How can I invest my money? Where to invest my money safely? o How to invest my money to make a profit? They are some of the most common.
All of them are included under the same question that all investors ask themselves. How to choose the right option to invest my money?
Then we try to answer this question, for this we rely on the journalistic formula of the six W (for its terminology in English) to be able to know the “complete image to select your investment”. We also tell you 4 new ways to invest emerged in this last decade. So, if you are interested in investing Keep reading!
Invest my money What does it imply?
The first thing you should keep in mind is that any investment comes with a risk. The risk of the investment can be very high up to an almost minimal risk. But you have to be clear that zero risk does not exist in the investment.
Generally, risk is linked to profitability, the more risk greater profitability , and the lower the risk the lower the benefits. Today there is a wide variety of products so you can invest money according to your needs. In this sense, you must know the product and determine your objectives, since as the investment expert Warren Buffet declared: ” The risk comes from not knowing what you are doing “.
Who can invest money?
The multiple possibilities for investing money have been adapted to all investors . Traditionally, the investments were destined to the great fortunes, nor was it possible, nor did it make sense, to invest small amounts of money. However, technology and fintech have transformed this scenario.
We give you an example, imagine that you go to your usual bank, and ask them to invest € 50 in a fixed-term deposit, do you think they would treat you as crazy? However, the new financial landscape has multiplied the possibilities of investing money for non-specialized investors. In this sense, you have to know what kind of investor you are. We summarize some:
- Investor with a conservative profile. Those investors who prefer to obtain lower profitability in exchange for reducing the risk as much as possible
- Investors with moderate profile. They are those investors who seek an attractive return with a moderate risk.
- Investors with an aggressive profile. These are experienced investors who seek to invest their money assuming a very high risk in exchange for very high returns.
When should I invest my money?
There is no magic formula to determine an investment. Regarding the timing of the investment depends on two main factors. On the one hand, your needs and the money you have and on the other, the product you want to invest in .
There are possibilities to invest where you have to take into account the fluctuations of the market , as is the case of the stock market. In this type of investment it is important that you choose the specific moment to make your investment. For this we leave you a few brief tips:
- Control the fear
- Be patient
- Be cautious
- Dedicate time to the decision
Other possibilities, allow you to delete the temporary variable to invest your money, in this case what you should mainly keep in mind is that your investment should never exceed 40% of your savings.
Where to invest money?
As we have said, the investment possibilities have multiplied. Because of this, every day more people consider where and how to invest their money. The Internet has allowed investors to access investment products adapted to all investors and with the ease of completing procedures from home.
Online investment platforms are one of the possibilities with more followers in this last decade.
Why invest money?
One of the questions asked by people who have never made an investment is: Why invest my money? In the past there was a deep-rooted thought that money was safe under the mattress, or in the bank paralyzed without giving any return. However, luckily, this thought is increasingly discarded by more people.
Some advantages that you can enjoy when investing your money are the following:
- Your money works for you
- Preserve your purchasing power
- Give yourself a treat
How to invest my money?
Online platforms have simplified the operations of the investment. Most platforms have a simple operation and are accessible to all investors.
Generally, they are summarized in three simple steps:
- Register as an investor
- Validate the account by providing ID and current account generally
- Transfer funds to the platform
Once you have answered all these questions and you are clear about your objectives, it is normal that you ask yourself. What are the options to invest my money? We tell you where to invest money today:
4 ways to invest your money in a new way
Invest money in cryptocurrencies
The first cryptocurrency was created in 2009 and was denominated as bitcoin. Nowadays it is one of the best known types of cryptocurrencies, along with others such as Ripple or Litecoin.
A cryptocurrency is a virtual currency that is used as a digital means of exchange through a system of electronic transactions. Most cryptocurrencies use blockchain technology for the creation of new currencies.
Nowadays this market is not regulated and implies a high risk. The volatility that characterizes investments in cryptocurrencies, with falls of value that exceed 80%, implies that knowledge about this sector must be very high.
Invest money in binary options
Binary options is a new form of investment that emerged in 2008 focused on predicting the behavior of a financial asset. It is a simplified version of the stock market in which, based on the current price, the investor foresees whether the price will increase or, if on the contrary, it will be reduced for a predetermined period of time.
The financial knowledge of the investor does not have to be as exhaustive as for investors in the stock market. Although it seems similar to the investment in the stock market, binary operations are not traded on the stock market but are offered through specific platforms.
The risk of this type of investment is also high, since in the case of not correctly correcting the trend of the asset, the loss is total.
Invest money in Startups
Although the term Startup does not have a clear origin, it is estimated that the first startups arose around the 50s, however it has not been until the last decade when they have started to become popular.
Startups are characterized by innovation and new technologies, they are technological companies that are in the early years of their activity and seek to test a scalable and profitable business model. The main need of startups is financing for their growth. One of the alternatives with more boom in recent years has been investment in companies, specifically investing in startups.
Business Angels are those sponsors who invest in a startup, usually in exchange for a shareholding. Business Angels are usually experts in the business world, which in addition to providing liquidity help startups with their knowledge and personal contacts.
Invest money in Crowdfunding
Crowdfunding is a type of alternative financing between individuals. Under the umbrella of crowdfunding four different types are included. We tell you its characteristics below:
- Crowdfunding of donation . The project is financed through private investors who contribute their money altruistically. Generally this type of crowdfunding is intended for social projects.
- Crowdfunding of reward . In this type of alternative financing the patrons invest their money in exchange for a gift or product. It is usual for companies wishing to test a physical product to opt for this type of financing, since at the same time they get financing for their project, they can test their business.
- Crowdequity . This type of crowdfunding is only aimed at companies. Investors lend their money to a company in exchange for receiving a shareholding. That is, the investor begins to be part of the company and has the right to collect dividends.
- Crowdlending In the investment in crowdlending, private investors or companies lend their money to companies in exchange for a return for their money. In the case of crowdlending for companies, investors are not part of it and only maintain a contractual agreement with it.