Traditional ways of investing would be going to shares, bonds, mainstream property, cash, and other traditional asset classes. But there are more unusual, yet highly rewarding opportunities called Alternative investment, usually embarked on by smart investors because of the risks involved in it.
Here are alternative investment ideas ranked from safest to riskiest, that are available in market:
1. Structured products
This is basically a contract with a financial institution to pay you a defined return at a defined time depending on the performance of the stock market. It’s the safest of all the other alternative investments. The only way you could lose money is when the stock market is performing catastrophically badly.
2. Bridging finance
These are short-term loans used by property buyers who are expecting to get a mortgage from the bank but cannot wait for the approval. For private investors, you can invest in funds that pool bridging loans, in order to spread the risk across several borrowers. The loan is secured against the property.
3. Peer-to-peer lending
Investors meet with individuals or businesses who want to borrow money. Borrowers can get lower rates than they would be charged by a bank, while lenders can earn more money on their savings than they could from a cash account. It can be quite risky for the investors because the individual or the small business might default or become bankrupt.
Returns from investing in woodland come from any increase in the value of the land and the trees on it, and any income produced by felling trees for timber. But increase in the value of the land is only good if you can also sell the forest. There are some excellent tax breaks in the market, with no income or capital gains tax to pay and exemption from inheritance tax if you hold your investment for two years.
5. Buy-to-let property
The property will form a large part of your overall wealth. You need to have at least 25% of the value of the property to use as a deposit, plus extra to cover any refurbishments and legal fees. Investors will likely face competition from professional landlords and may have to deal with rogue tenants and maintenance issues.
Rare stamps will have value as long as there are stamp collectors. The most valuable can fetch six- or even seven-figure sums. Stamp values can keep on going higher, and you can search for offers for private investors.
Rare coins are best bought through a reputable auction house, which will provide a money-back guarantee should the coin turn out to be a forgery. As with stamps, the value is underpinned by the popularity of coin collecting as a hobby.
The traditional way to invest is through established wine merchants. You must have knowledge on fine wine and their exact records. More recently, wine funds have been launched which offer an alternative way to access the market. Some of these qualify for the Enterprise Investment Scheme (EIS).
9. Business Angels
When you become an angel, you invest in smaller companies that are not quoted on the stock market. Typically, you won’t see any return until the business is sold or floats on the stock market. It could take years, and you could either lose all your invested money, or reap triple returns.
10. Equity crowdfunding
This is very similar to business angels, but managed wholly online. Investors can either deal directly with the company and get your name on the shares, or let the crowdfunding website deal on behalf of hundreds or thousands of investors. However, if the business you invested in does well, a bigger investor may buy it.
Gemstone-grade diamonds have increased nearly tenfold in value since the 1960s. The diamond price is much less volatile than the price of gold. But it may be difficult to access for investors because diamonds are valued subjectively by experts.
12. Carbon credits
A carbon credit is essentially a permit to release one tonne of carbon dioxide into the atmosphere. Companies that exceed their allowances are supposed to buy more credits, according to global cooperation. Private investors have been targeted by firms trying to sell them carbon credits. This is a highly specialist market and best left to professional traders.
13. Land banking
Land banking companies take a piece of land, parcel it up and sell it off to investors; hoping that once the land is earmarked for development, it will soar in value. However, there is often no development and investors are left holding a useless piece of land either in the market or overseas. A lot of land banking schemes have been stopped by the Financial Conduct Authority (FCA).
When you’re hot on Wall Street, you are treated like a rock star. At a hedge fund investor conference in San Francisco, I was mobbed by people who wanted to speak to me. I was put up at the Fairmont Hotel, where suites go for $3,000 a night. At the fanciest restaurants in the capitals of the world – Geneva, Paris, Frankfurt – big-money investors would hang on my every word. Investors sent me $1,000 bottles of champagne, Tiffany vases, gold cufflinks and cases of wine as gifts.
Our hedge fund was up 20% for five years straight. Every big-money investor craves this kind of high-level, consistent performance. However, it’s rare. And when investors find it, they flood you with money.
