Wednesday, January 18, 2017

Sometimes, The Reward Is High, And The Stakes Are Low

card or money
The world of investment has always been a tricky one. People want to make as much money as possible; but, they don’t want to risk what they’ve already got. Of course, this makes sense. And, it’s a rule that should always be followed. But, what if you could lower the risk of your investments while also raising the rewards that you get from it? Well, you can. And, to help you out, this post will be going through one of the best ways to go about it.

First, it’s worth thinking about risk when it comes to making investments. Whenever you invest in something, you’re taking some sort of risk. Even when it comes to relatively safe options, like a savings account, you still risk losing some or all of your money. Usually, the more risk you have to take, the higher the reward from an investment will be. For example, investing in a new company can be very risky. But, if the company does well, the investment could make you very wealthy. Whereas leaving your money in a bank account for the bank to trade with will only be lost if the bank goes under and isn’t bailed out. But, this is very rare, so the amount that you get back for your money is very low.

But, there is an exception to this trend. And, this can be found in debt funding. This sort of investment involves lending money to someone else, in the form of a loan. This can be done in loads of different ways. But, the best is providing mortgages to businesses to enable them to buy property. In some cases, the return rate on these will be as high as 15% a year. And, there’s nearly no risk. If the loan falls through, the company that arranged the loan will be able to get the money back by selling the property. One of the best parts about these schemes is that you never have to go in alone. Instead, you will be able to invest however much or little as you want. And, other people will make up the rest. This makes everything much more secure and enables you to start at any level.

These schemes are much better than simply leaving money in a savings account or bond. These sorts of investments will usually only yield 4% return, and that’s if you’re lucky. Considering the risk level for both methods is very similar, this is an easy decision to make. Of course, it’s worth doing some reading, though. Your bank may offer other options that appeal to you more. So, you should talk to them first, and see if they have anything that can help you.

Hopefully, this will help you to make a smart decision with your money. When investing, it’s good to leave no stone unturned. Otherwise, you could miss out on the best option, and you may not be able to go back and change your mind. Happy investing, and good luck!

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