A stable future is impossible without a competent investment in the present. Suppose you have a certain amount of money to invest.
Of course, you could put it in a bank for saving it from inflation. But it's not enough.
Where to invest today? Which areas will have the most significant effect?
Recently, there has been a lot of talks about the stock market overheating and inevitably correlation in the future. It may be the beginning of the spiral, after which there will be a recession, but if you play for a long time, you must undoubtedly succeed.
The main thing is to develop a strategy and stick to it so that emotions do not allow you to make hasty decisions. It primarily concerns peak situations: when bulls dominate the market and it goes up, or vice versa, under the influence of bears, it loses its position.
If you feel uncomfortable, buying shares on your own, you can take a look at robotic assistants like Wealthfront or Betterment.
How it works: you fill in information about your financial preferences, and these services develop a portfolio for you, help invest and manage money. The 21st century is a time of technological magic!
Average interest rate is 10%.
Here is a similar situation to the stock market. Many experts are sure that real estate is a bubble that will certainly burst. At least if we are talking about the USA, whose market is often seen as more attractive than Europe.
Optimists proceed from the assumption that even in case of a recession, people need to live somewhere. Therefore, they consider real estate as a good investment. However, there are more questions than with stocks.
Here's what you need to pay attention to:
what local taxes you have to pay;
if you are subject to pay capital gains;
what happens to the property in the event of death;
whether you need to pay inheritance taxes.
Here is a good solution if you are determined to invest in real estate, but "fussing" with physical property does not appeal to you.
We are sure that Real Estate Investment Trusts or REITs will help.
They allow you to profit from investment in real estate while eliminating the necessity to own property. Here are some examples of companies: Fundrise.com, RealtyMogul, and Rich Uncles.
Average interest rate is 8-12%.
These are relatively young investment areas. Platforms like Mintos, Bondora or Fast Invest allow you to loan money to individuals like a bank does. In return, you will gain interest from payments.
If you are worried that the person you loaned will disappear, then it's not worth it. These services spread your investment into small shares up to a couple of tens of euros and distribute it to different people. That's why you do not bet everything on one person and do not depend on his payments.
Average annual interest rate is 6-8%.
Crowdfunding is a new way of investing in startups and developing companies. Ignorance can be confused with crowdfunding, but there is a significant difference. In crowdfunding, you get a share in the project in proportion to the money invested.
Services offering such services have appeared recently, and therefore they are modern, convenient to use and very flexible. You can invest from hundreds of euros to thousands, instantly withdraw money from projects and at the same time have a guarantee of return on investment.
Professional auditors and financial analysts work on the selection of projects, so the investment is initially highly effective. Monethera is an example of such a service.
Average annual interest rate is 14-17%.