Once you have secured yourself through insurance and have put aside a substantial amount of savings, then it is high time to look for ways to grow your money.
Investment in stocks through mutual funds and government bonds is always a good idea. However, it is important that people diversify their funds and resources.
The stock market is a very promising source of fortune but the stock market is very volatile and it can be precarious. It would be nice to have a part of your money invested in other places. So after you have learned how to invest in stocks, you should learn other investment ideas that would make your hard-earned and carefully-saved money grow.
Below are a few options other than the stock market.
Money required: As low as $500, $1,000, or $10,000
A lucrative alternative to the stock market is real estate investment. Compared to the stock market, real estate is less volatile. The prices of real estate in Singapore do not fluctuate that much. In fact, they keep on rising. Investors do not worry about investing long-term as short-term fluctuations are unlikely to happen. Hence, real estate is really a good investment to put your money in.
Investing in real estate is a very good source of passive income. Investors keep on earning returns from rent. Rent has never been this expensive. As a place to live or space to conduct business is a necessity, Singaporean residents and businesses will always continue to find a way to pay up the rent.
There are three various ways to invest in real estate.
The first one is buying the property directly. As real estate will unlikely depreciate but more likely to appreciate value, buying property now is very good alternative where returns are guaranteed.
The second way is through real estate limited partnership (RELP). RELP is composed of investors, usually up to 30 members, who pool their money together for the purpose of purchasing, leasing, and developing real estate. There is a general partner that assumes full responsibility and there are limited partners whose liability is only limited to the amount of money they contributed. This offers relatively high expected returns but with comparably high risks.
Lastly, real estate investment may be in the form of a real estate investment trust (REIT). You invest in real properties managed by your chosen REIT. REITs use investors’ money to purchase, manage, and operate properties. In a sense, investors become part owners of the properties bought, managed, and operated.
Such properties earn in the form of rental income. Part of that earning is paid in dividends to investors.
Money required: $10,000
Farmland is probably the biggest opportunity you have probably never heard of. There is an increasing demand for high-quality food but the supply of lands continues to decrease due to development efforts brought by globalization. Hence, farmland is seen to become more essential over time.
Investments in smart agriculture technologies that boost crop produces are expected to generate profits. Investments in farmland have become more profitable than they have ever been before especially that the government of Singapore is taking a more active role in promoting agricultural technology (AgriTech) innovations.
In fact, AgriTech all over the world has skyrocketed by 49% in 2018. Such indicates a growing interest in farmland globally.
You may invest in farmland through AgriFood B2B eMarketplace.
Precious metals like gold are distinguishable from other asset classes like the stock market, real estate, bond, and equities in terms of the economic forces that determine their prices. Gold is usually bought during the extreme financial crisis or at times when high inflation is expected because it acts as a diversifier that mitigates losses during market stress.
Investments in gold are highly encouraged because this precious metal is highly liquid yet very scarce. It may give you more competitive returns than what other financial assets can give you.
Investments in gold come in many forms. You may opt to buy physical gold (bars and coins). The more common way nowadays is through Internet Investment Gold (IIG) where investors get to buy physical golds online and get them stored in professional vaults.
You may choose to purchase gold-backed exchange-traded funds (ETFs). GLD is a gold ETF.
Cryptocurrency is an internet-based medium of exchange that is distributed across a large number of computers. No central authority runs it. Its decentralized nature keeps cryptocurrency from government control and interference.
Cryptocurrencies are very portable, inflation resistant, transparent, and divisible yet many are still afraid to venture into them.
The most popular and most valuable blockchain-cryptocurrency is Bitcoin. However, there are many other alternate cryptocurrencies that offer various specifications that may be adequate to your liking or preference.
Globalization has made businesses a good alternative to the stock market when it comes to investments. Invest in a promising business venture like a restaurant, technological school, by putting your money in either private equity or venture capital. However, to be able to do that, you have to be accredited investors.
Cash and Cash Equivalents
This alternative to stocks is an investment on a short-term basis. The maturity period is usually pegged at 90 days.
