In my previous post, I mentioned there the six best investment that you could ever have. Basically, anything that gives you money is a good investment as long as it is legal. However, the question is how can you say that this or that is the best investment? I would like to answer that question in this post so keep on reading.
I think you already heard from other people the phrase “Buy this land because it is the best investment” and other people would say different things. You should not rely solely on the advice or suggestions of other people because it is your money not them. Make your own research and study so you could know which one is the best.
If you want to start learning, I hope I could help you by giving some of my ideas on how to determine the best investments out there. Here are some of the things on the list.
1. Low capital to start with
I think this is one characteristic of the best investment should posses. Maybe you think before that investing is only for rich people because they have lots of money to use. That’s not the case anymore today. Even employees and small business owners can now start investing from the extra money they have.
It is still advisable to leave some portion of your money on savings account and other part can be used for investing purposes. Many of the mutual fund companies these days offer a very low minimum investment for opening an account which is around P5,000.
I could say that amount can be easily raised by an employee who have a regular income each month. I think it is not that big and can be afforded by people who are interested in investing.
2. Non-labor intensive
The best investment should not be hard to start with and difficult to work on. As much as possible, the time you put to it should not exceed the time you used when working in your company. It can be done even you’re working in your current job.
It would be unwise to put your money on investment that will used up all the time and energy you have. This is not good especially when you have a job. I think the best investment must continue to work even you’re putting few hours of your time on it.
3. Can give a passive or semi-passive income
The best investment can be those things that can give you a semi-passive or passive income. Perhaps you already know that you can earn in two ways: active and passive income. Active income comes from your job or business while passive income should come from your investments.
Those investments that give passive income must be on your list. This is the kind of investment that you start and build at the beginning, then gives you a regular income even you work for lesser time than before or nothing at all.
4. Easy to learn and replicate by you
Another characteristic of the investment that you could have is that it should be easy to learn and replicate by you and hard for other people to copy. Competition is good because it makes you more innovative and resourceful but you should also be aware that it can also ruin your investment when someone copies it.
If you already found the best investment, your responsibility now is to take care of it and make sure that you will be able to replicate it so your earning potential will be greater.
5. Great potential to increase income in the future
A great investment should not be stagnant in its earnings. It should have the capability to increase its income in the future as you keep on developing and improving it. Some investments could not be controlled by you but other people can so make sure that the company you invested is reliable, competent and trustworthy.
You may also study the performance of the company your planning to invest. Mutual fund companies have prospectus where you can get all the information about the company. Furthermore, in their website, you will learn the performance of the fund in the past.
If you’re buying stocks on your own, make sure to know the company first, what is the nature of its business, how it make money, their debts and expenses and other investments as well. Always remember, understand what you invest and buy.