When most people hear “investments” they immediately think of stocks and bonds. However, there are plenty of other products and services you can buy which will show a significant return on your initial buy-in. Here are four ideas which many people initially overlook when building their portfolio.
Artwork
For those involved in the artistic community, supporting local or national artists can seem like a thankless job. However, a well-crafted piece of art, such as a painting, the original transcript of a novel, or a composition for a symphony, can also appreciate in value over the years. For instance, a Picasso painting, Les Femmes d’Algers, sold in 1997 for $31 million, then again in 2015 for nearly $180 million. And while this is an exceptional example (being one of the most expensive paintings of all time), savvy art collectors can quickly build up a priceless collection. There’s also a structured way to invest in art through art investment funds.
Retirement Plans
While retirement plans are consistently listed as one of the best long-term investments, many Americans neglect this particular aspect of their investment portfolio. Retirement plans, especially those that feature matching contributions from your employer, are literally money in the bank for when you’ll need it most. Even better, the investment is more or less guaranteed, as the matched contributions are defined from the very beginning. Meaning you’ll almost certainly see a return on your investment once you hit retirement age.
Insurance
All investments contain some aspect of risk. Whether you have to deal with a plunging stock market, health issues, or existential threats to your business, there is always a chance that something will go wrong at the worst possible time. Imagine that you bought your home 20 years ago, and the neighborhood has gotten much nicer since then. You’re planning on selling it and using the money to buy a smaller home and retire. Then, there’s a really bad storm, and a tree in your yard falls and destroys a large portion of your home. If you don’t have home insurance, your investment just became a burden that will cost at least $10,000 to fix. Insurance is your investment against the worst-case scenario, and it is an investment that becomes more and more likely to pay off as time goes on. Finding the right insurance company will save you money on rates and offer better protection for your assets and investments when it does.
Antique/Collectibles
We’ve all seen how someone can dig up a priceless treasure in their parent’s attic on Antique Roadshow. Unfortunately, chances are slim that this will happen to you by accident. However, if you go into antique collecting from an investment perspective, it is possible to make very healthy returns over the years. There are also other benefits to this strategy. Antiques and collectibles are often considered “wasting assets,” meaning they aren’t subject to many of the taxes associated with traditional investments.
While these four investments can be great additions to your portfolio, they are best acquired alongside traditional investments. Together, they can add diversity to your overall investing strategy. So whether you are putting money into home improvements, paying for home insurance, or building an impressive stock portfolio, investments of your time and money can take many forms. Finding the perfect strategy to meet your goals and minimize your risk will help you maintain financial security and make healthy long-term gains.
