are termed as precious or rare. It is to be noted that these things need the right buyers. Some stones are related to cultural or religious myths or traditions. There are so many people who believe that using a particular stone may bring a good fortune or using a particular stone may bring wellness to your health. Yes, this may sound awkward, but this is true. A lot of people still believe in these norms, and they can pay good money for such items. All you need to do is find the right buyer, and you can make good money with this one.
Investing in Gold:If you are looking for an investment that can compete with investing in stocks and can act as “counter-punch” to inflation, then, investing in gold is a good option—investing in gold offer diverse options. First, it is a highly liquid asset. Second, it is a tangible asset, unlike stocks. Third, apart from the occasional hiccups, its value keeps appreciating over time. One thing that is important, just like stocks, you need to hold it for a considerable time if you are looking to enjoy the benefits of this type of investment.
There are different methods to invest in gold. One traditional way is to directly buy gold bars, coins, etc. while other options include investing in gold mining stocks, investing in gold accounts, ETFs (exchange-traded funds). If your portfolio consists of 5 to 10 percent investment in gold, then it is considered as a healthy ratio.
Investing in bonds, bill, notes: investing in notes, bonds, or bills is another way to earn passive income. Although interest rates are low as compared to stocks, these are very safe and secure investments. For example, US treasury offers different kinds of securities, including inflation-protected securities, bills, bonds, and notes.
- Inflation-protected securities: As the name suggests, these securities get their principle amount increased with time by the US government. CPI (consumer price index) is used to increase the prices of these securities. Plus, interest is paid on these securities.
- Notes: These securities mature over different periods ranging from 2 years to 10 years.
- Bonds:Maturitytime frame of bonds range from 10years to 30 years.
- Bills: Bills are the short term securities with a maturity period of one year or less.
In general circumstances, bonds offer the highest return rate while bills offer the lowest return rates. Although these securities do not provide higher returns, they are safe as houses.
Wine (Alcohol): Sounds different? Well, don’t be surprised. You may be well aware of the fact that wine gets better and better with the time and most importantly, it gets more and more valuable with the time. Almost everybody loves wine, or you can say, everybody loves good or vintage wine. All you need to do is buy fresh wine and store it as long as you can. The older it gets, the better it will be, and you can earn handsome profits. However, you will need storage with controlled temperature for this purpose.
Your own setup:You can always start your own business setup and be your own boss. Yes, it is true that starting a new business is a very risky investment, and if it goes wrong, it can cost you money. But, if it goes well and your business starts growing, then, trust me, nothing can be better than this.
It is important to do the market research and analyze potential opportunities and threats you may face. You can go with different options like starting an innovative or creative service or launching a new product, or, you can go with traditional trading and operate as a retailer or a wholesaler.
You can also start a part-time business as well. You can be a service provider such as providing online consultancy services, coaching, teaching or freelancing. Most importantly, these kinds of setups do not need huge investment or even no investment at all.
Another way to start your business is to buy a franchise of a brand or product. This is less risky because you will be selling a product or brand which has already penetrated the market and you do not need to advertise for it. These brands sometimes also work on credit basis. You can sell the product, keep your portion of the profit and pay the rest to the company. One thing you must know, these brands can charge a hefty “license fee” depending on the popularity and market share of the brand or company.
Broken Assets: Just like distressed real estate properties, you can buy broken, damaged or distressed assets such as cars, machines, and similar items and resell them after making necessary adjustments. It happens so often that assets like automobiles can get damaged during accidents and owners may sell them at a very low cost due to insufficient funds to get them fixed. This is where you can get in as an investor. All you need to do is find such a seller, make necessary renovations and resell it.
Collectables: Collecting antiques and ancient coins can be another part-time business activity. You will be amazed to know that many people are opting this as a fulltime profession. But, this kind of activity needs proper knowledge about things, and you should know what you are buying and how can you sell it with profit. You need to buy the right item and then the right buyer to sell.
“Dormant” investment: If you are doing a job or other similar activity and you have money to invest, but you do not want to be an active participant while investing, you can invest as a sleeping or dormant partner in a business or a partnership. Dormant partners are full-time partners in any business or partnership. Still, their share in profits is little less than active partners because sleeping partners do not put any effort to conduct business matters.
“Direct Lending”: Just like peer-to-peer lending, direct lending is another option for money lenders. Here, you do not need any intermediator or middleman. You can lend money to someone against some security as collateral. This kind of investment is a private investment, but it is a good option if your money is secured against something like gold or other liquid assets.
The bottom line is, all these activities can be useful if you want to earn extra bucks. Some of these options can be used for full-time options, but most of them are part-time options. However, an investment that can earn you any amount of profit is a good investment.
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