You have probably looked into investing before, but you might have found it to be too much of a risk for what it’s worth. After all – unless you’re a professional investor with years of experience and lots of cash to throw – you might not be able to afford the potential losses of an investment that does not pay off. If that sounds like your situation, there are investments to be made which are just about as low-risk as they come. With this helpful guide, you may see investments in a new light – no scams, no shady business, just well researched, straight-up investment.
How Does Investing Work?
Investments work very simply – you lose money in order to make more later. Investments are not a get-rich-quick scheme; in fact, they are quite the opposite. If you invest in something it means you put money into it, in order to increase its value over a long period of time. Football teams invest in their players, for example. One football team may offer a player a transfer, which is why many players have played for more than one team during their career.. This costs the team money in the short term – they will likely offer a high fee for the player they want. But in the long run, if this player improves their team’s chances of winning, the club will make revenue from this player’s presence. This is what is known as ROI, standing for Return On Investment.
If the player does not perform to the standard the club expected, however, the club will therefore lose money on the investment they made. The player could become injured, or simply make errors on the field. This is the risk of an investment; there is never a one hundred percent guarantee of success, no matter how sure you are.
What Are Low Risk Investments?
Some investments are high risk. These are investments such as the stock market, cryptocurrency or buying shares in a small company whose trajectory for success is yet unclear. If you want to be careful with your money, it is important to be wise when it comes to choosing your investments. Well researched investments will pay off hugely; you will earn money from doing very little. If you invest on a whim without proper guidance, you might lose your money altogether. Of course, all investments hold some degree of risk.
Here are some options for low risk investments.
Here is the thing: everyone will always need houses. Real estate will always be a huge industry, no matter what goes on in the world. The real estate industry is currently estimated at over $200 trillion. This unbelievable figure covers all privately owned land and property in the world. Real estate is a big deal, and with this kind of popularity and good standing, the investment risks become lower.
How do you invest in real estate? If you are already a homeowner, you may be considering buying another property as an investment, or alternatively making investments in the home you already own. How? Read on to find out.
If you are looking to buy a second property, either to live in yourself, as a vacation home or to let out to renters, it is vital that you assess all the possibilities before you commit. View the house as if you would live there yourself full time, even if this is not the case. Is the property in an upcoming neighbourhood? Are their local schools that are well-regarded? Is the house in good condition, or if not, is there room in your budget to renovate? All these are vital questions to ask yourself before you buy. A house is an investment like no other – if it is in the right place, with the right work put into it.
If you want to invest in your existing property, consider a renovation. Adding a loft or converting the basement into another well-designed bedroom will add considerable value to your home. Similarly, landscaping your garden or renovating your kitchen with bespoke furnishings will cost you a considerable price, but this investment will likely be returned to you when it comes to selling. Real estate often pulls in reliable ROI, which is why so many people around the world make the investment.
Buying Shares in a Company
Buying shares in precarious companies is relatively high-risk, but if you spot a company or organisation with potential, this can turn into a low-risk investment. If you had invested $10,000 in Apple in 1980, you would now have around $6.7 million. This incredible figure, of course, has the gift of hindsight. How do you know a company is right for your shares investment? Here are a few key things to consider.
- What is the company’s PR like? This has never been more important than in this day and age. If the company has been involved in ethical scandals of any kind, it is best you steer clear, as this will devalue it over time.
- Check out the figures. Ensure you have someone with deep financial knowledge check the company’s quarterly figures and estimate its trajectory based on the current market trends in its industry.
These two major considerations, alongside professional financial advice, can help you make smart investment decisions when buying shares. Once you are a shareholder, you will be paid in dividends each year – essentially earning income simply by having a stake in a growing company.
Investing is always a little risky, but with the right guidance and risk assessment, you could be making money simply by putting your money in the right place at the right time. Following this helpful guide and finding ways to make your money work for you can change your life forever!