It's easy to assume that investing is synonymous with financial products, and thus with banks. But there are dozens of ways to invest your money beyond the traditional options! For any investor, it is essential to keep an open mind and not to dismiss opportunities automatically.
Why look for alternative investments?
First of all, remember that non-conventional investments are not intended to replace all of your bank assets. Rather, these solutions allow you to diversify your portfolio and open up other earning opportunities.
Limiting your investments to the banks alone limits your diversification options. The banks' financial advisers will almost always recommend traditional products (savings accounts, life insurance, equity savings plans, etc.) with little in the way of novelties. The interest rates on offer are not very attractive and the management or brokerage fees are often high and opaque.
Moreover, putting your money into these investments or withdrawing it later is a cumbersome and time-consuming procedure. Traditional operators will usually ask you to come to a branch to meet with an advisor to carry out your transactions. Unlike neo-banks, who offer a digital and remote approach.
Finally, there is still little choice in the range of products (sector of activity, SRI companies, etc.) and the allocation of funds is somewhat opaque.
There are other investment solutions out there
When it comes to investing, you should keep your eyes open for the opportunities the market offers and look beyond the usual avenues (if you've found your way here, you are on the right track). Here are a few investment opportunities outside banks.
# Investing in real estate and rental property
Even if it appears a traditional choice, real estate is the main investment vehicle outside of banks: a tangible asset that can generate additional income and allow you to realize a capital gain on resale. It is a well-known investment, for which you will find a wealth of information and can easily seek support. Of course, real estate requires a certain budget: a down payment to obtain a bank loan, maintenance costs, tax and the costs of rental management by an agency, for example.
# Investing in crowdfunding
Crowdfunding is now well established in the investment landscape. Numerous platforms offer individuals the opportunity to invest directly in the real economy: start-up capital, real estate development, renewable energy production, loans to SMEs, etc.
Thanks to crowdfunding, you know exactly where your money is going, you have access to operations that only banks could finance in the past (ironic, right?) and you can expect significant returns, between 5% and 10% per year for real estate, corporate loans or sustainable development projects, and much more with the resale of shares in start-ups... but like any financial product, the return depends on the risk, so remember to analyse projects carefully before investing. Another drawback is that this sort of investment can be quite difficult to diversify as doing so requires investing in numerous operations across different sectors which are not always available on the platforms.
# Investing in luxury or atypical products
Do you genuinely want to invest your money differently? Whether it's gold, wine, whisky, art or vintage cars, you're spoilt for choice. You might imagine that these products are reserved for the wealthy or the real experts, but you can invest in them too... provided that you get support or that you study them well before taking the plunge and starting small.
# Investing though Fintechs
For the uninitiated, Fintechs are technology companies that are shaking up the financial and banking sector. They cover a wide range of services such as online payments, savings, project financing, loans, asset management, and so on.
In the aftermath of the 2008 financial crisis, many people lost confidence in banks and have since increasingly turned to Fintechs as an alternative to traditional financing. Their strengths? Continuous innovation, proximity to their customers and more transparency, often at lower costs.
You could, for example, open a securities account or a customised life insurance policy, choose to invest in ethical, sustainable and responsible vehicles, according to your interests, simply and quickly, at reduced fees... thanks to Birdee and from just €50! Another way of investing your money.
In conclusion, it is now simpler and more profitable to invest savings outside the banking system all the while financing the real economy, through the activities of clearly identifiable companies or responsible investments. Moreover, these new investment methods offer essential diversification in financial investments to limit risk. Ready to invest differently with Birdee?