Investing is, in essence, a form of gambling. You’re just as likely to lose money in a new opportunity as you are to make any, and stumbling into a solid investment on the ground floor is as likely as a Royal Flush. While there are some guaranteed investments to make money, these opportunities are few and far in between.
Some of your investment success is based on who you know, some of it is having a keen eye for business ideas likely to succeed, and some of it is having the capital to finance a great project and get a return. Angel investors like Richard Branson and Peter Theil made their fortunes in part by knowing a great business proposal when they saw it. They practically smelled money.
But you’re not an angel investor, you’re just someone with some extra money you want to see grow in dividends. Thankfully, there are countless ways investments can pay off. With the right mindset and a keen eye for business, here are just a few ways on how to make money investing:
1. Play the Market
The stock market is the purest form of investing, and it takes a certain amount of courage to play it. But if you have the determination, even amateurs stand to make a few bucks in a matter of minutes. Day trading requires fast-thinking and a good handle on the state of the market – which can be volatile and unpredictable.
The more you know, the better. One way to ensure you don’t lose too much too soon is to create a limit to just how much you’ll trade during a single session. With luck and knowledge, you can even profit off of penny stocks.
2. Trade Commodities
For many, people are familiar with the commodities trade from the film Trading Places, in which Dan Aykroyd and Eddie Murphy manage to swindle the villains by giving them false information. If you understand just how they do this – congratulations, you know more about trading commodities than this writer.
What is evident is that the commodities trade is dictated by economic policy. This is why the trade war Trump has recently fired up with China makes traders so nervous. But investing long term in known commodities like gold and silver can pay out well.
3. Trade Cryptocurrencies
Cryptocurrencies are known to many as the new form of currency that no one understands how they work. What is apparent is that their popularity, while still fluctuating rapidly, is still on the rise. It also represents how the internet still has its roots in the unregulated Wild West. There are currently over 3,000 cryptocurrencies out there, but most of them are negligible. Once you find out which matter, it’s just a matter of learning the market and watching patterns.
4. Flip Real Estate Contracts
There are countless reality shows about flipping properties by buying them up, doing the renovations yourself and then reselling it for more than it was worth. While this makes for good television, the reality is much more simplistic. Flipping contracts involves just buying up the properties and simply re-selling the contract, allowing the owner to go the long away to make money. Meanwhile, you’re getting rich through arbitrage.
5. The Cookie Jar Approach
This is one of the safer options for beginners learning how to make money investing. This is different from the other options on the list, because in a way you’re investing only in yourself. Simply find a bank with a high annual interest return and no minimum deposit, then put ten dollars or so a week in it. The interest can go as high as 2.9 per cent, which may not seem like much, but it adds up.
So you’re too nervous or not well-read in the stock trade. Roboadvisors were created to invest your money for you based on your background and capitol you have. There are plenty that seem trustworthy, including Wealthfront and M1 Finance. Some may require a minimum amount, but given the way A.I. is going these days, if you’re willing to gamble on it, go ahead and sit back and wait for the robocalypse.
7. Investment Bonds
Bonds essentially entail lending a certain amount to a working company or the government. In return, as long as the bond exists, the entity will continually pay you back with interest. Generally considered less risky than stocks, bonds might be the best option for the inexperienced.
Investing in 401(k)s is simply another way to play the stock market, albeit with a safety net if your company’s boss is game to match some of your investment. It’s as close to free money as you can get, as you’ll see a return as long as the 401(k) is working as it should. However, once you’ve gotten to the maximum your employer is willing to pay out, it loses its charm.