Where to invest money to earn a monthly income?

19.05.2022
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People who have never invested their capital believe that only wealthy people who have a large amount of money in their account can engage in this activity. Since most residents of the post-Soviet space do not have large savings, they prefer not to be interested in investing.

Today, there are many options for investing capital. You don’t have to have a lot of money to earn passive income. Even a small amount of money can benefit its owner. In our article we will tell you what is best to invest in, about profitable options, as well as reveal myths that can confuse beginners in this field.

Rules to follow when investing

For a person who has always lived on a single salary and has never started his own business, investing can seem like a daunting task. However, you should know that even this mysterious and enigmatic activity can be learned if you show patience and make a little effort. Novice investors need to follow some rules. These tips will save you from disappointment at first:

  • Decide on the amount of capital you are willing to invest. What should be the initial investment? Theoretically, the amount can be any. For example, some beginners start at $ 30. With this money they buy the company’s shares. Of course, such investments will not bring you significant benefits. To earn more, experts in this field recommend using the amount of 150-250 US dollars. The reward depends on how much you invest.
  • Risk and profit are closely linked. On the stock exchange, as in business, there is one rule – the higher the income, the higher the risks. This shows that the best deals can enrich you and save you money. The analysis of investment options should be approached soberly. Assess your financial capabilities, whether you will be able to risk this amount, and whether the budget will withstand such losses.
  • You should work in those areas in which you are well versed. For example, realtors understand real estate, but they are far from heavy industry and mechanical engineering. It is recommended to invest in commercial or residential properties.
  • It is recommended to invest regularly. Having invested money once and received a reward, you should not stop there. Profits can be reinvested. Over time, your capital will increase by interest. This approach will increase turnover and achieve good passive income.
  • Don’t forget about portfolio diversification. The funds should be distributed among the various assets. Ideally, the portfolio should consist of equal shares of stocks, real estate and bonds. It is not recommended to invest all your money in one financial instrument, as you may lose all your investments at any time. No wonder the British came up with the saying that you should not keep all the eggs in one basket.

Where to invest money: 10 investment instruments

Many novice investors are wondering where to invest their money to get a guaranteed monthly income. If you analyze this area, you can find a large number of financial instruments that have different levels of risk and the size of the expected capital growth. Below we will tell you about the ten most popular assets that bring stable benefits. They are quite easy to manage and do not require large start-up investments.

Insurance

Now life insurance has become very popular and in demand. This financial instrument allows you not only to insure your life, but also to take care of the well-being of your family. To begin, you need to find a reliable organization that works in this field. They usually work on this principle. The client gets acquainted with the contract, and if the conditions suit him, puts his signature. Payments are made monthly. In the event of the death of a person, the persons specified in the contract, which may include family members, receive the payment provided for in the contract.

In most cases, beneficiaries are paid an amount equal to the contributions paid. If there is no death, the client receives the money invested and the income received from the company’s investment activities. Insurance investments are considered a reliable tool that guarantees customers 100% payment. From a legal point of view, your capital is fully protected, because even after death it will be transferred to the people specified in the contract. He will not be able to be confiscated or arrested.

Investing money at interest

People who often think about where to invest their savings, often come up with another reliable method – a bank deposit. Today, this financial instrument is at the peak of popularity. However, in recent years the interest rate on deposits has been significantly reduced. Finance believes that in the future the rate will be even lower. In addition to traditional deposits, banking institutions offer their customers savings deposits to achieve specific goals. This investment option is convenient because the funds can be withdrawn at any time, the investor does not lose accrued interest. If you take into account inflation, you will understand that keeping money on deposit can only save them, but in no case increase.

In each country there are banking organizations that offer potential customers to open a deposit at high interest rates. Such offers should alert you, so carefully consider your decision before transferring funds to a bank account.

Despite the fact that bank deposits are safe financial instruments, you should not expect high returns. You should prefer a bank offer if you want to keep rather than increase your capital.

Invest in stocks

Beginners in investing can try to invest in securities. They can be bought on the stock exchange. According to the law, an individual must first open an account with a brokerage company. This will allow you to manage your shares. Profits can be as follows:

  • dividends – income from securities will have a fixed amount, which is determined during the shareholders’ meeting. Profit is accrued once a quarter, six months or a year. You can learn about these nuances when buying shares;
  • purchase and sale of securities. The value of shares may vary. The investor has the opportunity to trade shares, ie buy them at a low price, sell – at a high. The difference in value will be the profit of the exchange player.

