Between the FTX crypto implosion and the Silicon Valley Bank collapse, investing safely has become even more challenging.
FTX, the third-largest crypto exchange, imploded in late 2022 when it was found that CEO Sam Bankman-Fried allegedly misused funds, lacked liquidity, and may have cooked the books in other ways. The ripple effects on the overall crypto markets were swift and severe.
Silicon Valley Bank, or SVB, was the largest funder and lender to tech companies and startups, and the reality of the damage is still being assessed.
How FTX AND SVB Impacted Investments
Within hours of the news breaking about FTX and, more specifically, SVB, the stocks took a nosedive, especially in specific sectors such as finance.
The impact these two financial institutions had on the markets has analysts afraid of stagnation. In this economic condition, there are slow-growth but consistent price increases, leading toward recessionary concerns.
While the future is unwritten, what is clear is that investors will need to rely on less-traditional asset classes to see real, positive growth.
Alternative Investing Ideas
With the traditional stock market becoming increasingly volatile, now is a great time to explore alternative investment options such as cryptocurrency, peer-to-peer lending, and real estate.
Whether you’re a beginner or an experienced investor, these creative investment ideas will help maximize your returns toward a more secure financial future.
Even with the FTX collapse, cryptocurrency is a revolutionary new way to invest and generate wealth. It’s a digital currency – meaning it exists only online – that can be used to purchase goods and services or stored as an investment.
Bitcoin is the most well-known cryptocurrency, but there are over 5,000 cryptocurrencies available on the market at the moment.
Cryptocurrency is especially attractive for those who want to make quick profits because of its volatility.
Investors can capitalize on short-term gains by taking advantage of rapid price movements and trading frequently.
Peer-to-peer lending, also known as P2P lending, is a great way to invest in people and projects you believe in without going through a bank or other traditional financial institution.
It’s an online platform where individuals and businesses can borrow money from investors. The borrower pays back the loan with interest, so the investor makes a return on their investment.
P2P lending offers several advantages compared to other investments.
First, it has lower rates than traditional loans since no intermediary parties are involved.
Second, investors have direct control over who they lend money and can vet borrowers on their own terms.
Last but not least, it provides access to borrowers who may need help obtaining financing from banks or other traditional sources due to poor credit history or lack of collateral.
Real estate is an excellent option for those who want to build long-term wealth.
Buying, selling, or renting out a property can be an excellent source of income and appreciation.
However, instead of taking the risk of taking on possession of the real property, another alternative exists, known as wholesaling.
To wholesale real estate is a popular strategy that involves finding properties below market value and quickly reselling the rights of the sale to other investors.
Investors can use this method to make money without ever owning the property by using what is known as a wholesale real estate contract which allows an investor to act as a broker between the seller and a secondary buyer for a small profit.
Here’s how it works:
First, you find a motivated seller willing to sell below market value.
They agree to allow you to find a secondary buyer. You transfer the purchase agreement in order to complete the terms of the sale.
In return, the difference between your original agreed selling price and the new price to the secondary buyer is your profit in the transaction.
The best part of this method is that you never take the risk of having to purchase the physical property. Instead, you’re buying the rights to buy the property and transferring them to a third party.
It’s a desirable option for those with limited capital since you don’t need to make a sizable down payment or secure financing from a bank.
Looking for alternatives to traditional financial investments that operate outside the stock markets will allow you to have more significant returns than you would otherwise. At worst, a diversified strategy will keep your assets safe and secure your potential growth.
Founder Dinis Guarda
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