All kinds of ways to invest money in order to make a profit are available to every person who has managed to create a certain resource base. The difficulty lies in making the right choice of a niche and a specific company in particular. In order to save your money and subsequently increase it, you need to be able to evaluate various investment projects and the selected market segment as a whole.
Those who intend not only to enjoy the fact of investing the accumulated capital, but also to receive generous interest, should take into account several simple, but extremely effective principles.
First of all, it is income diversification. In other words, there should be several sources that generate financial flow . This will minimize the risks that, as you know, inevitable in the difficult business of investing.
Forming an investment portfolio, you need to understand that in percentage terms, instruments with a high risk should be the smallest share. The main attention should be paid to the most stable areas of investments, which, although they do not bring superprofits, but are characterized by a low level of risk.
The main types of investment
If we talk about effective investment of funds, then you need to initially identify key areas that may be relevant for investors:
- Investments in the creation of a new production. It is about launching a new enterprise or about the process of reconstruction of an existing one. The latter option is relevant if you need to enter new markets or start the production of any product.
- Investing in a foreign company - the so-called equity participation.
- Expansion of own production and increase its efficiency.
- Investing in intangible assets. In this case, you should understand the investment to such objects as trademarks, licenses, copyrights, patents, etc.
- Net investments, the essence of which is the acquisition of a new company.
- Gross investment . We are talking about combining reinvestments and net investments into a single complex. The purpose of such a maneuver is the acquisition and formation of additional funds for production, which will support the organization's fixed assets.
- Investments for profit may include work with venture projects, as well as startups.
- Do not forget about futures and options.
- Bonds, stocks and bank deposits also deserve attention .
- It makes sense to invest in precious metals, mutual funds and real estate.
- For those who like to take risks, PAMM accounts in the foreign exchange market are suitable .
In the following sections, some of these areas will be discussed in more detail.
Venture projects and startups
If you try to highlight the most profitable investments, then you should start with this particular segment. This type of investment is associated with a fairly high degree of risk. In this case, there will be either significant profit or nothing. Various investors periodically invest in such areas, but they initially understand that they can lose all the funds that were entrusted to a particular team of startups.
But if successful, the investment will justify itself many times. For those who want to test their business flair in this area, there are special startup exchanges that present various projects that require funding.
Venture investment may also include investing in order to profit in investment funds, which, in turn, are engaged in the redistribution of funds received in various liquid instruments.
There are also accumulative insurance funds that operate in fact under a trust management scheme and provide investors with the opportunity to receive a fixed percentage of the invested funds.
If we consider the most profitable investments, then we need to understand the topic of PAMM accounts, since they are capable of generating a fairly high income. But it is also worth noting that this method of generating a financial flow is risky. In fact, this is one of the most common tools for investing in financial markets.
In this case, investors receive income from speculative operations that are performed by other persons, to whom the invested money is trusted. As a rule, experienced traders engage in trading in the financial markets, who offer open trading statistics so that the investor can assess potential risks.
As a result, investing money in order to make a profit in this particular segment implies the choice of a dealing center offering PAMM accounts, as well as a specific trader who will manage the finances entrusted to him. Moreover, such accounts have certain rules for entry and exit. These are the following conditions:
- the period within which the profit is fixed (terms of calculation);
- minimum amount of investments;
- amount of commission received by the trader;
- the conditions under which the withdrawal of funds.
In most cases, investors invest in several positions, choosing traders who have a more risky but profitable strategy, and those accounts that do not give a large percentage, but are stable at the same time.
This tool definitely deserves attention. In this case, we are talking about a specific type of obligations of the borrower to investors. The role of borrowers are often various companies that need certain funds. They take money from investors at interest for an agreed period. In exchange, depositors receive bonds confirming the fact of their investment and further return of a fixed percentage.
Any enterprise operating under such a scheme guarantees, with its own property, the payment of accepted financial resources. If you focus on the average, then the interest on bonds will be from 8 to 12% per year. Such an investment tool cannot be defined as the best investment, but it deserves the right to exist because it has a high level of reliability. As for net profit, it is enough to cover inflation and, albeit slowly but steadily increase equity.
