If you want to become an investor, there are plenty of business opportunities that can generate attractive returns, teach you something, and allow you to diversify your portfolio. If you’re new to the world of investing, however, knowing where to start can be daunting. While many people invest in the stock market, 10%ers don’t just buy stocks and watch them go up and down.
Your 10% is the place where you look to get involved and make something happen - you’re not operating on remote control. That’s why alternative investments - i.e. tangible and intangible assets that are not stocks and bonds - can make sense for your 10%.
Remember: regardless of the type of alternative investment you pick, make sure that it fits your needs and interests as a 10%-er, and don't forget to conduct a thorough due diligence process before committing any money to your new investment.
Below, I’ll show you some of the most popular alternative investments for 10% Entrepreneurs and offer some advice on how to make them work for you.
First up, I have an investment that can bring you big rewards if you have a good eye for talent and trends. Investing in a piece of art goes beyond looking forward to when the next Sotheby’s auction takes place, unless you can fit their prices within your 10% limit.
Investing in art has two cardinal rules: do plenty of research and get ready to play for the long run. Research will get you more acquainted with the art styles most likely to increase in value 5 to 10 years from now. This will also make you less likely to fall victim to a scam, which is something that can be quite common in the art world, sadly.
While it may sound like common sense, something else to consider is the aesthetic value you give to the piece. You don’t want to invest your 10% in a piece you don’t really like. At the end of the day, you should buy what you like so that you’ll be happy no matter what happens to the price.
Thinking about a more intoxicating type of investment? If you’re a wine aficionado, buying the right bottles is a good way to dive into it, and make profits in the long term.
As with art, when it comes to wine you need to acquaint yourself with the most reliable merchants, so you can access the best vintage you can afford. Also, keeping your bottles well-preserved is essential to their value. Don’t even think about storing them next to your regular wine collection, lest you risk drinking it away on a whim. It’s better to invest in a regulated warehouse that will maintain the precious wine under the right temperature conditions.
This third type is a no-brainer for 10% Entrepreneurs. As an Angel, you invest 10% of your capital to support the development of companies and entrepreneurial ventures.
Picking the right company to invest into is all about following a clear process of due diligence. This is true whether you’re using your 10% to invest in a friend’s app or you are perusing Angel groups for a business that catches your eye,
To read about the three questions you need to ask yourself before investing click here.
The last one on the list is probably the riskiest investment of all, but it has been all over the news in the past few months, due to its exponential value growth. Indeed, as I write these lines, Jamie Dimon, the big boss of JP Morgan, just slammed Bitcoin calling it a fraud
Whether the recent claims that a cryptocurrency bubble is on the horizon are legit or not, it’s true that many have used cryptocurrencies like bitcoin it as a source of alternative investments since Bitcoin’s debut in 2009.
People are making money and you may as well, but never forget that you should never invest in something that you don’t fundamentally understand. If you’re only investing because you have FOMO, then steer clear. I have.
Alternative investments can represent great opportunities to achieve the diversification and ownership you aim for as a 10% Entrepreneur. The goal, as always is not to put your eggs in one basket within the basket, but to pick investments that are right for you to guarantee a steady flow of returns.
Do you have any questions about alternative investments? What other types of investments you’d like to learn about?
About the Author
Hi! My name is María Virginia Rodríguez. I’m a journalist and content writer, passionate about communications, social media and our fast-paced world. I’m also part of Patrick’s 10% team, helping him connect with other like-minded 10%-ers around the world.
Follow me around in my adventures by visiting my about.me page.