Posted on: September 25, 2019 |
When it comes to investing for retirement, the most important thing is to feel secure. You want to make sure you’ll have enough money put away to enjoy your retirement without worry, and you also want to mitigate the risk with each of these investments. Alternative retirement investments can help you diversify and protect yourself from market volatility.
7 Alternative Retirement Investment Opportunities
1. Private Equity Fund
For many people, private equity investments seem out of reach and reserved for ultra-wealthy investors, however, private equity investments have become more accessible in recent years. Exchange-traded funds (ETFs) are financial tools that allow investment in a pool of funds and require a smaller minimum amount to start. ETFs are widely used for stocks, bonds, commodities and more, as well as private equity. You can invest in private equity ETFs with a traditional broker, or use online tools like E*TRADE.
2. Passive Income Business
A small business with minimal upkeep is a great alternative retirement investment for individuals that want to avoid market swings. A passive income business requires an initial investment and research, but minimal time; however, continue to generate returns. Ice and water vending machines are low-maintenance passive income businesses dependent only on sales, not stock activity. Place your machine in a popular area and you’ll have a steady residual income for years to come.
3. Private Equity Crowdfunding
Equity crowdfunding further democratized equity shares by allowing anyone to invest relatively small amounts in startups or established businesses. These companies aren’t publicly traded, so they operate outside of the stock market regulations. Platforms like WeFunder and LocalStake allow micro-investments as little as $250, with a variety of different investment arrangements. You might buy a share in a local brewery, or contribute to a revenue-sharing loan for an up-and-coming consumer products business.
4. Real Estate
Real estate has been a popular investment for hundreds of years. While the value of the real estate is subject to some market fluctuations, the fact that investors own tangible assets as opposed to intangible stocks or shares makes real estate a continually solid choice. Rental units, especially around universities or other areas with mobile populations, are popular alternative retirement investments that can have significant payoffs.
5. Real Estate Shares
Most people purchase a home, and/or a vacation home, leaving very little for alternative retirement investments in real estate. Real estate shares allow you to invest in property with much lower amounts and earn continuous returns. Traditionally this is done through a Vanguard real estate investment trust (REIT), however, other platforms like FundRise and RealtyMogul have expanded investment opportunities.
6. Direct Investment
If you know the owners of an up-and-coming company, or you know an entrepreneur has the skills and drive to make a lucrative business, direct investment in a local company can be a valuable alternative retirement investment. If the prospective start-up has a solid business plan, driven owners, and a marketable concept, you have a chance to make a significant return.
7. Tangible Assets
There are many tangible assets that allow you to diversify your investments and mitigate risk. Since you’ll own real goods, this often feels like a more solid, less abstract alternative retirement investment. Many different items can be good investments, including precious metals like gold and silver, antiques, even wine, and collectibles. If you already have an eye for rare items that are rising in value, this can be a lucrative and fun alternative retirement investment.
Stocks and bonds are the most common investments for retirement, however, many alternative retirement investments can help you diversify. Consider how much you feel comfortable investing, the amount of risk that makes economic sense, and what percent of your total investment this represents. With savvy investing, you can make high returns in a variety of different areas.