10 Reasonably Safe Alternative Investments


1
Real Estate
Real estate investment groups contribute money to companies that purchases large properties like condos developments.
Real estate investment groups contribute money to companies that purchases large properties like condos developments.
©iStockphoto.com/narvikk

Historically, real estate has been a very popular alternative investment. Of course, the 2008 crash in the U.S. real estate market made many nervous about investing in real estate. But with prices still extremely low, real estate can be a good investment opportunity. The three most accessible ways to invest in real estate are to buy rental property as an individual, to join a real estate investment group or to buy shares in a real estate investment trust (REIT). Buying rental property can usually provide steady, reliable income if you find the right tenants. However, there are also expenses like property taxes and general upkeep that can limit profits, as well as huge investments of time and effort.

Real estate investment groups offer a more hands-off, low-risk method of investing in real estate. A group of individual investors contributes money to a company that purchases a property (usually something like a condo development). The company manages the property in exchange for a portion of the monthly rent [source: Beattie]. Another option is the real estate investment trust (REIT). They provide extremely accessible ways for individuals to invest in real estate. An REIT is a group that invests in various real estate properties, and receives preferential tax treatment from the IRS in exchange for paying most of its income to shareholders [source: U.S. Securities and Exchange Commission]. Investors can purchase shares of REITs on public exchanges, making them one of the more liquid alternative investments. Another upside is that, like stocks, shares in REITs pay out regular dividends [source: Beattie].

Finance Planning Tips

Here are some tips to help you with generating income and planning for the future.

