One goal that you might have for yourself is to build your net worth, which can help you create a comfortable financial future. And one common way to help build your worth is through various appreciating assets, that over time can grow substantially in value.
Of course, there is no guarantee with any asset you invest or purchase that it will significantly grow in the future. No one can accurately predict what the future will hold, but these assets have a good chance of helping you build wealth.
1. Real Estate
Probably one of the most common appreciating assets many have built wealth with is investing in real estate. This can be in the form of single-family homes, multi-family homes, commercial real estate like office buildings, and even land or farmland.
Typically, this will mean investing for the long-haul and make these properties rentals or even listed on sites like Airbnb. But you could also purchase homes that you rehab and flip for profit as well.
However, the goal for real estate to be an appreciating asset is to hold on long-term, so that years later the value has jumped significantly.
2. Real Estate Investment Trusts (REITs)
With traditional real estate, it can require some serious knowledge, money, time, and effort on your part to be successful. That statement is not to scare you away, but it might be something you aren’t ready to dabble in quite yet.
However, you can still get exposure to real estate through something called Real Estate Investment Trusts or commonly shortened as REITs. A REIT is just a pool of money that is used to purchase and even sell real estate properties. These income-producing trusts provide the investor with a steady stream of dividends typically from commercial real estate and apartment buildings.
3. Stocks
When it comes to appreciating assets, I naturally have to include investing in stocks. When you invest in stocks, you take part in the ownership of a company in order to generate dividends and to increase your share price over time.
And pending the company, you might even get voting rights on company initiatives and other decisions as a stockholder. The challenge with investing in stocks is no one can accurately predict exactly what companies will be winners and how much they will grow (if they grow at all!).
4. Bonds
A bond is a form of debt that you can purchase as mutual funds or even privately in the form of a loan to a company or the government. As the investor, you’ll receive interest on your loan. Additionally, bonds usually have a set maturity date, which can typically range from one to ten years in the future. Once that date is hit, the bond is repaid in full.
5. Private Equity
Private equity is simply when you invest and take an ownership stake in a private business, like a start-up. The end goal will be to receive part of the profits and potentially be paid a percent lump sum if the business is ever sold.
Typically, this will require you to be an accredited investor or venture capitalist, as private equity will require a fairly large amount of capital. There are also sites that have the crowdfunding aspect so you can get in on the action like Kickstarter, IndieGoGo, and AngelList.
6. Certificates of Deposits (CDs)
Another example of an appreciating asset that might be interesting to you is certificates of deposits or CDs as they often abbreviated. These are similar to bonds in a way, as it is low-risk and has much less risk of loss compared to stocks or real estate. However, you can also expect lower returns.
CDs can typically be purchased through your bank or an online-only bank you might be interested in. Any CD you put money in should be FDIC insured up to $250,000. This is extra protection for you in the bank where if the bank was to ever go completely under, you’d be able to recoup your money up to a quarter-million dollars.
7. Savings Accounts
Your savings account is one of the safest appreciating assets for your money. The challenge is many banks are offering fractions of percents when it comes to interest rates. The means they are not keeping up with the rate of inflation!
However, you can look at high-yield savings accounts which usually you can find in the 1-3% interest range. But if the economy is struggling, you may see those percentages dip on banks and eventually rise again.
8. Commodities
Another investment that might not get as much spotlight compared to others on this list, but are just as important is commodities. It’s a pretty broad category, but besides being filled with appreciating assets can be a good diversification tool for your portfolio.
A commodity is items like grains, silver, gold, beef, oil, and natural gas. These items are also risky to invest in as there will be ups and downs in the pricing. However, over time these have substantial potential in being strong appreciating assets.
9. Collectors Items
Collector’s items can be a massive appreciating asset if you know what to look for and what to invest in at the right time. Out of this list, investing in collector’s items might be one of the more challenging assets to put your money into. But, the value in the future has serious potential to net you big money.
10. Starting A Business
Starting your own business can be time-consuming, stressful, and require a bit of upfront capital — and can still fail even with great execution. However, starting a business can build your net worth, and become a massive appreciating asset in the future.
And there are tons of businesses you can start, especially online that have less initial expenses but can build your income substantially. Naturally not everyone wants to be an entrepreneur and that’s okay, but think about many millionaires and billionaires who did not come from generational wealth.