Billions and billions of dollars. Our hedge fund grew from $1.5 billion in 2006 to over $5 billion by 2008. Our asset management company, which had about $5 billion under management in 2006, grew to over $25 billion in assets by 2008.
In our hedge fund, we took 20% of the profits we generated with investors’ money. On top of that, we charged investors for all expenses, as well as an annual fee of between 1% and 2%.
Yes, it’s obscene!
Now, the thing is, you really don’t have to have big money or pay these outrageous fees to get high-level, consistent performance. Sometimes you just need an expert like me to point you to how to get this on the cheap.
There is one investment in particular that generates high-level, consistent performance that big-money investors love. And it’s available to everyone. Unlike our hedge fund, you don’t have to give up 20% of your profits.
It’s an investment that I bet you’ve never heard about. Big-money investors like the ones that used to invest in my hedge fund know about it. And they put their money into it because it gives high-level performance consistently. So, what is this investment?
One of the best-performing assets over the last 27 years is timber, outperforming stocks, bonds and other commodities.
Not only does timber outperform all these assets, it’s consistent, too. In the last 27 years, there have been just three down years.
In some of the worst markets in history – deflation, inflation, crisis – timber holds up like a champ.
In 2008, when stocks crashed, timber was up.
The Great Depression, when stocks sank, timber was up.
From 1973 through 1981, when inflation was rampaging, timber kept chugging higher, gaining every year.
Timber is rock-solid in terms of delivering the thing that people want in investing. What’s that? High-level, consistent returns that you can count on year after year.
Profits 101 = More Demand, Less Supply
I’ve put my own money into timber. My investment is through a plot of timberland in North Carolina. The land is being used to grow a mix of hardwood trees such as oak and softwood trees such as pine. The forestry plan for the land is to harvest trees beginning 2018. So, my investment hasn’t generated cash yet. However, land prices are rising rapidly because people are moving to North Carolina. My timber investment can pay off for me either through income from selling the timber or selling the land.
Why did I put my own money into timber? Because its demand/supply balance is solidly in favor of me making money.
And because trees take time to grow. You can encourage your trees to healthy growth through good foresting practices. However, you can’t make them grow much faster than they grow naturally. On average, a tree takes 16 to 20 years to grow. So, supply can’t go up overnight. And demand grows steadily. We use timber to make houses, furniture and paper. Current estimates are for timber demand to rise over the next 15 years.
Land to grow timber on is shrinking. That’s because we keep using land for housing and commercial development. There are also huge amounts of land being set aside for environmental reasons.
Bottom line: Timber supply is limited by biology and land. Demand keeps rising as more people use wood in houses, furniture, etc.
How to Invest in Timber
Buying land with trees is one way to invest in timber.
Another way is to buy into companies that own forested land in the stock market. Most of these companies are too small to recommend here. Later this year, we will launch a research service to cover small-cap companies.
“An ideal investment is the one which reaps infinite returns for the generations to come!!”
Whenever the idea of investment comes, one of the first questions that pop in our mind is whether it would reap good returns or not. Then we proceed on to probe on the risks involved, investment tenure and other prerequisites before actually investing.
In this short piece, we explore interesting, easy to plan achieve investments that would make you feel content with the returns and have lesser risks in the market with the returns touching the sky and getting more and more with the time.
1. Investing for a Skill/Education: Education is one of the most expensive investment avenues these days. Acquiring a skill, implementing it, getting well versed in it consumes a lot of time, money and concentration. When worked hard and accomplished, the returns can be infinite. This means that you can find work and continue on it for as long as you want to. The gains are not only in terms of monetary returns, which are consistent and are usually on a rise, but also in terms of respect, experience and chance to invest more in your family and assets.
2. Real Estate/House: A lot of old and experienced people regard real estate as a pinnacle of investment or asset creation. Once someone starts transacting in terms of real estate, his outlook towards money is totally changed. An increase in the price of stocks, mutual funds is not as stable as that of a land or a house. Moreover, the emotional worth of an asset created in real estate is remarkable.
