Invest in used boats?
One November, many years ago, a coworker told me that a desperate seller would sell him a nice boat for $1,900, and it would fetch $4,000 in the spring. If I put up $1,500 he would cover the rest, take care of everything (storing and cleaning the boat), and we would split the profit.
I declined, and he came up with the money some other way. Sure enough, the boat sold for close to $4,000 the following spring.
I missed out on a five-month return of about 65%, but since then I have made some other uncommon investments, like used car flips, credit card arbitrage, and used wood furniture. I recently wrote about those and other unusual investments here on FFL.
Now it’s time to continue that exploration of the less-common investments, both for this article and for my own purposes. For example, I just started investing through real estate crowdfunding platforms like Fundrise and Realty Mogul.
Of course, in the process of looking for these new and interesting ways to invest, I found many other possibilities. Here are a dozen of the more interesting ones.
You may not feel entirely comfortable investing in wine, but as Wine Folly points out in their guide to getting started, in the worst case scenario you can always drink your investment.
They also say you can start with just a few bottles of rare wine, but some exchanges will only buy full cases, so realistically you could spend thousands of dollars to get going.
Maybe you like the idea, but you don’t want to do all the research needed. And perhaps you don’t want to spend money for insurance, or for the coolers needed for proper storage. In that case, Commodity HQ suggests an easier way: Wine Investment Funds.
They profile several such funds, including one that has had an average annual return of almost 8% over the last few years. Since none of the funds listed mention the minimum investment on their websites, it’s a safe assumption that these are for investors with some serious money.
2. Music Royalties
Want to get paid every time a song is played on the radio or through a streaming service? If so, invest in a royalty stream.
You can find these investments being auctioned on Royalty Exchange. This is where artists and others who own the rights to their songs go to sell partial or full rights.
For example, as I write this, one of the listings is a portfolio of “Reggaetón Songs by Major Latin Artists.” My wife assures me Don Omar (whose songs contribute more than half of the portfolio’s revenue) is a major latin artist.
The royalties from the last year were $2,757, and the current bid is $9,500, with a couple days left. Buy that and you own the rights to the royalties from those songs for the life of the artists plus 70 years (that’s how long the copyright lasts).
Royalty Exchange has a nice page explaining some of the factors to consider when investing in music royalties.
3. Antique Signs
Some people love old signs, and they’ll pay big bucks for them, as you can see with a quick look at the eBay category for “Original Advertising Signs (1930 – 1969).”
While “Fallout Shelter” signs from the 1960s go for less than $30, if you sort by “Highest Price” you’ll find some signs priced at $20,000 and higher.
So if you come across old signs at a rummage sale or (better) a farmhouse estate auction, get online and check the prices of similar ones on eBay. You can also learn more about what makes vintage signs valuable from Manifest Auctions’ Antique Sign Value Guide.
Investing in old signs is risky. You might not find a buyer right away, or you might misjudge the value of your investment and overpay.
On the other hand, if you make a mistake you can always put the sign in the attic for a few years and then try selling again. While you wait the sign will get older, and age is one of the factors that determine what collectors will pay.
You might think you need a lot of money to get started investing in gemstones. After all, a single diamond or ruby can sell for thousands of dollars.
But the International Gem Society says, “Low to moderate priced gems are the choice of many well-informed investors…” They even say that, compared to high-end gemstones, “Gems of lesser value often appreciate more and are easier to liquidate…”
So you can start with a modest investment.
But you do have to become knowledgeable. Gems appreciate at about the rate of inflation (unless you add value by having them recut), meaning you make your money by investing at the right price. So if you make a mistake, waiting for the value to rise can take a long time.
As with many other consumer items, given enough time, toys can generate feelings of nostalgia, and therefore become valuable to collectors. In fact, there are over 50,000 listings on eBay for “Collectible Vintage Toys.” If you sort those listings by “Highest Price” you’ll plenty of old toys at prices over $5,000!
Of course, an asking price doesn’t tell you whether the item sells, so before you invest in those Star Wars action figures, look at the eBay auctions with actual bids.
Parcel22Go.com has a guide to investing in toys that’s worth reading. It points out the crucial distinction between investing versus collecting.
If you’re willing to wait, one safe strategy is to buy toys that aren’t yet collectors items. You can find hundreds of toys for a dollar or less at rummage sales. Make an educated guess as to which toys will be in demand decades from now, buy a hundred or more, and store them.
If you guess right on a few of those investments, someday you could have a nice profit to help fund your retirement.
In an article on the basics of timberland investing, the Realtors Land Institute says, “Historically, timberland returns have compared favorably with stocks but with much less risk and volatility.” Trees are also a nice inflation hedge.
If you happen to have some land with your home, you might consider having the trees on it harvested selectively. My friend did that and made thousands of dollars from a few acres, without any noticeable difference in the view.
Otherwise you can buy forested land as a timber investment. Before you make an offer ask for a harvesting quote from a place that buys trees. Then ask a real estate agent to estimate what the land value will be after the trees have been cut.
