Investments – there are countless resources that you can capitalize on in order to make a living, or even to double your profits. Like most activities which would involve hard work, you may need to invest time as well in order to make it work. Sure, there are a lot of things at risk when you’re investing resources at your disposal, with no guaranty of a huge return in the end, but that doesn’t mean that you should not take the risk. Remember, fortune favors the bold, and if it’s fortune that you’re seeking, then your options are limitless. In any case, you do not even need to look far if you’re to discover these investments within your reach, you have your time, money (savings), connections, and even your colleagues to help you out if you ever decide to invest towards a particular goal.
First of all, what is the very definition of “investment?”
The truth is, the definition may vary, depending on what you’re going to invest. It is “an asset or item acquired with the goal of generating income or appreciation. In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth. In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or will later be sold at a higher price for a profit.” Take note that it usually concerns the outlay of some asset today, like time, money, effort, etc., in hopes of a greater payoff in the future than what was originally put in.
One of the main goals of investing is that you may double your profits in the end, a wise investment may either double or even triple your return, as long as you’d make wise decisions along the way. This is no different than reviewing for your exams back in high school. If you were to invest time reading your books, reviewing your notes and lessons, surely, the return would be a high, exemplary grade worthy of any proud parent’s attention. In business, the same principle applies, if you were to invest a reasonable amount while playing your cards right, your venture may bring in a high return of earnings at the ends of the day. Such are the very origins of many successful businesses today, with apps, gadgets, appliances, cars, and even furniture taking in the helm.
Risks in Investments
As with all things in life, there will always be risks. Counting on something to work without expecting the possible obstacles along the way would be an unwise thing to do, as being complacent in the long run would make you unprepared when something doesn’t go according to plan, and most of the time, especially when it comes to financial matters, they don’t go over smoothly.
All successful businessmen went through the very same rough patch that you may encounter along the way, hence, why you should lift your head up high and remember that there will always be solutions to every problem. Your financial investments aren’t safe from risks, but that doesn’t mean that you should give up at the first sign of trouble, you should instead take every lesson in stride and continue to march towards your goal, may it be doubling your returns or solidifying the legacy of your venture.
After all, all investments involve some degree of risk. In finance alone, there will always be a touch of uncertainty and/or potential financial loss inherent in an investment decision. In general, as investment risks rise, investors seek higher returns to compensate themselves for taking such risks.
Major Risks that may affect your Investment
1.)Scams
Let’s face it, there will always be people out there who do not have our best intentions at heart. You may have heard stories of people falling victim to these scams, perpetrated when they least expect it or when they were not on their guard. Indeed, falling prey to scams would garner a huge financial lost, hence, why you shouldn’t always trust strangers who are offering an immediate increase in investment returns. Do not be fooled by modern day investment scams, read the newspaper, watch your evening news, learn about these scams via your social media apps. Victims are always willing to share their side of the story, learn from them and always remember the dos and don’ts of trusting other people.
2.)External Calamities
You’ve already set up your small venture (local store), invested your life savings on all of the needed materials and structure, and even spent a few on marketing your business, when all of a sudden, a huge typhoon ravages your community, costing a lot in damages, including your business. This is one of those situations in which investors (such as you) would have preferred to be robbed instead of being hit by the storm. At least if thieves were to take a few of your earnings, they wouldn’t have had destroyed the whole place in the process. The thing is, the Philippines is prone to storms and calamities. In the recent years, 20 typhoons were recorded to have landed in the country, and that is on a year to year basis. So aside from unscrupulous scammers, you have the weather to worry about as well. In such case, the best thing would be to insure your business, thus, lessening the cost and taking you a step beyond storm warnings.
3.)Constant Inflation
This has been a concern of many business moguls for quite a while now. The mere definition of a financial inflation is the general upward movement of prices. Inflation reduces purchasing power, which is a risk for investors receiving a fixed rate of interest. The principal concern for individuals investing in cash equivalents is that inflation will erode returns. That last part alone is enough to send chills down every investor’s spine. Again, preparing for such an unexpected event may ease up possible loses in the long run.
4.)General Business Risk
Some concerns may come from the very core of your business decisions. If you didn’t make a wise choice early on, it may come back to haunt you (financially). If that part doesn’t ring a bell, take this very specific example from one of our online searches:
“With a stock, you are purchasing a piece of ownership in a company. With a bond, you are loaning money to a company. Returns from both of these investments require that that the company stays in business. If a company goes bankrupt and its assets are liquidated, common stockholders are the last in line to share in the proceeds. If there are assets, the company’s bondholders will be paid first, then holders of preferred stock. If you are a common stockholder, you get whatever is left, which may be nothing.”
Indeed, every step you take in business is a vital one, so choose wisely.
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