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Top 5 Investments Business Owners Should Make

When you run a business, whether it’s a small start-up or a large corporation, you need to be confident in where you invest all company profits. Pumping a lot of the money back into the business is the place to start in order to help it grow and remain profitable. Yet there are many other areas in which you can invest as a business owner that will provide dividends to gain further profits for strengthening the firm. Here are five of the best investments for business owners to make.

Penny Stocks

Especially for start-ups, new and small businesses, penny stocks are a great place to start for any business owner making their first investments. These are companies that trade with exceptionally low share prices (usually £3 or less), which means a lot of shares can be invested in with a low amount of capital. They are a highly volatile investment but do make a great starting place for learning the basics of investing.

Forex

If you want to find a reputable way of making some extra money for your business by investing profits, then forex trading with Fx Pro is a good option. There are a number of safe currencies to invest in during times of uncertainty, or more risky choices if you’re feeling brave. For beginners or experts, it offers a good way to boost profits across international currency markets.

Equity

Buying an ownership stake or equity investment in another company can provide additional capital for your firm. Obviously, it is highly inadvisable to invest in any competitors. Finding a successful company or one that is on the rise to take an ownership stake can result in good percentage profits for your business, as long as it doesn’t perform poorly or go bankrupt.

Property

Real estate is a great way to enter an entirely new market and with house and rent prices still rising, it can be incredibly lucrative. It may be better to invest in commercial property, related more to your business though, such as buying your office rather than renting if you have the profits. This provides a useful asset and one that will hopefully grow in value.

Bonds and Mutual Funds

For long term, safe investments bonds and mutual funds are the go-to option. Government bonds are some of the safest investment options out there, while mutual funds can be found that have low risk attached to them. They provide a good place to learn about market trends without the risk of losing big in one go.

Consider these five investments if you’re a business owner looking to put your profits in a worthwhile place.

3 Investments You Should Immediately Consider

Investment is an asset purchased with a purpose to generate more income in the future or to sell it for a higher price. There are a myriad of investment selections available in the market today but here are a few 3 simple investments you can start with…

1. MUTUAL FUNDS

Being a newbie in the investment scene is not a problem anymore. With Mutual Funds, you can entrust a professional investment manager to produce capital gains for you and your co-investors. Mutual funds are investments that gather the investors’ money into a pool to make multiple types of investments, known as the portfolio. Shareholders participate proportionally in the gains and losses. Lastly, it gives the budding investors the access to professionally manage, diversified portfolios of equities, bonds and so on. This can be difficult and nearly impossible to create with a small amount of money.

2. CENTRAL PROVIDENT FUND INVESTMENT SCHEME

The Central Provident Fund (CPF) Investment Scheme is a way to invest your CPF savings to various banks such as OCBC, DBS, or UOB. This will enhance your retirement or housing money. Simply, the money you will generate from your investments will eventually go to your CPF account and not your pockets. To be eligible, you need to be above 18 years old and have over S$20,000 in your Ordinary Account (i.e., used for housing, education, investment, and insurance) and over S$40,000 in your Special Account (i.e., used for retirement). Compare the investment options and their charges. Instead of complaining about the CPF, why don’t you start investing?

3. REAL ESTATE INVESTMENT TRUSTS

Real Estate Investment Trusts (REITs) allows you to invest your money to a range of properties. REIT investors pool their money to buy buildings then, they divide the rental returns. This is a cheaper alternative to buying a property. Furthermore, REITs receive special tax considerations and mostly offer investors high yields and liquid method (i.e., converting your assets into cash) of investing in real estate. Although there are benefits, it is important to hire a trusted REIT Manager. One REIT in Singapore is CapitaMall Trust including properties such as Plaza Singapura, Junction 8, and JCube.

Image Credits: www.rentalrealities.com via Flickr

Sources: Central Provident Fund Board, MoneySense, and Investopedia

This article does not form part of any offer or recommendation, or have any regard to the investment objectives, financial situation or needs of any specific person. Before committing to an investment, please seek advice from a financial or other professional adviser.

