Investing doesn’t have to mean Wall Street, stocks, or bonds. There are several creative ways to invest your money, many of which are easier to understand than a traditional investment portfolio. They’re great ways to diversify your portfolio (if you need a business reason), but they’re also just more fun.
Peer-to-peer lending sites allow you to lend small sums of money to borrowers. Many programs offer a 10% or higher return on investment. You put up a set sum of money to invest and then a qualified lender borrows the money. Terms of the loans vary, but they’re all short-term. Sites like Prosper.com take care of checking the borrower’s credit eligibility for you, so you have worry-free lending.
Unlike buying faceless stocks, peer-to-peer lending sites let you help out an actual person. By lending them money, you may be helping someone consolidate their debt to make it more manageable or you may be providing start-up capital for their business. Either way, you’re changing someone’s life. Not bad, eh?
Tax Lien Investing
When taxes go unpaid, the IRS can put a lien on a property. Local governments will then sell those liens as tax lien certificates. Tax lien investing gives a higher return that traditional savings accounts and there’s the (albeit slim) chance of gaining real estate as repayment.
To get started investing in tax lien certificates, call your surrounding county offices to see if they offer them. Find out anything else you can about how you go about taking over these liens. Then, research the properties tied to the liens before you do anything else. The rule of thumb is that the property should be worth quite a bit more than the lien! This increases the likelihood that the property owner will pay the lien, but if they don’t, then you have a valuable property to sell.
This is the type of investment that is the hardest to predict. The return depends completely on variables! Your best bet is to choose a type of item in which you have some level of expertise so you’ll be able to identify the most valuable items to purchase. Items you could consider include:
- rare records
- comic books
- antique toys
- action figures
Sites like eBay make it easier than ever to check the current value of collectibles, either before you buy them or as you’re hoping that they appreciate in value.