Do you have any savings and would you like to get them some benefit? If you want to know where to invest money, you have arrived at the right place!! In this article, I will talk about the best options to invest your money and start generating extra income. Before thinking about where to invest money to make money fast you must consider certain aspects and concepts that will guide you in your decision to invest 100 pounds money.
Do you know what type of investor you are? To know what type of investor you are, you should know to what extent you are willing to risk your money. Although it is not so simple since they can influence elements that are difficult to quantify and other subjective ones, knowing your financial profile will help you know the most convenient investment for you.
How to invest money to make money fast?
The investment profile will indicate the relationship between the risk you are willing to assume and the returns you expect to obtain. With this in mind, the investment profiles are:
Risky: It is the investor who already knows and controls the financial world, is willing to risk his capital with the possibility of achieving greater profitability. Normally you will invest money in equities with short or very short terms.
Conservative: It is an investor who will prefer to keep his capital safe even if this means a lower return. You will make investments in fixed income and are usually medium-long term.
Moderate: This investor is between the risky and the conservative, because he wants to receive more profitability but without risking too much. Your investments in fixed income and equities will be similar and in the medium term.
Is it possible to invest without risk?
No, not. The investment risk will never be zero. All investments are at risk, but what we can do is reduce it, choosing products with low risk.
Are you going to get money fast? I am sorry to inform you that if this is your intention, this is not for you. No, you will not get it fast money. Some investments will generate the first income after a few months, others after a few years, it depends on which option you choose. Remember that investments can also depend on macroeconomic factors and other factors external to us.
How to choose the right option to invest my money?
This decision is personal and will depend on the study you have made of the investment options. This study is done to know the main characteristics such as risk, profitability, or the degree of liquidity.
You also have to think about how much money you are willing to risk, what your economic goals are, what knowledge you have and your preferences regarding investment control.
If you’re a little lost, don’t worry, it’s normal. I recommend that you visit the website of the Organization of Consumers and Users (OCU). In their section on investments, they have prepared a tool that advises you which investment best meets your needs.
How much money should you invest?
As I said above, all investments are at risk, some more than others. There is even the risk of losing everything. Therefore, you should only invest the extra money that you have saved and that you can afford to lose without affecting your life. In other words, my advice is only to invest the money you have left over after covering your basic needs in the future.
That is, that you allocate different amounts to different options because that way, you reduce the risk of losses. If an investment fails, you have others that can give you returns. I recommend you read these 10 fundamental rules to invest money successfully
The best options where to invest money
Below you will find a list that I have prepared with the best options where to invest money.
1. Investment funds
Investment funds consist of pooling the funds of investors to invest in different assets, which can be stocks, bonds. The management of this investment is carried out by a professional.
There are different investment funds that we can access, according to our profile, as investors (conservative, moderate, risky) and the profitability we want to obtain.
In recent years, this type of investment can also be made with Robo advisors. Theft advisors are “robot advisors” who are responsible for managing your assets automatically according to your investor profile. Do you want to know what investor you are and what plan is right for you? In less than two minutes, you will find out with this test.
2. Invest in Shares
Shares are securities that some companies issue to finance themselves. The owners of these obtain certain rights, such as receiving dividends if the issuing company decides to distribute them and obtain benefits.
Investment in shares consists of buying these securities to sell them at a higher price later, and / or receive dividends.
Normally the shares are sold quickly, which makes this an investment with a high degree of liquidity. It also has a high potential for profitability in the medium or long term.
However, it has a high risk, since this market is highly volatile and is affected by economic, political or social factors that influence the price of the shares.
Although you do not need to have a lot of capital, if you must take into account the payment of commissions to a professional for each operation (to assess whether a small investment is profitable or not, for example). In the case that you want to do it on your own, for you to make a correct investment in actions, it is necessary to have knowledge in this field.
3. Invest in Bonds
Bonds are debt securities that some companies, governments and other entities issue to finance themselves. They give the owner the right to receive periodic interest payments, which are fixed in advance and are constant during the life of the bonds.
This investment consists of buying these securities to obtain an income with periodic interest payments. The bonds offer a high return potential, but less than the shares. Also, here you do not need technical knowledge to invest.
Investment in bonds was considered as low risk. However, given the latest financial crises, investors now go with lead feet. The main risks of a bond investment are the interest rate, credit, inflation and liquidity. In addition, the duration provides a measure of risk linked to changes in the yield of a particular bond: the longer the duration, the greater the risk, and vice versa.
4. Invest money in Binary Options
I do not recommend investing money in binary options without knowledge. Although it is increasingly popular and seems very simple, you can lose your savings, and this happens many times.
This investment mechanism consists of selecting an asset or a currency and betting or predicting whether its price will rise (CALL option) or lower (PUT option). Similar to a bidding system and where speed management is important.
