Usually when people think of investing and building a future, either as part of a wealth management plan or personal goal, they think of investing in liquid assets such as stocks, bonds, ETFs and other securities. While these are all good investments, you should also consider owning hard assets, which are usually physical items that also hold tremendous value. You may need hard assets for times when economic activity is slow or the stock exchange is plummeting, and the more assets you can use to diversify your portfolio, the better. What are some good hard assets to own?
1. Commercial Or Residential Real Estate
You can invest in commercial or residential real estate in a variety of ways whether it’s through home flipping, buying rental properties such as apartments or office spaces, or going with a real estate investment trust (REIT), though an REIT is more of a liquid asset. But real estate is a good investment because as a property owner, you can always take steps to increase property value, and when a seller’s market happens, you could be poised to turn your properties into real wealth. Breaking into real estate can take some know how, but if you own properties of any kind, you should definitely hold onto them and know when the right time to sell could be.
2. Gold And Silver Products
Different experts debate on whether you should own gold or silver as an ETF, or physically own it yourself. Usually the best way to own gold and silver is physically either through coins, or minted bars that will be stored in a vault. What you need to remember is that if you’re planning to setup an IRA using gold or silver, it will need to be through an IRS-approved custodian who will store it on their premises until it’s time to be claimed. Gold and silver have their own sets of risks to deal with, but they continue to be where investors go when they need a safe haven to invest in for the long-term.
3. Energy And Natural Resources
Natural gas is on the rise and it’s estimated that by 2040 it will be even more widely used. Energy companies, including those that deal in natural gas are a little like regular stock traded companies, only many of them are master limited partnerships which means they pay out even higher dividends to investors. Oil and some natural resources can be volatile, but natural gas definitely is a hard asset you should look into, and usually owning shares of energy companies is the way to get it.
This may not be the best hard asset to get into as a way to build wealth. But there is a growing interest in many e-commerce communities in cryptocurrency like Bitcoin and Ethereum because it’s not controlled by a central bank, and the blockchain technology it uses is being researched as a huge change in how records are kept. Investing in cryptocurrency is usually done through exchange platforms where you buy it in local currency, though ATMs have also begun to pop up. Even some big name investment firms have started looking into buying it for their portfolios. You may not want cryptocurrency to be your first hard asset choice, but if you see tremendous potential in it, it’s certainly worth buying a little of.