Tuesday, November 8, 2011

Best Way to Make Money Investing

There is no cut and dry best way to make money investing for everyone. With that in mind consider these 5 ways to invest and see if one of them is suited to your available cash and interests. Bear in mind that while some of these strategies involve more risk than others, all investment strategies involve some type of risk. Any individual considering putting money into an investment should do so weighing the available opportunities and returns with their own personal knowledge and skill set. Sometime the best way to make money investing is to keep your money in your pocket.

Investing in the Stock Market

Of all the ways to make money investing, investing in the stock market has to be the lightest burden in terms of time commitment. That isn't to say that it requires no time commitment, only that the other forms of putting money to work are much more hands on. The problem with investing in the stock market is that people are finding out (the hard way) that stock returns are nowhere near as good as advertised in financial textbooks. Having said that, many investors have turned to the day trading teachings of Nassim Taleb, having decided that one should only put money at risk when the opportunities for gain are at their absolute maximum. Otherwise one should understand that the presumed riskiness of stock market investments are substantially greater than textbook averages reveal.

Dividend Investing for Income

Given today's very low bond yields, dividend investing for income has become more popular. A number of the great multinational technology companies have begun paying dividends to shareholders out of their cash hordes. The problem with this strategy is that it really requires an investment portfolio of something on the order of a half million dollars or more to make an income that maintains a reasonable standard of living. There are of course some stocks and other types of dividend payers which pay a higher yield but like any investment of that kind therein lies additional risk. The benefit of this type of investing is that (similar to regular stock investing) it is much more low maintenance than more direct forms of investing.

Starting or Buying a Small Business

Starting or buying a small business is a good investment for people familiar with a particular trade, skill, or market. Direct buying of a business can involve a good deal of professional expense up front (lawyers and business brokers), but transactions ultimately do get made which yield value for the investor if the seller is motivated. The real trouble with this type of investment is that motivated buyers are hard to find (many times they have a significant emotional investment in the business over and above its true value), and when you do find a motivated buyer... you have to make sure their motivation has nothing to do with the potential of the business going under.

Real Estate Investing / Rental Property Investing

A big part of the real estate crash of last few years was the dramatic over-investment in the real-estate market. The good news today is that a lot of weak hands have been forced out of the market - having been forced into foreclosure. The bad news is that a lot of potential investment grade properties may have problematic titles or have been poorly maintained due to abandonment or indifference of the foreclosed owner. It's my belief that good / clean title properties bought now will yield good results for investors willing to did in and do whatever is necessary to find good tenants. Be forewarned however - while bank mortgage interest rates are at all time lows right now getting financed remains a considerable challenge for low capital / low equity candidates. Only loans with good loan to value (75-80%) are being written today.

Starting an Online Business

The last way I like to talk about when it comes to the best way to make money investing is starting an online business. The advantages are numerous - including the low cost and few barriers to entry, the endless opportunities to create valued properties on the web and the modest time commitment needed to develop an online presence. More and more people are taking advantage of the numerous free internet marketing courses to learn the basics and start making money with a small online business and a modest investment in their web marketing education.

Conclusion: Which Is the Best Way to Make Money Investing for You

So which is the best way to make money investing for you? What is your capital level? How much time commitment do you want to make? How much money are you really trying to earn with your investment? What are your interests and skills? Are you willing to invest a little time and money in your education? For my money, the best return on your investment of money and time would be in investing in your online marketing education. On the other hand if you have a significant amount of capital to invest, you may be more apt to give dividend investing a whirl. If you're a handyman with a little bit of capital to invest, there are some good values in the real estate market for people who can fix and flip clean title properties. It all remains up to your make up and interests which is the best way to make money investing.

Previous post: How to Start Trading Stocks with Little Money

No comments:

Post a Comment

Comments are moderated and restricted to members of this blog

Note: Only a member of this blog may post a comment.