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When an individual usually thinks of investing in any business, he usually takes initial steps by having a glance at the stock market. Even though there are a lot of investment options available in the market, stocks are the first choice of most people. Stock market is the place where the shares of your company usually trade internationally and represents the ownership claims in any sort of business.
Beside this, there are many other methods for investment of your savings. So expanding your business with investments which don’t belong to the stock exchange is usually a safe and volatile choice but it needs a certain amount of investigation before you invest.
Types/ options if investment other than stock:
There are usually many options for investment other than stock, five of them are listed here.
- Saving bonds
- Municipal bonds
- Crypto currencies
- Venture capitals
Saving bonds is a great investment options
Investment in the form of saving bonds is irresistible if an individual is interested in the investment which in turn presents most stable interest rates. These types of bonds are usually given by the federal government which in turn pays interest for a specific period of time.
Advantages of saving bonds
There is a very low risk of any loss in these bonds because usually they are paid by the government. So any situation that leads to the loss of money is due to the government when it puts a specific defaulted amount over its debts. Moreover, no type of taxes are applied on bond interest and you can defer this tax until the bond reaches its maturity. But before deciding the best way to redeem savings in the form of bonds, it is crucial to know which type of bond you possess.
These bonds can be;
- Series EE bond that represents a fixed rate of interest
- Series I bond which shows a part of interest rate according to rate of inflation
- Series HH saving bonds, in which interest pay every 6 months, its value doesn’t change. These HH series bonds are issued after the maturity of H bonds. Face value is paid at the purchasing of bond while at the maturity/ cash the bond the face value will pay back to the investor.
Gold is another investment options
Investment in the form of gold also presents better opportunities because it can be done in a number of ways such as coins, gold bullion ornaments and gold based future contracts.
Federal commission suggests that the prices of gold vary with the dollar rates because the dollar is backed with gold.
When the dollar rates fluctuate in the international markets the rates of gold also fluctuates. So, a proper investigation should be made before investing in the deposit box.
Moreover, it is important that you have made a deal with a reputable company if the physical custody of gold is not possible.
These are the types of bonds issued by the government for their usage in certain projects such as building schools and national highways.
Although these bonds show lower interest rates, they are exempted from state and federal taxes. This in turn makes after tax much higher than that of other bonds having lower rates of interest.
They are relatively light as compared to corporate bonds but the investors should be more curious about the bid-ask spread. The default rate of these bonds is much lower than the corporate bonds.
These are usually digital currencies that are decentralized and have attained much importance. Basically, it’s a digital payment/transaction system where the bank’s verification isn’t required for the transaction.
It’s a peer to peer payment system where anyone from anywhere can send or receive the money/payment, instead of being physical money.
Crypto currencies use decentralized technology to make the payment secure and store the money without using any name or visiting the bank branches. It usually uses a blocked-chain technology, which records all the updated transactions and holds them to the currency holders.
The most famous currency is bitcoin but it’s not the only single option to invest. But some other digital currencies are used like Litecoin, Stellar, Ethereum etc.
This investment involves obtaining loans starting up a business from the start. It is much similar to that of private equity whose focus is the early stage companies. As this type of investment is risky so it is available to accredited type investors. At the same time, equity crowdfunding has created new options with limited opportunities.
Investment is important in today’s world because it is essential and beneficial for us at the same time. The biggest importance of investment is that it generates income and can serve efficiently to provide regular or recurrent income. Secondly, it is important because it helps to meet the financial goals by supporting people to attain their financial goals whether long or short term.
Not only is investment important, but is highly beneficial as well. This is because it can help you achieve many financial dreams and sometimes the bigger ones. Investment can provide possibilities for many long-time goals and returns, it is highly beneficial to surpass the upturn and also benefits in the changing needs.
To sum up, investments are equally important and beneficial and they provide us better resources to generate wealth, avail taxes and much more. Investments are our own profits made by ourselves for securing the future and one should willingly invest in themselves.
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