In a favorable operation, you can earn between 50 and 80% of profits, a great advantage without a doubt. But in the opposite case, you can lose all your investment. This is why this option is high-risk and where the term is very short. Sometimes the operation can last a couple of minutes.
On the Internet, there are many pages to invest in binary options. If you want to invest here, I recommend selecting a quality one that is authorized.
5. Fixed-term deposits
This option is the most common where to invest money, among those who seek security and simplicity. The operation is simple. The financial institution offers you an X profitability in exchange for you keeping X amount of money for X time in said banking entity. You will charge the interest once the term has been met.
In the case of needing the capital, you could withdraw it, but after paying a penalty that does not affect the principal. It is undoubtedly one of the safest investment options because you know the interest you are going to receive and the term of the recovery. Besides, you do not need great knowledge about finance because the financial institution manages this.
Microcredits were born as an alternative to traditional banks in developing countries for social purposes. What are microcredits?
They are small loans that are granted to groups with limited resources and who have difficulties in obtaining a loan.
Initially, they were aimed at women with few resources and who wanted to undertake a project or meet their needs. But currently, microcredits are also granted to cover urgent needs that can be covered but not at that time.
If you are interested, you can go to a specialized financial institution, either online or in an office, to request more information. I recommend that you do not invest all your capital in a single project, but that you allocate it to finance several projects, to reduce risks and obtain better returns. Think that if a project does not work, but you have invested in five, your losses will be less.
This investment can be made in the short, medium or long term, according to the project you choose. But I recommend you, that you look for investments with returns to different terms, to obtain income at different times and you can reinvest according to the evolution of the market, or simply enjoy the benefits.
7. Invest in Crowdfunding
Surely this sounds to you, right? And it is that more and more crowdfunding is being talked about as a way of investment and means of obtaining financing.
Crowdfunding is a means of collective financing, which is usually done through online platforms, that is, without financial intermediation, and is intended to finance a given project. The objective is to put project promoters in contact with potential investors or providers of funds that hope to obtain a return.
There are four types of crowdfunding, according to the reward that is expected to be received for financial contributions:
- Crowdfunding. It is expected to receive a reward that can be in the form of a product or service.
- Crowdinvesting. The consideration is through shares or participation of the company. It is expected to obtain medium or long term benefits.
- Crowdlending. The contribution is made in exchange for interest on the money borrowed. This interest rate will vary according to the amount borrowed and the repayment term.
- Crowdonation. Contributions are made selflessly and no reward is expected.
The operation of Crowdfunding is quite simple, although it will depend on the platform where you do it and the project, it is usually the following:
- The entrepreneur or project promoter sends his project idea to the platform, with the detailed description, the quantity he needs, type of crowdfunding, etc.
- The platform is responsible for assessing the project and after this, it is published. The publication will indicate the time that people have to invest money in it.
- Once the ad is published, entrepreneurs will be responsible for promoting it to get the necessary funding.
When the deadline ends, the project is closed and the funding obtained is verified. Also, if you want to know more, you will find in this blog different interesting posts about crowdfunding and different projects. I recommend it to you.
8. Real estate or real estate
This investment of money consists in buying a property, it can be a house, department, commercial premises or land, to sell it at a higher price later, and/or rent it and obtain an income.
Although it may seem a simple operation, it is necessary to have a good capital for this investment and also good knowledge of the market to be able to choose the property to be purchased correctly.
On the other hand, it is a safe investment with low and profitable risk, it is difficult for real estate to lose value over time, and if they lose it, they increase again.
9. Angel investor
Investing as an angel investor is to find ideas that are going to be launched into the market or recently created companies, to invest your money in them with a shareholding, and thus help them grow.
- The idea is to sell these shares later to obtain benefits. It is generally a long-term investment.
- The risk here is very high because you cannot predict exactly the success that a company or idea will achieve or not. Most companies go bankrupt in the first 3 years.
10. Invest money in a business
This involves starting a business from scratch or buying a business that is running or financing the business of a third party.
The purpose is to obtain benefits from a percentage of the shares or, if, in the future, you sell it at a higher price than the purchase.
Are you sure that having your own business is where you want to invest your money? Yes?. So these are some of the general recommendations that I think you should keep in mind:
- Find out about the different possibilities to start your business. You should also inform yourself of everything that has to do with your business idea.
- The choice of the business model you are going to follow is important. Review the information you have obtained in your research, the knowledge you have (by experience or studies), your skills and also the time you have to start it up and then to devote to it.
- Make the correct organization of the tasks to be performed. It will help you achieve your goals and objectives.
- Properly plan both the functional part and the budget you have, so you don’t get any unpleasant surprises.
- Publicize your business. There is no better publicity than word of mouth. Use social networks, your circle of friends and acquaintances to publicize your business and for everyone to help you spread it. If your business is not known, no matter how good it is, it will not succeed.
This investment option offers a high return if your business is working properly and is successful, but at the same time, it has a high risk. On the other hand, you can have full control of your investment when it comes to your own business.
