How to invest your money: Alternative investments

There are numerous alternative ways to invest your money. It’s helpful to research what different options are available to you and see what kind of investment interests you the most.

With some forms of alternative investments, it’s useful to have some background knowledge in order to invest as successfully as possible. A few examples of alternative investment are cryptocurrencies, crowdfunding, antiques and collectables. 

Cryptocurrencies

There are thousands of different forms of cryptocurrencies, and it’s a growing field. In the past year, Bitcoin has performed particularly well. Buying cryptocurrencies, including Bitcoin, can be particularly confusing and come with a number of challenges.

Investors can purchase Bitcoin through a cryptocurrency exchange, equivalent to stock exchanges for cryptocurrency. This is the recommended option, and the top global exchange to purchase Bitcoin through is Coinbase.

There are also businesses with platforms where you can purchase Bitcoin. However, with this method, the investor doesn’t actually own the digital coin. The company buys it and holds it on the investor’s behalf. This limits what an investor can do with their investment.

Crowdfunding

Crowdfunding involves numerous investors putting their money together, this is usually for providing investment capital for small businesses and startups, for a specific return. If the business does well, the investor could gain substantial returns. However, at the same time, an investor could lose all of the money they invested.

Crowdfunding platforms make it easy to invest this way. Some of the most popular ones are Kickstarter and Crowdfunder. There has also been an increase in crowdfunding for rental estate investing. It often requires less money and time than traditional property investments.

Antiques and collectibles

Certain antiques and collectibles can help investors earn a substantial amount, but you can lose the money you paid for certain items as well. For this type of investment, you’ll need to know about the item you’re purchasing and the potential resale value. Certain collectibles can produce quick income. However, some need to be held on for longer periods of time.

Collecting wine can be an investment option for investors knowledgeable about wine. It’s helpful to know what vintages are better than others. With this kind of investment, history of ownership and the storage method are important factors to help increase resale value.

Antique cars are another popular item to collect. However, again, with this type of investment, it’s helpful to have an inkling of what car models are a wise investment. And it’s important to keep in mind maintenance and insurance costs and where the car will be kept until it’s sold.

Risks for alternative investments

There are a range of unique alternative investment opportunities. Some are helpful to diversify investment portfolios while adding high returns. 

However, alternative investments often carry additional risk. And the risk is usually losing all of the money that has been invested.

It’s recommended to receive professional financial advice when considering any kind of investment to ensure you find the best investment option for you.

Posted on 9th March 2021