There are many ways different types of investments. On this blog, I mainly focus on passive investments because that is a huge part of my plan to retire early. (Essentially by building up passive investments and focusing on cash flow, I will be able to retire within the next 2 and a half years.) Yet, focusing entirely on passive investments doesn’t always highlight the different types of investments. I could bore you with the different options available to you like stock options, bonds, retirement investments, etc., but how about some non-traditional types of investments?
Looking Beyond the Traditional Types of Investments
Let’s face it. When you think of investments, your mind most likely leads to ideas like stock market, 401k’s, bonds, etc. It may just be me, but these seem to be pretty boring. There is nothing exciting about storing away a percentage of your income into a fund that you won’t touch for decades. Don’t get me wrong – it is an important aspect that everyone should be taking advantage of, but there is a reason why people get bored with their finances. These types of investments are likely to make someone go off and buy something to avoid the boredom. But, what if investing was more exciting? What if we could consider other aspects of investments that would get your blood running?
Instead of focusing on the essential types of investments – the traditional, cookie-cutter type investments – I want to come back to what I talk about a lot on this blog. Non-traditional forms of investing. The fact is that the world is changing and we have to step outside of the box to realize other areas where you can find a huge return on your investments.
Non-traditional Types of Investments
Blogs: I have written elsewhere that I think that blogs can be investments. I know many others think of investing in blogs similarly as hundreds, if not thousands, of websites are sold on a weekly basis. People are starting to understand that there is such a thing as online reality. While blogs do take effort and a time investment, I believe it is possible to hire out the many aspects of running a blog while still making a profit. If you have enough of these, why couldn’t you earn a full-time income from blogging?
Real Estate: Investing in real estate or rental properties may be more traditional, but it seems like less and less people are considering investing in real estate. In fact, it seems like people are shying away from real estate because of those few bad renter stories that ruins it for them. Yet, real estate continues to be a great idea in my mind. I look forward to investing in rental properties and am formulating my plan as we speak. I will be sure to write more about my plan to use real estate for retirement.
When you think of the different types of investments, do you think of Blogs and real estate? If my estimates are correct, I think you can see a larger return on these two areas than you can in the stock market. If this is the case, why are people not taking full advantage of these avenues? Is it just a lack of familiarity or is it the uncertainty of the return?
Good article! Stimulates the thinking around different investment vehicles. I agree that 401Ks and IRA’s (while very important), are long-term vehicles that I like to set and forget. In the near term, taxable vehicles like brokerage accounts, online income, real estate, consulting etc are nice for diversifaction. I used to own 4 rental properties and it just became too active for me. I moved to a strategy of real estate investment trust (REITs) in my portfolio that I purchase just like a stock in my brokerage account. Completely passive and nice dividend return.
Sometimes boring can be good – if you boringly (passively?) grow your 401(k) into 7 figures, I’m sure you won’t mind the lack of excitement, looking back, haha.
I think you nailed it on the other two. In the stock market, liquidity is an awesome thing. Any time the market is open you can get a perfect quote on what your stocks would sell for, if you were so inclined. Real Estate and blogs are illiquid – it takes a longer period for price discovery. While you can never be exactly sure where you stand when you own property (virtual or actual), the risk that comes with that fact might allow you to make a greater return.
I think that if you can master both virtual and real property selling (or monetizing – rent, ads…) you’re going to be in very good shape.
I am going to be investing in both these vehicles. I have started by investing in a blog, which will take a long time to appreciate or pay off, but in the mean time I truly enjoy it, which is a big part of investing. And I would like to own a rental property or rent out a room once I buy a home. But that is many years down the road so short term I intend to buy a REIT, which I love for the dividend and the exposure to real estate.
I think these are both good investments if enough research is done prior to the purchase and they are considered long term investments, especially real estate. My dad was in real estate for more than 35 years. If it is one thing that I learned from him, it is that you need to be able to hold on to the real estate until the conditions for selling are prime. We often hear about quick-flips that made tons of money but most real estate investments are long term.
How would you see something like LendingClub? Traditional or non-traditional?
As to your point that blogs are investments, a year ago I wouldn’t have understood that as even remotely possible, but I have seen enough bloggers who have sold their blogs now to see it is true.
Not there yet personally, but ever hopeful!
I think I consider both real estate and building blogs to be more of a business than an investment. Perhaps I’m splitting hairs…
I totally agree – owning blogs can be a great investment. It can also be a time waster if you don’t do it the right way.
I agree with you, both blogs and real estate can be great investments. Sure it’ll take some time, but it’s nice to see your work pay off.
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Blogging is a good investment but it could be long term so if you like blogging, you could give it a try as you wouldn’t mind waiting for the return of your investment. But if you don’t like blogging, you might end getting impatient and weary.