Sooner or later, this question arises before everyone. Firstly, there are many ways to increase your capital, but not all of them are profitable. Secondly, a newbie investor must consider the degree of risk, because no one wants to lose their money, right? And last but not least, the minimum thresholds as everyone’s opportunities are limited.
In this article we will touch upon the most popular types of investment taking into account the following factors:
- The degree of risk
- Minimum threshold
So, let’s get started, shall we?
Investment in Banks
Perhaps the most popular way to invest your funds is bank investment. Deposits to savings accounts are carried out even by those who are far from it. Almost no risk is a significant gain to this kind of deposits. One can choose a bank by taking into account various ratings. It’s important though, to lean towards state banks as they are more likely to survive a disaster than the private ones.
The disadvantage of bank investment is low profitability. Therefore, experienced investors use banks more as a transit point for storing their money while searching for investing in some other, more profitable financial instruments. As for the minimum threshold, it is pretty low.
After the bank deposits, the next thing that comes to mind is investing in real estate, which is the second most popular form of investment. In this case, the profit is more tangible: for example, 1 square meter of a residential house after its commissioning increases by at least 25% in price, so that the acquisition of real estate at the construction stage can significantly improve your financial situation. Also, do not neglect the purchase of apartments for their subsequent lease.
As for the cons: not everyone can afford this type of investment due to the high entry threshold that depends on the region (the average figure is $25'000–30'000).
Perhaps the most profitable type of investment from all the above and, at the same time, the most risky one. Although the risk is relevant to the initial stage, when passing successfully it gradually decreases to a minimum. Business is considered to be the main financial instrument. By using the right approach to the matter and well-done analytical work along with the proper knowledge, one makes the chances of success are very high.
Investment funds are organizations that take over the assets of private investors for the purpose of investing them in various financial instruments to make a profit. The funds received are proportionally distributed among investors depending on their investments, and some are left to themselves.
Investment funds state the conditions for attracting investors' funds and managing them. The conditions are normally as follows:
- Minimum investment amount;
- Investment dates;
- Terms of adding, partial or complete withdrawal of capital ahead of schedule;
- Specific instruments in which investments will be invested;
- Approximate profitability;
- Payment to the fund for investment management;
- Tools for tracking investments.
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