11. Acquire a franchise
This is an alternative where to invest money, for those who are looking to start their own business. However, investing in a franchise requires, in addition to money, many hours of work.
It is the right that gives you a company (franchisor) already established in the market so that you (franchisee) can open a place with its brand.
There are all or almost everything franchises: restaurants, travel agencies, hotels, … even hospitals and financial institutions. There are also business idea franchises. That is, they do not have their premises, but you acquire the right to use the idea.
The advantages of acquiring a franchise are clear, including brand strength based on the credibility and loyalty of its customers. This is already a high probability of success.
However, you should not launch without more before doing a research study to assess this option as the best form of investment.
You should keep in mind that when you acquire a franchise, you will be supervised and guided by a parent company. You cannot apply changes on your own, the parent company must approve them and you may not get their approval. This is going to limit your imagination, it’s not serious, it’s true, but you should assess if you can work this way.
12. Invest money in Gold
Investing your money in this precious metal consists of buying gold to sell it later at a higher price and thus obtain profits.
You can acquire gold in two ways :
- Direct: Buy physical gold. But beware, this requires care, maintenance and safety. If you leave it in custody in a bank, it can be a high cost.
- Indirect: certificates of gold deposits, investments in specialized gold funds, shares of mining companies. This investment can be quite profitable if you know when to buy it and when to sell it.
If you are looking for a short or medium-term investment, it is better not to invest in gold because of its instability.
However, it is a good option for long-term investments due to the growth trends in gold demand and therefore, the value is also increasing.
In addition, you do not need great financial knowledge to invest in gold, it is a simple operation. As for security, it is considered a fairly safe investment, since the value of gold is not easily devalued because any government does not regulate it but depends on supply and demand. As I said before, the demand for gold tends to be higher.
Another advantage is that at any time, you can sell it, and you don’t have to go through an intermediary to pay a commission.
13. Invest money in Silver
Investing in silver is an alternative to gold. This metal is used for industrial consumption and is running out, which increases its value. Even faster than gold.
Nowadays, the acquisition price of silver is low, but the value is expected to increase considerably. It is a good investment opportunity.
The ways of investing in silver are similar to those of investing in gold. You can buy silver bars or coins, certificates of deposit of silver or invest in shares of companies related to the extraction of silver.
14. Invest money in works of art and collectibles
Basically, it consists of buying paintings or sculptures from known or emerging artists. But they can also be other types of objects such as stamps, coins, jewelry. That is objects that are expected to increase their value over time and thus be able to sell them at a higher price than the purchase.
Although it may seem like a simple investment, keep in mind that it is not easy to get a buyer. It may take time to sell them. But in the meantime, you could rent them to a gallery or museum and get rent for them.
This investment can be quite profitable in the long term. And if you like art, you will surely enjoy having a work of art or a collector’s item in your possession.
The biggest drawback is that they require considerable care and maintenance. They have to be well preserved so that they do not lose value and are not destroyed. In addition, insurance usually has a high cost.
If you are thinking about this investment, EYE to scams, so you don’t buy a fake. I recommend you read: The 13 most common Internet scams!
15. Invest money in theater or cinema
This investment can generate significant benefits. But of course, for this, you have to invest in the right movie or theatrical play, and this, unfortunately, no expert can tell you. The risk in this investment is high.
You may have been successful with the highest-grossing film, and in that case, you will have high and even constant income. If, on the contrary, the film or the work has been a failure, you can lose all your investment.
No one knows how the public will react. Normally, this investment is made in the short term.
16. Invest money in high-end wine
Some experts say that investing in high-end wine is more profitable than in art. Although I warn you that you are not going to become a millionaire with a bottle of wine.
But why invest money in wine? There are several reasons why you should consider this option to invest money. The value of wine increases with just getting old, even if you keep it underground. The value may increase, even when its flavor erodes over time and can no longer be drunk. Although it may surprise you, it is true, and it is what differentiates it from other assets. Over time these bottles become “rare” because there may be few or no other bottles like that. So wine lovers or collectors are willing to pay large amounts of money.
Being a consumable product and increasing demand, stocks (bottles) decrease. There is a limited offer, and this affects the price, so it increases. The price of wines increases in the same line that increases wealth, that is, if more people can afford high-end wines, their price will rise.
On the other hand, this sector is not affected by economic recessions, interest rates, political aspects, or fluctuations in the stock market. You do not need to have the financial knowledge to invest in wines since it is a tangible product and can be easily acquired.
For all this and other reasons, this investment is quite stable in the medium and long term. If you decide to invest your money in wines, remember that it also has its risks, although low, but they exist. In addition, you have to choose very well where you are going to buy since not all wines accumulate value. Make sure you choose the right wines and pay a suitable price for them. Although normally these are going to have a high price.
It is important to conduct a good study of each of the options before deciding where to invest money. Because that way, you can make the right choice according to your economic goals. I hope this information has been useful to you.