There are many investment choices available so it can be tricky to work out exactly what you choose to invest in. There are a number of ways that in which you can attain financial freedom and be wealthy, but as every individual is different it’s essential to discover the investment plan that is most appropriate for you.
This is a walkthrough of some investment options so you can review and analyse your options and their advantages and disadvantages. In addition, to help you develop an understanding of what you would like to accomplish through investment.
First, What’s Your End Objective
This is a very important measure that many budding investors frequently skip over. It’s critical to make a determination about just what your end goal is, and what key checkpoints along the way will be
If your goal was to ultimately achieve $75,000/year in passive income
The small progress checkpoints on the way could be:
$100/month – To establish It Can be achieved
$1000/month – Leaves $12,000 a year to invest
$1500/month – Enough income to move to a part time work load if you so desired
$3000/month – An extremely tight income that could be survived on if you heavily budgeted.
$5,000/month – Maybe not quite my target but a Fantastic income, a family could be fairly comfortable
$6,250/month – The end goal, you will now be achieving a $75,000 passive income yearly
Developing a Deadline
You should plan a timeline as to how and when you expect to achieve your end goal. This will give you direction and understanding of your own situation and is more likely going to lead to success.
Things To Purchase In – Immediately Your Alternatives
Now it’s time to think about your options. Having a goal set up and also a deadline for attaining this goal you now only have to decide on the option which will allow you to reach your target in your timeframe. Each choice has its dangers and benefits. So let us delve a bit more deeply into the various investment choices.
Property could be among the best investment possibilities out there. Although property rewards the smart investor it can also destroy the uneducated buyer.
Advantages: Capability to leverage the advantage by borrowing money in the lender, capital gains can create you large returns, but it’s fairly secure since they are not producing any more land so you may choose to invest in selling land for development in the future as demand will outweigh supply.
Disadvantages: This option requires a large amount of funds at the beginning of your investment, it may be risky if you do not understand what you’re doing in property valuation or management. You will have to enter a great deal of debt to begin and a vacancy or rise in mortgage rates may send your cash flow into negative really quickly.
Shares can be another fantastic investment choice.
Advantages: A liquid market, so you can get your cash in and outs of stock exchange rather quickly. There is plenty of information out there concerning stocks. There are also many different approaches to invest; purchase and maintain, invest for volatility, short your inventory, options trading, futures .
Disadvantages: can be immensely volatile, you may lose your cash as quickly as you create it. It is difficult to leverage and there is limited control in trying to increase the value of your assets.
Cash investment is a very popular strategy, but it’s not likely to get you to financial freedom as fast as you might hope. To put it simply, obtaining a 4-5% return on your investment requires you to have to save up a great deal of money to accomplish financial freedom.
Advantages: Incredibly safe as far as investments go, virtually guaranteed rates of return.
Disadvantages: Very low rate of return, as a result of inflation the value of money decreases annually…so you’re not actually earning 4% because your whole pool of money is currently worth significantly less ($100 in 1912 can buy you a good deal more compared to 100 at 2012).
Of the four options business by far has the most potential for rapid growth and attaining financial freedom fast. But, it requires the maximum amount of time and energy. Business can be very complex. You need to understand exactly what to invest in to receive the best return for your time and cash
Advantages: Can acquire extravagant rates of return. If the business grows rapidly you could grow be financially free extremely fast. It can be extremely economical to begin (when beginning online).
Disadvantages: Extremely risky , 1/10 companies fail in the first 5 years of its launch. It requires a good deal of cash to begin (brick and mortar company ) and time which means you may have to quit your day job.
Always Have an Exit Plan
When determining what to spend in you need to always have an exit program planned. Your exit plan could be to purchase 10 possessions and sell 5 to repay debt and maintain the remaining 5 to continue to receive earnings. Or it may be to earn money in the stock exchange, then sell some of your stocks and maintain the amount from the bank.
The exit plan is your escape incase things aren’t going to plan. It creates a way for you to tap out and still enjoy the earnings you’ve created.
The investment choice you choose is entirely up to you. However, you must do research on whichever avenue or avenues that you chose to ensure a greater success rate.