Whether you look upon investing as a blood sport or safety net, a smorgasbord of investment types await your inspection. Some are predictable and familiar; others suit the fancy of folks preferring offbeat or unique paths to financial security. Whatever your personal investment style may be, achieve your goals by diversifying, so if something doesn’t pan out, the others can carry you comfortably into the future.
1. Bank Accounts
Contemporary bank accounts are a far cry from the past, where high interest rates and premiums like pots and casseroles awaited faithful depositors. Low interest rates for “passbook” accounts notwithstanding, you can still put your investment funds into higher-yield certificates of deposit and wait out modest profits at maturity.
2. Real Estate
Capitalize on the smallest cash investment when there’s a glut of vacant real estate resulting from foreclosures and distressed properties, particularly if you can afford to wait for a market recovery. Double your chances of a profit taking by flipping homes–adding sweat equity to your investment by rehabbing holdings–and this investment could also turn into a career.
3. The Stock Market
Put on a seat belt if you plan to ride. Make friends with a broker to collaborate on buys or manage stocks on your own by becoming an online trading master. Specialize by dabbling only in IPOs, pick one industry, fill your portfolio with blue chip stocks like AT&T, Pfizer and IBM or dabble in junk stocks. Not sure which road to take? Follow the advice of “Wall Street Journal” editors and employ a dartboard!
4. Gold and Silver
Invest in gold and/or silver if you like history with your investments. There are more silver than gold deposits on Earth, which could account for value differentials. Choose just one precious metal or mix it up. Silver investing guru David Morgan calls this “the world’s money of last resort.” He recommends limiting silver and futures to 10 percent of a portfolio. Buy actual bullion bars and coins of the realm, not jewelry and commemorative coins, if gold is your preference.
5. Mother Earth
Investing in Mother Earth makes sense, but this isn’t for the risk-adverse. Petroleum engineer Kenny DuBose explores pros and cons associated with this type of investment on the Geology.com website. Mechanical risks, finite reserves, an iffy commodities market and luck all come into play. “Reasoned forecasts are the best you can do unless a price hedge has been put in place,” he says.
6. Life Insurance
Safe and steady as a savings account, whole life–not term–insurance is a good bet if you’re wealthy. That stated, investment gurus like Suze Orman and Dave Ramsey question the wisdom of insurance over other options. Affordable premiums and tax breaks make this an ideal choice if you’re worth over $5 million and don’t want your heirs to be saddled with taxes when you’re gone.
Buy U.S. Savings Bonds if you crave simplicity, early maturity, dislike paying commissions and want to shelter up to $10,000 per year. Buy them from banks or the website treasurydirect.gov. Step it up by investing in municipal bonds–paper floated to meet state or local government obligations. There’s no federal tax associated with munis; some states even give investors a pass on state tax. That said, take Steve Forbes’ advice and check out the “Forbes Moocher Ratio” before you buy.
Venture capitalism isn’t reserved for the wealthy. Think about investing in business start-ups. Assist entrepreneurs by underwriting them on your own or with a consortium of other investors, but only after you apply due diligence by researching everything from the start-up’s marketing, product sourcing and competition to the people you plan to support with your investment bucks.
When the John and Catherine T. MacArthur Foundation started giving “genius grants” in the mid-1980s, they joined benefactors stretching back to the European royalty supporting the world’s Michaelangelos and Tintorettos. If you find the next Steve Jobs or Bill Gates, invest directly in their future. Don’t know where to start? Visit peer-to-peer lending websites like Prosper.com.
10. Go Abroad
Unless Congress acts, capital gains taxes will shoot through the proverbial roof in 2013, so you may wish to add an offbeat investment to your portfolio if you decide not to avoid taxes by hiding money in the Caymans. Forbes’ analysts suggest overseas prospecting for products like China Life Insurance or China Mobile if you’re fed up with the domestic investing scene.