Investing can make you as wealthy as a Rockefeller. It’s also a versatile way to earn income. Some investors feel joy seeing the green or red stock tickers on their TV or smartphone screens. Others prefer the security of bonds. However, a growing class of investors is choosing alternative investments.
Many alternative investment types exist. What are alternative investments? How do they stack up to investing in gold? Find out as you learn how some of the top alternative investing options compare to gold in 2024.
Real Estate
A tried-and-true wealth management strategy is buying properties. Picture buying real estate as like living a real-life game of Monopoly. Buy properties, lease properties, repeat. Some feel the rush of snagging a deal on a fixer-upper home they can repair and flip for a profit. Investing in real estate can provide stable income. However, property management requires effort unless you hire property managers.
But how do real estate and gold investments differ? Both options are nearly as old as time. As gold maintains value, so does owning property. You may remember the stacks of bills piling up on your counter as the 2008 housing crisis led to an economic recession felt by millions.
You don’t need to be as wealthy as Jeff Bezos or Elon Musk to invest in real estate or gold. Instead of footing the bill for a home’s down payment and property taxes, some investors choose real estate investment trusts (REITs). Investing in a REIT means putting your money towards a company that owns, operates, or acts in a similar capacity regarding real estate that generates income.
Gold also offers low-cost points of entry. If you want to start investing in gold, purchasing gold coins is more financially feasible than buying a more expensive gold bar. Gold bars can cost upwards of $70,000.
Cryptocurrency
So many things are now digital. From shopping experiences to how people consume media, it’s clear to see that the digital revolution is in full swing. Because of that, it should come as no surprise that digital currencies called cryptocurrencies exist. Several popular cryptocurrencies include Bitcoin, Dogecoin, Ethereum, and Cardano.
In the past, central banks controlled all currency. However, cryptocurrency has no organizations or authorities overseeing its transactions. That makes crypto suitable for people who value privacy and control over their funds.
You might be asking yourself: “Why should I buy gold instead of cryptocurrency?” The main reasons are price stability and legitimacy. Historically, gold has remained at a far more stable price than Bitcoin. Investing in anything with volatile price changes can sometimes be too much for investors to deal with.
Unfortunately, the past several years have also seen news stories about altcoins turning into pump-and-dumps or complete scams. This problem doesn’t exist with a currency as stable as gold.
Collectible Items
Many investments are intangible. Intangible means untouchable things. These things have no physical presence. That’s not the case if you invest in collectibles. Collectibles come in many forms, including but not limited to:
- Trading cards
- Rare media
- Sports memorabilia
- Vehicles
- Antiques
- Art (physical and digital)
Owning collectibles can mean holding on to serious wealth, depending on the rarity and condition of what you own.
As is the case when comparing stocks vs. gold, the decision to invest in collectibles or gold comes down to your interests. Earning full-time or even extra income from buying and selling collectibles involves extensive research, which might be too much for some to keep up with.
Hedge Funds
Investing is a skill that takes considerable time and effort to master. Fortunately, depending on which one you choose, investing in hedge funds can be a relatively low-risk option. What makes hedge fund investments attractive to investors is these companies often have a history of generating a return on investment (ROI) for their clients.
An advantage of investing in hedge funds instead of gold is saving time. Instead of researching what to invest in and how much to spend, hedge fund employees make these decisions on your behalf. While this option can be advantageous, there’s no guarantee that giving money to a hedge fund will guarantee any profit.
Private Equity
Traditionally, most people invest in companies that are publicly traded. These companies operate on their respective countries’ stock markets. But public trading isn’t the only way to invest in a company’s future. You can also put your money towards private equity, which means investing in private companies not publicly listed.
Whether it’s part of an exit planning strategy or to maximize your estate’s value, private equity investing can be an ideal solution for either goal.
When comparing private equity investing vs. buying gold, it’s undeniable that the former offers more options than the latter.
Private equity investing could be a financially wise move if you’re well-versed in a business or industry. However, you also typically take on more risk by taking the private equity route. Gold has proved its value for centuries—it’s nearly impossible to find such an opportunity through investing in private companies.
P2P Lending
P2P lending connects lenders and borrowers. A company matches lenders with borrowers. Lenders can achieve a great ROI. Borrowers find financing. Everyone wins.
Peer-to-peer lending benefits borrowers because it’s often more accessible and less strict than seeking funding from a bank or other financial institution. Instead of seeing the red ink of a “REJECTED” stamp from the bank down the street, borrowers have a path towards financing.
The price of gold will always fluctuate. However, dips in gold are often minuscule compared to the costs of a few bad peer-to-peer lending investments. That said, peer-to-peer lending may also yield a higher ROI than investing in gold. Consider checking out the opportunities that peer-to-peer lending companies offer.
Closing Thoughts
Because investing involves your finances, doing your due diligence is imperative. Investing means taking on a certain amount of risk. For more help on this subject, consider speaking with a certified financial adviser. This type of investment professional can provide additional help comparing gold with alternative investment options.
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