In today’s current banking climate standard interest rates offered by most financial institutions is predominantly low. For people or businesses with a surplus of cash, savings accounts are the low-risk safe option for their money. However, storing a balance in a savings account, or even a business account for that matter, is one of the slowest ways to earn a return on your investment (ROI). After all, if you are choosing to let a bank store your money, you are effectively making an investment in their services, but with low risk comes low return.
Of course, you should always leave some surplus cash aside that is quickly accessible because you just never know when cash guzzling special circumstances may arise. Therefore, in this guide, when we say invest your ‘cash surplus’, we mean use money that is spare and free of your life or business above any emergency cushion you may need. So, without further ado, let’s get down to what we promised in the title of this article–investment opportunities as an alternative to using a bank account.
Hedge Fund/Family Office Investments—Hire Specialists to Manage Your Cash Surplus
Family offices that specialise in wealth management, which is an option for millionaires, and of course, billionaires use these specialists to manage their wealth. Highly regarded companies such as South Pass Partners perfectly fits the description of what a wealth management company offers for the super wealthy. For those that do not fit the millionaires plus category, then a hedge fund is your best option.
With both options, the company you hire will have financial expertise across a broad range of investment opportunities. This could include venture capitalist investment, property, infrastructure development funding, cryptocurrency, and of course the most obvious, stocks, shares, and FOREX market investments.
Low or high risk? As long as the stock markets such as the FTSE and NASDAQ are performing well, having a wealth management or hedge fund look after your money is a fairly low risk endeavour. Should the financial markets plummet, your money is still in a good place because experienced family offices and hedge funds will spread the risk by diversifying their portfolios across industries in which the financial markets have little or no influence.
Cryptocurrency – Highly Volatile & Low Risk Opportunities
Although cryptos need little introduction, there is still an abundance of people out there that know so little about even the most popular cryptos like Bitcoin and Ethereum. For those of you looking for a fast ROI, they don’t come much better than cryptos. That said, cryptos can also work in the exact reverse, so you would need to invest wisely or even hire an expert with a proven portfolio. Bitcoin (BTC) is perhaps one of the safest cryptos to invest in as its track record continually shows year-on-year gains, however, as a short-term investment, you’ll need good timing because it is still a highly volatile currency.
Low or high risk? Investing in crypto is high risk. Although, there are options to stake crypto. If you purchase stable coins tied against the USD or gold prices (reasonably stable by-and-large), then you can stake this on the DeFi markets, which can return interest rates of 10% to 20%.
Weighing Up Hedge Funds & Wealth Management Options Versus Crypto
Hedge funds are a great way to increase your ROI versus storing your cash surplus in a bank account. It does come with a small element of risk, and the returns are not instant. Family office investment is a no-brainer if you are wealthy and need someone to properly manage your wealth. These financial experts know exactly where to invest at the right time and in nearly all examples, wealth management funds consistently increase your worth. As for crypto, it is an investment that can earn huge ROIs, but where quick returns with high percentages are involved, the risk is also higher. As a result, by far the safest investments are with financial experts operating hedge funds or wealth management funds.