Investing is the secret sauce that separates the extremely rich. It doesn’t make any difference how much you make. Your decision to either invest your money wisely or leave it in a regular account, is what will determine just how much it grows with time, and whether or not you can eventually consider yourself to be “wealthy.”
Exploring the world of alternative investments can be daunting, but fortunately there’s many alternative investment opportunities that can be taken advantage of if you’re not looking for your cash to sit in a savings account.
Investing is something that everyone should consider once they start to build up a certain amount of cash in the bank. If you let it sit in an ISA or savings account, you’ll be making miniscule interest when you could be increasing its value by a lot more.
But then again, putting money into a savings account is likely to offer feeble returns right – especially with interest rates being so low. In many cases, savings accounts are able to offer little more than regular checking accounts, making the exercise almost pointless. If you have a regular amount of savings, then these accounts offer very little in return. And if you have enough money to make a saving’s account worthwhile, then you’d be wasting thousands by not putting it somewhere more lucrative.
The other option of course is to create a proper investment portfolio of stocks and shares – spending thousands of dollars to back specific companies, or paying into a hedge fund that can do that for you. But investing in stocks and shares is a frightening prospect for many people who aren’t familiar with investing or trading, and owing to the current uncertainty in the market, it might not even be a wholly wise decision right now.
So, what other options do you have?
Why Invest in Gold and Other Physical Assets?
One of the best “alternative investments” is to invest in physical assets like gold…
Of course, financial assets include things like stocks, shares or bonds, while physical assets are things like real-estate or gold bullion.
In times of economic hardship, financial assets will suffer as a result of unstable markets and volatile currencies. Some physical assets suffer too – real estate being a prime example.
But one asset that remains reliable even in the face of recession, is gold bullion. This is a very popular choice among people who want to keep their investments safe and let them grow slowly and steadily (i.e. the average Joe) but it’s also a great option for people who are right now predicting a severe economic crisis.
But it’s not just gold that you need to consider. The same also goes for other precious metals like silver and platinum. In fact, precious metals will often actually increase in value even as other assets struggle. So, can any of these options give gold a run for its money?
Gold v. Silver
Many articles will focus purely on gold investments and generally this is the more popular option. However, investing in silver also has its own unique benefits1.
In particular, silver has a comparatively lower value per unit than other precious metals. What this means is that you can afford to invest in silver even if you don’t have as much capital to invest. This in turn means that silver is much more accessible for individual investors.
If you invest the same amount of money into silver as you would for gold, this then also gives you more options regarding the way you want to use it. Essentially you will be able to sell it off in smaller units allowing you to sell/keep more precise percentages of your investment.
It’s also worth bearing in mind that the values of both gold and silver do fluctuate from time to time. Having both can give you a more diverse portfolio which ultimately is safer than keeping all your eggs in one basket as it were. It also allows you to take advantage of changes the value of either. This is a concept that anyone who has invested in stocks and shares will be familiar with.
Platinum and Palladium
Then you have the option of platinum and palladium. Things are getting complicated!
Platinum of course is a precious metal that is highly practical (unlike gold which is soft, heavy and not at all conductive). It is commonly used for designer jewelry but also in all manner of other applications – including in the automobile industry. The popularity of platinum is largely due to its resilience and it’s very hard to scratch it. Powdered platinum is meanwhile used as a catalyst in the ignition of your car!
Palladium meanwhile is part of the platinum group but is slightly different. It is commonly used as an alloy along with platinum in the jewelry business and it is often seen as a good low-cost alternative. Both options are popular among investors owing to their rarity and their usefulness. Bullion is often available in 10-ounce bars with some beautiful designs.
Palladium is currently considered to be a hot prospect, poised to grow quickly over the coming years2.
What Should You Invest In?
So now the big question… which of these wins?
Well, if you were only to invest in one precious metal, gold would be advisable for those with the money. Why? Because it is the most valuable and it is highly rare. It’s also what our money is actually based on. The supply is the least likely to change and this also makes it the most stable option.
If you don’t have enough money to buy gold though, silver might be a better entry point and a good way to start out with investing in precious metals.
Best of all though? Diversify your portfolio with both types of previous metal! And while you’re at it, why don’t you also throw in a little platinum and palladium? Especially seeing as these are the two metals that are most likely to see their value go up as demand increases.
And then you can start thinking even further outside the box. Why not invest in some bitcoin just to mix things up? How about art and wine?
Diversity is the spice of a good investment strategy!
- Gold vs. Silver: The 5 Differences That Matter Most to Investors
- Palladium Outlook 2020: Metal of the Year Still Poised to Grow