Investors know how not to put all their eggs in one basket. Instead, they learn about a few types of investments and use their knowledge of each to make money in a variety of ways.
With investing, there are a lot of things you can put in each basket to get the best return. There are a lot of things you can do with your money before you start to invest it and build your portfolio.
It's true that every type of investment has both good and bad sides. The best investments for you will depend on your risk tolerance, level of knowledge of certain markets, time frame to avoid capital gains, and why you want to invest in the first place, among other things.
Some of the investments out there are likely to be a good fit for you, so let's start looking into them now, okay?
REAL ESTATE
The ways to invest in real estate range from buying homes and apartments to flipping houses and owning farms and RV parks. Most people who start out as investors don't like that the cost of getting in is so high, though.
Real estate in Nigeria is a lucrative investment for investors particularly for Nigerians in diaspora. Investing in Nigeria requires that you are strategic in the choice of location. Lagos and Abuja continues to be a hot cake for smart investors followed by Portharcourt in Rivers State.
1. Property
If you want to buy property, it can be very costly, which can make it hard for small investors who don't have a lot of money.
However, crowd-funded real estate investment opportunities are starting to show up, giving people who want to invest in real estate but don't have a lot of money new ways to invest in the real estate market.
Investment in real estate can be difficult because it's hard to find a property that you can buy with a little extra money in case things go wrong. In order to make money investing in property, you need to be able to do that.
To make money, you can buy the property at a low price and then sell it for the full price. You can also rent out or lease the property to people who want to live there.
They all have the potential to be good if you treat them like any other Rule #1 investment. This means that the property should be important to you, have a moat, be well-managed, and come with a little extra money in case it doesn't work out.
2. Real Estate Investment Trust
People who invest in a Real Estate Investment Trust, or REIT, get their money from many different people and invest it in a group of income-producing real estate properties.
The stock market is a good place to invest in REITs because they can be bought and sold just like stocks. This means that they can be cheaper and easier to invest in than property.
Investors in REITs don't have to buy, manage or finance their own properties. This makes it easier for people to start investing in real estate.
CASH AND COMMODITIES
If you're new to investing or are very afraid of risk, one of these options might be a good place to start. Keep in mind that investments that aren't very risky also don't make very much money.
3. Gold
It is true that you can put your money in gold and other things, like silver or crude oil. It's true that people have been investing in gold for a long time, but that doesn't mean it's a good idea to do that. Gold is a commodity, which means its value is based on scarcity and fear, which can change because of political or environmental changes.
Be aware that your "moat" (protection against a price drop) is based on things outside of your control. This means that the price can change a lot and quickly. Price tends to rise when scarcity and fear are high and fall when gold is easy to get.
If you think that the world is going to be a scarier place in the future, then gold might be a good thing for you to buy.
4. Cryptocurrency
It's one of the newer ways to invest. Cryptocurrencies are one of the newer types of money. You can buy and sell them on websites called "cryptocurrency."
Many people are interested in investing in cryptocurrencies like Bitcoin or Dogecoin because they have grown quickly and dramatically. However, because there are so many unknowns about them, they are still a very risky thing to buy.
If the cryptocurrency isn't widely used as a form of payment, there is a chance that the government will try to stop it. In the beginning, cryptocurrency doesn't have any value, and it could disappear just as quickly as it came into existence.
How do you invest in Bitcoin?
If you want to exchange your US dollars for another currency, like Yens or Euros, you can do the same thing with cryptocurrencies.
It doesn't make sense to say that cryptocurrencies are part of the Forex market, but it's very similar to investing in cryptocurrencies. If you want to invest in cryptocurrencies, many people hope that their value goes up compared to the dollar, and it's easy to buy them on the internet.
In fact, someone who bought Bitcoin in 2013 and sold it today would make a lot of money, even though it's now 2015. Because there's no way to time the cryptocurrency market, this is a big problem Bitcoin and other cryptocurrencies could keep going up in price, or they could go to zero and not be worth anything at all.
Bitcoin and other cryptocurrencies could keep going up in price, or they could go to zero and not be worth anything at all.
In the stock market, there are a lot of ways to make money. It's possible to invest in a stock market index, stock options, or individual stocks.
5. Individual Stocks
A stock is a "share" of the ownership of a certain company. As soon as you buy stock in a specific company, you become a part owner of that company. So when the company makes money, you also make money. When the company grows in value, the value of your stock grows as well.
People who own stock in a company that goes up in price see their investment in that company go up. When the stock is sold, the owner can then make money. That doesn't mean, however, that when the price of a company's stock goes down, its value as an investment goes down.
People who own stock can also get money in the form of dividends if the company chooses to give the money to their shareholders.
Individual companies you've chosen to invest in can make a lot more money than the average person would. To cut down on the risk, you can only invest in great companies at prices that will make you a lot of money back.
6. Stock Options
In order to buy an option in a company, you bet on whether or not the price of that company's stock will rise or fall. To buy or sell shares of that company, you can buy or sell an option. You don't own the stock.
Stock options can be very dangerous. Investing in high-risk things can pay off, but there is also a chance for big gains. If you don't know what you're doing, you could lose a lot of money, which is bad.
7. Put Options
As soon as the stock reaches a certain price and time, you'll agree to sell it. When you use a CALL option, you promise to buy a stock at a certain price at a certain time.
This is how you think of PUT options. They can be thought of like insurance policies. Over a certain amount of time, you buy them at a set price. You then sell the stock, no matter what the price is. As a general rule, investors buy PUTS when they think the market is going to fall. PUTs give you the right to sell a stock at an agreed upon price, and if the price of the stock you want to sell drops, your PUT will usually rise in value as well.
8. Call Options
CALL options have a value that is called a premium. This value is what people pay for them at the market. You pay the premium for the call option to get the contract to buy the stock. This is how you get the stock.
CALL options are a great way to make money and lower the value of the companies we already own.
