Money makes money but is that all to it? Not necessarily. It all depends upon where the money is invested. There are many investment options in the marketplace to hit the jackpot but not to forget that there are always risks associated with it as well.
You should consider all investments as a small business and pay attention to it. This includes doing research, hiring people to handle tasks for you and putting up aims.
Let’s consider stocks while going into this business can make you a billionaire overnight; it can also cause you to go bankrupt. In fact, since 1980, around 40% of stocks have dropped down to 70%. That’s a huge percentage. To be on a safe side, you need to consider it a business. Do research and find companies with future potential. Hire a finance or stock market expert to provide you with tips and reduce risk so that you are among the people who make money.
Let’s talk about real estate, which isn’t any different. About 27% of Africans believe that investing in real estate property is the best option to make money while 17% think that investing in stocks is a better option. Real estate is on the rise, but it can backfire as well.
The thing is that these kinds of investment offer a do or die situation. One can either wear a billionaire’s crown or lose everything they have.
Let’s have a look at four investments that can make you a billionaire or leave you broke:
- Stocks
Stocks are shares that give partial ownership (in percentage) of a company or asset. However, you might not have certain rights unless you own a specific percentage of shares.
When the economy is in a growing stage, stocks rise. This is because when companies begin to earn well, the demand increases and so does their market value.
Stocks have a 10% return per year on average. This means you get to make 10% profits for the number of shares you bought. However, that’s if everything goes smooth and your shares don’t drop drastically. You have success stories such as that of Warren Buffett, who credits stock for his wealth.
However, there’s a drawback, too. Companies do not always grow. They can default as well and go bankrupt, and when it happens, you lose all your investment so make sure to always be careful about investing in stocks.
- Real Estate
This involves buying a property in your name. It is considered to be the fastest way to becoming a billionaire as the owner gets to have all the profit money earned.
Real estate can be bought for both long and short-term gains. You can earn monthly rent on your property and then eventually sell it when the prices rise. However, again, there is risk.
When you think of real estate, you need a huge investment, but not always. You do not have to buy your own property. If you have links, you can be an agent and help others buy and sell and earn a commission on every successful sale.
However, remember that prices can go down anytime. Look at the condition in the UK, Brexit caused the real estate market to nearly crash, causing many people to lose their investment.
- CFD Trading
Forex or CFD trading is a risky business that works largely on the guessing game. CFD, shortened for contract for difference, is all about guessing if the prices of a specific item would go up or down and you win or lose money based on it.
This may sound like an odd business, but many people are making money through this as CFD trading has turned into a business now. You can put your own money or start investing it for others and earn a commission.
CFD trading is available on different assets including stocks, commodities and even currencies. The benefit is that you do not really own an asset here, so it removes the need for permissions and red tape. You only bid and then wait for the price to change.
Another benefit is leverage trading where you can buy assets worth more than your original investment. This is great because if there is a profit, you can earn more; however, the risk is that if you lose money, you may lose all of it.
CFD trading comes with many risks, but it does have the potential to change your life.
- Cryptocurrency
Digital currency is gaining immense popularity these days. Satoshi Nakamoto started it with the invention of Bitcoin, and now we have hundreds of other currencies. In fact, Facebook is also expected to come up with its own cryptocurrency.
While the potential is there, the crypto market is among the riskiest markets out there since the prices are not regulated. Consider Bitcoin, it hit a high of $19,783 in December but quickly crashed to $6,000. Those who got out at the right time laughed all the way to the bank while some are still repenting.
If you know cryptos, you can start this business. The world is huge. You can make money by investing your own money or investing it for others and earning a commission. You can also start a firm and provide others with tips on how to invest in cryptos.
Square, one of the biggest companies out there, recently entered the crypto space by starting to offer crypto trading on its platform. You too can come up with something like this.
The Verdict
These five the most popular ones that hold great value on the market, but make sure to invest carefully.
