Investing brings with it great potential for financial growth, but it also carries built-in risk that the investor must be aware of and manage well. The most basic and crucial lesson you will ever learn in managing investment risk is the importance of “diversifying your portfolio.” This simply means spreading out your wealth to a variety of investment categories so that no one type of investment can do too much damage to your portfolio’s value in the event that it suddenly tanks. Here are three interesting ways to invest your money and round out your portfolio.
For some people, there’s almost nothing more personal than the music they listen to, and there’s no better way to invest in that music than buying royalty shares. Investing in music royalty shares essentially means you are purchasing one or more shares of the royalties generated by a given song (which is different than purchasing the rights to the song itself). Royalties for the song (or songs) you’ve invested in are generated over several weeks and months through its use on streaming apps and other platforms, and then those royalties are divided up and paid periodically to the investors by whatever broker they went through to buy their shares in the royalty stream. Investing in these royalties can be a great way to add a unique (and even personal) touch to your investment portfolio, and the returns can be similar to those yielded by investment in securities like bonds.
Cryptocurrency might immediately remind you of risk, and therefore it can be difficult for some to be willing to invest any money in it. But while it is certainly true that most cryptocurrencies experience a high level of volatility, they also offer the potential to skyrocket in value, especially because of their growth in popularity and the continued interest in them that even larger financial institutions continue to show. Cryptocurrency is also tied together with a technology called “blockchain” that has great potential in itself for growth over time as it is further developed and used.
Investing in art gives you a unique opportunity to really enjoy your investment in a tangible way. Art has the potential to hold value and increase in value over the long term, and in the meantime, it can freshen up and enhance your home or office for your own and others’ enjoyment. You can generally expect a return on your art investment similar to what bond investments would yield. But again, it’s critical not to over-invest in art (or any other aspect of your overall portfolio). International banker Julio Herrera Velutini writes that “it’s best to build a diverse, well-rounded portfolio of investments, with art accounting for just a small percentage.” Also, keep in mind that selling art can take more time than selling stock or other investments.
There are plenty of creative and fulfilling ways to plant your hard-earned money and see it grow over time, and these three unique opportunities can help get you started rounding out your investment portfolio. Don’t let fear or laziness get in the way of experiencing the joy of investing; get started today!