Have you ever thought about diversifying your savings? Unfortunately, many investors are so concerned about their stock portfolios they neglect their savings accounts. It’s important to maintain a proper level of savings but even more essential to keep your funds in multiple forms. Instead of focusing on cash alone, consider owning rental real estate shares as part of your savings fund.
Likewise, precious metals, crowdsourced lending, and cryptocurrency make excellent diversification vehicles for your emergency money stash. Remember to keep these assets separate from stock, retirement, and other portfolios you already own. The first step with any savings program is to maximize the amount of money in the original account. For the vast majority of working people, that means doing a bit of liquidation right at the start. Here’s how to begin.
Table of Contents
Liquidation
When you set out to diversify your monetary holdings, take the first and most logical step of ramping up the account balance before doing anything else. For most working people, the fastest way to do that is to sell unwanted assets. Go through basements, storage lockers, attics, spare bedrooms, and tool sheds with the intent of identifying items that can be sold. For larger pieces, opt for a traditional yard sale. Others can go onto internet auctions or direct sale sites. Don’t skip this step. Some are often shocked at how much cash they can pull out of their household junk. If you have a second car you no longer need, spend time fixing it up before selling it to a local dealership or individual.
Rental Real Estate Shares
Rental real estate shares are a smart way for everyday investors to take part in the profits and appreciation of this busy market without committing to owning entire properties. Real estate investment companies like Arrived Homes are making fractional RE ownership an easy and desirable investment to further diversify your portfolio. When you add rental shares to your personal balance sheet, there’s never a worry about management or maintenance. That’s because, as a share owner, you have zero operational responsibilities. Your only role is to take part in profits and appreciation of the properties you select out of hundreds on offer. Your rainy-day emergency fund is stronger and more flexible when it contains rental real estate shares.
Silver and Gold Bullion
You need to know how to identify a good investment and precious metals are the first choice for people who want to balance stock and bond portfolios. Both silver and gold represent excellent assets for safe deposit box storage. Use them as you would any other emergency source of funds. One of the advantages of precious metals is that they’re highly liquid and tend to appreciate in value over the long haul.
Crowdsourced Lending
Why borrow when you can earn a profit by being a lender? There are dozens of online platforms where you can lend a little or a lot to applicants who have decided to crowdsource their borrowing activity. Screen candidates carefully and avoid putting all your capital into one contract. Consider setting aside a small percentage of your emergency capital for crowdsourced lending.
Cryptocurrency
Be warned that the cryptocurrency markets are highly volatile. If you’re okay with carrying some risk, consider placing no more than five percent of your emergency capital into one of the larger alt coins. The move is more about diversification than aiming to earn a profit on the cryptocurrency itself.
About Carson Derrow
