- March 30, 2016
- Posted by: Roger Walker
- Category: How to invest
If you are thinking where to invest your money to generate income, and continued to be possible, waste, surely you’re plant one of these three alternatives:
– Investing in financial products (stock, investment funds …).
– Investing in buildings, land, etc.
– Invest in a business.
Depending on your situation, your goals and your ideals, you might be interested more a type of investment or another.
In my opinion, both financial products and real estate investment are completely speculative investment types and depend mainly on factors external to each of us, to macroeconomic factors.
On the other hand, I think that these types of investments do not contribute anything to society; they only move money from one pocket to another.
So, in my opinion, they can be “extra” investments that serve to try to grow extra money that does not require in the short to medium term, but they are not the basis to generate your income.
With little money you can start investing, and if higher interest than inflation is obtained, we can consider worthwhile, at least more than having money standing in an account.
But this kind of investment requires some knowledge, sometimes acquired based on errors and losses, sometimes qualified by training and therefore paid. Still, we are conditioned by the situation of the stock and financial markets.
In this type of investment we can choose between different types of risk. It is what is known as the triangle of investment, in which returns are handled, risk and liquidity. A higher percentage of interest, typically greater risk and lower liquidity also, if you prefer low risk, profitability and liquidity will be low.
Real estate investment
There is an obsession with having a house owned by an investment wrong concept. We educate ourselves thinking that if rented a house to live in, we are throwing money; however, if we buy a house to live, we are investing it. It defines very clearly that buy a house to live is not an investment, it is indeed a passive because ” it takes money from your pocket”, while buying a second home when you already have in your home to live, if that is an investment, an asset, because ” it puts money in your pocket.”
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I know people who have bought their first floor “to invest” but that is a floor that would not like to live. In this case, since the investment is made when the person has some money and security to get into a mortgage, it is quite possible that in a few years want to move to their own home. But they do not want to go live in the house they bought and carrying paying few years, have 3 options…
Try to sell it to buy another
This leaves them at the mercy of the market. In the current situation, the property market is completely stagnant and can spend months or years to sell or “mis-selling”.
Try to rent another home where they are comfortable, and bought rent that they do not like
This leaves them with a double risk. On the one hand the owner of your rental the price rise or no longer want to rent, or that the tenant rent home leave and miss a few months looking for another tenant. And we do not talk of the risk that your tenant does not pay rent for a few months.
Will they live unwillingly home
In this situation, they are paying a monthly mortgage of a house where you do not feel comfortable. In short, it is clear that if you want to invest in real estate should not be your first home, because in this case is an expense. You must also have a high percentage of the purchase money, and know that you can allocate money for the monthly mortgage for all contracted years plus 10% to cover increases in the index.
Invest in a business
From my point of view, this is the investment I think more constructive to society and to yourself. Also, I think that is what more can depend on you and not on external factors. In this case, the investment can be 3 types…
Investments that require more effort than money
They are investments in respect of time and knowledge, but require little money. In today’s market there are several options for this type of investment; you just have to choose the one that suits oneself.
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Investments that require effort and even money
Let’s say you need to invest enough money, which in many cases it is necessary to ask for a loan, but also require time and effort investor are typical traditional businesses: a shop, a small business consulting or advice, etc.
Investments that require more money than effort
They are very high economic investment, but business ideas from other people and developed by others. The effort and knowledge required to principle, to assess the business opportunity, and when considering interesting to invest, the effort is done by other people and only requires your periodic review. They are very high and high risk investments but may return you a very good return.
Personally, as I said above, my choice is business investment. In my case I decided to invest my money, my time and my knowledge in a business that requires little investment and greater effort. It is a business that I feel very comfortable, which helps me in my personal development and with which I’m starting to get the necessary income to my standard of living, especially because revenues are being scalable over time.
I prefer a good quality of life, without heads or obligations of times, and with a business to get a direct reward for my efforts, and my business permits.