Where to Invest Your Money for Real Returns

By now, most people have figured out that putting your money to sleep in a bank will cause you to lose money. Historically low interest rates, coupled with inflation will guarantee a loss. So where can you put your money to wake it up and get it working for you? Here are three trending, unconventional investment platforms that Canadians are turning to for higher investment returns. I will highlight features of each of them to help you make an informed decision should you decide to invest.

1. Lending Loop - this platform allows you to create an account for long term savings of 3-5 years with estimated net returns of 6.7% to 7.5%. You need to invest at least $200 to start an account. After that you can invest in increments of $25. When opening an account, you will need to answer a series of questions about your financial health (e.g., employment, net worth, savings) and provide some personal information. Another series of questions addresses your investment goals and risk tolerance. Lending Loop makes it clear that your money will not be accessible for 3-5 years so if you plan on using this platform, only invest money that you will not need access to for a while. They recommend that you start with their automated lending tool called Auto lend, which allows you to choose which types of businesses you would like to lend to. Auto lend will try to invest your money into that type of business when a loan becomes available. You also have to have the choice to manually invest. If you choose to use Lending Loop, be sure to read the electronic signature documents before moving forward. They do warn that there is a possibility that you could lose all of your money and you are required to sign on that. They also state that there is a service fee that is taken out of your earnings, although they do not indicate how much the fee will be. That would be a good question to ask before signing up.

2. Fundscraper - this is a real estate funding platform that allows you to invest larger sums of money into particular real estate projects for a monthly return. Their minimum investment is $5000. When you start a membership with Fundscraper, their staff will arrange a meeting with you to get to know you personally. You will need to go through a screening process to determine your elegibility for their investment platform. This process involves more identity verification than Lending Loop; Fundscraper will need your social insurance number as well as government issued photo identification. To invest with Fundscraper, you need to be at least an eligible investor, which means your assets have to exceed $400,000 and your net income before tax must have exceeded $75,000 in the past two years and be expected to increase. Their returns range from 7% to over 15% and include first and second mortgages. You can also make investments with Fundscraper inside registered accounts. Their fees take about a percent off your earnings, but you still end up with a lot more interest than you would receive from a bank.

3. Hutsy - This platform offers personal loans to borrowers and offers investors a handsome return ranging from 10-25%. Hutsy has their borrowers sign an agreement allowing Hutsy to garnish their wages should they fail to repay their loan. It sounds harsh, but it almost guarantees investors their money back. You can start with an investment as small as $100 which you can deposit by e-transfer or credit card. Hutsy functions a bit like an online bank. You deposit your funds, they lend it out and give you a high return, the way the banks did before the low interest rate era began. Hutsy has earned 4.5 out of 5 stars on Trust Pilot, a popular review site. Hutsy has only been around since May 2019, so we will have to watch as more reviews emerge.

If holding your money in a bank or other traditional investment vehicles limits your cash flow and you need more options, you could consider these. They create a greater risk than the banks do, of course, so you will have to weigh the risks and do your research. My favourite, unconventional place to hold my money is in a dividend-paying whole life insurance policy from a mutual company, designed for high growth by Isura Financial. Your money will be safe and will be guaranteed to grow every year. After you have done your research, if you plan to invest in a risky vehicle, I suggest that you start small. You can borrow a little from your life insurance policy to invest in one of those vehicles. If you lose the money, you can repay the policy loan at your own pace since the insurance company does not have a repayment schedule. If you find your new investment vehicle to be profitable, invest the returns you make from that vehicle back into it. This way, you are not risking any of your own capital. Invest wisely and remember that your wealth is in your hands.