Are you looking into investing but are not sure what kind of investing is right for you? Investing For Life has created a list for you with links to more information as well. Investing can be a big financial decision for you and it may even be the riskiest thing you do with your money. Determine what kind of stress level you are prepared for, what kind of investing interests you and how to create a new stream of income for yourself.
Investing Type #1: Real estate
Real Estate can increase your net worth significantly if done correctly. There are many different types of real estate investing which I have explained before. Real estate investing can be started with a small amount of money or a large amount of money. Usually to invest in real estate you would need a large lump sum of savings. Check out my post on how to start saving money from today. There are four key steps to getting ready to invest in real estate.
1. Ensure you have enough income and lump sum when starting up.
2. Set up your investment goals
3.Choose your strategy: Growth, Cashflow, or Renovation.
4. Research location location location. I can't stress enough about researching the location. Research the median price and year-on-year growth for properties in the areas you are interested in.
Like all kinds of investments or anything you do in life, there are pros and cons.
Pros for investing in real estate
- There is loads of information out there about creating wealth with real estate investing. This means there will always be help.
- You can access equity you build in the property to help finance other purchases.
- Investing in real estate allows you to maintain control of all the decision making.
Cons for investing in real estate
- Large upfront costs, with potentially more after the purchase. This is something that stops a lot of people from investing in real estate.
- Only investing in one single asset at one time which might mean your investing profile is not diversified.
- There is no guarantee your large investment in a property will pay off.
Investing Type #2: Cryptocurrencies
Have you heard the rumours of people becoming millions from buying Bitcoin. Well they are not lying, you really can become filthy rich investing in cryptocurrencies but there is also a huge change to lose a ton of money and if you are not careful you could become dirt poor. Cryptocurrency is more the riskier side of investing but don't let that stop you from achieving your financial freedom. If you are interested in knowing more about financial freedom check out my post on what is FIRE. Many cryptocurrencies such as Bitcoin and Ethereum are launched with objected that are not 100% certain they will reach but if they do reach the objectives then early investors would have made a great profit.
Here are some pros and cons for investing in cryptocurrencies:
Pro
- Potential for high returns
- Accessible 24/7
- Complete control
Con
- High volatility: The price fluctuations in crypto assets which could cause stress to some.
- High risk
- There is no regulation
Investing Type #3: Stock Market
Investing in the stock market means you are purchasing a share of a company. You buy a share from a company hoping they grow in value and other people will want to buy the share off of you. This is how profit can be made. Another way is by a company paying you dividends. If you are interested to learn more check out my post on stock investing.
Here are some pros and cons for investing in the stock market:
Pros
- Grow with economy
- Stay ahead of inflation
- Easy to buy and sell
Cons
- Risk losing it all
- Takes time to research
- Emotional ups and downs
Investing For Life hopes to have helped with making a decision about which kind of investing is for you. Investing can be a hard decision but with time and patience the right answer will come to you. With all these kinds of investments you should be able to make money from them. With hard work and good research some positive results should arise. Good luck!
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