3 Unconventional Ways To Diversify Your Retirement Portfolio
Written by
Jaime Catmull
Edited by
Gary Dudak
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There are a lot of strategies in the investment world. Traditional stocks, bonds, mutual funds and interest-bearing savings accounts are traditional ways to build wealth slowly but surely. Warren Buffett is famous for saying that, given time, even he can’t beat the most stable bet of them all, the S&P 500.
And yet, set against these conventional options are a variety of unpredictable, high-risk, high-reward alternative investments. Alternative investments make up a healthy portion of any well-balanced portfolio. The challenge is finding an investment opportunity that is off the beaten path before it finds its way into the mainstream world — which often has the effect of picking up momentum and dampening returns.
If you’re looking for unconventional ways to shake up your investment strategy, here are a few ideas to consider.
Open a Whole Life Policy
This may sound like a surprising spot to start. But lifestyle investor Mary Lyons, the Wealth Woman, advocates for this strategy as an excellent way to beat the system and build wealth. “We are taught to put all of our savings into the market,” she said, “but really, that’s inefficient when you are trying to create income.”
She goes on to explain how a properly funded whole life policy (which can accrue interest as well as payout in the event of death) can work to your advantage. “I have saved money into a whole life policy built specifically for cash value growth and internal rate of return. This contract has been funded so I can borrow against the cash value while all of my assets remain compounding and growing tax-deferred,” Lyons said.
If you’re trying to find a way to invest, start with a whole life policy and then use it to fuel other investment opportunities that can produce income.
Try Tokenized Real Estate
Tokenization has gone mainstream along with the rest of the blockchain movement. However, cryptocurrency is no longer a new phenomenon, and the prolonged “crypto winter” makes digital currency anything but a safe bet at the moment.
Instead, alternative investment options are finding ways to redirect the concept of tokenization into something more tangible — as in literal brick-and-mortar assets. Companies like The Hideaways are finding traction in a world that is shunning cryptocurrency. Why? Because they represent digital ownership of real-world real estate.
On top of that, the tokenized aspect of these businesses makes them particularly appealing to smaller investors. Larger real estate projects — and especially commercial real estate (CRE) — have notoriously high barriers to entry. Often CRE ventures run into the tens of millions of dollars. Tokenizing the ownership rights of these projects allows a larger number of investors to get in on the ground floor, often for as little as thousands or even hundreds of dollars.
Find a Broker Who Will Work With You
According to The College Investor, “Self-directed retirement accounts allow individuals to invest in assets beyond the traditional stocks, bonds, and funds offered by mainstream brokerages.” The investment site goes on to explain how tools like startup Rocket Dollar are enabling investors to take control of their investments.
Rather than invest in an IRA with a strictly limited set of options, these companies are tapping into the full potential of a self-directed IRA. They enable customers to invest in wildly outside-of-the-box ideas, from cryptocurrencies to startups. If someone can find a viable investment, these increasingly sophisticated tech options are making it possible to redirect funds toward higher-risk alternative investments.
Of course, putting this kind of power into the hands of investors also means they’re assuming a much higher level of risk. As is always the case, tapping into off-beat investment opportunities should remain within reason and be just one portion of a well-balanced portfolio.
Amping Up Calculated Risk in Your Retirement Portfolio
Retirement savings should never be a single-strategy activity. You want to use tried and true conservative methods to build up a solid base for your wealth. From there, you can take on higher-risk opportunities, from real estate investments to business ventures and beyond.
As you do this, it’s important to find the tools to help you along the way. Whole life policies give you a source to borrow from that is, in and of itself, an investment. Tokenized real estate opens up the doors to a large, profitable area of property ownership that was previously unavailable. Cutting-edge self-directed IRAs facilitate a wide variety of alternative investment options, all within the confines of your retirement fund.
Use these tools to expand your investment options and breathe new life into your wealth-generating strategy.
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