Niches not worth investing in when you’re young
Let’s suppose that you are a student who has got a sum of money in your bank account. I know such students are not mythic, but here is an important detail, those funds are actually yours. I mean, you developed a money-earning plan while finishing middle or high school, spent a lot of time checking my assignment help reviews, ordered dozens of papers from best services, used additional hours to work part-time or full-time without sacrificing your grades, and finally got several thousand bucks in your pocket. Or maybe you’ve got some money with the help of your parents, but now you want to become financially independent. In any case, that’s cool.
Any person knowing how to earn and save money starts thinking about one thing sooner or later. They want to make more funds with what they have. If you are one of those people, then your wish is to make money not just be there on the account or in the wallet but work.
Here is the first question a new investor asks— where to load funds to make profits safely? That’s a good point, but I’ve got a better one. Let’s find out what investment niches are better to avoid nowadays for young investors.
Bank deposits
Young investors frequently consider bank deposits as low-risk long-term investments. The truth is, your money will simply be there for a bank. Funds will generate profits for bank owners (they can use the deposited money for financial operations), but not for you.
Why? It’s because many large banks offer interest rates that are nearly equal to the official currency inflation. That means an actual deposit owner does not only fail to earn money like that but even loses funds in a long-term perspective.
Stock and currency trading
Services like Forex and other likely websites allow investors to speculate on currencies and their exchange rates. That’s the simplified definition of trading. However, there are some other things you need to know about it.
First, trading is not only a high-risk investment. It’s a profession that most probably will take the major part of your working, studying and leisure time. You won’t even have enough free minutes to read a 99papers review. Instead, you’ll pick a random service and sacrifice your grades to trading.
Second, this niche is an excellent way to… lose all your savings within a day. Moreover, you’ll do that with excitement, just like in a casino.
Here is what I mean, don’t invest in trading unless you spent years studying that field. And even if you did, keep in mind that successful trading can only be profitable when you’ve got significant funds in your stash. You’ll lose relatively small sums (let’s say up to $100 000) almost surely.
Cryptocurrencies and mining
That is the topic on air nowadays. Cryptocurrencies and mining investments caused huge shifts in the world hardware market and influenced economies of smaller countries all over the world. It seems that the growth of Bitcoin and other coins is an excellent way to earn big money quickly.
But here is a thing you need to consider, the entry point in cryptocurrency investments is high enough these days (regarding the price of 1 Bitcoin at over $58 000), and even the leading field experts don’t know what to expect from digital coins in the nearest future. That’s the key feature of high-risk investments— you know nothing for sure.
Will Bitcoin continue growing or fall down rapidly? No one will tell.
Additionally, no cryptocurrency is supported by anything but the demand for it. The exchange rate of a coin grows until the stable demand is visible. You can’t predict factors influencing the demand. That’s why cryptocurrency investments are dangerous and uncertain.
Additionally, governments all over the world introduce regulatory methods and laws for cryptocurrencies. Moreover, they can prohibit the use of any coin for economic safety reasons, for instance.
Real estate
Many newcomers suppose that real estate is the safest investment one can find. People who never tried to offer an apartment for rent may think it’s the best business possible; you only find a tenant and then simply get regular monthly incomes as a landlord.
However, many nuances remain out of sight. For instance, it is quite challenging to find a tenant that will be maximally careful with the rented property and able to pay rents regularly with no delays. Additionally, different ongoing problems and repairs are for you as a landlord in most cases, not for a tenant.
And here is another myth, they say real estate prices only grow. Obviously, that’s not true.
The first enemy of your real estate property is time. The older the building is, the cheaper it becomes (unless it’s an architectural legacy or an office centre in the downtown which you most probably can’t afford). And even if the prices will grow, can you calculate the correlation between that growth and inflation?
As a result, buying an apartment or a house is profitable only if you are going to live there. Otherwise, you will spend years recouping that investment.