Ask any financial advisor how to invest money and decrease risk and they will tell you to have a diversified portfolio. Diversify with options that not only boost ROI in terms of money but the overall benefit it can provide to greater good.
Peer to Peer Lending
There are number of reasons to consider this option. First the bank has been taken out of the equation. What does this mean to you? Higher return on your investment, the added greater good benefit — the borrower is able to get the money they need at a lower rate and with less fees.
How does this decrease your risk? Lower fees to the borrow increase the likelihood of repayment. Through an organization like Lending Circle you can invest in complete portfolios, this means that your investment isn’t going towards one loan but hundreds if not thousands. If one or two loans take nose dive, you aren’t out your investment because the other loans in the portfolio plus the interest rate you are getting make the “loss” non-existent.
Before you blow this one off, think about it like this You have a credit card or two that you are making your usual payments on with a 10% interest rate. If you take the money you are looking at investing and pay off those cards it is the equivalent to earning a 10% return on another investment.
For this one to pay-off, you have to know what you are doing. Many compare investing in collectibles to buying penny stocks. Sometimes they pay off, occasionally there is a substantial pay off but for the most part people tend to lose money.
The best approach to take if you are considering this type of investment. Invest your money in something you wouldn’t mind keeping. Also, keep in mind that collectibles become the investment to have at hand when the value of the dollar is weak.
What does this require? To invest in wine you need to have the right vintages, meaning you want the wines that are highly sought after.
Similar to investing in collectibles, where you need to know what you are working with, the same holds true for wine. You need to have a temperature controlled room to keep the wine in for two reasons; to preserve the quality of the wine and you will need to store a significant quantity.
Additionally records will need to be kept that show the type of wine, date of purchase, where it was bought, wine connoisseurs will require this information when you go to sell. Believe it or not, a 15% return annually can be expected with investing in wine.
In summary, when looking at how to invest money and net a solid return, having a diversified portfolio is key. Making sure that in there are innovative investing options in that portfolio will not only decrease overall risk but will increase your return.