Investment is always tricky. Everyone wants to watch their money grow with high returns, but with the least amount of risk. Yet, a lot of us still stick to the traditional concept of saving. Though saving money is good but putting that money to work is better. The concept of saving is smart, but investments in assets is smarter.
To know why savings can set you back in the long run, read full article here.
Holding or saving cash in the long run, can prove to be a liability, since the saving accounts and the low interest rates are not adjusted for inflation. Thus, your money’s value only depreciates over time and so does its power of purchasing.
Here is a list of 10 assets that are better than holding onto cash:
Real Estate and Land
When you start earning, there will be a bunch of people giving you free “advice” on investments. And at the top of the list will be investing in properties. Though it is an excellent idea, it may be tough to bear the brunt of monthly EMIs at the early stages of your career. Speak with a few property consultants regarding options of pooling-in. This is where a bunch of people pool in smaller amounts of money to purchase a fairly-valued property or land and share in the profits. Either renting it out or selling it when the market is hot, both allow for profits to be shared among the investors, according to the percentage of investment they put in. This is an excellent way to begin investing in real estate or land.
(Tip: The prices of agricultural land may be slightly lower than commercial land and renting it out could reap better returns in the long-term.)
Stocks, Bonds and Index Funds
Surely one of the prime modes of investments is through stocks. Purchasing stock of a trusted company (or of a promising new company, also) can prove to be of great value in the future. The growth of your investment depends on the performance of the company and its contributing power to the concerned economy.
Bonds are also a good way of keeping your savings safe. Though the returns aren’t as high as in stocks or other funds, they are relatively higher than the bank interest rates, and thus adjust well when factoring in the rising inflation.
Index Funds are the best bet when you do not have much time to research the individual performances of companies and track their return’s history. Index Funds are a pool of the best performing stocks on that index, and thus are adjusted for optimal performance. If a share isn’t performing up to the necessary standard, it is immediately replaced by the next best share in line. Thus, your investment is always performing for you, purely based on the market.
Foreign Currencies
One of the most widely accepted foreign currencies in the world is the United States Dollar. But theis major currency is subject to heavy fluctuations, depending on the nation’s trade and the general economy. Apart from that, global economy also has its toll on the fluctuations, brought on by the prices of commodities.
In such cases, currencies with lesser fluctuations, and lower inflation rates are a better option to invest in. An example would be Swiss Franc and the Euro. Investing in a foreign currency requires a fair amount of research. Carefully choose the currency depending on the economic, political and speculation surrounding the country to which it belongs.
Cryptocurrencies
With the rise of Fintech and Cryptocurrencies, it is no surprise that it is a better option than keeping money hidden under your mattress. With blockchain technology only getting cleaner and being widely adopted, digital currencies may be an excellent way of parking your money, with good returns in the coming years.
NFTs (Non-Fungible Tokens)
Another product from the world of blockchain. Also, another product which will give good returns as it keeps growing. As more people around the world adopt NFTs, its uses will diversify, thereby increasing its value. Quite similar to the value of mobile phones or the internet. Investing in NFTs and holding onto them could serve to be a great investment strategy.
Precious Metals and Gemstones
Gold and Silver have long been a popular choice for investors preferring to safeguard their savings and allowing growth over a long term. Prices of these precious metals only grow over time, given the demand and supply curve. Thus, this is an option that should never be ruled out. But there are options of other metals like platinum and rhodium which are valued higher due to their rarity.
Further, investing in gemstones is also a fair way of investing, rather than holding cash in savings. Diamonds, emeralds, rubies, and sapphires are just some of the commonly invested gemstones which see a fair increment in value over time.
Luxury Items
We have all noticed our favourite celebrities don beautiful watches and walk out of the airports with designer handbags. They are not really trying to show off their wealth. Well, not in the typical sense, at least. These luxury items are investments. Their value lies in the rarity. The luxury brands do not produce items by the masses, so the resale value of the items, even 10 years from now will only increase.
In particular, luxury watches and handbags are a good real-time investment to make and hence have made it to our list.
Art
Well, not all art sells big. Knowing the history or the story behind a particular art, and the way the story catches traction, boosts the value of the art. Whether it is paintings, murals, handicraft, or a piece of history or culture – buying art is not for the faint of heart. But similar to land and real estate, it can be purchased through a pooling of resources. Since it is a long-term investment, be sure to understand what it is you are investing into.
Vintage motors
This is a choice for those who understand which motors do not depreciate in value. Generally, motorised vehicles are a liability, such that they depreciate in value and require you to spend on maintenance. But the right kind – vintage – are indeed an asset. Once you have some experience with investing, looking at vintage cars, which aren’t made anymore, or have a popular story behind them, would be an excellent investment to make.
Raw Materials (and commodities)
Commodities market is parallel to the stock markets. Learning how to pick the right commodities to invest in, would be a real game-changer for any young investor. An example, steel is raw material to countless projects around the world, and hence will always be on the global economy’s supply and demand. Similarly, oil and natural gas have their own way of controlling a lot of product prices around the world, given their extensive use in the transportation and logistics of most products around the world.
Learning more about commodities and how the market functions, would be a major factor in deciding your investment portfolio.
Though saving for short terms is advised, that should only be done to cater to emergency funds or immediate expenses. As for the rest of your money, why not let it work for you? The biggest flex lies in making money while you sleep. And that is possible through building the right investment portfolio.
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