Investing
"How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case." — Robert G. Allen
Investing can seem like a daunting task, but the reality is that today investing is easy as. All you need is a smartphone and $10 to get started. But before i go into that we will explore your options if you are considering investing.
SHARES
When you buy shares of a company, you become a part-owner. The company sell shares of their business to the public to raise capital.There are two common ways you can receive income from shares.
a) Share value - A shares value relies on how well the companies doing, although other factors such as politics and economic conditions can also impact share prices. It is also determined by consumer faith, that is; how much people think its worth.
b) Dividends - Some companies also pay a dividend in which a company distributes a percentage of profits to shareholders. A company can pay this quartery, half yearly or yearly which is directly paid to you, the shareholder.
I'd recomend starting with stocks first, even if you have $10 to spare. Here are some great Crypto apps here.
BUYER BEWARE
There are higher risk shares and their are lower risk shares. Major supermarkets, banks and other established businessess are considered lower risk, whilst businessess such some fintech and new startup companies may be considered a higher risk. As a result higher risk companies offer a promise of higher returns. I would stay clear of this to begin with. Focus on major players that have a history of good returns. If you are comfortable with the risk tolerence over time, you can increase it accordingly to the areas your most interested in.
If you are unsure, the motley fool is a good website to have a look at for recomendations.
Pros: Better returns than savings accounts, owner stake in companies, diversified portfolio
Cons: Market volatility, requires market knowledge.
Crypto
Crypto currencies are essentially digital coins that derive their value based on utility, consumer faith and supply, promises, politics and fads amongst other things. Some currencies such as DOGE have no utility, but are supported by a large community. Others such solana are able to process transactions at low costs, which makes them attractive for businessess.
Crypto currency utilises blockchain. Think of big notebook your writing an entry in. Then imagine everyone in the world can see it when you enter it. This grants legitimacy to the entry, but it cannot be altered, deleted or erased. This allows payments to be made securley and fast.
Cryptocurrency is incredible volatile. Before you invest keep in mind that a cryptocurrency's value can dramatically change in a 24 hr period. Be sure to know your risk tolerance and refer to your investment stategy.
Overall i consider it a good investment if you have a diversified portfolio. It can make you money very fast, but it can be lost just as fast. Its worth keeping an eye on at least. Some recomended crypto platforms can be found here.
Pros: Potential for high returns, involvement in emerging technology.
Cons: Extreme volatility, regulatory uncertainties.
Here are some other investments that are worth considering:
Real Estate Investment Trust
A Real Estate Investment Trust (REIT) is a company that owns, operates, or finances income-generating real estate. REITs allow individuals to invest in large-scale, income-producing real estate without having to buy properties directly.
Pros: Lower entry cost, diversification.
Cons: Subject to stock market volatility, less control over investments.
Property Syndicates and Crowdfunding:
These platforms pool funds from multiple investors to purchase or develop properties.
Pros: Access to premium properties, shared risk.
Cons: Less control, potential lack of transparency.
Exchange-Traded Funds (ETFs):
These funds track indices, commodities, or baskets of assets and are traded like stocks.
Pros: Diversification, lower fees.
Cons: Market risks, may include unwanted assets.
Peer-to-Peer Lending:
Investing by lending money to individuals or businesses through online platforms.
Pros: Higher interest rates, supports small businesses.
Cons: Risk of default, less regulatory protection.
Conclusion
Investing is a powerful way to grow your wealth, but it requires knowledge, patience, and a strategic approach. By understanding the basics and starting with a clear plan, you can navigate the investment landscape with confidence. If you are ready to dive into investing, check out some must have financial product reviews that will help complement your journey. They can be found here.
Cain, A. (2023). Past performance is not an indicator of future performance. Money Magazine, (272), Page Numbers 12.