Investment is the investment of money for passive income or capital preservation.
Investments are inextricably linked with risk, and each investment strategy operates in its own way. However, you need to know some rules to understand this process.
1. You need start-up capital. Small amounts can be invested, but the resulting profit will be correspondingly less.
2 . The higher the risk, the higher the return. In other words, the most interesting offers can bring a solid profit, but if the situation changes for the worse, you can “lose” your investment.
3. It is better to invest in an area in which you already have knowledge or experience. Without special knowledge of a particular area, it is more difficult to understand the nuances.
4. Invest in multiple ways or in multiple areas. This will mitigate the risks.
Now about the main thing: where to invest now?
Is it reasonable to invest in real estate?
There are several options for this direction : rent, sublease, commercial real estate, real estate funds.
Everything is simple in renting: you buy an apartment, look for tenants, draw up an agreement and sign it. The contract specifies the terms, reimbursement of funds for early “departure”, compensation for damaged property, and so on. This type is especially good in large cities for renting out premises to visiting people.
Subletting is when you rent a home to rent out to others. You can rent apartments by the day. The option is promising if the area is located in the city center or in resort towns. But it is essential to draw up the contract properly and notify your landlord of the purpose of the lease.
Commercial real estate. In addition to residential premises, you can buy a plot or a building for rent to commercial organizations. You can build a shopping or business center. You will receive income, but it is important to understand that you will have to invest in providing the building with everything you need: utilities, repairs, plumbing, heating, and more.
In addition to renting and subleasing, you can buy some premises for the purpose of further resale, but for a larger amount.
Another option is real estate investment funds . For example, REIT. REITs are real estate funds that buy or build real estate, rent or sell it, and buy mortgage-backed securities from banks. Anyone can buy shares in most real estate funds. Income from the sale of real estate is distributed among shareholders through dividend payments.
Real estate is always in demand;
income for the long term;
Availability of investments;
Large selection of options.
Dependence on the economy of the country and region;
Real estate prices are quite high;
Not suitable for small towns;
Force majeure may also occur. Due to circumstances beyond the control of the property owner, the price may drop sharply.
Bank deposit: is it worth taking money to the bank?
Bank deposits are investments of money at interest. It is most advantageous to choose programs without partial withdrawal or replenishment, since the percentage depends on this. Deposits differ in the frequency of payments and types of capitalization.
Is it worth investing in foreign currency?
A well-known way of investing is deposits in foreign currency. The most liquid are euro, dollar and bitcoins, cryptocurrency. But the exchange rate is quite volatile. The currency market is not the most reliable option.
It is best to buy currency on the stock exchange. The most famous with a variety of possibilities and types of currencies is FOREX . However, speculation on the stock exchange requires knowledge of the market and a fair amount of experience, since the process is accompanied by major risks. Other options where to invest money: rates of one currency against another and exchange in a bank. The betting option is the most risky. The most common way is an exchange in a bank. This method is designed for the long term.
It is advisable not to concentrate on only one currency. So you will not lose everything in the event of a sharp change in the exchange rate of one of the currencies.
Foreign currency is the most stable and slower to inflate;
By investing in foreign currencies, you are more protected from losing the amount of your assets due to devaluation.
No significant capital gains;
Investing in gold: is it worth investing?
Gold is suitable for those who are looking for where to invest money without risk. In this option, you must follow a number of rulesthat will help you better navigate the gold market.
1. You need to invest for the long term.
2. Choose trusted vendors, banks and coin dealers.
3. Decide in advance on the place of storage of gold.
4. Find out the amount of additional costs;
5. Make regular investments.
6. Distribute gold into different portfolios.
Analyze market conditions and rebalance your portfolio in parallel. Learn about various investment tools. Learn quality analytics.
The most reliable investment option, gold is always valuable;
Cannot be completely depreciated;
Gold prices have been on the rise in recent years.
Not suitable for the short term;
To generate income, you need to wait for the rise in the price of the metal.
Should you invest in stocks?
In order to buy shares, you first need to open a brokerage account. The shares themselves, securities are traded on the stock exchange.
You can earn income in two ways: through dividend payments and through subsequent sales. The amount of dividends from shares is established by the meeting of shareholders, payments occur at a certain frequency (quarterly, half a year, yearly). If you decide to sell shares, keep in mind that their prices are volatile.
It is important that you will have to pay a commission for maintaining a brokerage account. In addition, without an individual investment account (IIA), the state will take 12% of income from shares.
There is no maximum profit;
There are several options for earning on shares.
The stock market is too volatile;
High level of risk;
A high knowledge of the stock market is required.
Investments in IIS
IIS is an individual investment account through which you can make various transactions with securities and other trading instruments. Thanks to IIS, you will be entitled to favorable income taxation. IIS is a good tool for investing money and further increasing income.
With income from IIA, you can purchase bonds, stocks, futures and options, foreign currency, shares of investment funds. An important condition is that you must use Russian stock exchanges.
What business is worth investing in?
You can open your own business or contribute to someone else’s. It is important to choose a promising area. It will be no less profitable to give preference to online business, since business is trying to keep up with the times, and IT technologies allow it to develop faster.
There is no maximum profit;
Many spheres and directions;
Can be done without large investments;
You can see exactly where the invested funds go;
The investor can take part in business processes;
Suitable for the short term due to monthly profits.
There are certain risks that do not depend on the investor;
The situation in specific areas depends on the legislation and market conditions;
Business knowledge required;
Additional investments are required depending on the situation.
Investing is a profitable tool for obtaining active or passive income. However, it is extremely important to have knowledge in this area in order to understand this process. If you follow all the rules, as well as with the ability to analyze and adapt to different situations, you will succeed.