7 Alternative Investments to Help You Build Wealth Faster
As an entrepreneur, one of your biggest goals—if not your only goal—is to build wealth and retire comfortably. But building a successful business takes time, and even if you have a phenomenal idea, there’s no guarantee of your success. In fact, nearly half of all businesses fail within the first 5 years.
If you’re serious about building your wealth and financial stability, it’s important that you avoid putting all your eggs in one basket. But when you’re so busy investing time and effort into your main business, you don’t have many opportunities to invest in other assets or enterprises.
Thankfully, there are some simple, viable alternatives that can help you secure your financial future.
Alternative Investments to Consider
These are some of the most profitable and accessible options for your consideration:
- Stocks and ETFs. Though not an “alternative” investment by the technical definition, stocks and exchange traded funds (ETFs) are two of the most reliable secondary investments you can make as an entrepreneur. Essentially, you’ll be owning a small portion of an existing company (through stocks), or a collection of different stocks within a certain sector or group (through ETFs). Depending on how you invest, you can aim to choose companies you think will increase in value over time, or companies that pay out their profits to shareholders in the form of regular dividends.
- Bonds are another straightforward investment, but they’re a safer play than stocks or ETFs, and they offer a lower return. Here, you’ll be lending your money to an institution, such as a company or the United States government, in exchange for interest to be paid on that loan.
- Metals and minerals. If you’re willing to put in the time, you can also invest in metals and minerals, whose prices fluctuate based on factors like supply, demand, and other market conditions. They’re a fantastic way to hedge your bets against the stock market, since they won’t be as volatile, but if you want to invest wisely, you’ll need to find a good resource where you can research your options.
- Do you believe that cryptocurrency is the future of financial transactions? There’s a growing community that’s inclined to agree with you. Bitcoin is the leading name here, but there are alternative coins like Ethereum and Litecoin that are worth your attention as well. You can set up a computer to mine coins (basically a way to produce your own coins for future transactions) or buy some coins outright in the hopes that their value will increase in the future.
- Real estate. Investing in real estate offers similar options, but with a more tangible and familiar type of asset. You can purchase homes in budding neighborhoods if you believe that real estate prices there are due to increase, or if you’re getting a fantastic deal on the home. Or you can invest in real estate that you can rent out to tenants, in the hopes of earning more in revenue than you spend on your mortgage and house upkeep. Either way, you can make a nice side income here.
- Private lending. If you have capital already, you could invest it by lending it to other people in need, making a reliable interest rate on your principal. Peer to peer lending sites like Lending Club and Prosper are becoming more popular. The only downside, other than the fact that you need significant capital to start with, is that you might face the risk of non-payment.
- Venture capital. Finally, if you’re entrepreneurially minded and you have significant capital to work with, you can put that capital to work by investing in another startup. It’s a good chance to get in on the ground floor of another company with high growth potential, and you might be able to swing some interesting partnerships and deals to grow your own business in the meantime.
Building a Balanced Portfolio
Ultimately, your goal should be to build a diversified portfolio, which includes your investment in your own business, as well as several other independent investments. It’s up to you how you want to balance that portfolio; depending on your age and your goals, you might gravitate toward something high-risk and high-growth or something more stable and reliable. The point is to ensure you have plenty of options to draw from in case things don’t work out as you’ve planned.