Australians might be obsessed with property, but it’s not the only way to invest your money. The team at Equity Mates outlines some alternative investment avenues you really should consider.
You don’t have to be a genius to make money from investments.
When it comes to investing, Australia is a very bricks and mortar country, meaning we love property. It’s all the rage, and don’t get me wrong, historically it’s been a very rewarding form of investment. But affording a house is a monumental task, especially if you’re living in the major cities. Right now, the median house price in Sydney is $1,410,133, so investing in property takes a lot of hard savings, and a hefty bank loan!
Alternative investment avenues can maximise returns
The good news is if you’re just at the beginning of your investing journey, or you have some cash handy that you’d like to put to work, there are a number of alternative investment avenues you can use to maximise your returns, and that don’t require too much time or energy.
Before we start looking through them, it’s important to remember that with any investment, consistency and patience goes a long way. You need to determine how much you can afford to invest and then set aside that amount each week, or fortnight or month. Then consistently add to your investment avenues. That way you’ll see the effects of compounding over the years and BOOM, before you know it you’ll have a nice little kitty. So remember:
- be patient
- be consistent
- always put something away, even if it’s $5, it’s better than nothing
Now, let’s have a look at some of the cool options available.
Share investment with $0 brokerage
Stake is the simplest way to trade stocks in the US. The US markets are so much bigger than Australia’s and they offer plenty of opportunity to invest. Some of the worlds biggest companies are from the US – Facebook, Google and Amazon, for example. Stake offers FREE brokerage, so it makes trading in and out of stocks very easy and super cheap.
Raiz, formerly known as Acorns, is a fantastic app that you should download right now. It makes investing SO easy and before you know it you’ll have accrued $1000 bucks without even doing anything!
Raiz is a micro-investing app that connects with your card and for every purchase it rounds up to the nearest dollar and invests those cents. For example, if you were to buy a coffee for $3.50, it will round to $4 and invest $0.50 for you. It doesn’t seem like a lot but over time it all adds up. You get to choose the level of risk you want to invest – conservative through to aggressive – and can see exactly what shares and commodities they’re investing in. Download it now!
More options here: How to get started micro-investing and why you’ll want to
Fractional property investment
There’s your standard property investing that most Aussies are interested in saving for, and there’s fractional property investing. It allows you to invest in a small part of a property, rather than having to buy the entire property yourself.
Fractional property investors usually don’t hold title to the property. Instead, a company or trust is created that holds the property, and investors then invest in the company or trust. One company that allows you to invest this way is BrickX.
For those who want to get into the property market but can’t afford to buy a house (who can there days?!), BrickX is the solution for you. BrickX allows you to by portions of a house, through a cool app. They buy a house, in say Sydney, and then split that house into 10,000 ‘bricks’ which you can buy.
If the house is rented out, you will get a share of the rental income, and then when it’s sold, you’ll get a split of the profits depending on how many bricks you have. You can also sell you bricks to someone else. Pretty cool, hey?
Interest rates on savings accounts in the banks these days are pretty pathetic, and it’s almost a waste to have large amounts of cash sitting in there doing nothing. One opportunity is to sign-up to a peer-to-peer lending business. You can give them your money, and they will lend it to someone who needs a short-term loan, and your return for doing so is a nice interest payment.
Of course this comes with risk, because not 100% of loans get paid back, but a lot of checks are done in the process to ensure who you’re lending to is more than likely to pay it all back.
An Australian company that does peer-to-peer lending is SocietyOne. You can lend anywhere between $5 and $50K and there are no ongoing fees. You’ll get an individual interest rate based on a your credit score history. Incidentally, making an enquiry with SocietyOne won’t affect your credit score (which is not the case with some traditional lenders).
Keep exploring alternative investment avenues
These are just a few of our favourite alternative investment avenues that put your money to work. There are many more out there and we encourage you to really have a good look around! Putting money to work for you is the best thing you can do.