There are certain steps that everyone should take to establish a solid portfolio. Start by seeking out safe and secure investments that can provide a degree of stability.
Mutual funds, index funds, bonds, and CDs are common forms of investing that can accomplish this. They don’t provide rapid or high-value returns, but they tend to slowly increase while providing a floor for your portfolio.
Once you have these basics established, it’s time to think bigger. You want to find higher-risk, higher-reward investment opportunities that can lead to greater profits over time. Are you looking for ways to build your wealth, take advantage of opportunities, and still stay diversified? If so, here are a few innovative investments to consider as you seek to grow your portfolio.
Buy real estate in new ways.
Real estate is an age-old investment portfolio option.
Even though buying, renting, and selling properties is a famous form of investing, the ability to do so effectively remains elusive for many investors. Often logistical complexities, a lack of industry knowledge, and limited resources get in the way of taking advantage of the many real estate investment opportunities that can arise over time.
The good news for investors with limited wealth is that there are new technological tools that are breaking down the barriers keeping them from those larger, more profitable real estate gains.
Arrived Homes is one example of this. The financial investment tool allows investors to purchase small, individual shares of a residential property. This enables them to tap into proportionate rental income and property appreciation based on the number of shares they own.
RedSwan is another option for more institutional real estate investors. The forward-thinking investment marketplace uses blockchain real estate to make the ownership of massive (and profitable) commercial real properties accessible to smaller investors. In essence, this tokenized real estate divides the ownership of multi-million dollar properties into shares that you can purchase for as little as $1,000 dollars.
Whether it’s investing hundreds of dollars in a rental or thousands in a skyscraper, the most lucrative portion of the real estate sector has become an option for smaller investors.
Approach crypto thoughtfully.
It’s amazing how quickly the concept of investing in cryptocurrency has become both mainstream and cliche. And yet, there are still many ways that this sector of the economy offers a serious and innovative way to diversify risk and grow wealth.
The important thing is that investors go into the process with the right mindset. Rather than treating cryptocurrency and its blockchain-adjacent options (like NFTs) as get-rich-quick schemes, you need to see this as a long-term investment. You aren’t scamming the system or short-cutting the wealth creation process. You’re investing in something with a real opportunity to increase in value when given time.
Try to view cryptocurrency in the same light as collecting antiques, rare items, or fine art. These are acceptable investment options when they’re done in moderation as part of a balanced portfolio.
Start by building up a base of popular, low-risk cryptos, like Bitcoin and Ethereum. From there, add unique, newer coins with higher potential into the mix. Just make sure to do your research before investing.
One key filter to use is considering the function or purpose of each coin. Utility is critical with crypto. For instance, something like Dogecoin fluctuates with the whims of the public. However, a coin like MANA serves a legitimate function as part of the future of the metaverse (via the metaverse brand Decentraland) and has enormous potential. Just remember, you’re investing for the long term.
Invest in others.
This last suggestion may not be new — but the specific way it’s applied always requires an innovative mindset. If you have money to invest, one of the most creative ways to put it to work is through the innovation of others.
One easy way to do this is by trying peer-to-peer lending. Companies like Upstart exist to facilitate crowdsourced loans that cut out the need for an official bank or other corporate lenders. Instead, individuals invest their own resources, which others can borrow and pay back with interest.
If you’re feeling more ambitious, you can go further than basic loans by becoming an angel investor. This involves putting your investment cash directly into entrepreneurs who are turning unique ideas into bonafide realities.
Much like peer-to-peer lending, you can do this through pre-existing platforms like AngelList Venture that match lenders with vetted startups. You can also look for your own companies that you want to invest in. This can save you any overhead that a third-party platform might charge. Just keep in mind that it does take more work to discover, vet, and decide which startups to invest in.
The economy may be struggling at the moment, but that is often a good sign for investors who are willing to think outside of the box. Challenging circumstances create unique opportunities. If you’re an investor with a solid portfolio and room to grow through innovative investments, consider the options above. Pick one that suits your interests or preferred risk level, and then invest some money while things are cheap in the hopes of reaping larger profits in the future.