Many investors stick to the basics, such as stocks or mutual funds, when investing money. However, there are other alternative investments to protect yourself from failures of capital markets and help you diversify your portfolio.
In choosing an alternative place to put your money, avoid scams that promise the highest returns. Try to choose legitimate investment vehicles. Here we share the three most common types of alternative investments for you.
1. Real Estate
One of the most common alternative investments is real estate. When you invest in real estate, you can buy the property and rent it to generate income. A property can be like a duplex, multi-family dwelling, or a whole apartment. You will have to deal with all responsibilities such as repair, noise as a landlord.
If you are unsure how to manage a property or are not ready to be a landlord, you can find partner investors to buy and manage a property together. In this way, you can share the risks, knowledge, and exchange new investment ideas with the partner. If your partner is more knowledgeable and experienced in real estate management, you can learn how to succeed in real estate investments.
Moreover, you may want to use an online investment platform (like Fundrise) to invest in residential properties because the online platform can take care of all your responsibilities and manage the property for you. However, there are some extra fees that you need to pay for their services.
While most people are still not interested in cryptocurrencies, more and more people start to buy bitcoin. Because people can spend it on different services now. Cryptocurrency does not belong to any country or any bank. At present, cryptos are more famous than ever before and accepted by more countries. It affects its volatility. Their value can exponentially rise or fall. No one is sure about its exact value. Cryptocurrencies such as bitcoin or NFTs are unique and hot investment options you may consider investing in. Before buying cryptos, it is good to learn about their market value and risk level.
3. Invest in Startups
Starting your own business is also a great investment idea. If you are not ready to run your business, you may think about owning part in startup companies. Startups seek initial capital from investors, and they offer company shares. Startup companies have the potential to become billion-dollar companies. When you invest in startup companies, you become an owner of its part, and you can get profits if the company succeeds. However, if the company fails, you may lose your money. Anyone can easily invest in startup companies with a few hundred dollars on equity crowdfunding websites. SeedInvest, AngelList are sites used for equity crowdfunding.
To read more about Islamic Finance related topics, please click here and visit our academy.
Feel free to sign up for our free stock screening services at musaffa.com.