Given that you’re reading this post, it’s likely you’ve already realized that investing is the most accessible path to true wealth. Heck, you don’t need to be a rocket surgeon to work that out. What could be better than making money from the money you make? If you make wise choices about where you invest your cash, you’re sure to get on the fast track to early retirement and the life you’ve always wanted.
There’s just one small issue; the investment world can seem like a minefield. And, if you aren’t familiar with where to step, it’s a possibility that you’ll place your foot on a mine. Many a newcomer has lost substantial amounts by investing in the wrong places. The issue, of course, is that everyone wants your pennies. As such, you’ll hear different things from different people in every field you step into. What’s more, you’ll find, once you start, that there’s an awful lot of options. It isn’t unusual, then, to have no idea which one would be best, or which field would be safest.
In the spirit of battle, we thought we’d pit three of the prime opportunities against each other. After all, it can be tough to get a grip on the matter when all the players are far removed. Instead, investment should be about bringing your options together, and seeing what they offer and where they fall. Then, you’ll be in the best position to make an informed decision. Lucky for you, you don’t even have to do the groundwork. All you need to do is carry on reading to find out who to put your bets on.
Dividends
We couldn’t not start this list with dividend stocks, could we? For the layman, dividends involve investing in stocks or shares and receiving payouts as a result. Usually, these payments come on an annual basis and consist of an allotted part of that company’s profits. It works for the company because they get backing before they make money. And, it works for you because you stand to see significant returns on what you invest. Many people would argue that the best part of dividend investing is its passivity. You give the company the money and see a return through no effort of your own. Hence why many people head straight for this option. Of course, the downsides are that you’re at the bottom of the food chain. Given that you’re a passive partner, it’s likely the company can reduce or even drop dividend payments as they want to. Equally, the amounts you receive may vary depending on the market. Some years you’ll get more than you put in. Others, you may lose what you invested and more. It’s a dividend eat dog industry, and you need to be on the ball at all times if you want to make it work. That means a lot of effort has to go into finding investments. You also need to track companies to be sure of your return.
Real estate
Second on most people’s lists is real estate. In many ways, this is more familiar footing for a lot of us. After all, if you’re a homeowner, you already know what it’s like to buy a property. And, buying a house for investment purposes definitely has its plus points. One of the best things about this option is that there are two main ways to make money. On the one hand, you can rent a property out and earn a monthly income to supplement your lifestyle. Plus, during the rental process, your property itself may gain in value, and that can profit you when you sell. Of course, this isn’t all sunshine, either. Buying property is a much more involved process than buying stocks. You’ll need to play an active role in seeking and purchasing your investment. You’ll also need to be present as a landlord. What’s more, your investment here could cost you in repairs and upkeep. And, of course; the property market doesn’t always go up. Get this wrong, and you could be left with no choice but to sell for less than you spent in the first place.
Business
Last on our investment list is business. This is the least passive of the options, so many people don’t even consider it. But, it does stand to bring the most substantial return. What’s more, you always have the option to sell a part of the business and still benefit when you opt to retire. If all goes well, this could also be the longest lasting of your investment options. It can take a while to get started in this field. But, once profits start soaring, you could employ a team who can take a lot of pressure off your shoulders. What’s more, starting up is cheaper now than it ever has been with the takeoff of e-commerce. The downside is that expansion will still cost a fair amount. What’s more, you stand to lose all that money if you can’t find an audience for what you do.It may also be a good few years before you stand to see any form of return from your efforts here. And, again, this income is dependent on the current climate. There’s no guarantee that people will continue to buy your product. With industries moving so fast, there’s every chance your company will collapse and leave you out of pocket before retirement.
So, who wins?
Those are the contenders, but who wins? As you can see, all three options have their strong points and their weak spots. In truth, the victor depends on your individual needs. Obviously, these outlines are brief. If an option stands out to you, do more research. Consider what you’re after. What type of investment do you want? How much work are you willing to put in to get it? Questions like these could be the difference between a business and a dividend. And, sadly, only you have the answers. So, get a grip on your investment by breaking up the fight and picking your winner.
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