1. Peer-to-peer lending
This is possibly the easiest investment you could make.
Peer-to-peer lending involves you lending some money to a peer in hopes of
making a profit out of the interest in the returns. Now of course this peer has
to be someone you know or trust, so that alone reduces the pool of potentials.
In a way, this method could be deemed as risky as it is simple. However, if you
abide to the golden rule of lending anything including money, “Don’t lend
something you can’t afford to lose”, the risk is definitely worth the
simplicity and potential profit.
2. Investment in precious metals
Precious metals are a very controversial investment. Some
deem them the best investment one could make, others deem them the worst. Truth
is, they could be a little bit of both.
The fluctuation in their prices aren’t as predictable as
other things since they’re mostly dependent on the rise and fall of the dollar.
However on the plus side, if a small investment is what you wish to make, the
potential profit usually balances out the potential risk. Besides, precious
metals like gold and silver are among the last remaining material investments
one can physically hold on to.
3. Trading forex
Forex or the foreign exchange market is the world’s largest
financial market. Everyday trillions of dollars are exchanged through forex and
that is vital to the economy. Businesses, governments and investors use forex.
Businesses use them to facilitate foreign trade, governments to implement
policies and investors study the market and predict the rise and fall of the
exchange rates and capitalize on this.
For as little as 25$ you could get started on foreign
currency trading. The basic idea is that you buy a certain amount of a foreign
currency and sell it at a higher price when its valuation is higher than what
you originally paid.
4. Trading options
Options trading is a process that lets you control a stock
or an asset without actually owning it, letting you capitalize on its price
chances. An options contract allows you the right to buy the shares owned by
another person for a certain price known as the strike price before a certain
date in exchange for a certain premium.
If the value of the share rises, then you can buy the shares
for a price cheaper than the market price and then sell it at the market price
to make an overall profit. If instead the value of the share falls, then you
may decline from buying the stocks but you lose the premium you initially paid.
Options trading can make a great investment if you
understand the market.
5. Trading futures
Futures trading involves investing in a volatile market and
capitalizing on the fluctuations while providing stability to the businesses
you have contracted with. With the pay of a full a time job, you can possibly
afford to contract with small local businesses.
If the market prices drop and the businesses can manufacture
cheaper, then you get the profits. However, if the market prices rise and the
manufacturing becomes more expensive, then you lose money. Once again, like
options trading, if you are well educated about the market then futures trading
make great investments.
6. Investment on real estate
Real estate prices continually rise and fall. And like
precious metals, they are assets you can physically hold on to. If your pay
can’t afford to invest in real estate around you, there are options around the
world.
Many countries allow foreigners to invest in their real estate
and if you’ve assessed the risks well enough, they may potentially prove to be
a great investment. This is specially true for developing countries where a
cheap real estate can be worth a lot more within just a few years. Once again,
this requires great research.
7. Crowdfund investments
This could possibly be the best option for someone with a
full time job. In crowdfund investment you are only require to invest a small
portion of the required amount, and your future returns depend on the amount
you have initially invested. This gives you the option to invest on big
businesses that could potentially make a lot of profit. Furthermore, since
you’re only investing a relatively small amount you could invest in a number of
businesses and expect at least some of those to make you a profit.
8. Buying stocks from established corporations
Stocks of established corporations are usually a safe bet.
Let’s say you are willing to invest a thousand dollars a month from your
salary. You could buy 20 stocks worth 50 dollars each. Since big corporations
are constantly at work to try and increase their profits, stock prices are
sooner than later bound to increase too. You could then sale some or all of the
stocks you own to make a profit.
For an established corporation, worst case scenario may be
the drop in stock prices by 5 or 10 dollars, because they don’t usually go
below that. You’ll only be losing a $100 or $200 of your initial investment.
9. Being a silent partner in small businesses
Small businesses don’t usually require a lot of money to
operate. The $1000 you agreed to invest in stocks in the previous point could
very well help run a small business somewhere else.
Furthermore like real estate, you are not restricted to
invest in businesses near you. In a developing nation, the $1000 could mean a
lot and could help establish a number of businesses that could in time grow to
be profitable. Becoming a silent partner means you don’t have to worry about
the operations of the business. But once again, you need to be sharp on your
assessment of the business and the person running it before you invest.
10. Buying penny stocks
Penny stocks are common stocks that are valued at less than
a dollar. Investing in penny stocks is therefore considered highly speculative.
They seldom make a good investment so unless you’ve run out of options, you
should stay away from them. However since they are already so cheap, there is
no other place for their prices to go but up. If you buy a lot of them (since
they are all so cheap), at least some of them are bound to make you some
profit. At least, these are the general assumptions surrounding investment in
penny stocks.
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