Traditional asset classes are the ones that typically draw a greater amount of interest from investors.
These assets, however, particularly in the past have not resulted in the profits that many individuals
have hoped for. This is largely due to the fact that traditional assets are strongly correlated with the
stock market – an entity that has not been performing especially well in the last few years.
This is where alternative investments overtake the other well-trodden paths of investment. This is
because many of the assets and commodities involved in alternate investments are not tied to the
stock market. It also for a greater range of options when it comes to financing. Here are some of the
more profitable alternate investments:
This form of financing involves placing a large amount of your wealth into start-up organizations.
Start-ups are usually a sector that is fraught with a lot of controversy. This is because investing in
such a venture can go one of two ways. The fledgling company can become extremely successful,
assuring you a large profit or it can go bankrupt leaving you with nothing.
There is a way for this to become a high yield investment, however. This is by getting other investors
involved in the venture. This way each member only contributes a small portion to stake a claim in
the budding company. You can apply this method to the other start-up organizations that you wish
to be a part of as well.
Another unusual form of alternate financing is lending on an individual-to-individual basis. The
advantage here is that you get to choose just how much risk you are willing to take. You can
thoroughly vet the individual that you would like to provide a loan to. There are certain established
websites that will identify people that are better prospects as borrowers than others. They do this
with the help of a grading system. The yields with such a venture can be quite favorable and are
typically between 5 and 11 percent. This is an interesting opportunity for someone who wishes to
take part in an endeavor that has minimized risk and considerable returns.
Providing Private Mortgages
There are many people who would rather not go to a bank for certain loans such as a mortgage. In
these instances, the unconventional option to banks are private mortgages. You can provide
individuals with loans for their homes. In return, you receive a certain amount of interest as well as
asset as collateral.
The typical rate for such a venture is usually between 10 and 12 percent each year. The foreclosure
rate on such an investment stands at around 3 percent. This means that the yield is considerably
higher than any risk incurred. Furthermore, there is always the collateral which you can collect on.
There are many different types of non-traditional investments that can provide considerably high
yields. There is a certain amount of risks involved in such financing. A little bit of careful
consideration and planning can, however, eliminate a large portion of that risk.