How to Start Investing Money – Guide for Beginners

Investing is a form of collecting more money. When we talk about methods that can help you to collect more funds, which you can use for the first time there are a plethora of opportunities to start improving yourself. In this article we will have a look at the necessary steps that are important to consider when you start to engage in the investing process.

Newbies can start with bank deposits or buying stocks in companies. The more experienced investors invest in gold, government bonds, startups, cryptocurrency, and so on. On the other hand, in order for the investment to end in making a profit, and not to permanently discourage the desire to invest, it is necessary to have at least an initial knowledge of what investment is, what it is, and also to understand where to invest so as not to go bankrupt.

We will figure out what classification of investments exists, which of them are the most profitable and high-risk, where people who know how to invest and, in fact, what types of investments are suitable for micro and macro-investors. And we’ll start from scratch.

Classification of investments by form of ownership

First when we talk about investment for beginners, it is necessary to classify them by form of ownership. Such investments are:

  • Private: an individual or legal entity acts as an investor;
  • State: deposits of capital of state-owned enterprises, state bank, state funds, funds that are not budgetary, but are state;
  • Foreign: investors are foreign companies;
  • Mixed: joint ownership of assets of several investors.

This list is not comprehensive, though. If we take a look at other firms and companies, they also consider Forex trading as a form of investment. According to Axiory FOREX broker which is one of the most prominent and reliable brokers, FX trading has become a popular method of investing money and a lot of traders are turning to this way to improve their financial situation.

Classification of investments by objects

  • Real: buying equipment, building new premises, expanding production, investing in brands, in personnel development, and so on.
  • Financial: the purchase of shares and securities, bank deposits, real estate, loans, and so on.
  • Speculative: the purpose of such investments is short-term enrichment due to the expected increase in the price of currencies, precious metals, securities, and so on.

Classification of investments by investment term

It is about the time during which the investor plans to reach a certain level of profit.

  • Short-term: up to one year.
  • Medium term: one to five years.
  • Long-term: investments for more than five years.
  • Annuity: some types of investments may not be profitable all the time, but on a regular basis. For example, deposits, purchase of debt obligations, payments of pension funds.

Classification of investments by the factor of profitability

There are high yielding, medium yielding, low yielding and no-yielding investments. If the first three types are determined by the level of income received in comparison with the average market, then in the non-profitable type the profit is replaced by the effect of an ecological, social or other non-economic type.

Risk classification of investments

Low-risk investments are characterized by a yield of 10-15% per annum. This includes bank deposits, real estate investments. They also include impersonal metal accounts, savings insurance, deposits and NPFs with a risk level of about 3%.

Average-risk investments are potentially capable of bringing 15-30% per annum. The risk level is around 25% depending on the instrument. The group includes all kinds of mutual funds and general funds of banking management, as well as trust management and trading on the stock exchange.

High-risk ones can bring from 50% of income annually and differ in the level of risk from 25%. High-risk investments include Forex (a game on the international currency market) and HYIP – a highly profitable investment project in which participants earn through the inflow of funds from new investors, but at the same time resembles a financial pyramid.

It is also worth noting that these two classifications (# 4-5) are interconnected: the higher the risk of investment losses, the higher their profitability.

FG Editorial Team
The Founder's Guide Team - Asian Associates with dynamic elements out to make a change.Thank you for visiting our site! If you do have any questions or inquiry, feel free to contact us through our links and please don't forget to follow our social media accounts. It would be our pleasure to help you in any way we can. Always Remember: "Proceed to Succeed". Hoping to hear from you soon!

Leave a Reply

Your email address will not be published. Required fields are marked *