Alternative Investment Round-up
by Andrew Willink
15 July 2008
We all know that savings accounts and term deposits are great traditional investment methods, but have you ever stopped to think about what other ways there are to invest your hard earned dollars? Here are a few of the alternative investment ideas that have been around for a while now:
‧ Livestock
Whether it’s alpacas, cows or pigs, livestock can be a solid investment if you know what you’re doing. However, this is an area where you really need to be an expert otherwise you could run a high risk of ending up with a poor investment. There’s no harm in doing your own bit of research before speaking to a broker. If you’re interested in cattle, the Beef Stock Market is a buying and selling service which allows you to own and trade beef cattle over the Internet. The service will also provide you with regular industry news, updates on stock progress and seasonal marketing conditions. All you need to use the service is access to the Internet, an ABN, a BPAY enabled Bank Account and a valid email account. But just like operating your own shares portfolio, there are some servicing fees and charges involved. For more information see Related Links at the end of this story.
‧ Gold
Gold is well known as being a solid investment choice, however, just like livestock, you need to be an expert in this field or you run the risk of making a poor investment decision. According to some sources, gold is an investment which can hold its value well during an economical crisis.
Here are a few of the questions you need to ask before you invest in gold:
1. What kind of gold should I buy?
Gold comes in many different shapes and forms. There are bullion coins, American and European coins or different eras, and a variety of other options.
2. When should I buy?
According to some sources, timing is not an issue when it comes to purchasing gold. Gold can be looked at as a diversification method for your overall investment portfolio.
3. How much should I invest in gold?
Some sources claim 10 to 30% of your assets is the recommended amount you should invest.
‧ Wine
Again, investing in wine is not for the average man on the street. You need to know what you are buying, and that requires expert knowledge of the wine industry and wines themselves. However, for the wine expert, investing in this field can be both personally and financially rewarding. Experts strongly suggest not trying to make a quick buck with wine. A serious wine enthusiast will devote money back into their cellar year after year without drinking away their investments! Start off by reading the industry magazines, visiting the online websites and generally conducting as much research as you possibly can. There are sommelier and viticulture courses held at most Australian TAFEs and universities that will be able to provide you with more insight into the art of this industry and investment.
‧ Super Annuation
This one is probably the most common of all investments detailed here. Contributing to super annuation while you’re still working can be one of the most beneficial methods of investment you could ever make. It is both tax effective and flexible. Depending on your circumstances, you could also be eligible for government co-contributions. For more information see Related Links at the end of this story.
‧ Government bonds
By purchasing government bonds you are effectively lending money to the government. Why would you want to do this, you may ask? The windfall comes when the government pays you a fixed rate of interest until the bond "matures". Unlike some of the investment strategies above, government bonds are recognised as a low risk investment. Investment companies such as Macquarie deal with government bonds.
Seek expert advice
No matter what investment strategy you choose, the key is to seek expert advice and be sure you know exactly what you’re getting into before you sign up for anything. For every story about an alternative investment making someone rich there are equally as many about people who’ve lost everything, so you need to be very careful.
Related Links