When you think about investing, you probably consider such common kinds of investments as stocks, bonds, or even real estate or precious metal ETFs. While it’s important to do your own due diligence, you might remain open to some other ways to use money that don’t rely upon typical brokers.
You might not have a lot of resources at this point, but that’s OK. Many alternative ways to save and earn money don’t require a big cash commitment. If this idea appeals to you, consider some alternative investment ideas for small investors.
The First Rule of Alternative Investments
The first rule of alternative investing is NOT that we don’t talk about it. It is that you need to take care to avoid scams. In fact, the more time you take to learn what other people say and think about your diversion from the beaten track, the safer you are. So, before you decide to take money out of your savings, it’s a great idea to search both online and even offline to make sure you understand what you’re getting into and the risks you might be taking.
That’s not to say that all alternative investments are particularly risky. With all investments, you need to weigh the risks against your own tolerance for risks in order to make a good choice.
Five Alternative Investments That Let You Start Small
Sometimes, the only way to truly understand a market is to get involved with it. At the same time, to begin investing in any new products, companies, or people, you may choose to take a conservative route. As you gauge your returns, you can decide if you want to commit more of your funds or back away. These alternative investment ideas for small investors will let you begin with a relatively modest stake.
- P2P Lending: Peer-to-Peer lending sites like Prosper and Lending Club allow you to make direct loans to borrowers. As these borrowers repay their loans, you receive a payment each month that includes interest. You may be taking a risk on borrowers who choose P2P over traditional financing, but you can review them and decide who you want to take a chance on.
- Physical precious metals: There are plenty of ways to obtain gold, silver, and other kinds of precious metals without buying from a broker. Some people find great bargains on “junk” silver coins or even old silverware. You just need to learn about the products your buying and the market first.
- Real Asset Funds: Companies like Art Fest invest in art and allow stakeholders to buy in. Other real asset funds may cooperatively invest in everything from farmland to wind farms to oil. You can buy into something valuable but just own a small stake. It’s best to look for investment funds in areas you can research or already are interested in.
- Equity Crowdfunding: Maybe you’re not ready for your own startup but would enjoy owning a share of one. AngelList is just one example of a company that provides a platform for startup crowdfunding. Investing in startups can be risky, but there have been major success stories. Again, do plenty of homework, and never invest more than you could afford to lose.
- Invest in Yourself: If you’re going to risk money, why not risk it on yourself? Maybe it’s time for you to finish your degree or certification or even start a business. If you need to hold down a day job, you can still find part-time opportunities.
Why Consider Alternative Investments?
These days, you should consider diversifying your investments. That doesn’t mean you have to choose alternative investments. Still, some alternative investments can be quite interesting and even do some good for you and for the world.