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Every day you are making investments. It might look like investing in yourself with self-care spa treatments, sweet treats, or something trendy to keep you motivated and inspired in your work. It can look like investing energy and time into a project, a relationship, your family, your career, or your personal interest or hobby. Then there’s the “stereotypical” investing, which you may or may not be accustomed to, like building or buying a home, starting a business, or buying stocks and shares.
Understanding that investments are not as scary as they seem – that they have the potential to offer more return than initial debt – you will find comfort in investing in things like a home, or multiple homes, and stocks! Of course, there are plenty of things you can invest in, like someone else’s business ideas, but it might provide a sense of comfort to do something more in your control, like buy a house and make monthly payments, or invest in stocks with professional assistance and guidance. Each type of investment holds different pros and cons.
Investing in a Home
How exciting! You are finally about to invest in your dream home or land! Property investment is, and always will be lucrative. Maybe you are planning to start a family, a food forest, a campground for RVs, or whatever it is you are aspiring. The great news is that buying a home is never just getting yourself a four-walled shelter, it is so much more – whatever you want it to be in fact!
Despite the excitement and freedom of owning a home, many people are fearful of the commitment. What if you can’t pay the mortgage this month? What if you can’t afford a couple-hundred-thousand-dollar home? A million-dollar home?
It can be very unclear, with fear inspired by uncertainty. So take a deep breath, you’ve got this!
First of all, you don’t need the full amount to buy your dream home. You just need enough to make a substantial deposit – the higher the deposit, the less you will pay each month, and a high enough income to afford a monthly payment. Chances are, whatever the price of the property, you will need to take out a mortgage from the bank to help you pay for the house upfront.
Various sites can help you calculate a loan for house. This calculation will help you determine how much you are likely to pay each month and if you can afford that with your income.
A home, big or small, is an investment because it will allow you to capitalize on your home’s value later. As homes age, especially in a place of high interest, the value of your home will hopefully increase (although there is no guarantee!). If you pass away, your kids or whoever inherits the house will also have access to that money.
The downside? Like any investment, it’s a risk. Housing economies go in boom and bust cycles, which can leave you stuck with a home you may no longer want temporarily until the economy stabilizes again. This could take years! Buying a home is not to be taken lightly. You will want to make sure you like a place before buying a house there.
Investing in Stocks
Stocks are just as risky, if not more, but can drastically change your net worth without requiring much effort other than a chunk of money.
You do not have to go to school for finance or live near Wall Street to invest in stocks, as there are many companies and banks that offer expert guidance on the best investments to make right now, keeping you updated on the trends.
The downfall? Again, investing is a risk. Although there are reports on decades of various trends available to you or your expert assistant, sometimes things are unpredictable. Natural disasters, wars, pandemics, politics, and modern journalism are just a few factors that affect the stock market, and all these things are typically unseen. Historic performance is not an indicator of future performance.
Your best bet? Start small with an expert. Investing doesn’t imply investing thousands of dollars at once. Try investing with what you know you can afford to lose and expand from there!
