These days, alternative investments are becoming more popular than ever. After all, with rising inflation and a rough year for the markets, more investors are looking for alternative ways to invest and build wealth.
However, figuring out how to invest in alternative assets can be challenging for beginners. This is especially true for securities that aren't listed on any stock exchange, like sports cards or rare collectables.
Thankfully, there are numerous alternative investment platforms that you can use to easily invest in a variety of asset classes. And, the best part is that many platforms have very low minimum requirements, so anyone can get started.
The Best Alternative Investment Platforms
If you want to get started with alternative asset investing but want to work through platforms that specialize in these assets, you're in luck. Here are some of the top alternative investing platforms you can use to spice up your portfolio.
Our Score: 10
Best For: Asset variety
Minimum Investment: $2,500
Why We Chose Yieldstreet: Yieldstreet is one of the best alternative investment platforms because of the variety it offers. It has a variety of individual deals and funds covering assets like cryptocurrency, artwork, private equity, real estate, and structured notes. Plus, its flagship Prism Fund provides exposure to a variety of assets and has a $2,500 minimum investment requirement.
We also like Yieldstreet because it helps you create goal-based portfolios depending if income, growth, or balance is your goal. The main downside is that many deals and funds require being an accredited investor with the exception of the Prism Fund.
That said, Yieldstreet has an immense amount of variety out of any alternative investment platform. In terms of fees, most offerings have up to 2.5% in annual management fees, which is fairly standard for alternative assets.
Our Score: 9.5
Best For: Easy REIT Investing
Minimum Investment: $10
Why We Chose Fundrise: If you want to invest in real estate without much money, it's hard to beat Fundrise. This real estate crowdfunding platform lets you invest in income-generating eREITs with only $10. Shareholders then earn quarterly dividends, and historically, Fundrise returns around 8-9% annually.Fundrise is also a leader in the alternative investment space because it only charges 1% in annual fees. In comparison, many real estate crowdfunding platforms charge 2% or even more in various fees. Overall, Fundrise is a simple-yet-effective way to add real estate to your portfolio.
Our Score: 9
Best For: Artwork investing
Minimum Investment: $20 increments, varies
Why We Chose Masterworks: When it comes to artwork investing platforms, Masterworks is pretty much the undisputed king. This alternative investment platform lets you buy shares in artwork from the likes of Bansky, Monet, and Van Gogh. And, shares often start at just $20 and there's no accreditation requirement.
Once it acquires and securitizes artwork, Masterworks has a three to 10 year target holding period before it sells art for a profit. Masterworks takes 20% of profits as a fee plus a 1.5% annual fee, and investors split the remaining profits.
Overall, it's an interesting platform and way to invest in blue chip artwork. And U.S. investors have access to a secondary marketplace for shares which helps improve liquidity.SEE IMPORTANT INFORMATION HERE
4. Arrived Homes
Our Score: 9
Best For: Residential real estate
Minimum Investment: $100
Why We Chose Arrived Homes: Fundrise is one of the best alternative investing platforms if you want to invest in REITs. But when it comes to individual, residential real estate, Arrived Homes is one of our favorites.
With Arrived, you can buy fractional shares of individual, single-family homes starting at just $100. From there, shareholders earn quarterly dividends from rental income. There's a 1% annual management fee like Fundrise. To date, Arrived Homes has paid 3.2% to 7.2% in annual dividends to investors, although this doesn't include property appreciation since the company is so new.
Our Score: 8.5
Best For: Sports memorabilia
Minimum Investment: $5
Why We Chose Collectable: If you're a sports fan, Collectable could be the perfect alternative investing platform for you. It lets you buy fractional shares of iconic sports memorabilia like rare trading cards, signed jerseys, worn sneakers, and other highly collectable items.
Normally, rare sports memorabilia can go for hundreds of thousands of dollars. But Collectable securitizes assets and offers shares to investors starting at just $5 in some cases. The only fee investors have to worry about is a 1% trading fee if they ever buy or sell shares through the platform.
That said, this is a highly speculative alternative asset class. And rarity doesn't guarantee appreciation or liquidity either. Ultimately, Collectable is an excellent platform for super fans and collectors, but consider the risks before investing.
