When the word ‘invest’ comes up in conversations, many people immediately think of men in suits looking at a screen as they monitor the exchange of millions of dollars in stocks. The truth is, you don’t have to be the Wolf of Wall Street to be an investor.
The secret to creating wealth is developing good financial practice. Once you have a small amount of money to play with, you can begin to invest. Let’s take a look at some of the ways on how to invest money wisely and get started!
How to Invest Money in 2021
In most cases, the best way to start your investment journey is to choose which asset class you want to own. It could be fixed income, stocks, real estate, or even all of them. Each of these has unique opportunities for reward and risks of loss. Or you can work with professionals like Viva Capital Management to know how to invest money effectively.
Here is a breakdown of three smart ways you can use to grow your money.
1. Invest in Real Estate
The real estate industry happens to be one of the oldest in the U.S. If you own a piece of property such as land, a house, or an office, you can make good money by charging rent or lease fees.
There are several ways through which you can acquire real estate property. You can either buy a house and rent it outright, sell it at a profit when its valuation increases, or buy property through a REIT (Real Estate Investment Trust).
A REIT involves putting money down together with other investors to buy property through a business exempt from corporate tax.
2. Acquire Ownership in a Successful Enterprise
Owning a successful business has always been a great technique of accumulating wealth. There are several ways through which you can acquire a stake in a successful business.
One way is through buying stock in a publicly-traded business. This is achieved by buying stock in a company listed on any of the stock markets like the NYSE (New York Stock Exchange).
Alternatively, you can also kickstart your own brand if you have the skill and discipline to become a sole proprietor. If not, you can consider buying equity in someone else’s company and becoming their partner.
3. Lending Out Your Savings
Loans are as old as civilization is. Saving money and lending it to other people with the promise of full repayment plus interest is a good way of investing.
You could choose to buy government bonds, a certificate of deposit from a financial institution, or directly loan out to a person based on a written contract.
Make Your Money Work for You
Everyone has a unique financial status and there is no one-size-fits-all solution to improving one’s financial situation.
The best way to become more financially stable depends on how they earn and use their money. Having a comprehensive understanding of your income vis-à-vis your assets, liabilities, and expenses is key when creating a solid financial plan.
Investing your money well involves you taking the time to research viable investment opportunities. Make sure you consider your preference, how much money you’re willing to put on the line, and how much risk you can take.