Alternative Investments You Can Start Today

2018-07-26 17:53:53.0

When one hears about ‘investing’, stocks often comes to mind. It’s not a bad thing too. Stock investments have rightfully gained their reputation because they have been proven to help transform the lives of people through building on their wealth. Today, it isn’t surprising to hear about how people have improved their circumstances through the gains and returns like dividends and interest on their investments Other forms of investments such as bonds and money market securities have been explored too, creating a lot of choices for people.

While they have differences in terms of the risk and returns , it cannot be denied that these investment vehicles have been effective tools to get out of the system of working 9-5 jobs till the die we day. For some, they became the mechanism to allow people to spend their time pursuing their other lofty goals and passions in life. But an interesting thing is that they aren’t the only things one can invest in. Technically, as long as something has value, one could turn it into an investment vehicle of sorts. This has led people to pursue rather less orthodox methods in investing.

1.) Real Estate

Among the basic needs of people is a space to live in. This means that real estate can prove to be an stable investment since people will always be in need of space for both living and working. Depending on the investing style, people can profit off real estate through a variety of means including rent and capital appreciation. Do you like renovating and fixing homes to make them better? You can even make loads of money by fixing old and run down buildings and reselling them in the future. Such real estate investment method is called fix-and-flip and is actually practiced by a lot of people.

Real estate can be capital restrictive, however. It shouldn’t come as a surprise that land and building prices are often too high for a single investor starting out on his own. Some people work around this restriction by introducing real estate notes. This arrangement is similar to loans. When the price of a property is too high, a landlord/active investor may choose to issue real estate notes to generate enough cash to pursue whatever project he has in mind. The holders of those notes then earn through periodical interest payments from the loan.

2.) Peer to peer lending (P2P)

When securing a loan, banks and other loan facilities might require collaterals in order to be qualified. When people cannot provide collaterals, they turn to other people for money. This practice evolved into what we call Peer-to-peer lending system. In the simplest terms, a P2P investor gets matched with a borrower through an online platform. Once the request for loan is accepted, the investor transfers the amount and then earns through interest.This actually is beneficial to the parties involved because they no longer have to pay a laundry list of vague fees charged by financial intermediaries.

It does come with a catch however. Like other forms of lending, P2P Investors have to carry the risk of being not paid. Such is why they might require higher interest rates for the loan or shell out small denominations for the loan. With a bit of luck and due diligence, P2P lending can still be worthwhile.

3.)Cryptocurrency

Last December 2017, the general population got confused when Bitcoin and cryptocurrencies hit the headlines. For most people, 30 minutes of Googling only led to more confusion.

What is a cryptocurrency anyway? A cryptocurrency (like Bitcoin) is a currency stored digitally. These coins contain high walls of security that make it difficult to counterfeit. Such coins make it nearly impossible for governments to interfere/manipulate. What makes them groundbreaking is that trading in bitcoins is more efficient than trading your usual securities because they remove the need for intermediaries that minimize costs involved.

Now, how do people actually earn from trading in bitcoin? Well, one of the ways to earn similar to how one would earn from ForEx. Day trading cryptocurrencies is highly speculative and like other goods, the value of one coin is based on supply and demand. The simplest way one can earn is to sell it when the value of one coin has captured enough value to satisfy the holder.

Other ways include mining for bitcoin, which tends to be an arduous task. Cryptocurrencies are hosted in the blockchain. A blockchain is a platform that houses all the information and records regarding deals and transactions related to cryptocurrencies. To maintain security, there are people who have invested in expensive computers to facilitate confirming the integrity of the records through complex mathematical problems. The people behind these earn bitcoins and can use them through other purposes.

4.) Art pieces

Whoever said that there’s no money in art is probably an uncultured fool who hasn’t spent a minute in a museum. It may seem harsh but it’s actually possible to make money through artworks that we love. When we think about profits through art, we might be led to think about selling enough artworks like how you would sell any other goods. While this can be a valid strategy, some people just aren’t skilled in art. Not everyone can make wonders out of oils and canvas. They can however, buy pieces that will increase in value in the future.

The heart of this method lies on capital appreciation. When Vincent Van Gogh was still living , his style weren’t valued highly and people thought of him as a madman and a failure. Two centuries later, in 2015, his painting L'Allée des Alyscamps was sold for $66.3 million at a Sotheby’s auction. The selling price was almost thrice of the same painting’s value in 2003, where it was valued at $11.8 million.

Capital appreciation for artworks tend to be slow, that’s why you should only invest in art if you’re passionate about it in the first place. Unless you have the power to predict which new artist will become the next Van Gogh, Renoir or Manet, you can’t expect to make millions right away. Seasoned art collectors and dealers know best which pieces earn a place at museums and private collections, that’s why it might be best to leave it to them.

5.) Vintage collectibles

In 1959, present day toy giant Mattel introduced a toy that signaled a radical shift in toy industry and the country’s morals at the time. For $3 apiece, girls before could go home with their very own first issue Barbie doll. With a womanly figure and a sultry makeup look, the first iteration of Barbie was definitely a controversial piece for then conservative US --- but her shock factor was to the benefit of her creators. In her first year, about 200,000 of first issue dolls were sold. Almost half a century later, a #1 Ponytail Barbie can demand prices of up to $15,000 in online marketplaces like eBay.

Now you might wonder, do people actually buy an old piece of glorified plastic?

The surprising answer is yes. People do and still do shell out thousands of dollars for their collections, creating a nostalgia backed market that still runs to this day. Most commonly, the more valuable objects tend to be earlier iterations of things that we adore now. Things like first edition Levi Strauss jeans, the first Spiderman comic book and a copy of the Gutenberg Bible all fetch prices of up to $60,000 in auctions. If you’re lucky enough to have some really unique stuff from the 50’s stowed away in your bodega, you might want to check out if someone’s willing to buy at a hefty price.

Investing in vintage collectibles run on the same principle as investing in artworks. To make money, you must wait for it’s value to rise, which might probably take years. That’s why you should look into trading vintage products if you’re passionate about them. Like in art, only those that keep these products close to their heart know which pieces should be thrown away and which ones would make a 50 year old smile with a childlike glee.