Beyond Crypto: 7 Optimal Alternative Investments For Millennials

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Millennials are regarded as one of the most ambitious generations alive today. As a result, it’s not surprising that some of these people are now involved in the investment scene or intend to enter it in the near future. Thankfully, there are quite a few options to consider (particularly in the alternative investments space).

Many people, particularly millennials, have invested in cryptocurrencies such as Bitcoin over the past decade. The demand for cryptocurrencies has surged over the last decade, and some have benefited from it. But the problem with cryptocurrency is that it’s highly volatile. Therefore, it’s not always a suitable investment for a novice investor. 

However, there are several alternative investment options that millennials should consider adding to their portfolio. Here’s an outline of some of these:

Collectibles

People collect all kinds of things for various reasons. Most of the time, it’s because they have a passion for it. But some people also collect things to make money. Collectibles generally refer to valuable items you can collect and keep with the hope that they’ll increase in value. For example, consider how the 1972 silver dollar value has changed over time.

Typical collectible items include antique art pieces, jewelry, coins, stamps, vintage cars, and others. But the most significant caveat is that collectibles can’t be traded publicly, so valuing them isn’t easy. You have to find someone who values that item the same way you do for a sale to happen, which isn’t an ideal situation.

Precious Metals

Precious metals like gold and silver are an excellent investment choice because they possess significant desirable properties. Bear in mind that precious metals have been used for centuries as a store of value. Even in today’s contemporary society, these commodities have managed to retain their value. That’s why some investors buy precious metals like gold and silver to diversify their portfolios and use them as a hedge against inflation.

Most precious metals are a great addition to any investor’s portfolio since they’re relatively stable compared to other alternative investments. However, they’re also volatile to a certain degree since they’re also subject to forces of demand and supply. But when faced with a tight economic situation, you’re always better off holding on to a precious metal than cash since it holds its value well over time.

Plus, there are many ways to invest in precious metals. Most people may know the method of buying or selling physical bullion. But nowadays, thanks to technology, you can invest in precious metals through other channels like exchange-traded funds (ETFs), mutual funds, futures, options, and stocks. Due to digital investment channels like ETFs, you don’t need significant capital to invest in precious metals. So, beginner investors could consider ETFs as their entry point into precious metal investing.

Real Estate

Real estate is probably the alternative investment familiar to most people. Anything from farmland, houses, factory buildings, and shopping centers falls under real estate.

Real estate is a fantastic investment because its value tends to appreciate over time. Plus, you can get money from rental income too. But it’s also important to note that making money from real estate requires insight and strategy because buying the wrong property could be more harmful to your pockets in the long run. Nevertheless, real estate investing is perhaps one of the least risky alternative investments.

Before investing in real estate, you should know that being a landlord isn’t easy. It’ll almost certainly be laden with challenges. Sometimes, people fall behind on rent, things break, you could come across a troublesome tenant, and so forth.

As such, you need to be prepared to deal with these things. But, inasmuch as property requires regular maintenance and monitoring, it doesn’t require as much effort to manage if you employ a property manager. You can earn a monthly income from rent while the property management company handles tenant interactions, maintenance, and repairs. You’ll be required to pay an additional fee for their services, but it’ll benefit you in the long run.

Moreover, there are also many ways to get involved in the real estate business. You can get involved in the house flipping business wherein you flip used properties for a profit. This may require a bit more dedication on your part because finding ideal properties isn’t easy, but you can make good money from it. Another way is to get involved in real estate investment trusts (REITs), which allow you to invest by buying stocks from companies that are into real estate.

Hedge Funds

This option is more geared towards investors with significant capital outlay or deep pockets. Hedge funds aren’t as regulated as mutual funds because most are private, so they allow investors to invest in a wide array of securities on the market. A hedge fund pools the funds of various investments together and then reinvests those funds to make more money.

The goal of any investor is to get high returns for their investment in their hedge fund. Therefore, investors must choose well-managed hedge funds to increase their chances of getting a good return.

Venture Capital

Capital is a major issue for prospective entrepreneurs when launching businesses. There are many people with business ideas who don’t have the money to fund those ideas. Thankfully, there’s now an investment vehicle called venture capital, which allows individuals to invest in startups in exchange for equity. Once you become a venture capitalist, you’ll be closely monitoring the company’s activities since you’ll have a vested interest in the success of that startup. If the company succeeds, you’ll get a return on your investment.

Peer-To-Peer Lending (P2P)

This type of alternative investment is pretty recent, having emerged around 2005. It has gained prominence as the world has grown more digital. Banks have long been regarded as the main choice for obtaining personal or corporate loans. However, not everyone has good enough credit to qualify for a bank loan. People can access loans from P2P lending websites instead of banks, venture capitalists, or microlending institutions. Online peer-to-peer lending platforms provide people and businesses with access to loans that banks may not offer.

To partake in an online P2P lending program, you simply need to invest your money into the P2P lending account. Your contribution or investment will be pooled together with other investors’ funds. Loans will then be made from investors’ funds.

Borrowers can borrow money directly from lenders via P2P platforms, eliminating the need for an intermediary. As a result, these platforms essentially connect investors and borrowers. It becomes a fair game of demand and supply in this market. However, the website sets the rates and terms and handles all transactions between borrowers and investors.

This alternative investment option is appropriate for individuals who want to earn higher returns than they would if they kept their money in savings. In addition, peer-to-peer lending is a riskier type of investment. So, it may be a worthwhile option to consider if you have high risk tolerance as the high rates of return may be worth the try. Nevertheless, you must choose the right P2P lending website for the best returns. Therefore, you might have to do some research to find the right one for you.

Start Your Own Business

Instead of pouring your money into other businesses, you can start your own. Starting a business isn’t an easy task. There’s always the possibility that your business will thrive and you’ll make a lot of money. You’ll also get to keep the majority, if not all, of the proceeds. But there’s also a risk that the business may never take off and fail. Nevertheless, you could also create a business that generates a steady income over time.

For some people, embracing the world of entrepreneurship may not come naturally, and that’s understandable. Starting a business certainly may not be for the faint of heart, but it’s still possible. Some people may be concerned about the high startup costs, but there are some businesses you can start with low startup costs. Teaching, consulting, drop shipping, and affiliate marketing are a few examples. 

The most significant benefit of starting your own business is the independence it provides. You can choose to attend to your business on a part-time basis to balance your project with your primary job, which may be your main income source. So, you can build your business however you want, especially if it’s an online-based business. Also, choose a business idea that plays to your strengths and passions. Passion will help you keep going even when you feel like giving up. If you’re concerned about investing all your money in your business, you could split your investments between your company and other interests.

The Best Alternative Investments for Millennials

the best alternative investments

Alternative investments are great because they enable you to diversify your portfolio’s risk profile. However, try not to rush to buy investments you haven’t researched about. Research allows you to make more informed investment decisions. So, it’s always best to give yourself time to do the necessary research before committing to investing in anything. Alternatively, you could consult with your financial advisor to help pick the right one.

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