How to invest your money Best investment options
Note: What I share of writings is just my opinion and my personal analysis of things from my point of view, my readings and my little experience, and it is not an investment advice for anyone. Before taking any step, study the matter and consult more than one individual.
Everyone looking for an investment opportunity, and if you are not looking, you should search, because keeping the money as it is in the bank, for example, not only does not increase it, but it also decreases value because of what is called inflation.
The purchasing power of the pound varies from year to year. If you have a million pounds, for example, from 5 years, although they are still the same number, a million pounds, but what you can buy with a million pounds today may be less than half of what you can buy five years ago. So this million pounds now is in fact half a million and maybe less.
What is the types of investment?
investment is divided into two types:
- Investment in an asset: that is you buy an asset such as a real estate or a piece of land and the value of this asset increases over the years, so you benefit from the difference in the price increase when this asset is sold. Investing assets also includes buying shares in companies on the stock exchange, for example or investing in gold
The return on this investment is not high due to the low risk and requires you to leave your money for years until you can recover it with a reasonable return.
This investment is suitable for those who do not have time to follow up or who do not have the spirit of risk and will be harmed if they lose their money.
The investment is to some extent guaranteed, for myself, I do not prefer this investment, especially if you are like me in the thirties or forties.
- An investment that generates a regular profit: It is an investment whose goal is that you get a regular monthly or annual income, such as to establish a project, whatever this project is without an asset or with an asset that decreases in value over time, such as machines, furniture, or others. Therefore, you get a salary from this project or Profits at the end of the year, but after years, if you decide to sell these machines, they will not generate a profit for you.
Examples of this investment are also investment certificates in banks that generate monthly income and the principal amount decreases in value over time.
This type may be good for those who do not have other income and want a regular amount to cover their expenses or even a regular amount to be used in other investments.
The problem of this investment is the lack of an asset that increases, so with the project stopped, the income stops and the return stops, especially if the return does not increase with the passage of years.
Therefore, if you want this investment to succeed, the total return over the years must be higher than the value of the investment, because you assume that you will not recover anything from it.
An example for clarification: A person put 100 thousand dollars of certificates in banks in 2011, and the return was perhaps 10%, or 10 thousand dollars every year, according to the standards of ten previous years, so the amount was sufficient for him per month. After ten years, in 2011, the 100,000 pounds as an asset became much less than its value, and with the passage of another ten years, the value of 100,000 pounds will decrease until it disappears and is equal to zero. The same example applies to the project if you do not reinvest some of the profits in order to increase your income.
In conclusion, any project that does not increase its value is a dying project, not a stable project
What is the best investment?
In my opinion, the best investment is what combines the two, and you own an asset that increases in value and at the same time generates an income to live from. For example, if you buy a property not for the purpose of housing, but for the purpose of renting it, it will return to you and the value will also increase with the passage of years, or you may own land and instead of landscaping it, you use it as a garage..and so on.