Learn About Mutual Funds Before Investing

Mutual Funds

Mutual funds are investments that gather the investors’ money into a pool to make multiple types of investments, known as the portfolio.

Professional money or investment managers, who invest the fund’s capital and attempt to produce capital gains for its investors, operate the mutual funds.

The investment manager’s compensation relies on how well the fund performs. In this way, you can be assured that they will work hard to make sure the fund grows well.

Image Credits: Steve Jurvetson via Flickr

As a mutual fund investor, you become a “shareholder” of the mutual fund company. When there are profits you will earn dividends. When there are losses, your shares will decrease in value.

Mutual funds are diversified or are made up of different investments to lower the risk of loss.

Advantages of Mutual Funds

1. Mutual Funds give small investors the access to professionally manage, diversified portfolios of equities, bonds and so on. This is difficult and nearly impossible to create with a small about of money.

2. Each shareholder participates proportionally in the gain or loss of the funds.

3. The experts handle your money professionally…so even if you have little knowledge on stocks, you may learn as time goes.

Three Categories of Mutual Funds

1. EQUITY FUNDS. Equity funds are made up of common stock investments alone. Although this can be riskier, this can earn more money than other types of funds.

2. FIXED-INCOME FUNDS. Fixed-income funds are made up of government and corporate securities. Since the government and corporate securities provide fixed return, the risk of the investments are low.

3. BALANCED FUNDS. Balanced funds combine both stocks and bonds in the investment. It offers a moderate to low risk. So before investing to mutual funds, you will have decide how much risk you are willing to take.

Why Should You Invest in Mutual Funds?

Sources: Investopedia and HowStuffWorks

5 Tips For Couples with Joint Bank Accounts: Sharing is Saving

Being in a relationship founded by mutual trust may find it natural to create a joint bank account together.

Since you can trust your partner with everything else, why not trust him/her with your own finances?

But, managing this may be difficult especially when there are two people with different buying habits and priorities.

So, here are 5 Tips to Help Couples with Joint Bank Accounts…

1. HAVE SHARED GOALS

Maintain a joint bank account for big financial goals such as vacations, household bills, or insurance. Whatever the purpose and goals may be, be sure to make it unanimous as both of you will contribute each month.

Image Credits: Asher Isbrucker via Flickr

2. CREATE RULES BEFORE OPENING AN ACCOUNT

Have a plan of how each of you will contribute (e.g. 50-50 or 60-40). As said a while ago, discuss the goals and priorities you want to pursue in order to know where the money will go.

3. MAINTAIN YOUR OWN BANK ACCOUNT

Aside from the joint account, each person is entitled to have an individual account. This is because you must treat yourself or your partner personally without affecting the “household money”.

You might say that this burns the bridges of sharing, but not really. The key to having individual accounts is that both would have access to each other’s account in case of emergency so there are no secrets.

4. RECORD AND MANAGE YOUR EXPENSES TOGETHER

Communicate openly about your joint bank account and organize your expenses. Make it a habit to log on to your online banking account to reconcile all your purchases together (i.e., every week or every two weeks). Through this, you will understand how you are spending the money. Make cut backs if possible so you can save more.

5. REMAIN EQUALS

Embody your marriage vows or treat it like a merger between to companies. Everyone has an equal say and contribution to the shared account. This is why setting up rules and agreement before the processing is very important. Through this, you can keep an open eye if one overspends on something you did not agree on.

Image Credits: BK via Flickr

Ultimately, you must respect each other’s decision and communicate openly about your finances. Having a joint bank account may not be easy, but it is possible! Sharing is not only showing Care but it also Saves money.

This article does not form part of any offer or recommendation, or have any regard to the investment objectives, financial situation or needs of any specific person. Before committing to an investment, please seek advice from a financial or other professional adviser.

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