It includes bank accounts and marketable securities and should be easily convertible to cash. Thus, equity and stocks are not considered cash and cash equivalents.
In other words, cash and cash equivalents are the companies’ cash on hand. Those that can be invested as cash and cash equivalents include cash, foreign currency, and cash equivalent.
This kind of purchase is a low-risk venture partly because there is little risk that its value will change, unlike stocks and equities. If you are interested in short-term ways to invest then this is worth considering.
Peer-to-peer loans or peer-to-peer lending is a new and straightforward market stocks alternative. It is straightforward because its meaning is already indicated in its name. Basically, you will lend money to your peers and charge them with interest rates as agreed upon.
Money required: $1,000
This alternative investment is one of the most viable investment options you have. It is comparable to lending a friend some cash with the expectation of getting paid the whole amount with interest rate. Peer-to-peer lending involves some P2P platforms like Prosper and Lending Club where all you have to do is to invest a particular amount, say $1,000.
All lending transactions can be facilitated through these platforms. Returns are more likely to transpire than losses because there will be more than one borrower of your investment. One defaulting borrower would not automatically put your investment to waste because only a portion of your money was borrowed.
Remember, however, that this investment option is a high-risk, high-return way to invest. Make sure that you do not rely on this solely for your retirement money.
But when you have some extra cash, then peer lending is an opportunity to diversify your investments. Sign up for peer lending in a trusted online platform and be critical on who you lend your money to. You will surely earn from the interest rates when you manage your investment well.
Collectibles – Alternatives to Penny Stocks
Investing in collectibles is a long term investment because a lot of items increase in value through time. Antique artworks, furniture, and jewelry tend to shoot up in value through time.
Its value also increases if it has a significance in history and culture. This way of investment is very interesting especially if you have a knack for certain hobbies.
For example, a lot of sports enthusiasts are also into sports card collection. They take the time and effort to acquire certain cards that are rare and limited.
For collectors and hobbyists, it is satisfying to acquire coveted items. Secondary to this is the potential of turning these collectibles into cash.
The rookie sports card of LeBron James, for example, fetched a staggering $1.8 million. If you are into this hobby, keep your collection in mint conditions because you would never know the potential value of that investment in the market in the near future.
Fine Wine & Fine Art
Similar to the collectibles, fine wine and fine art are also long-term investments. As you might already know, these two items earn more value the older they get. What is good about fine art, say a painting, is that you may buy it from a random artist at a small price, like $200. And then a decade later, that random artist grew world-famous.
Suddenly, your $200 investment started to gain thousands of dollars in value in just a decade. This kind of scenario is highly possible when it comes to a fine art.
So next time you feel guilty for buying that piece of painting for your small art collection in your living room or for buying that bottle of wine you know you won’t open anytime soon, consider the boundless possibilities that can grow out of that purchase.
If you have family or friends who are starting entrepreneurs or have a great start-up idea, be an angel and give them a head start by becoming an angel investor. By becoming one, you are taking ownership of equity to their start-up. You can either provide a one-time investment to help the start-ups hit the ground running or you can also inject funds a couple of times as the young company takes on the most difficult part of starting a business–the initial stages.
Angel investing, however, is a risky business. Make sure that you are investing the amount of money that you can afford to lose. Since you are investing in start-ups, then the idea is not something tried and tested.
However, angel investing also requires thorough scrutiny of promising business plans. If you are to be proven correct in your appraisal and the start-up became big, then you will reap the reward of being a believer.
You yourself can also be an investment. It is always a good idea to learn new skills. You may enroll in several short courses and acquire certain certifications that would make you eligible to take side-hustles.
Invest in acquiring marketable skills that can give you a chance to be an entrepreneur yourself. Aside from this, you may also start working with a life coach or a financial coach that would dedicate time to looking through your personal growth.
Lastly, take a more aggressive approach to learn how to invest. Move over googling “how to invest stocks.” Make your research more systematic and scientific by taking investment courses or talking to registered investment consultants.