When I hear Investment, it seems to me like a big word, a delicate word that should not be recklessly said because every human has their own level of eagerness. As humans, what we say has the probability of being nurtured or ignored, this means, someone else might ignore what is being said or try out its possibilities.
To elaborate on what investment means,
‘Investment’ as a term is contributing your resources or assets to gain futuristic profits, it is the process of investing money or an item with the aim that what is invested appreciates within a particular time. Investment is a process of creating and maximizing wealth. It also means placing your money into something with the mindset of making profits. Investment might have its own losses but the purpose of the action is to make profits.
An instance;
“If Bola is to invest her crypto or fiat into something and wait for a certain period of time to access her money, her goal is to get interests, receive more money than what was invested irrespective of how much was invested.”
A financial plan is necessary for every human regardless of their status. Investment is not limited to a specific status quo, anyone from any social class can invest, it is based on an individual’s risk appetite.
A common misconception is that investment is reserved for the wealthy. However, one should know that the poor invest to become rich and sometimes it is not by “how much was invested”, it is “how much interest was received”. Your $1 can become $10 or 50 cents within 3 months.
Top Investment Types
There are several investment types open to individuals, some are of low risk and some are high risk, it is only best to know which plan works.
Stocks
Fixed income
Reits
Mutual fund
Stocks
Stocks can be regarded to as growth investments, they help increase the value of your initial investment. Stock literally means buying a fraction of a company. It is a type of investment in a company where you buy an amount of share(s) to yield more interest in the future. While an investor who purchases stock in a corporation gains fractional ownership, those who own the stocks in a corporation are referred to as shareholders.
To start investing in stocks, you must study the company’s growth rate, monetary value and competitive advantage. One may even predict the future expectations of the company, predicting a company’s growth to reach a particular level in a few years, instigates the purchasing of stocks.
Stocks is a high-risk investment but the returns are higher than low-risk investment. The company whose stocks you purchased can either increase or reduce in value based on the relevance and market rate. It is essential to monitor the company’s growth and price-to-earning-ratio; the ratio of the share price to the company’s earnings per share. It is also important to not invest heavily, it is better to spread the risk. You can discover the best global and local stocks to invest in.
Fixed income
This investment type is low-risk with lower returns, it involves conserving capital which could be an investment in Government and corporate bonds. It is the best plan for average investors to keep their money safe and own fixed income
Arguably, fixed income in dollars is more profitable, It is saving your money for a specific time and then the value of your money increases with the dollar rate. However, with the dollar being volatile, one could either get more returns in addition to the principal or not.
REITs
This involves investing in commercial properties and rented buildings with the purpose of earning interest tied to the property. This return is usually dividends on the rental income made from the properties. With Real Estate Investment Trust, you do not need to buy a building to invest, you can invest in already-established properties through the fund. Reit comes as the middleman between an investor and a real estate or property owner, giving room for investors to generate wealth indirectly.
Considered a solid way to start staking, Investing in reits is a good way to diversify your capital, the trust fund has enabled several income-producing real estates to be accessible for investors to pick from.
Mutual Fund
This is a fund that connects different investors with a common investment objective, also bringing funds from numerous sources and investing them in stocks, bonds, or other assets. You can invest in crypto and other assets attached to the cryptocurrency market and this could be investing in one or more crypto coins. Crypto mutual fund is specifically tied to crypto, fiat is not accepted. Besides, each mutual fund has an expense ratio which is how much to invest.
