Seven Asset Classes You Might Want to Consider Investing In

My most recent personal finance read was The Four-Minute Millionaire by Niklas Göke, and I’m still mulling over some of the insights gained. No, Göke does not show you how to reach millionaire status in four minutes (that would be a fun, if unrealistic, read).

He does however give you a number of small daily actions you can take, in (yes) as little as four minutes a day, to slowly build wealth and eventually hit that millionaire marker. There’s a lot of information, for a small book, but today we’re looking at a few of the less traditional asset classes the author advises investors to take a look at.

Crypto Assets

Okay so this isn’t a new idea. But it’s still one that most would consider a ‘less traditional asset’. The era of the Bitcoin millionaires is arguably over. Bitcoin grew from a value of $0.0009 in 2009 to more than $30,000 in 2023, and another value increase on the same scale is improbable. But there are still new altcoins being launched all the time. There are over 9,000 digital currencies on the market now, along with other crypto assets such as NFTs, so there are plenty of options for investors to consider.

Fractionalized Art

Art investing has traditionally been the domain of ultra high net worth individuals. A Picasso sold for $106.5 million in 2010, and even modern artists can sell in the million dollar+ range (a Banksy went for $18.6 million in 2021). But what if you could own just a tiny fraction of a Picasso, a Banksy, or other famous (or fast appreciating) work of art? Apparently, you can. Masterworks is an organization that allows you to buy shares in the type of artwork you could never actually afford to invest in otherwise.

At the time of writing, the platform is offering the chance to invest in a Banksy (with an Annualized Net Return of 32.0%), an Andy Warhol (with an Annualized Net Return of 10.4%) and a George Condo (with an Annualized Net Return of 39.3%). Those are historical returns, of course. As with any investment, anything can happen in the future, and the value of a piece of art can easily go down as well as up.

Pre-IPO Shares

Traditionally retail investors have had to wait for a company’s Initial Public Offering in order to buy shares in it. But now there are other options available. Platforms such as EquityZen allow you to invest in companies pre-IPO, before they are publicly launched on the stock market.

It’s sometimes easy to recognize the potential of certain companies –  from Airbnb to TikTok – long before they’re available to trade. However, unless you were a venture capitalist, there has traditionally been no easy way to take advantage of that. Now there is.

Rolling Funds

Speaking of venture capitalists, there is away to potentially invest in new start-ups right alongside them, through investing in something called rolling funds. Platforms such as Angelist facilitate investment in rolling funds making it possible for anyone, not just wealthy VCs, to invest in companies that are still in their early stages, and certainly before they launch on the stock market.

Of course, it’s important to understand how rolling funds work and appreciate the risks involved. Only consider them if they’re suitable for you, your investment budget and your appetite for risk.

Investing with the Crowd

Crowdfunding has become a popular way for companies of all types and sizes to allow for early, and even pre-launch, investment. Sometimes early investors just get a perk or ‘gift’ for investing. Sometimes they get a financial stake in the start-up.

Again, make sure you understand everything involved, and exactly what you get in return for your investment. You can find a huge variety of different companies looking for seed funding, early funding, or growth funding on platforms like CrowdCube.

Music Royalties

You may be aware how lucrative music royalties can be. If you’re a songwriter you often make money every time your music is played on traditional or online radio, as well as when it’s sold or streamed, which is why the songwriters can be some of the wealthiest people in the industry, not (necessarily) the singers.

You may also be aware that you can buy the royalties to a specific song. Remember when you had to pay to sing Happy Birthday on the radio? (Because Warner/Chapell owned the rights to it, or claimed they did.)

You can, however, legitimately invest in music royalties via specialist exchanges such as SongVest, which allow you to buy fractional shares of the rights to a variety of hit songs and artists. While you may or may not make money out of this one, it’s kind of nice to own a small share of a favorite piece of music. You can create a free SongVest account, and bid on the “SongShares” you want to own. Any royalties you earn will accrue in your account and are paid out at the end of each quarter.

Crowdsourced Index Funds

Traditional index funds run by big institutions such as Blackrock are generally considered a fairly solid investment for various reasons. Now the built-in tools on some stock trading apps allow you to pretty much create your own index fund, with the ability to customize your investments to your own needs and interests.

In the book, Göke recommends the Trading 212 trading app, and specifically it’s “Pie” feature, which lets investors not only compose their own index fund, but also collaborate with other users, so you can share your pies around. You can even add another user’s pie to your portfolio, truly sourcing the wisdom of the crowd when it comes to investment decisions.

Obviously, your approach to these investment categories should be the same as with any other investment. That is:

• Do your research
• Understand how each asset or opportunity works
• Carefully assess the risks involved
• Read the small print when picking a platform to trade on
• Don’t invest more than you can afford to lose
• Take professional advice when needed

Want more thought-provoking, unconventional, advice about investing, but also saving money, paying down debt and improving your money mindset? Check out The Four-Minute Millionaire.

Karen Banes is a freelance writer specializing in entrepreneurship, parenting and lifestyle. She writes articles, website content, ebooks and the occasional award winning short story. Her work has appeared in a range of publications both online and off, including The Washington Post, Life Info Magazine, Transitions Abroad, Brave New Traveler, Natural Parenting Group, and Copia Magazine. Learn More About Karen