If you are starting your adventure with investing, you must know that this is a risk-free path. Therefore, it is good to invest money from the generated surplus. Before you start investing your resources in any enterprise, make sure you have enough capital to pay for your basic necessities. Return on investment is never certain, so pay your bills before buying stocks. Let see about Financial Cushion
Systematic and consistent with the plan action is the foundation of sound investing. However, even if you stick to the plan, you may be surprised by a speculative bubble. Sudden and unannounced release of the exchange rate can also be painful, as the franc borrowers have learned. So prepare security. In a crisis situation, you will need a financial cushion.
What Is A Financial Cushion?
A financial cushion is an emergency fund that is supposed to provide a sense of security. So before you start investing, set aside your money for a rainy day. How high should the amount allocated to the financial cushion be? As the results of the survey, the crisis budget at the level of 3-month salaries gives a sense of security to only about 20percent of subjects. And the usual opinion about the desired value of the financial cushion is just 3 times the monthly income. The average amount ensuring a sense of security.
Investing In Social Loans
Quite a non-obvious answer to the question “what to invest money in to earn” are social loans. What is it about? P2P (social) loans are loans made by individuals with excess capital to other individuals through an online intermediary platform. How to make money on it? By investing money as a lender.
The attractiveness of this possibility lies in the rate of return on investment (the so-called ROI). In the case of online peer to peer loans, the profit may exceed 10%. However, if you come across an unreliable borrower, you must take into account the need to start the debt collection process.
Deposits And Savings Accounts – Profit Without Risk
The safest form of investing are deposits and savings accounts. Unfortunately, when you open a deposit, you cannot count on spectacular profits. The highest interest rate on deposits is currently 4percent. Savings accounts have even lower interest rates.
So is it worth investing in these products? Yes, because they give a guaranteed profit. What’s more, the money you put aside for the deposit will not tempt you, so it will not be spent on your current needs and pleasures. Looking at the long-term perspective, a deposit or an account may turn out to be an ideal investment that, for example, will finance your daughter’s studies or will be a significant contribution to a new apartment.
What is the difference between a deposit and a savings account? First of all, funds on a deposit are frozen for some time, usually for several months. Only at the end of this period is the profit paid out. If you reach for the money earlier, you will most often say goodbye to interest. A savings account usually has a lower interest rate, but your money is always at hand. By withdrawing them, you do not lose profit.