If you’re just starting your investment journey, you may hesitate to invest in abstract securities like stocks and bonds. However, investments don’t just end with these securities.
Tangible assets also offer reliable investment options. Sometimes, they even offer higher returns. These securities are good for building investment confidence in beginners since they can see and touch their investment. Let’s consider some options you can explore:
1. Real Estate
Real estate is one of the oldest investment strategies for earning passive income. It involves investing in physical properties or property-related securities. Many ways exist to invest in real estate. Consider some popular methods:
Owning Rental Properties
This investment involves buying or building a house, usually a multifamily apartment, for rental purposes. As an investor, you gain returns when your tenants pay monthly or annual rent. Your rental property could also be a piece of land or a shop.
While this is an excellent investment for cyclic passive income, rental properties often incur operating costs and attention. You can only truly enjoy passive income when you hire a property manager, which eats into your potential income.
Flipping Properties
Property flipping involves buying a real estate property, improving it, and selling it for profit. Usually, you’ll buy a property in poor condition but with good potential, and improve it to sell at a higher price.
While this option requires technical expertise, you shouldn’t do it alone. To pursue this investment strategy, you can build a team of experts, including property surveyors and building contractors. Many simpler real estate investment strategies exist, even for limited capital investors. For instance, you could invest in real estate crowdfunding or real estate investment trusts (REIT).
2. Precious Metals
Precious metals like gold, silver, and copper are excellent in holding value and can appreciate significantly over time. Besides their role in storing value, these metals have practical applications for their holders, making them good tangible investment assets.
These durable metals have wide industrial and fashion applications. They also have financial applications, where they are used as a currency. Thus, they are some of the most popular physical assets to invest in. For example, the market determines the value and price of gold daily. However, it is stable because the laws of demand and supply do not affect its price.
You can get gold for investment in many ways. Look for jewelry, gold bars, or the American gold eagle coin for sale. Buying these can keep them as your investment. If you don’t want to keep your asset on hand, you also invest in gold on the stock market through exchange-traded funds (ETFs). Unlike gold, silver’s value fluctuates more frequently. That is because of its higher market demand due to wider industrial applications.
3. Gemstones
Like precious metals, gemstones are reliable stores of value. They also appreciate well over time, making them good tangible investment assets for stone lovers. Additionally, these stones are compact and easy to store. You can easily travel with your stone investments without attracting attention.
Diamonds, especially colored ones, are the most popular gemstones for investment. However, emeralds, rubies, and sapphires hold much more value. Investing in gemstones is a good option for fashion lovers because it allows them to satisfy their fashion needs while creating and saving wealth.
4. Oil
Oil is popularly called black gold because of its market value. The entire global economy runs on this asset, making it a reliable, tangible asset for beginners. While oil price depends on demand and supply, regulatory boards ensure relative stability. If you’re just starting your investment journey and looking for a profitable long-term physical investment, invest in crude oil.
5. Automobiles
Generally, all automobiles are subject to depreciation. They lose value with each passing year and continuous usage. However, this is not true with classic and vintage automobiles, especially cars. These vehicles age well, increasing in value with proper care. If you have a flair for cars and automobiles, consider investing in the classics to build and preserve wealth for the long term.
Endnote
Intangible assets like bonds and stocks are some of the most popular securities investors pursue. However, young investors who are still building confidence in the market can benefit from investing in physical assets. If you’re in this category, consider investing in real estate, precious metals, gemstones, or oil to start your investment journey.