Presented by United Way of Greater Atlanta Powered by SunTrust Foundation

Related Articles

More Great Links

Sources

  • Beattie, Andrew. "Simple Ways to Invest in Real Estate." Investopedia. (Jan. 7, 2011)http://www.investopedia.com/articles/pf/06/realestateinvest.asp
  • Cadwalader, Wickersham and Taft LLP. "Hedge Fund Regulation Under the Dodd-Frank Wall Street Reform and Consumer Protection Act." July 20, 2010. (Jan. 7, 2011)http://www.cadwalader.com/assets/client_friend/072010_DF5.pdf
  • Cambridge Associates LLC. "Private Equity and Venture Capital Funds Closed Out First Half of 2010 With 5th Consecutive Quarter of Positive Returns, Says Cambridge Associates." Nov. 17, 2010. (Jan. 5, 2011)
  • Coin World. "Frequently Asked Questions." (Jan. 7, 2011)http://www.coinworld.com/FAQ/
  • Coin World. "U.S. Mints and Their Mint Marks." (Jan. 7, 2011)http://www.coinworld.com/newcollector/mintmarks.aspxhttp://www.marketwire.com/press-release/Private-Equity-Venture-Capital-Funds-Closed-Out-First-Half-2010-With-5th-Consecutive-1355278.htm
  • Financial Web. "Investing in Gold Coins." (Jan. 7, 2011)http://www.finweb.com/investing/investing-in-gold-coins.html
  • Fund Evaluation Group, LLC. "Investing in Hedge Funds." Winter 2007. (Jan. 5, 2011)http://www.feg.com/philosophy/documents/InvestinginHedgeFunds_000.pdf
  • Gobel, Reyna. "Investing in Fine Wine." Investopedia. (Jan. 5, 2011)http://www.investopedia.com/articles/pf/08/wine-investment.asp
  • Gross, Daniel. "Is Art a Wise Investment?" Slate. June 21, 2006. (Jan. 6, 2011)http://www.slate.com/id/2144185/
  • Investopedia. "Derivative." (Jan. 6, 2011)http://www.investopedia.com/terms/d/derivative.asp
  • Johansmeyer, Tom. "Ten Tips for Investing in Art." Luxist. June 30, 2009. (Jan. 5, 2011)http://www.luxist.com/2009/06/30/ten-tips-for-investing-in-art/
  • J.P. Turner and Company. "Managed Futures Funds." (Jan. 7, 2011)http://www.jpturner.com/products/ManagedFutures.aspx
  • Knaus, Gary. "Investing in Rare Coins." Numismatic Investments Corporation. 2006. (Jan. 7, 2011)http://www.coinforum.com/uploads/investing-coins.pdf
  • Lambert, George D. "Private Equity Opens Up for the Little Investor." Investopedia. (Jan. 7, 2011)http://www.investopedia.com/articles/mutualfund/07/private_equity.asp
  • Mendicino III, Frank. "Know the Risks When Investing in Venture Capital." Denver Business Journal. Dec. 3, 2000. (Jan. 7, 2011)http://www.bizjournals.com/denver/stories/2000/12/04/focus7.html
  • Morgan Stanley Smith Barney. "Managed Futures." (Jan. 7, 2011)https://www.morganstanleyindividual.com/investmentproducts/managedfutures/
  • National Venture Capital Association. "Frequently Asked Questions About Venture Capital." (Jan. 7, 2011)http://www.nvca.org/index.php?Itemid=147&id=119&option=com_content&view=article
  • Opdyke, Jeff. "The 5 Rules of Investing in Wine." The Sovereign Society. July 29, 2010. (Jan. 5, 2011)http://sovereignsociety.com/2010/07/29/the-5-rules-of-investing-in-wine/
  • National Guarantee Corporation. "Buffalo Nickel (1913-1938)." (Jan. 7, 2011)http://www.ngccoin.com/CoinDetail.aspx?ContentID=65&Page=3
  • Picerno, James. "5 Rules for Investing in Commodities." CBS MoneyWatch.com. Oct. 16, 2009. (Jan. 5, 2011)http://moneywatch.bnet.com/investing/article/gold-oil-and-more-5-rules-for-investing-in-commodities/353297/
  • Picerno, James. "How to Invest in Gold." CBS MoneyWatch.com. Nov. 10, 2009. (Jan. 7, 2011)http://moneywatch.bnet.com/investing/article/how-to-invest-in-gold/301604/
  • Reiss, Stephen. "Wine as an Investment." Wine Education.com. (Jan. 6, 2011)http://www.wineeducation.com/invest.html
  • Rutledge, G. Philip and Robert Bertram. "A Brief Guide to Financial Derivatives." Pennsylvania Securities Commission. February 1995. (Jan. 7, 2011)http://www.psc.state.pa.us/corpfinance/derivatives.html
  • Sherman, Lynn. "Hedge Fund Investing 101." Forbes.com. July 15, 2000. (Jan. 5, 2011)http://www.forbes.com/2000/07/15/feat.html
  • Summers, Graham. "Why Derivatives Caused the Financial Crisis." Seeking Alpha. April 12, 2010. (Jan. 6, 2011)http://seekingalpha.com/article/198197-why-derivatives-caused-financial-crisis
  • United States Securities and Exchange Commission. "Hedging Your Bets: A Heads Up on Hedge Funds and Funds of Hedge Funds." (Jan. 5, 2011)http://www.sec.gov/answers/hedge.htm
  • United States Securities and Exchange Commission. "Real Estate Investment Trusts." July 23, 2010. (Jan. 7, 2011)http://www.sec.gov/answers/reits.htm
  • Wallace, Charles. "How to Invest in Commodities, Carefully." DailyFinance.com. Dec. 22, 2010. (Jan. 5, 2011)http://www.dailyfinance.com/story/stock-picks/commodities-investing-tips-for-small-investors/19772404/
  • Wells Fargo. "A Guide to Investing in Private Equity and Private Real Estate Funds." (Jan. 6, 2011)https://www.wachovia.com/file/Private_Equity_Guide102507.pdf
  • Woliver, Robbie. "Investing in Art Takes Taste and Business Savvy." Bankrate.com. Sept. 12, 2001. (Jan. 5, 2011)http://www.bankrate.com/brm/news/investing/20010912a.asp
  • Yamazaki, Tomoko. "Hedge Funds' Returns Beat Global Equity Markets in 2010, Eurekahedge Says." Bloomberg.com. Jan. 10, 2011. (Jan. 14, 2011)http://www.bloomberg.com/news/2011-01-11/hedge-funds-returns-beat-global-equity-markets-in-2010-eurekahedge-says.html

UP NEXT

When Is It OK to Leave Kids Unequal Inheritance?

When Is It OK to Leave Kids Unequal Inheritance?

HowStuffWorks finds out if and when leaving more money to one child than the others is a good idea and how to cut down on the hurt feelings that might result.


More to Explore