Alternative investments are an option for people who usually have no confidence in the stock market, want to flee from low interest rates or generally always want to do everything differently than everyone else.
You have lost confidence in the financial advisor or have acquired expertise in certain areas and now want to put this into practice yourself.
Alternative investments are investments and capital investments outside the traditional form of investment such as overnight money, time deposits, shares or funds.
Of course, one can also see investments in owner-occupied real estate or classic cars, but these alternative investments will not generate any profit, but only serve the well-being of the investor.
In today’s article I would like to point out 5 possibilities for alternative investments.
Please note that these are not recommendations, but only examples of how you can invest your money in an alternative way
1. Peer 2 Peer Credits
Peer 2 Peer (P2P*) credits via online credit platforms are currently a widespread possibility to invest your money profitably as an alternative. This can be used to finance various projects and, depending on the payment of the debtor, the invested capital plus interest is returned.
These are platforms that allow personal loans without a financial institution. In principle, therefore, anyone can invest and invest money via these platforms under certain minimum conditions.
It is important to note that the loan exists between you as the investor and the debtor. If the debtor is unable to service the loan, the invested capital is gone and only legal action remains.
2. Crypto Currencies
Whether Bitcoin, Ethereum or Litecoin. Crypto currencies are on everyone’s lips and a modern, trendy investment opportunity. Prices can rise or fall in the multi-digit range every day. As a speculative investment with quick results, crypto currencies are definitely worth considering.
The big boom in December, during which Bitcoin had cracked the EUR 15,000 mark, is currently over for the time being. Nevertheless, nobody knows whether the next hype about one crypto currency will break out tomorrow and the value will rise sharply again. Crypto currencies are purchased and sold through different online marketplaces at different fees.
Crypto currencies are a purely speculative object where huge jumps upwards and downwards are possible.
3. Company shares
If you want to invest your money directly in the economy again, you can, for example, secure shares in a company through participation agreements and support this company with your investment.
Especially start-up companies are often dependent on investors from the private sector and are also happy about it.
Nevertheless, it should be checked beforehand how the company in which you would like to invest is faring. Real value is created in the financing of start-ups. Such a company can also go bankrupt overnight.
Investments in commodities such as precious metals or oil have experienced a real boom in recent years. Be it the specially purchased gold bar, which is stored in the bank vault, or the coin collection of noble, rare collector coins.
The mental background for this is, if money is no longer of value it should direct raw materials. But this is not quite as simple as that.
The price of raw materials is highly dependent on the world market. However, if the prices for certain raw materials rise too much, alternatives are sought and one is stuck on one’s raw materials. Alternatively, commodities can also be traded via trading platforms and thus buy cheaply and, ideally, sell again at a profit.
5. Real estate investments
Finally there is the possibility to invest your money in real estate. It doesn’t have to be your own property to rent, there is also the possibility to participate in real estate. Whether for new construction projects or for existing real estate.
The advantage of this is that you only have to partially take care of things like services at the house or repairs. The property is usually managed by a company from which you have acquired a loan through your investment or a loan which is repaid with interest over a term.
Alternative Investments and the Risks
Finally, it should be said that any investment, whether in one of the upper areas or on the stock market, is always risky. So you should be well informed in advance and be sure in which areas you are investing and how much money you want to invest.
As with many investment strategies, it is advisable to set up an emergency account with a certain reserve (usually 3 – 6 net monthly salaries) before the first investment.
The amount of the sum to be invested should therefore only be as high as one can do without a longer period of time.