If the lumber quote and the remaining land value estimate add up to more than you’re paying, you could be ahead on your investment from the start.
If you want to keep it simpler, you can just invest in any of the many dividend-paying lumber and wood production stocks.
7. Movies and Documentaries
I was once offered the chance to invest in a documentary, one that I happened to be in because of a book I wrote. The offer didn’t tempt me and, as it turned out, the documentary never made it to any major outlets, so I assume I would have lost all of my money.
It’s tough to predict whether a movie or documentary will hit it big. On the other hand, if you like to gamble, the payoff can be big when a movie is a hit.
To learn more about the process, see Investopedia’s guide to movie investing.
One problem some of us will face is the size of these investments. MovieInvestor.com, a platform for filmmakers and investors, says, “Most movie investments are for several hundred thousand dollars to upwards of a million dollars depending on the person investing and the requirements of the movie.”
Movie Fund is a better option for small investors. It’s something like a crowdfunding platform for Hollywood-produced movies.While some projects ask for a minimum investment of $50,000 or more, others accept investments as low as $500.
8. Rare Books
Books don’t necessarily need to be old to be valuable. Meier and Sons Rare Books says that because the hardback version of The Philosopher’s Stone, the first book in the Harry Potter series, had a small first run, a copy in good shape is rare, and worth $25,000 or more. That’s despite being less than 20 years old!
As with other investments in collectibles, you can start small with books. One list of what to look for in rummage sales and thrift stores has dozens of examples of books you might find for a few bucks that can be sold for $50 to $5,000.
You can check current book values using the book price search tool on Biblio.com.
9. Foreign Currency CDs
One-year bank CDs pay barely over 2% at the moment, but there are alternatives. One of the more interesting and uncommon ones is foreign currency CDs.
You can buy these in an FDIC-insured account right here in the states. TIAA Bank (formerly Everbank) has a variety to choose from, each with a $10,000 minimum investment. Current offerings include the Polish zloty, Mexican peso, British pound, and ten other currencies.
The CD rates are not always higher (although a 3-month Mexican peso CD pays over 5% at the moment), but this is also a way to invest in the currency. So, for example, a Euro CD that pays 0% might be worth it if you think the Euro will rise substantially in value against the US dollar.
Of course the flip side of that is that you can certainly lose money with foreign currency CDs, if the currency you choose goes down in value relative to the US dollar. That FDIC insurance only covers bank insolvency, not currency fluctuations.
10. Business Inventory
Suppose a maker of cool cat toys needs to raise money to expand. What can they do? They can go to Kickfurther, a crowdfunding platform where they can pre-sell their inventory.
That’s where you come in as the investor. You might invest $20 (the minimum) or thousands of dollars in their inventory, and be paid back, along with a predetermined profit margin, as those cat toys sell. You can even help market the items if you want to speed things up.
These are risky investments, backed only by inventory), so you should look for good returns to compensate for that risk. You might make 10% in 60 days on one investment, but the next one could be with a company that goes bankrupt or is slow to sell their inventory. Investing a little bit into a lot of different offerings might help mitigate that risk.
LexShares is a crowdfunding platform used to raise money for lawsuits. As an investor, you put up some money and, if the lawsuit is successful, you get repaid with a decent return (which varies by case). You can learn about and track the progress of cases on the LexShares website.
The minimum investment varies by case, but is sometimes as low as $2,500. The bad news (for some of us) is that you have to be an accredited investor, which means, to participate, you need a net worth of at least $1 million, or an income of over $200,000 annually for the last two years.
12. Invest in Local Small Businesses
NextSeed is a platform where small businesses can raise the capital needed to start or expand. The money comes from investors like you and I, who buy “revenue sharing notes” in hopes of a good return.
For example, one current offering is for Oxalis, a new restaurant opening soon in New York City. The minimum investment is $100, and, if the deal is funded (they need to raise a minimum of $100,000 or your pledge is cancelled), you’ll start getting a share of their monthly gross revenue once the restaurant opens. Within 48 months (the maturity date) you should be paid a total of 1.6 times your total investment.
Invent Your Own Uncommon Investments
If you don’t see an investment you like in the above list, create your own! For example, if you live in the north you might buy used snowmobiles in the spring, when demand and prices are low, and then sell them in late fall, when demand and prices are rising.
Of course, that sounds more like a business than an investment, so I would just invest with a friend who knows snowmobiles and does all of the work (where’s that boat guy?).
Other possibilities? I’ve invested in cheap bicycles that I later sold for a profit. A friend once invested in 40 tons of landscaping stones, had it all dumped on a property he owned, and then sold it off in smaller quantities over time, making a nice profit.
Maybe someday there will be a crowdfunding platform where you can make odd investments like that. In the meantime use your imagination.
If you’ve invested in any of these, or in other uncommon investments, please share your experiences below … and keep on frugaling!