Yes, undoubtedly, you need to have some net worth and status before venturing into this investment class, but the returns would make sure that the hard work you have put in to create wealth via real estate is all worth it.
3. People: For any manager or a business owner, the people working under him are his prime assets. Investing wise and well in the people will pay him off enormously, irrespective of the amount invested and time consumed over that investment.
Further, versatility makes it easier to find what kind of investment can suit your people. Complementary insurance, perks, bonuses, trips, education, skill trainings, assets, cheaper loans etc., there are numerous ways in which you can decide how do you want to invest. Investment is people earns you more loyalty (which can never have a price tag), better results, higher efficiency and several such fruits which would enhance your business or get you a promotion.
4. Creating a second income source: When you have multiple uses of the money earned, why can’t there be multiple income sources. Often, a second income source seeks some amount of investment, which does annoy people as they fail to realise its need. It is quite simple to analyse it though. The current job or business you are doing has come to you at a cost, which has gradually paid off via income and other tangible/intangible returns. You can create a source such as part time tuitions, blogging, baby sitting, product research etc., which give you a stable income and keep on giving more and more returns once you gain good experience. Second income source gets a further boost when you invest in acquiring a skill that in turn gets you another income source.
5. Planting Trees: Promoting Greenery in your neighbourhood is again an invaluable investment. A seed that nurtures into a plant, and further to a tree has a lot to give for the sunlight, water and care it receives. Interestingly, apart from sowing a seed and occasionally putting a fence around it, you don’t have to spend anything at all. The sunlight is free and water requirement, even though being initially crucial, is later managed by the plant itself. Multiple returns that a single fully fledged tree gives include fresh air, fruits, wood, temperature control, shade,
Are you willing to invest in a more long-term and reliable organic traffic source for your website? Then let’s look at a search engine that can assist you in increasing your traffic.
Interview an Influencer or Get Interviewed by a High-traffic Website
Have you heard of Tim Ferriss, the author of the Four-Hour Work Week?
His podcast is nowadays a staple content type that he provides to his viewers. Tim’s show has world-class performers who share their insights on a variety of topics, and he is well-liked on social media. Do Tim’s fans enjoy the show? So far, the show has received over 50 million downloads. On most days, it’s the most popular business podcast on iTunes.
Interviews, whether on video or audio, are inherently conversational, lively, and engaging. The great aspect is that it’s a win-win situation for both sides. The interviewer is exposed to a new audience, while the interviewee is able to provide his website visitors with new fascinating and authoritative information. You can ask an industry influencer to share your interview with their followers on social media if you interview them. Consider the organic traffic you’ll get from their social media followers, which number in the hundreds of thousands. Consider the level of interest generated by a prior Derek Sivers interview on the Tim Ferriss Show. Derek shared the show’s URL with his 283K followers on Twitter. It won’t hurt if you establish a relationship with the influencer as a result of the interview.
Similarly, being interviewed by a high-ranking website can result in a significant increase in search engine traffic. Harsh Agrawal’s blog, Shoutmeloud, received 35,000+ views in a single day after he was profiled by YourStory. That was the blog’s most popular search engine traffic source (with 600,000+ monthly visitors). Because interviews provide consolidated value, they can be used as a long-term lead generating source for your company. Consider how many bloggers you’ve learned about through interviews on YouTube and other high-authority websites.
You may also conduct a Reddit AMA if you have a very compelling storey to tell. Mateen’s AMA got about generating $85,000 in profit by selling TeeSpring shirts/hoodies received 2000 page views. He also boosted the number of visitors to his website on a daily basis.
By registering as a source with HARO, you can also answer queries from journalists. On HARO, Christopher from Snappa came across this question from Inc Magazine about the future of content marketing. He swiftly responded with a thorough response. He was mentioned in Inc a few weeks later as a result of this. HARO is an excellent strategy to have your brand mentioned on authoritative news sites such as Entrepreneur and Inc. Those backlinks will enhance your search engine traffic and increase your marketing strategy by improving your reputation in Google’s eyes. Contact an SEO agency to find out how you can do this and how they can manage it for you while you work on the bottom line of your business.