Until recently, due to federal regulations and persistent gatekeeping on Wall Street, non-accredited investors had very few options when it came to investing outside of the traditional stock market. Fortunately, thanks to the federal government's amendment of the definition of an accredited investor, and unprecedented access to opportunities provided by online platforms such as Yieldstreet, investors of all backgrounds and experience levels now have plenty of ways to invest outside of traditional markets.
Whether you're looking for a short-term gain or hoping to generate passive income to fund your retirement, here are just a few ways to invest beyond the stock market.
Peer to Peer Lending (P2P) - Peer to peer lending, or P2P, is an increasingly popular investment vehicle, allowing investors to generate passive income by providing interest-earning loans to individuals and businesses. It is a fast-growing industry, and platforms like Upstart and Lending Point are incredibly intuitive and easy to get started on. P2P lending can serve as a great alternative to traditional passive income strategies, and provide higher rates of return than similar investments. There are, of course, a few risks, such as a borrower defaulting on payments, or a loan being paid off earlier than expected, resulting in a return that might be lower than initially expected.
Cryptocurrency - Cryptocurrency has always been a divisive topic, but the incredible long-term appreciation of an asset like Bitcoin, as well as the growing interest and involvement of institutional investors has made it hard to overlook as an asset class. While investing in crypto was previously a complicated endeavor, requiring the use of an encrypted browser and a willingness to learn how to navigate decentralized exchanges (DEXs), platforms like Binance and Gemini have greatly simplified the process, making buying, selling, and even staking cryptocurrencies for passive income easier than ever. Investors need to remember, however, that buying cryptocurrency is still a speculative and extremely high-risk investment, and those looking to test the waters should never invest more money than they are prepared to lose.
Multi-Asset Funds - Any successful investor will tell you that portfolio diversification, or spreading your exposure across multiple asset classes, is an absolute must in order to maximize your overall returns. But diversification is also difficult and requires a level of knowledge, experience, and insight into market trends that most non-accredited investors simply don't have. This is where an alternative investment vehicle like Yieldstreet's Prism Fund comes in; rather than attempting to build a diversified portfolio from scratch with little to no investment experience, investors can buy into a professionally managed fund containing multiple asset classes including fine art, consumer financing, and real estate. In addition to each asset within the fund targeting yields between 8-13%, investors can join the fund and begin generating returns for an initial investment as low as $500.
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Original Source: How to Invest Outside the Stock Market