Even though the majority of people dream of becoming investors at one point, as soon as they are in the position where they have this surplus of money, they often demonstrate a staggering lack of imagination. Namely, they buy stocks, bonds or invest in mutual funds, occasionally even giving ETFs a consideration and that’s it. With so many amazing alternative investment options out there, this approach to the situation is quite narrow. Nonetheless, it’s impossible for you to consider options you aren’t even aware of having. With that in mind, here are five investment choices that you should know about.
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Private equity
First of all, investing in a business is a safe, intuitive and simple method of growing your revenue and providing valuable assets, however, you shouldn’t restrict yourself to companies that issue public stock. Instead, you could do a bit of independent research and look for smaller businesses and startups looking for investors. Sometimes, you can even invest in a business idea of someone that you know. In this way, you can use your personal relationship and knowledge of their abilities, ambition and commitment as a reassurance. All in all, there’s no investment cap here and the amount of equity that your investment provides is up to negotiation, seeing as how there’s no fixed price either.
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Managed futures
The next idea you could consider is buying managed futures, which are accessible and simple to understand, even if they are not so easy to predict. A managed future is a contract made by two parties to purchase a certain amount of goods, stocks or currencies at a specific date and for a specific price. The reason why they are so interesting is due to the fact that at that point in time, the value of the given contract may be much different. This means that a person making a commitment may be at a gain or on a loss. Still, it provides a certain amount of security due to the fact that both parties know the exact value of the contract (it will not be affected by fluctuations of the market).
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Gold
Investing in gold is probably the most common way of diversifying your portfolio. For this reason alone, the majority of investors prefer to keep 10 to 20 percent of their total assets in gold. This is a smart move because the value of gold moves in a different direction than the price of stocks or currencies. In other words, trends that devalue one might have an opposite effect on the other (or, at very least, keep it unaffected). So, those interested in diversifying need to find a reliable platform that will allow them to track gold price and make a purchase when the price is right.
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Real estate
The best thing about investing in real estate is the fact that you have so many options. You can buy an investment property or a rental property. This property can also be industrial, residential or retail. The profit (or income) that you receive from it depends on the choices that you make. On the other hand, it’s highly unlikely that you’ll be able to handle all of this on your own, which is why you might have to consult a number of experts. This ranges from contractors, all the way to buyer’s agents. Other than being a lucrative investment option, real estate also diversifies your investment portfolio, thus making your assets a bit safer.
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Know your priorities
Even though you might be anxious to start investing your surplus in order to create a passive income, there are some other issues that you need to consider first. You see, investing means immobilizing your funds for a certain amount of time and if this is money that you believe you’ll need in a couple of months, it’s probably for the best to put it in your emergency fund. Here, you should at least have enough money to cover three months of your living expenses. Second, it might be smarter to pay off your loans (at least high-interest ones) prior to making your first investment. Finally, your retirement fund might need some reinforcement as well.
Conclusion
Investment options like buying wine or art are also out there, yet, they require you to either have a specific niche knowledge or a contact with someone with these qualities. With the above-listed five investment alternatives, you don’t need such a specific set of circumstances on your side in order to succeed. This is the very reason they should be your go-to investment alternatives. Those looking for more choices, nonetheless, won’t have trouble finding what they’re looking for.