Not everyone has spare money these days, but you have probably thought about investing if you had any at all. Passive income is attractive, but for a beginner, this direction can bring more losses than profits. In today's article, we will tell you whether it is possible to make money on investments and which methods are most rational for beginners.
In order not to mislead readers, we should immediately answer the question - Yes, it is quite possible to make money on investments, but let's start with an analysis of the concept. The term "Investments" has a lot of synonyms - contribution, investment, capital investment, and so on. The essence of such movements lies in the prospect of making a profit on top of a person's starting financial reserves. And the more benefit he manages to extract, the better. The process of investing start-up capital is called investing. A person's task is to determine the object of investment and transfer funds to the subject of financial management. The first includes assets, and the second includes banks or management companies.
Important: it is necessary to distinguish between the concept of speculation and investment. Both imply investments, but in speculative activity these processes are oriented towards 1-30 days, no more. Investment is a longer-term process that can bring money to the owner of capital over the course of a year or even decades, depending on the type of asset chosen.
The essence of the concept is clear, but what can be considered a real investment activity. If, for example, you buy a set of cups and sell it in 20 years, can this be called an investment? Terminologically, yes, but in fact it is pampering.
To feel the result of investments, you need to fulfill 2 conditions - have a starting capital of $ 1,000, and focus on current investment instruments, which we will discuss below.
Some experts also single out non-financial investments as a target category. That is, those that are directed to other areas that are indirectly related to finance, or do not relate to them at all (for example, self-education). Now let's talk about the positive and negative consequences of investment activities for an ordinary person. The lower the investment risk, the larger the amount required for investment. Otherwise, you will not be able to feel the money earned at all. I will give an elementary example - a person invests $ 100 in shares for 5 years and receives $ 5 annually as dividends. Not enough, right? To get at least $ 500, you need to invest $ 10,000, for $ 5,000 - $ 100,000, and so on. Now think about whether the investment is worth it or not.
Earnings from investments are a strategy and a cool mind. By adhering to generally accepted principles and recommendations from more experienced ones, a beginner can reduce losses in a niche by 50%-90%. Even a theoretically savvy investor cannot guarantee a failure at first, so 10% is the minimum that is acceptable in this area.
In long-term investments, an important stage of work is considered to be drawing up a capital investment plan. How to draw up such a document is clearly described on specialized sites on the network, but for a complete understanding of the situation, I advise you to contact a qualified specialist. Yes, you will spend money on this, but the knowledge gained will recoup the investment in the very first investment approach.
I appreciated the clear explanations of complex financial instruments and the emphasis on risk management. The author's insights make it easier to navigate the often confusing world of investments.
Everything about finances and investments is written quite concisely and in detail. The information turned out to be useful and really helped to understand some issues. I really liked the article.
Many questions were unclear, but after reading the article and studying the details and particulars on financial management, investing, new opportunities opened up and they prompted reasonable actions.
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