If you are looking at growing your money, the world of investments has no limits. While there are conventional methods of investment like fixed deposits, PFs, bonds and more, there are multiple alternative methods you may want to explore too.
Non-traditional methods can surprise you and provide outsized results. Here are a few different types of non-traditional investment methods that you should know about:
1. Digital Gold Currency
Digital Gold Currencies or DGCs, are a form of virtual or electronic currency based on gold mass units. These are representative currencies that are available for exchange for gold on demand. Linked to grams as their measurable units, DGCs are now issued by various companies.
Backed by gold reserves by private agencies, DGCs are best suited to survive during economic turmoil, considering that they are not tied to any monetary policies or economic systems of a country.
While equities can seem like a popular investment option, the truth is that only 2% of the country invests in the stock market. That’s a staggering amount of people left out of one of the most visible indicators of our economy. This is partly due to a lack of understanding of how this asset class works, and the related apprehensions that brings with itself. But in the process, you’re missing out on opportunities for solid returns on your investments – the Sensex delivered a 17% return in 2017 and 11% in 2018.
You may want to test the waters by beginning with mutual funds – generally a less volatile, and easier to manage investment than stocks and shares directly. Get yourself a demat account to begin.
3. Inflation-indexed bonds
Inflation-indexed bonds are a measure of protection taken by the RBI (Reserve Bank of India) that acts as a hedge against inflation. This investment choice is particularly to safeguard your bond holdings. While a regular security bond of the government is subjected to the risks of inflation, inflation-indexed bonds are free from it. Sold in the secondary markets, there are no set fees for this service and these bonds score higher with respect to capital protection.
Collectibles are an interesting investment choices for tangible investments. They tend to usually include vintage antiques, precious metals, numismatic and rare coins, watches or anything whose value is likely to rise in time. The key to investments in collectibles is the question of rarity – the price demanded is higher for anything exceptionally rare. However, it is extremely important to have a thorough investigation before investing. It is also vital to ensure that you are investing money that you can afford to lose, considering the volatility of prices in the market. That said, collectibles are ideal investments for failed conventional investments.
5. Real Estate
Real estate is one of the best tangible assets for money investment and growth. This is because unlike others, its price has historically consistently performed well over the long term. The three basic ways of investing in real estate are:
- Buying your own house – This is the simplest investment in real estate considering the fact that you would have to live there too. This is beneficial in increasing your ownership equity through mortgages and appreciation of the property.
- Investment in rental properties – Investments in rental properties add an extra flow to your already existing income. However, it is important to understand that rental real estate is a hand on activity, meaning this requires a larger investment in terms of down payments and market prices. Nevertheless, it is the perfect way to grow your money on a long term basis.
- Real Estate Investment Trusts or REITs – REITs are like mutual funds in the real estate market. These are trusts that are sold on known exchanges, from which you can either invest in the property or its mortgages. A new asset class that’s only just launching in India, an REIT is generally categorized into multi-unit apartments, commercial flats and retail buildings. An advantage of REITs is that they have huge tax benefits and provide higher yields too.
Investment is a slow and steady process; it is important to remember not to dip your feet into every pond. And while you’re at it – remember that it’s only prudent financial management that will enable you to invest well in the first place. If you’re short on funds, you may want to look at instant loans from EarlySalary to meet your urgent needs and maintain financial wellness.
If you’re beginning to enter the world of investment, starting with one or two traditional investments and then working your way up to the non-traditional ones is an ideal way to play this field.