Contributed article in our small business series. Enjoy! – Kimberly
Everybody is aware that they need to invest in something that will become sustainable and profitable in the long-term. But not many people have wondered what does this exactly mean. The world is full of ideas, but not all of them provide good results. The greatest ‛wisdom’ you’ll hear is that you shouldn’t invest in an idea, but in the person behind it. This also has numerous misinterpretations – people tend to think that that person needs to be wealthy and equipped with lots of influence and connections, but that’s not entirely the point. The indicator for your investment should be your relationship to an idea – do you like it or not. Although it sounds suspiciously subjective, if an idea feels right and you’re attracted to it, you should go for it.
The funding landscape of startups is not what it was fifteen years ago. Many new funding options are under development, providing more ways than ever to get the ideas off the ground. That means almost everyone is able to invest in the next unicorn if they play it right. People always talk about the important questions of investing in an idea – does it address particular problems, do target consumers need it, and are they able to afford it. While the perfected pitch that answers all these questions is desirable, it is not the only indicator. Your personal hunch can sometimes provide you with better results than any analysis
Paralysis by Analysis
With the end of the year approaching, you’ve realized that you finally have some money to invest. Whether it’s an end – of – year bonus or a raise, you immediately tell yourself you should be very smart with your investment if you want those extra bucks to count. This is where your overwhelming analysis begins, and your problems with it. The myriad investing options are clouding your instinct where to invest, and a great amount of time you spend analyzing these options will lead you to ‛paralysis by analysis’ where you’ll be putting it off and end up not investing at all. The extra cash that you’ve set aside will undoubtedly end up consumed by unexpected life expenses and bills, so now is the time to change your perspective.
Business is Everywhere
When we’ve made the first step into the adulthood, our parents have taught us that politics is closely interwoven with our lives – it is not just the question who we’ll vote for, but also where we will live, how much we will earn, how many kids we’ll have, etc. These capitalistic times have also made the business part all-present. This means that even if you’re not a business type, the business opportunities to invest are a part of your personal life. Investment in real estate is extremely popular today, but not everyone is cut out to be a landlord and running out and buying an investment property can be pretty risky. Even if you evade dealing with a physical property by investing in real estate notes, you need to have a lot of trust in an individual that has offered them to you.
But you live somewhere, don’t you? This automatically makes you a part of the real estate business, whether you’re aware of it or not. Many people dream of various home improvement which they never bring to life simply because they’re not considering them as an investment. If you choose one of the attractive and reasonable home improvement loans not only you’ll be able to turn your home into a place you’ve been always dreaming of, but you’ll also increase its market value in case you decide to sell it at some point in the future. There’s no calculation in it – it is simply the idea that presents your needs and desires, and going for it will certainly pay off.
There are many ideas that seem great to us, and seeing that their loans have been rejected by banks leaves us completely puzzled. We feel the need to show them our support, but at the same time, we’re overwhelmed by the cost of our own lives, which prevents us from helping out. But with peer-to-peer lending, you’ll be able to invest in these people and their goals with a promise of return. The existence of platforms such as Prosper and Lending Club will put you in the role of the bank, where you’ll be able to split up your investment into increments as small as 25 bucks while earning upward of 6 per cent or more rate of return, which is pretty decent. To sum up, you’ll be able to loan money to complete strangers you believe in, the small sums making this right decision even more comfortable. Investing in something you truly like has never been more rewarding.
There Will be Blood
We’re not gonna talk about the oil business whose madness was clearly depicted in Paul Thomas Anderson’s cult classic. We’re gonna talk about the other type of metaphorical blood, the one connected with the world of bonds. Although investing in the stock market has historically paid off making it the most basic advice, there is still a good reason why many people think that the stock market is pretty overvalued and they’re reluctant to put their trust in it. But this is where your hunch is most valuable, as Baron Rothschild has put it once in a pretty picturesque way, claiming that you should invest when there’s blood in the streets even if it’s your own. What this means is that you should always use the opportunity which appears when good investments become oversold and buy exactly when everybody else is getting out. In situations when fickle investors head for the hills the stock prices of some great companies will inevitably go through the slumps and if you follow your intuition you’ll be able to wait for them there. This approach has its risks, but you can be sure you’re not buying garbage by using the price-to-earnings ratio.
The Man Behind the Idea – The Conclusion
We hope that up to this point you’ve realized that the person we’re talking about is you. The idea doesn’t have to be your own, but when it comes to investments your personal relationship with it is what matters the most. It could be your unfulfilled desire, the need to show some support or just a hunch it’s time to take a stroll through ‛bloody’ streets. When we say you need to like it personally, we mean that you need to feel the strong attachment that leads to your own fulfillment, guaranteeing good results. You should also take this subheading quite literary and also consider investing in your skills and knowledge, as well as in the education of your children – that way you’ll be improving the biggest assets you have. In this modern world, we’re all businessmen and it’s time to put that fact to good use.
Author: Emily Wilson
Emily is a business psychologist with a passion for marketing and finance. Researching, exploring and writing are her favorite things to do. She works as a business consultant for OurMoneyMarket. Besides that, she loves animals, music and traveling.by