6 of the Stupidest Alternative Investments People Blow Money On!

Diamonds – Diamonds become a really stupid investment when you buy them for reasons besides enjoying their beauty on your significant other. The diamond market, for retail purchase like you and me is highly inflated as far as price is concerned. Even when a jeweler gives us a “great deal” they are still making over 20% the cost of the diamond.

Consider that when it’s time to sell the diamond has often been worn for a number of years or decades, has been worn to some degree and is no longer in a fitting that is fashionable. It will be rare to get 60% of what you paid back. That’s not an investment. Stick to silver and gold bullion.

If you must buy diamonds for investment purposes, only buy those of 1 carat or more and skip the placement. Just get the raw diamond with the certificate from a trusted jewelry store.

Forex – Forex or FX is one the most gullible markets for people right now. Its popularity is exploding among young people and people who live in countries with little financial over site. This is because this ‘investment’ which is largely a gamble has little regulation.

Nevertheless, a few people do very well with it and seem to have a knack for understanding it. I’ve written about it here and would invite you to check out these books for learning Forex before getting started.

Collectible Toys – Maybe you thought Beanie Babies were going to make you rich or maybe you still hold onto your action figures from childhood, hoping to cash them in one day. Unfortunately the majority of toys worth money today are those that few people saved, a simple illustration of supply and demand. In order for them to be worth something, people have to actually want to buy them from you.

Toys of the last 25 years have all been bought brand new from and been kept in perfect condition by collectors. When it comes time to sell they’re worth nothing because everybody already has them. If you’re going to invest in collectible toys focus strictly on items that are timeless (like Star Wars) and only focus on the vintage toys that almost no one saved.

If you think I’m joking walk into your local antiques mall or flea market. You are bound to find at least one vendor who has a huge collection of toys from the last 20 years, mint in package. Unfortunately no one is buying them, at any price really.

Stamps – Yes, stamps used to be worth a ton of money. A few still are but, by and large the stamp collecting hobby has come and gone as almost no one under 25 is familiar with the postal system, nor cares for it besides obligatory mail. The fascination with philately has come and gone.

6 of the Stupidest Alternative Investments People Blow Money On!

On top of that, the stamps of the last 50 to 100 years have all been printed in such high numbers that anyone who wants the stamp already has it. Another illustration of supply and demand illustrates that there are few buyers out there for millions of stamps. 19th century stamps and earlier seem to hold up well but most sell for a fraction of the guide book prices.

If you still like collecting Americana and history, try coins. They are often just affordable with a much greater audience of buyers and sellers.

Mineral Property Rights – I’ll admit, I would love to own some of these because they are so freaking fun! Can you imagine owning your own property that you have the opportunity to pan for gold in, dig treasure and spot oil? The problem is, you don’t own the land, just the right to the minerals. These properties are often difficult to get to, you have to pay fees on them each year, and the why did the person sell it to you in the first place so cheap if there is really gold on the land?

These are strictly hobby opportunities for people like you and me. Don’t try to sell your friends and family that this is an investment. If you have excess money and enjoy metal detecting and panning for gold, go buy yourself a mineral property right on a “known gold reserve” in the middle of nowhere.

Domain Names – This one is a bit tricky because I have made some good money on domain names in the past and know a few people who makes tons of money right now. The problem is that it is very difficult and time consuming to register new domain names for profit. The marketplace is so flooded with domains that nobody wants and email inboxes are full of unsolicited offers that people just doesn’t care.

Domaining successfully takes start up money, salesmanship skills, and a whole lot of research. To think that registering a few names on Godaddy that sound great will be an investment is just throwing money away!

I know I’ll take some flak here but, overall most people don’t make any money at all unless they are buying .com domains.

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