8 Non-Traditional Ways to Invest Your Money

Women who take care of their finances are more likely to achieve financial independence. Since they know how and where to invest their money and make it work for them consistently, they can plan to potentially retire early and enjoy their mid-life with one less thing to worry about. Starting now can give you a headstart in building your freedom, so here are eight non-traditional ways to grow your assets through investing.

Mia Barnes
February 28, 2024
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1. Peer-to-Peer Lending

Entrepreneurs with low credit scores who can't borrow from the bank or lack collateral and loan options could consider P2P lending to acquire funds. This vein of investing allows you to lend money to individuals and startups looking to secure business capital.

The process for starting is pretty straightforward — an advantage for women new to financial management. Your first step is to find a reliable P2P platform online. Open and verify your account, then fund it through a bank transfer, set an interest rate and wait for lending requests. Once you have some funds coming in, check and evaluate loan proposals, and decide which borrower you want to lend to and the amount.

P2P can provide high returns, as personal rates can range from 6.40% to 36%, which is many times higher than conventional savings accounts. It's a great way to generate income, but as always, with the potential for higher gains usually comes higher risk. This is no exception — be aware you don't have any protection if the borrower defaults on the loan.

2. Impact Investing

If you want an income-generating investment that allows you to make a positive social or environmental impact, this is for you. People who invest in this method are driven by their desire to use their assets to bring optimistic changes in renewable energy, sustainable agriculture, education, microfinance and other domains.

An advantage of this investment method is you can choose between types of returns. For example, a survey found 74% of investors target market-rate returns, balancing profits with environmental or social impact, while the rest resolve for lower financial gains at the cost of making a bigger difference in social causes.

To get started, find a company involved in impact investing and start a conversation with them. It might be looking for angel investors or crowdfunding opportunities you could get involved in.

Death to Stock

3. Municipal Bonds 

Municipal bonds are an excellent investment plan if you have capital and want to create a tax-free income source. These are debt securities issued by the local and state governments in the U.S. You loan your money to them and receive regular interest payments and the principal amount at maturity in exchange. The strategy is to buy and hold until the bonds mature.

You need a broker to start, so find a firm with various municipal bond options. Once you have an account, choose and buy those with attractive interest rates. These bonds are relatively low-risk, so your money is secure, but don't expect a high yield.

4. Franchising

This investment model will suit anyone who wants to gain higher profits and do the business leg work under the supervision of a franchisor. When you decide to franchise, you agree with a business to receive legal rights to sell products or services using the same brand name but under your ownership.

In franchising, you pay an initial fee and royalty to complete the requirements before operating. The downside is you don't have control of the enterprise because a legal agreement binds you. You can't change the pricing or decide about holiday sales — there are restrictions you need to follow.

A good example is McDonald's. To become a franchise owner, you should have at least $500,000 convertible to cash and pay a $45,000 one-time franchise fee. The overall cost can rack up to over $2.3 million, but it’s highly profitable since it's a global brand with a robust customer base. You don't need to market excessively — the name alone sells, so you can expect regular profits. Local brands cost less to franchise if you have a smaller budget.

5. Collectibles

Most people don't typically think of antiques, stamps, coins, or toys as a form of investment since many who collect them do it for passion and fun. However, they can fetch good money if you know how to do business — plus, it's an excellent tactic for portfolio diversification. The value of collectibles depends on the items' condition, rarity, origin, authenticity and appeal.

If you want to start a collection, the first step is to choose an item that interests you, such as fine arts, coins or vintage jewelry — there's a market for almost everything. Set a budget and start small, but be careful of widespread counterfeits. Joining a community to connect with co-collectors and buyers can be beneficial, as your success in this area will depend heavily on having a network. A downside is the holding periods can last for decades before the collectible reaches a price point that guarantees a good return.

Set a budget and start small

6. 529 Plans

If you want to invest in your children's college education, 529 plans in the U.S. are your best bet. There are two types — education savings plans and prepaid tuition plans. They're a great alternative to high-yield savings because of their tax advantages. You can deduct contributions from state income tax and be eligible for tax-free withdrawals.

You can also roll over funds into a Roth IRA for the same beneficiary — an excellent feature if you have money left after your kids finish college. Before investing, understand the fees and expenses, as they vary on the type and whether you have a broker- or direct-sold plan.

7. Precious Metals

Common options for precious metals are gold, silver, palladium and platinum, which can command high returns because of their appeal and various applications. If you want to add metals to your portfolio, you have several choices for investment. First, you can buy physical bullion, which costs about $2,000 per ounce of gold.

Other options are to purchase future contracts in publicly traded companies, and through mutual funds or exchange-traded funds. The volatility of the price of these metals is a double-edged sword, as they can go high one second and crash the next.

8. Angel Investing

If you're familiar with "Shark Tank," you'll know what an angel investor is. In this show, budding entrepreneurs present their business ideas to millionaires and hope to get funding. You, too, can pursue the path of an angel investor if you have excess funds to invest. This venture carries high risk, but the return can also be exponential.

The strategy is to find a startup with a decent chance of success and collect your profits later on. If you get a grand slam, you can win a return of 85% to 90% of your investment. However, more than half of early-stage ventures often fail, so research the one you want to invest in and gauge the risks.

Death to Stock / Karolina Grabowska

Diversify Your Portfolio

Putting all your money in the bank exposes your assets to a single risk. If it goes out of business, you have nothing as a fallback. However, placing your financial eggs in several baskets means if one fails, you have a few others to use. It's better to forfeit a slice of the pie than lose everything.

These eight alternatives diversify your portfolio to balance your risks and rewards, get higher returns, and gain more control of your finances. Remember to learn the ins and outs of any investment before putting money on it.

NB. There are references here for our US audience and may not be applicable if you're based elsewhere in the world!