This is a very good question – and there are many other ways to make money instead of the traditional method of
purchasing securities in the stock market.
Let’s look at the top five.
Remember, the key to investing wisely is to choose an investment that will monetize upon itself, to grow and compound over time. You want some type of appreciating asset that you can rely on to provide a revenue stream once in retirement. Financial planners and advisors want to do this through the stock market encouraging most Canadians to invest in ETFs (exchange traded funds), MFs (mutual funds), or SMAs (separately managed accounts-institutional investments) and for those that don’t want to invest in securities, bankers will suggest you choose GICs or SNs (structured notes) which are still reliant on the stock market. So, what else is there?
The easiest and most effective way to increase your net worth is to buy real estate. You can certainly consider rental properties or commercial real estate ventures if you have the extra income but if not, why not consider simply updating your home. Shelter is a necessity of life and owning a primary residence in Canada is a great tax-free investment. Selling and continually moving into a higher priced home every three to five years is a great way to create wealth over time. One method could be to buy new, from plans, move in for a few years, then sell and move to another new build home again. It takes a special kind of person to want to up-root their family, live in the dirt of a new subdivision, and then do it again. But the stats show this is the best way to make the highest return on your investment when flipping properties.
The second option also involves buying and selling properties – since they are always assured to increase in value over time. For those “handy people” out there, why not buy a fixer-upper home and then sell it once the home has been remodelled. This is still a very lucrative way to make money since move-up buyers can’t imagine doing improvements to a rundown home – they simply don’t have the experience or the cash to do it. Instead, they would much rather pay a little more for an updated home and put the extra purchase cost on a higher mortgage without the headaches of anticipated renovation work.
The third way to make money is to invest in physical commodities such as coins, jewelry, classic cars, or artwork. Choosing something that can retain and grow in value is a specialized skill that many of us do not possess. Should you buy something that is already established and well known, or perhaps a piece of art that is up and coming? Owning these types of investments may be fun, but they are not easily converted into cash, and it will be difficult to predict when something has reached its maximum value.
The fourth way to invest without the stock market is to try your hand in the cryptocurrency market. Personally, I believe this market is too risky for someone who wants to avoid the stock market. Price volatility is high and due to the many emerging digital currencies available, it is difficult to discern which cryptocurrency will be the most favoured. The digital wallet where you store your crypto assets may be vulnerable to hacking and as we have seen in the media lately and one can easily lose access to your cryptocurrency if the platform is compromised. That being said, there still may be opportunities since this is still a very new investment market, one that the world is grappling with to actively develop regulations.
And the last way to monetize your money over time is to invest in a franchise. You need to ensure you do your homework on this option, since you must ensure you have the correct business and location. You will need to research the franchise business model, ensure there is sufficient consumer demand, work arounds for competition, potential for future growth, and the adaptability to change the model if needed in the future. If you are thinking of buying a franchise – tune in to my YouTube Channel to get more tips on what to look for.
Good Luck & Best Wishes!