Alternative Income Investments for 2022
The world of traditional finance is concentrated around three things: cash, stocks/shares, and bonds. Apart from buying these things directly, there’s an almost endless variety of ways these assets are packaged together for consumers and businesses. The packages depend on how much risk the investor wants to take, how much they have to invest, and whether they’ve got any other requirements: such as ethical investing. Of course, it wouldn’t be finance without middlemen collecting guaranteed fees from you whether your investment goes up or down.
Investors fed up with the small returns generated by traditional finance often diversify into “alternative investments”: which is, any investment that isn’t covered by the “big 3” of cash, stocks/shares and bonds. These “asset classes” include art, real estate, investing in early-stage companies (“seed investment”), and of course cryptocurrency and NFTs.
Why you should look for alternative investments in 2022
Well, you should almost certainly choose investments that aren’t likely to throw all your money down a hole, which means doing checks on whoever you give your money to.
Aside from that, the best alternative investments are liquid. That is, there are plenty of buyers and sellers, and you’re not likely to be stuck with something you can’t sell. Plus, it’s easy to get a definitive value of how much something is worth.
The best investments also trend up in value over time: this is true, for instance, for art and real estate (both of which are illiquid investments and require an expert even to get a valuation, and valuations cost money). This can be vital if you need your investment money back (though you should never invest money you think you’ll need soon – investments should always be regarded as long term).
Risk vs Reward
Every single article about investing points out that the riskier something is, the more reward it offers (and the greater the losses you might suffer).
What risks should you be worried about? Unrealistic promises, scams, market shocks and technical glitches are the top 4.
This is where your research comes in (you did do some, didn’t you?).
Within each sector, there are also safer assets offering less risk, of course. For example, Amazon is safer than Acme, Apple is safer than Risk Corp.
Investing in Cryptocurrency
Cryptocurrency is known for its volatility, and choosing the right assets to invest in is key. People can make 100% in a day if they invest in the right coin at the right time – but that’s just like picking the right roulette number, and the profit is unlikely to be driven by anything wholesome. Even the best crypto coins can have prolonged ups and downs like any market asset.
Bitcoin and Ethereum are both liquid and heavily used and are unlikely to “go to zero”, the traditional fear of crypto investors. Bitcoin trades up over the long term because of scarcity, and Ethereum trends up because more and more people will use it, especially after the forthcoming Ethereum 2.0 upgrade.
Like a port in a storm, there are also “stablecoins”. These are coins that are “pegged” to the value of a real-world asset: such as US dollars, euros, gold or silver. That means they should only be as volatile as their real-world asset.
The devil’s in the detail though: what makes that coin worth anything? Well, the ideal stablecoin is backed 1:1 with real assets owned by the company that issued the coin. That way, the coin is actually redeemable for the thing you bought. Surprising numbers of stablecoins aren’t, and that’s where research comes in… or, you can stick with the classics…
Investing with AQRU
Bitcoin, Ethereum and the USDC stablecoin family are the three main planks of the least risky crypto strategy. Combine that with the ability to earn interest, and you’ve got the AQRU crypto interest-bearing account: sign up, verify, fund, invest, and watch your funds grow (you get 10USDC to get started).
We take safety and security first but are still committed to generating returns greater than the traditional finance markets. The volatility of crypto means that interest rates may vary according to market conditions, but the overall return will be much better over even the medium-term. With AQRU most yield accounts don’t have a lock-in either, so you can withdraw your money as easily as you deposit it.
Crypto yield accounts are a way to take advantage of cryptocurrency returns and guarantee you end up with more of the asset than you started with.
Of course, Bitcoin and Ethereum will still change in value against the dollar (and of course, a US dollar stablecoin will change in value against the pound and euro), but this is a long-term investment in which you can also choose your exit point.
AQRU will even help you change your Bitcoin, Ethereum or US dollar stablecoins back to fiat currency with no commission and a fair exchange rate.
When you invest in alternative investments, it’s probably best if you consider the money “out of reach”. So have a think about whether you could afford to lose it, or whether you’re likely to need it. Investment experts generally advise that everyone needs access to immediate cash reserves for emergencies (car, health, etc), and that expensive debts (e.g. credit cards) should be paid off before investing.
You also need to work out whether you’re investing for income, or for capital growth: AQRU is good for both, but you do lose out on the compound interest if you’re withdrawing the interest all the time.
If an investment opportunity allows you to start small and get out fast, then that’s probably an ideal profile for people who don’t have lump sums to invest: which is most ordinary people.