Company Formation

5 investments tips: complete entrepreneur's guide

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When you have a full-time job, investing will offer a fallback position or complements the income from your employer. Here are tips to understand before you start investing your money.

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The editorial staff
Apr 3, 23 · 8 min read
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Putting funds aside cushions against unexpected situations in business. It also makes progress towards meeting your financial goals much easier. Investing is a good way to grow your income. It works for everyone whether employed or not. 

What is an investment? 

Investing is an asset where you commit funds to generate profits when the price gets high in the market. It can also mean purchasing goods for consumption in the future to generate wealth. 

An investment is an asset for generating additional income or for selling at a higher price than you bought it at. 

Making an investment is putting your money to work like when you buy assets including securities, bonds, government treasury bills, or stocks to generate income and build wealth. It’s a strategy that will make your money grow after tax. 

Successful investment requires making sound financial decisions. 

Why should you consider making an investment? 

Let's look at the inspirations to start investing your money today.

Stay ahead of inflation

You’ll likely lose your funds during inflation if you don’t use it to gain more. Inflation is a general increase in the prices of goods and services over time. It declines purchasing power meaning that you’ll get less from the money you currently have. 

If you invest money in a trading company or bond with good returns, you'll generate additional income to help you afford whatever you want even when prices increase. 

Helps build wealth

Investing allows using the money you currently have to make it grow. There are various assets you can hold with the potential to generate more cash in the future. You need a solid investment plan matching your budget and financial strategy. 

Building wealth through investing doesn’t happen overnight. You must be ready to give it time and put in the effort. Analyzing available opportunities is important to pick the best one with highest returns on your investment. 

Achieve financial goals

When saving for something like retirement or a holiday, investing will make reaching your financial goals faster. A diversified investment portfolio increases your chances of generating income to achieve your goals.

Investing allows for achieving long and short term financial goals in a short or long period of time. 

Get financial independence 

Being financially independent is having enough passive income to cover all your expenses. It’s a situation where you don’t depend on income from an employer.

Investing builds income to achieve financial independence after good performance. You will have enough income to live without working when you invest wisely. 

How to invest today?

There’s no single best way to invest money. It depends on personal preferences, investment goals, and ability to handle risks. Here are five popular ways to invest today. 

Real estate

The average income from renting is about 4.7% and it’s expected to increase over time. Investing in buy-to-let is a wonderful idea. House prices are likely to grow by 37% in London and the rest of the country by about 30%. Some of the best ways to invest in real estate today include:

  • Home flipping
  • Purchasing rental property
  • Real estate investment fund
  • Property ISAS 

Peer-to-peer lending

You get over 10% return on your principal investment after putting funds in a project that needs capital to grow. Your investment is paid back with interest when the business succeeds.

This investment strategy has lower risk. It also offers higher returns than regular savings or investment accounts. 

Lifetime ISAs

These are saving accounts for people from 18 to under 40 years to help them buy their first home or save for retirement. You can only save £4,000 in a year and the government contributes 35% which may go up to £1,000 per year until you’re 50 years old.

You can hold cash, stock, or shares in your lifetime ISA. Investing £20,000 in a year at a growth rate of 5% has the potential to make you £1 million after 25 years. You can’t withdraw your money before the period lapses. 

Stocks and shares

You can invest your funds in shares, securities, government treasury bills, and stocks in public listed companies through a stockbroker or financial advisor. Alternatively, you can open a share trading account with an online investment platform although itrequires paying some fees. 

There’s also an option to own the shares directly or pool funds with other investors in an investment fund. 

Private equity

This investment option generates positive returns for any investor. Private equity firms get funds from institutional investors to buy various businesses. 

They aim at growing the companies for about three to five years. Then they sell them to generate profits for every investor. 

Private equity investing mitigates against public risk, it’s also a good way to diversify your investment portfolio. There’s potential to earn about £91,038 in a year for being an associate in a private equity firm. 

How to invest successfully when you are new in the market?

Let’s take a look at a few simple strategies to consider when you’re just starting out:
HowTo step image

1. Flexible funding:

Always be able to invest as much or as little as you can

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Become an entrepreneur with HelloPrimo.

A team of experts will get you the answers you need to get started with your business.

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