With more and more young Australians being priced out of a ridiculous housing market, we can’t help but feel a little hopeless when it comes to the prospect of owning our own homes.
The Sydney market this year, although slower, is still expected to grow by 2.2%, with some suburbs forecast to soar by as much as 28%. So while seasoned investors are still frothing on these property gains, it leaves first home buys scrambling for a deposit that takes, on average, 14 years to achieve.
So if you’re left jaded by the market in its current form, much like myself, you’ll want an alternative that frees you from the binds of lifelong debt, but also makes you some money at the same time.
Of course, before you envelop yourself in a world of investment opportunities, you should first clear yourself of any debts. Credit cards, personal loans, money owed to dodgy loan sharks, whatever it is, get rid of it to maximise your investment profits.
Here are four alternatives to investing in property.
Though deemed a riskier investment than property, if you do your homework, it can make you some handsome returns on your money.
And while I don’t wanna sound like your dad or anything, I’m going to say it again to emphasise the point: DO YOUR HOMEWORK. Blindly jumping into the market can lose you big bucks, so if you want to treat it like gambling, you might as well throw it all on the roulette table. Hell, Mike Baird will even let you do it past 3am!
If you don’t know where to start, there are two great companies that will serve as killer learning tools.
Firstly, suss out Acorns, an app that will round up your spending to the nearest dollar and invest the change in one of five portfolios of your choice, depending on your appetite for risk. The more aggressive your portfolio, the more risk is involved, but with higher risk comes the opportunity for higher returns.
Acorns is great, as the investment can be as little as you like, you can see where your money is invested and will encourage you to learn more about it. A great place for any novice investor to start.
If you want to up the ante while still being cautious, have a gander at Stockspot. Known commonly as “robo-advice”, Stockspot will ask you a bunch of questions about your investment goals and inclination for risk. It will then use that information to pair your money with a managed portfolio of shares that align with your goals.
It’s a step up from Acorns, as you’ll need a minimum of $2,000 to get started, but still makes it easy for you to learn while reaping the benefits of being in the market.
Yep, art is something that people invest in, but it can be a fairly volatile market, so caution is advised if you’re thinking about joining the club.
Like the sharemarket, investing in art is best done with a certain degree of knowledge, so doing some thorough research is crucial here.
It can be pretty damn lucrative too. Anyone that bought an Andy Warhol piece for $300 can vouch for that, because now they’re worth upwards of 40 million god damn dollars!
And as a bonus, it’ll make your home look pretty schmick.
If you have the iron willpower required to not drink the delicious aged bottles of wine before they can be sold, then this can be a reasonable investment to make.
You can expect returns ranging from 6 to 15 per cent, but you’ll need to buy in bulk to make a worthwhile profit. On top of that, wine is not an easy commodity to store, as it needs to be kept at a controlled temperature and requires semi-regular maintenance.
But as there’s a service for everything these days, you can get yourself a Wine Broker to take care of everything for you.
If you can find yourself a niche, you can make money on all sorts of stuff. Cars, coins, records, toys, whatever it is, if you know a lot about it, you can invest in it.
And I stress the knowledge component of this, as you’ll need to be able to authenticate the item, negotiate buying/selling prices and identify restoration and preservation requirements.
This can be a pretty dicey way to invest your money, so unless you’re really passionate about what you’re collecting, then it’s probably best to stick to more traditional methods of investment.
If you decide it’s the right time for you to use your hard earned money to make more money, but you’re unsure of the next step, it’s best to seek financial advice before making any big decisions. Happy investing!