If you’re looking for ways to invest money and see it grow, the best strategy is to spread your investments into multiple channels.
A typical investment portfolio will include stocks, bonds, and index funds, but there are plenty of alternative investments for you to consider in your portfolio.
Digital Currencies
One of the more popular ways to invest in alternative ways is through digital currencies. A digital currency is any type of currency available in electronic form and sometimes never takes a physical form.
As opposed to traditional currencies like the dollar, peso, and pound, digital currencies are decentralized, and transactions are recorded on a public ledger known as a blockchain.
Bitcoin and Ethereum are two of the most popular forms of digital currency right now, and they are a form of cryptocurrency.
There are three types of digital currencies and one other form of a digital investment opportunity; those versions are;
- CBDCs
- Cryptocurrency
- Stablecoins
- NFTs
CBDCs: CBDCs are short-hand for central bank digital currency and digital currency that is issued and overseen by a country’s central bank. According to the Federal Reserve Bank, CBDCs could disrupt and fundamentally change the structure and nature of the U.S. financial system.
Cryptocurrency: Cryptocurrency is a term for a type of currency that exists in digital form and uses cryptography for recording and executing secure transactions.
The operations occur on a blockchain, an algorithm designed to provide a currency for a transaction between two parties and a digital format to account for those transactions.
Cryptocurrency derives its value from two factors; the overall supply of a digital currency and its demand. The higher the demand, the greater the overall value of the coin.
Stablecoins: Opposed to other forms of digital currency that don’t link their value to another asset, Stablecoins are value based on the value of the assets that support the coins.
NFTs: NFTs are a form of digital currency that stands for Non-Fungible Tokens. NFTs are one-of-a-kind and can’t be replicated, making their scarcity and exclusivity add to their overall value.
TIPS
TIPS is an acronym for Treasury Inflation-Protected Securities and is an excellent inflationary investment vehicle. As inflation increases, so does the value of the bonds under TIPS. Conversely, when inflation decreases, the yield on TIPS decreases accordingly.
Real Estate
Real estate provides an opportunity to make short- or long-term investments that appreciate more than the rate of inflation. For example, in traditional ownership, a person would buy and hold property, in the process, pay down their debt and, as the value appreciates, gain equity that they can have years later.
Other ways to make money through real estate include;
- Fix and Flip
- Wholesaling Real Estate Contracts
- Acquire and Develop
- Rental Properties
An investor would take hold of physical property with fix-and-flip, acquire, develop, and rent properties after executing sales contracts.
The unique aspect of wholesaling is that for the investor, you get into an agreement for a transaction with a seller and then acquire a new buyer to take over the contract at a higher rate. To safeguard the trade, the investor would agree with parties under a wholesale real estate contract allowing the investor to act as an intermediary.
And if you’re wondering is wholesaling real estate legal in Virginia, the answer is yes, wholesaling is legal. To get involved with wholesaling, an investor would want to find a home below market value and be certain to secure a new buyer quickly.
Gold and Precious Metals
Gold and other precious metals are another long-term investment opportunity. These precious metals appreciate over time and are typically more valuable 5-10 years later than when they were purchased, making them an incredible way to hedge against inflation.
Disclaimer: This content does not necessarily represent the views of IWB.