An investment is defined as “an asset or item that is purchased with the hope that it will generate income or appreciate in the future.”
But there are many ways to invest, some of which you may not know about.
Let’s explore.
1. Invest with financial advice
While it can sound a bit scary — why does the word ‘broker’ have the word ‘broke’ in it? — getting a professional on board to support you through your investment journey could be beneficial. After all, it’s literally their job to help you achieve your investment objectives, and they should be able to explain things to you, so it’s usually a little less overwhelming.
2. Invest in real estate
Real estate is a popular one. It’s nice and understandable, and people generally feel safer if they own a home. However, it can be a difficult market to break into, and even once you’ve got a deposit down on a place, a mortgage is a long-term commitment. To get into real estate investment, you could also consider investing in a listed REIT (Real Estate Investment Trust), which is similar to buying stocks. However, much like with stocks, the value of a REIT is prone to fluctuations.
3. Invest in P2P lending
Peer-to-peer lending platforms essentially play matchmaker between people who have money and people who need money. It’s designed to allow people to get loans without having to involve the banks. Investors earn money through the interest paid by the borrowers, while the platform itself usually takes fees from both sides too.
4. Invest through your super
There are several different ways you can contribute to your super, some of which may come with certain tax benefits. At the end of the day, whether you put that money in pre or post-tax, it’s still going to be invested by your super fund and slowly grow over the years. Don’t forget: you can have a say in your super investment mix, and you can usually choose investment options with higher or lower risk (ideally with higher and lower returns, respectively).
5. Invest with an app
This may be a great option for people who are just starting out, people who only want to invest small amounts, or people who find the prospect of the first few options on this list a bit overwhelming. There are a few different types of investing apps out there (including us of course), and they’re usually extremely simple to set up and get started.
6. ‘Invest’ by paying off debt
Okay, so this one probably doesn't really sound like an investment but think of it like this: if you have a high-interest loan draining your finances, paying it off quickly is kind of like ‘earning’ that same amount elsewhere.
Plus, you know exactly what you’ll get back through avoiding interest, and you won’t have to pay tax on your return.
7. Invest in gold
Investing in a precious metal such as gold is sometimes used as a method to hedge against inflation. No, it doesn’t mean you have to physically buy gold ingots and store them under your bed. You can gain exposure to precious metals through products such as exchange traded funds (or ETFs), mining stocks, and gold receipts.
8. Invest in someone else’s dream
While you might not have the desire to start your own business, you might consider investing in someone else’s. Providing a budding business with the investment capital they need to expand — and taking part-ownership, rather than simply loaning money to the business — can pay off handsomely down the track. Crowdfunding can be one way to get exposure to these kinds of businesses.
9. Other things you could invest in
Aside from property and financial products, you can also invest in things like art, wine, antiques, rare coins, and cryptocurrency. If you’re considering any of these options, be aware that it can be extremely difficult to identify what will appreciate and what won’t, even if you have a deep knowledge of the industry.