Another way to increase financial resources is to invest in securities. By purchasing shares, investors receive the right to own part of the company to which the purchased securities belong. The essence of earnings is quite simple: you need to analyze the stock market offers and choose the most promising company, which, according to forecasts, should grow. Having invested in the shares of such an enterprise, we can count on a stable increase in their value, and therefore, it is possible to sell securities at a higher price.
But in this case, there are certain risks. First of all, this is a drop in the value of shares, which will mean a loss of money. Another opportunity to say goodbye to invested finance is the default of the company that issued the shares. Therefore, the process of analytics before buying securities should be approached very thoroughly.
In the case of shares, in addition to the growth of their value, one can determine the payment of dividends, which is made by the company annually, as another additional source of income. Their size is approximately 0.5-1% of the value of the shares.
Considering the various options for investing money, Mutual investment funds should not be overlooked. Their essence boils down to the fact that a certain number of participants pool their financial resources to acquire various assets, including bonds and shares. At the same time, there is a fund manager who, having the necessary qualifications, ensures competent and profitable investment of trusted funds in current assets.
Both in Europe and the USA, such companies have long been recognized, and their number is constantly growing. This investment tool has several obvious advantages:
- First of all, it is the complete transparency of all processes. The collective investment system implies constant reporting to both the depositors themselves and the organizations performing the audit function. The reports provide information on operations and transactions in which the assets of the fund are involved.
- No need to acquire financial literacy for those who invest in mutual funds. Instead of investors, employees of the management company will think, which, in turn, are highly qualified.
- Save time. An investor who has opted for mutual investment funds does not need to analyze the securities market, delve into the affairs of a particular company and assess the situation.
With these advantages, UIFs can be safely placed in the “Most Profitable Investment” category, because they not only provide a stable and fairly high income, but also do not require the active participation of an investor, freeing up temporary resources for other matters.
This category of investments should be considered separately, since some important nuances are associated with it. First of all, it is worth noting that precious metals need to be understood as gold, silver, palladium and platinum.
You can buy them in the form of bars and coins, as well as by issuing a so-called metal bank account.
Considering the prospect of acquiring ingots, it is important to pay attention to the current Tax Code of the Russian Federation. The fact is that the legislation defines bullion as property, which means that in the event of their sale you will have to pay VAT. The surprises do not end there: when trying to sell a bullion to a bank, the investor will be faced with the need to pay 13% of income tax.
A more profitable way would be to purchase investment and commemorative coins. Both of them are in fairly high demand and allow for stable capital growth. In addition, in the event of their sale, you will not have to pay VAT, although the payment of income tax cannot be avoided.
The conclusion is simple: considering different ways of investing money in gold and other precious metals, attention should be paid primarily to coins. But if an investor is more interested in the safety of his funds, then it is better to take the opportunity to open a custody account with a bank.
You can choose a “depersonalized” metal account, which, in fact, acts as a deposit, only precious metals are used instead of currency.
You can also invest in securities that are secured by gold. Do not exclude the possibility of earning on the acquisition of shares of gold mining companies.
Real Estate Investments
This direction of investment has allowed many people to earn significant amounts of money. But it is important to understand that such an activity requires a competent approach, otherwise the amount of capital due to unsuccessful investments can be significantly reduced.
But first, it makes sense to pay attention to the advantages of this method of earning:
- with a rise in property prices you can earn;
- much more profitable than bank deposits, because it allows you to receive income stably and in much larger amounts;
- residential and especially commercial real estate is able to bring good profit through rent;
- there is always the opportunity to increase the liquidity of certain facilities due to the improvement of their condition (repair, technical equipment);
- Owning real estate makes it possible to take large loans from the bank for other investment projects and create new sources of income.
One of the main risks in this type of investment is the fall of the real estate market. In this case, the opportunity to profit from the sale of objects is blocked.
A fairly profitable option is to invest in the primary real estate market. By selling an apartment in a new building, you can earn good money, especially if there are several objects. This is one of the most common areas in which money is now invested. Short-term financial investments are also associated with some risks. If you are not lucky to deal with a poor builder, then the construction of the house will be frozen for an indefinite time, as well as the money invested in it.
Therefore, before investing in primary real estate, you need to carefully study the reputation and qualifications of the developer.
Obviously, there are a lot of tools that allow investors to profitably invest the accumulated capital. But each of them needs to be approached thoroughly, given the possible risks. With an accurate and thorough investment strategy, you can use several opportunities at the same time and successfully diversify your income.