You should take into account the fact that you will have to pay for the services of a brokerage company. A fee is charged for withdrawals, currency conversions, opening a depository and other transactions. Remember that you will have to pay income tax, which is about 13 percent. If you want to avoid transferring funds to the state treasury, try to create an individual investment account.

In the financial sector, stocks are considered the most valuable financial instrument because they have no income restrictions. Buying a stake in well-known corporations, you can get a good source of income. The disadvantage of this method of investing is that the market can change dramatically. For this reason, many novice investors seek help from the manager, as they themselves do not understand anything about securities trading.

Bonds

Compared to stocks, this financial instrument has an obvious advantage – a stable and predictable value. Therefore, investing in bonds is associated with the least risk. If you compare this tool with bank deposits, you can see that buying bonds is much cheaper than deposits. Most often, investors receive an income equal to 20 percent of the invested capital.

Your investment will not only pay off, but also increase in size. It is worth noting that the bonds have high liquidity, ie you can sell and receive funds at any time. The disadvantages include the fact that the company in which you decide to invest your money may go bankrupt.

Precious metals

Acquisition of precious metals refers to classic assets. Experienced investors boldly invest in gold, palladium, platinum and other metals. It is worth noting that in most cases, people prefer silver and gold, other options are not yet used. There are several ways to make the following investments:

  • purchase of investment coins;
  • purchase of ingots;
  • opening an impersonal metal account.

The advantages of this financial instrument include the fact that precious metals are physical objects, not quantities on the Internet. They always remain in the price, even in times of crisis and war. The price of precious metals is constantly rising. Of course, growth is not so fast, but stable.

This investment belongs to long-term assets. Don’t expect a quick profit. If you want to save on old age or create a financial cushion for your child, you can use this method.

Residential real estate

Many investors consider buying real estate the most reliable investment. With a stable economic situation in the country, housing prices are constantly rising. Residential real estate rental services are in great demand in megacities, because you can get a good income every month.

The disadvantages of this method of investing include a high entry threshold, relatively low income and dependence on the economic situation in the country. Residential real estate requires constant investment, and you need to monitor its condition.

Sublease

This term means a real estate contract. To do this, a novice investor must rent a home and transfer it to another person at an inflated cost. He takes the difference in price. This method is suitable for those people who do not have the funds to buy an apartment. We recommend renting real estate in megacities or resorts, where excursions are often conducted, and rental services are always in great demand.

Sublease has little to do with the risk, as the property belongs to the homeowner. Of course, this method involves additional hassles. You will have to constantly look for new customers. The landlord should be informed that you are subletting. This approach will avoid misunderstandings on the part of the property owner.

Commercial real estate

Buying commercial real estate will bring much more profit than residential real estate. The cost of renting a spacious office space is much higher than the price of an ordinary apartment. It is advisable to choose facilities that are located in lively areas with developed infrastructure. The most popular are the rooms located on the lower floors of high-rise buildings. They can be taken to a beauty salon, pharmacy or grocery store. Despite the fact that commercial real estate guarantees you a stable monthly income, the investor must understand that in times of crisis, income may decline.

Where can I invest money online?

The novice investor should pay special attention to the type of activity and the size of the contribution. Many people are now starting their own businesses on the global network without providing physical services. The information business is in great demand. This term means the sale of certain knowledge and skills. Experts with extensive experience can order sites on specific topics, increase inbound traffic and place ads. There is also the monetization of accounts and publics on social networks.

During the pandemic, most schools were closed, so online platforms were needed to help students learn from the required disciplines.

This method does not require large initial investments, but the risk is quite high. The project can pay off, as there is a lot of competition in this area. To promote such projects on the global network, you need to invest a considerable amount of money.

Invest in a small business

To open your business, you need not only to find a promising idea, but also competent management and marketing. It is difficult to call income from small business passive, because its development will have to spend a lot of time and money. An important role in the case is played by the formation of an interesting trade offer of the population of your city.

What mistakes do beginners make when investing?

Beginners in the field of investment should use the following recommendations:

  • don’t invest all your savings. Make sure that even after losing capital, you still have money for your living needs. All you need to do is invest extra money, the loss of which will not hit your budget hard;
  • you can’t use other people’s money;
  • do not act in areas where there is a lack of knowledge. The stock market, precious metals and real estate require minimal knowledge. Create a script in advance that you will follow;
  • do not believe the offers where you are promised huge profits. In most cases, such schemes hide fraudsters;
  • do not make decisions based on your emotions. Of course, when the stock market is volatile, novice investors may panic and despair. Under no circumstances should you succumb to emotional outbursts or sell stocks. Wait until they rise in price.

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