8 Alternative ways to invest your money that really pay off

Gaining in popularity, peer-to-peer (or crowd) lending saw £5 billion in investments by the end of March 2016. Peer-to-peer lending is an alternative to a loan available to small-medium enterprises. Investors can put in small to large sums, and are placed alongside other investors until the investment sum is met.

Borrowers and investors can expect to see better rates than offered by banks.

It's regulated and the risks are low. Some companies even offset risks. They put their money in the pot and only lend to people they trust, so their money is always exposed to risk first. In fact, some peer-to-peer lenders boast that their individual lenders have never lost a penny.

You should expect to see rates at around 5%–7% a year for a three-year investment—the longer you invest for the higher the rate you earn.

Investing can take a matter of minutes as it is all done online. If you think it sounds too good to be true, then read more about peer-to-peer investing here, and believe it. 

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Investing in tomorrow's biggest stars not only pays for the future of the country, but it can earn you a sweet 5% on your investment too. 

Postgraduate courses can cost as much as £60,000 a year, and unfortunately, not all our bright young things can afford that kind of money. MBA students studying at top schools then go on to earn more than £70,000 a year, yet finding that initial investment often proves to be a problem for many, and even when they find loans they face rates as high as 12%.

Fortunately, those techy entrepreneurs have stepped in and offer a solution similar to the peer-to-peer option above, they call their service Prodigy.

But there are a few setbacks.

Although you can rest assured the students will be high-performing and will be studying at the best schools, you have to have a minimum of £10,000 to invest. You will have to wait eight years for your bond to mature and there's no Financial Services Compensation Scheme to protect you. 

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Ever fancied owning a pub? You may not quite be stepping into the shoes of Peggy Mitchel, Mick Carter, et al, but you could get to help, start or in some cases save, a community institution. 

While cooperatives aren't new, they are certainly making a comeback thanks to the rising popularity of crowdfunding.

Investment can be as straightforward as buying shares after a spot of research, or if you're feeling particularly adventurous you could try starting your own local cooperative. Buying shares in your local will either see a return in the form of interest or alternatively you might see more of a social return.

One local pub that has achieved this kind of community investment is The Bevedan Hotel in Moulsecoomb, Brighton. After a troubled past, the locals reclaimed the closed-down pub and reopened it with support from the Cooperative Enterprise Hub. The minimum investment was set at £10, and the maximum £20,000, they managed to raise £200,000 to reopen it in 2012.

Depending on where you invest and what you invest in, this might not be the right investment if you are looking for financial reward as the above example has no plans to pay interest. Always do your research first.

With so many ways to invest you money, figuring out exactly where to invest it can be hard. Franchise Info have a list of franchises for you to pick from, investing into franchises are becoming more and more prominent in recent years.

Yes, carparks. Not houses or buildings or businesses, but carparks. Not too dissimilar to buy-to-let schemes, with this investment it's all about location. 

A parking space in a busy city centre such as Manchester, could earn you a tidy profit in the long term. And at a busy airport such as Gatwick, it might not only save you pounds when visiting the airport, but could see you make a return of as much as 8%. A spot in Dubai can earn you as much as 9%. 

Essentially this is an investment in property, but with a minimum investment of £20,000 it's considered entry-level. Having said that, the carpark market is estimated to be worth $12.6 billion around the world.

This kind of investment can be risky, but the payoff is significant. Abundance (a crowdfunding company for renewable energy sources) reckons that investors can double their capital over 20 years—but that is assuming the company manages to stay in business that long.

With interest rates as high as 7% if you have a large sum to put in then you could make a nice return with many bonds maturing after five years. 

Capital is not taxed but income is liable. However, it does fall under social investment tax relief which means you can claim 30% tax relief in the year that you invest. The big question remains: is it worth the risk? Find out what risks are involved in green investments here.

One-upping green investments is forestry. It has enjoyed strong returns—8 percent a year over the past two decades—and with the UK climate perfect for growing trees, there are no signs of this industry going bust in the near future.

There are two ways to invest, the first is to buy your own woodland or put money into an investment fund with others. The former is obviously quite a costly affair, the investor not only needs to buy the land but will face additional maintenance costs.

With a minimum investment is £40,000, and those additional maintenance costs, it's usually recommended for those with surplus capital.

Tax evasion is never a good reason to invest but, if the investment is bought two years before death, then the investment escapes inheritance tax. Income from harvesting commercial woodland is also tax-free. 

Grayson Perry's "Expulsion From Number 8 Eden Close" via Artfund

Art can be risky business, but its rewards can be staggering. The image at the top of this page, "The Card Players" by Paul Cézanne, is the most expensive painting ever sold—it went for £250 million in 2011. Art investments can be volatile. Risks include artists falling out of favour and accounting for taste (which as the saying goes, you just can't do).

You can't invest in any old painting and hope for the best and art funds are not generally available in the UK. If you don't know where to look, you may need the advice of a specialist, which in itself can be costly.

However, art first and foremost should be bought for enjoyment—a reward that is emotive rather than monetary. It is likely that a return will be seen in the future—although rates are variable—but at the very least you will have owned something that you enjoy. 

If you want to invest in art but aren't sure where to look there are websites and fairs that are created with you in mind. The Affordable Art Fair runs annually and hosts a range of commercial galleries and artists in one place, catering for all tastes. The Royal Academy hosts a summer exhibition where everything is for sale. You can pick up works from emerging artists for as little as £200 or by established artists like Grayson Perry or Gilbert and George for £25,000 and upwards. Saatchi art also offers selected artists from as little as £67 ranging up to £20,000. 

If you fancy yourself as having an eye for art, it might be worth scouting MFA degree shows in your nearby cities, or keeping an eye out for artists' open studio events.

What makes a car a classic? No one can really say. HM Revenue & Customs say it's anything built before January 1976, but does this really mean that old sentimental banger locked up in your garage is actually worth something?

Between 2005 and 2014, classic cars made a 399% gain. Put into perspective among other luxury collectables: coins up 176%, jewellery up 150%, fine wine up 134%, while 19th-centruy art fell by 7% and rugs managed a lousy 7% increase in comparison. You can read more about investing in luxury goods here.

The question is, is now the right time to invest? You could buy that Alfa Duetto Spider for £20,000–£25,000 but would it match the 399% increase over the same nine-year period? Perhaps not, but the market is estimated to make a 20% increase over the next 3 years.

Similarly, gold experienced a huge gain between 2001 and 2011—that's despite huge world disasters such as 9/11 and the 2008 economic crisis. Usually advised as an investment as a part of a diverse portfolio, gold tends to remain stable in the face of adversity. You can read more about gold investments here.

Always make sure that you are aware of investment scams.