Our Score: 8.5
Best For: Fine wine
Minimum Investment: $1,000
Why We Chose Vinovest: While it's certainly niche, another leading alternative investment platform that's perfect for wine lovers is Vinovest. This platform lets you invest in curated portfolios of fine wines from around the world. And, like a robo-advisor, you can invest in various portfolios that match your investing goals and risk tolerance.
There's a $1,000 minimum investment amount for the AI-powered portfolios. But Vinovest also has a separate marketplace where you can purchase individual bottles of wine, with many costing under $150.
According to Vinovest, fine wines have returned 10.6% over the last 30 years, and this asset class doesn't correlate with the market for some downside protection. Just note that you pay between 2.25% and 2.85% in annual management fees for Vinovest portfolios depending on how much you invest.
7. Rally Rd.
Our Score: 8.5
Best For: Niche collectables
Minimum Investment: $5
Why We Chose Rally Rd.: Rally Rd. is similar to Collectable, except it has a much wider variety of assets you can invest in. This includes rare collectables like comic books, luxury cars, sports cards, and even NFTs. New collector items launch under an “IPO” which is when you can buy shares. There's an initial IPO fee that Rally Rd. works into the offering, but after that, investors don't pay any fees.
Down the line, Rally Rd. and shareholders can decide to sell an asset if a collector comes along and makes an offer. But there's also a secondary marketplace where you can potentially sell shares to exit earlier.
Liquidity isn't guaranteed, and like other niche collectables, this is a very speculative way to invest. But if you want to own 0.5% of a Ferrari or 1% of a pair of Michael Jordan's Air Jordan's, it's the platform for you.
Our Score: 8
Best For: Peer-to-peer loans
Minimum Investment: $25
Why We Chose Prosper: With Prosper, you can invest in personal loans as a form of peer-to-peer lending. In other words, you're almost acting like a bank by lending out money to borrowers in exchange for interest payments. According to Prosper, the platform has an average historical return of 5.7% per year. And, you can get started with as little as $25.
Borrowers make monthly payments, so you begin earning interest quickly. And Prosper has some requirements to reduce risk, like minimum credit score requirements plus income and bank statement proof. Investors can also pick and choose individual loans to fund or use Prosper's “Auto Invest” feature to fund loans that match preset criteria.
Just note that loans are unsecured, and borrowers can and do default. However, the low $25 minimum makes it easier to reduce risk by spreading out money across several loans.
Our Score: 8
Best For: Small business debt
Minimum Investment: $100
Why We Chose Mainvest: One final alternative investment platform you can invest with to earn passive income is Mainvest. This platform lets you fund small American businesses as a form of debt investing. In exchange, business owners make regular repayments back to lenders, plus interest, until the loans are paid in full.
Mainvest has a host of small businesses available on its platform, including cafes, breweries, food trucks, wineries, and restaurants. There's a $100 minimum investment requirement, and it targets 10-25% returns for investors. The highlight is that investors don't pay fees; business owners cover the costs since Mainvest provides access to capital.
Of course, the main risk of debt investing is that borrowers default and can't repay their loans. However, Mainvest's $100 minimum investment requirement makes it easier to diversify across several businesses to reduce risk.
Pros & Cons of Alternative Investments
Important Considerations Before Investing
Now that you know the best alternative investment platforms and pros and cons, there are several more factors to consider before making an investment:
- Risk Tolerance: As with any investment, it's important to consider your risk tolerance before diving into the world of alternatives. Some of these assets are more speculative and can have large price swings. More conservative investors may prefer fixed-income options like bonds or middlegrounds like dividend stocks.
- Timeframe: Since many alternative assets are illiquid, you generally have to hold them for the mid to long-term. This makes them a poor choice for short-term investments or parking extra cash you might need in the near future.
- Due Diligence Requirements: Researching various alternative assets can take a lot of work, especially if you're buying from another individual instead of a platform. But even on alternative investing platforms, doing your own due diligence and weighing the pros and cons is important. This all takes time, so alternative assets aren't always so passive upfront.
Alternative investments aren't the right choice for every investor. And at Investor Junkie, we still love good old fashioned stocks and ETFs. But if you want to diversify your portfolio with some non-traditional assets, alternatives could deserve a spot in your portfolio.
It's still important to consider the pros and cons and how alternatives fit into your overall asset allocation. However, with alternative investing platforms, it's never been easier to add assets like fine wine or luxury cards into your portfolio.