Stocks and bonds are among the most prevalent investment assets of today, but they are also just the tip of the iceberg. There are some lucrative non-conventional options that are a far cry from the get-rich-quick scams. So, it is time to think outside the box and diversify the streams of income. As with any investment, planning well ahead of time is the key to gaining the much-needed peace of mind. In other words, you need to get smart with your asset allocation and you will minimize volatility exposure.
That way, you will be able to tackle any unexpected expenses and emergencies and ensure prosperity well into the old age.
Single Premium Immediate Annuities (SPIAs)
This investment vehicle is geared towards retirees seeking nothing short of consistent returns. Namely, SPIAs generate a steady flow of income over the lifespan of an annuity. That is why some experts compare them to life insurance policies. What is more, the payments kick in right off the bat, giving an instant liquidity boost. It is important to note, though, that interest rates are fixed and remain untouched by inflation. Also, the payments seize at death, which could put some people off.
Series I Bonds
Due to the low risk associated with them, Treasury bonds are a go-to choice of securities for retirees. Many of them don’t know, however, that Series I Bonds offer similar benefits. There are no coupon and interest payouts throughout the year, but the investment itself is insulated from the inflation. This is a great thing for those counting on a fixed income and people willing to have money set aside and sitting for a while. The prices of these bonds vary wildly, from $25 to $10,000.
Digital coins are one of the newest asset classes to hit the big stage, but they certainly came with a big bang. Albeit notoriously volatile, the cryptocurrency ecosystem is already maturing and becoming more regulated. For instance, one can now invest in Bitcoins in a well-structured manner, via self-directed IRA and financial instruments like futures. Naturally, higher risks are linked to greater rewards. The trick is not to succumb to panic in the wake of twists and turns and play the long-term game.
Precious metals have always been darlings of investors. But, platinum often gets overlooked, even though it is rarer than gold and has its annual global supply always devoured by the demand. It is sold in the form of bars, but it is also possible to enter the platinum futures market or take on a platinum index. Just bear in mind that the price of platinum is more volatile, which can be actually enticing for those who don’t mind a bit of risk and hunt for opulent rewards.
Real Estate Investment Trusts (REITs)
Next, we have one of the most liquid investment tools. REITs represent companies or other organizations that own and manage various income-producing properties, such as mortgages, jails, and amusement parks. They essentially add a new asset class to the portfolio and give rise to its better diversification, allowing upcoming retirees to make headways into the real estate market. The returns are consistent because they stem from rents that REITs collect.
Those on the doorsteps on retirement are probably not looking to run a business anymore. One nice alternative is to own a part of someone else’s company. There is no shortage of startups that emit shares via crowdfunding sites in order to obtain capital. If you manage to find promising businesses with high growth potential, their shares could pay immense dividends. You can start with a few hundred dollars and work your way up in this booming landscape.
Your future is now
In this day and age, it is worth looking beyond standard stocks and financial instruments. More and more investors across the globe are turning to alternative sources. But, before you jump on the bandwagon, come up with a strategy and consult a financial advisor. Your choices depend on your financial goals, tolerance to risk, and means (how much money you piled up). In any event, you want to measure twice and cut once. Build a rock-solid investment portfolio and banish the fear of not having enough money to live comfortably after leaving your 9-5.