How to Grow Wealth Outside the Stock Market
Did you know roughly 90% of people lose money in the stock market?
If you’ve lost money when trading stocks, you might be looking for a better way to grow your wealth. However, if you don’t know a lot about investing, you may not know how to grow wealth outside of the stock market.
Below you’ll discover a few strategies that’ll help you increase your net worth without having to rely on the stock market. If you’re ready to increase the size of your bank account, these tips will help boost your savings.
Let’s begin!
1. Rent Out Real Estate
One great option for people that don’t want to invest in stocks is real estate investing.
This approach is an excellent long-term method that provides you with a steady income. That’s because if you rent out a property, you’ll be earning an income as long as tenants are in the home.
To help you develop a better understanding of how this approach works, here’s a quick look at the stages you’ll need to go through:
- Finding a property you can rent
- Buying the property
- Making the property suitable for tenants
- Finding tenants
As mentioned, the first step of this process comes down to finding a property in an area where there is significant demand for rentals.
It’s vital that you study a given region before you decide to purchase a rental property. If you don’t do this, you might end up with a property that nobody wants to rent.
The next thing you need to do is purchase the property, which often means you’ll need to get some financing. To get the financing, you’ll need to provide a down payment, which usually amounts to a percentage of the total value of the home.
Once you have the home, you might then need to make some adjustments to the property. However, this depends on the state of the property, and you don’t always have to do this.
Finally, you need to find some tenants, and you can do this with the help of a realtor.
When finding tenants, don’t rush through this process, and be sure to vet potential tenants thoroughly. That’s because bad tenants can give you a lot of problems, and this can often make your real estate investing journey a lot harder than it needs to be.
2. Fix and Flip Properties
Above, we mentioned that you could make money from property by renting it out.
However, some people like to make money from property using a ‘fix and flip’ method.
Fix and flip is where you find a run-down property, spend money on it, and then sell it for a profit. The idea here is that your repairs will raise the value of the property so much that you can make a profit in spite of the money spent on renovations.
The fix and flip approach isn’t necessarily a long term approach to investing, as you don’t earn any residual income from the property. After all, as soon as you sell the home, you need to start again, or else you won’t be earning any money.
3. Invest in Precious Metals
Another way you can grow your wealth outside of the stock market is by investing in precious metals.
There are lots of precious metals that you can invest in, but the most common options include gold, platinum, or silver.
It’s worth noting that each precious metal is different, and so the value of a particular precious metal is affected by different factors.
For example, the price of gold is closely tied to how the economy is doing and how confident people feel about the future of the economy.
So, if there’s a recession, you’ll find that the price of gold increases, as people think that gold is a good store of value during turbulent times. In fact, gold actually outperformed the stock market between 2006 and 2011.
That said, other precious metals are often tied to industrial demand. An example of this is platinum, which is used to make catalytic converters.
Catalytic converters are used in cars to reduce the amount of pollution that is being emitted. If the car industry is doing well, you’ll generally find that the price of platinum is doing well too.
However, if the car industry innovates, and finds a way to make catalytic converters without platinum, it could lose value. That’s because the demand for platinum will drop, as there isn’t really as much of a need for it. Following this, you could end up losing a lot of money if you own platinum.
Thus, if you’re new to investing in precious metals, you might just want to buy gold. This can be the most stress-free option, as gold generally increases in price over time, and it always increases in value during a recession.
4. Start a Side Business
Besides the other options mentioned in this post, you might also want to consider starting a side business.
Starting a side business is often an excellent way to grow your wealth, as it provides you with a secondary source of cash that you can use for other things. For instance, you could use your business income to help you buy rental properties or precious metals.
If you don’t know what kind of business you should start, think about your current skill set. So, if you work as a web developer, you could offer web development services as a freelancer.
Once you begin to get a lot of clients, you can then think about hiring someone to help you handle client work. You can then focus on growing the business so that it’s generating the kind of income you’d be happy with.
Do You How to Grow Wealth Outside the Stock Market?
You should now understand how to grow wealth outside of the stock market.
If you can, try to focus on just one method at a time, as doing too much will lead to confusion and probably a loss of funds. Once you figure out how one approach works, you can direct the resultant funds towards another method that’ll help you earn money.
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