Investing consists of using our money to acquire goods or assets through which we hope get benefits. The credits are obtained in the medium or long term, so it is necessary to have patience so that the result is fruitful. So the main objective of an investment is to increase capital through the wise use of resources.
The main aspect to consider when investing is that the profit is never guaranteed. Risk represents the main characteristic of any investment, and therefore we must choose well what we will use our money for. It is important to be clear that in order to increase our capital we must take risks using our assets wisely. Today we will show you what are the goods or activities in which you can invest to multiply your capital.
Why do you need to invest your money?
- It is important to create a monetary cushion that you can use if your financial situation worsens in the future. By not investing, although you do not lose money, you do not create future capital, making your finances vulnerable. The loss of a job or an unexpected expense can shake your financial stability if you are not financially prepared.
- Investing your money correctly prevents inflation from destroying the value of your assets and affecting your purchasing power. Economies are unstable systems that can change at any time and affect your quality of life. By putting your capital in motion you create a certain Financial Independence in relation to the economic situation and protect your assets.
- Investments help prevent our money from stagnating and stretch our capital over time. While saving may seem like an attractive option, when we save our money we run the risk that it will lose value. While by investing wisely we make our capital work actively in our favor.
Where should I invest to make a profit?
The first thing to keep in mind is that the risk of an investment is never zero. The trick of investing is to use our money in activities that have a low or moderate risk. The strategy to follow is key so that profits appear and we do not lose capital. Here are some of the best options to invest your money:
- Investment funds. They are collective investments in which a group of people or companies invest their capital in an investment vehicle. In turn, this process is directed by a managing entity that favors the economic profitability of the process. The managing entities can be part of financial entities or be independent. The assets in which you can invest are multiple, including bonds, stocks and currencies.
- Buy actions. This basically consists of allocating money to the purchase of shares in the capital of a company or business. This type of investment is based on buying securities and then selling them at a higher price and receiving a profit. Likewise, shares tend to sell quickly so this is an investment with a high degree of liquidity. In addition, the shares give the buyer certain rights to the company, such as receiving periodic payments. This is because the company must share its profits with the shareholders.
- Invest in bonds. Consists in buy debt certificates, that is, a documented promise of future payment. These in turn are issued by different entities in order to finance themselves. The issuer of the bond agrees to return the capital plus interest within a specified period of time. While the buyer or holder receives interest payments periodically which are set in advance. In addition, the payment must be made within a specified period of time. The issuer can be a company, state or body that needs financing.
- Invest in Crowdfunding. This consists of finance a project collectively through the internet. The project promoter requests the financing publicly on the internet and the contribution is made using a specialized platform.
People who contribute the money altruistically are called micro-dozen. While individuals who expect to receive profits are called microinvestors. This is a method of intermediate risk so it is recommended not to invest too much capital.