Last Updated on November 22, 2019 by Chrisantus Oden
Basic Investment Skills
The key to building wealth is developing good money managerial skills. Simply put, you need to know when to invest, when to spend and when to save. Although a lot of people want to get wealthy, they shy away from the idea of investing because they think you need a lot of money to start investing.
This is not true at all. You do not need millions of Naira to make an investment.
I have heard lots of people choose saving over investments. They say, “Just open an account with any bank and keep putting in a fixed amount of money in there for as long as you want”. Saving money is good but you are not going to get rich if you do not invest. Investments are a way to double or triple that cash you have been saving up.
You might think that shying away from investing because you are scared of taking the risk involved is a better option.
But, stay with me here!
Don’t you think you should consider not investing at all a greater risk?
It is good to invest even if you do not have so much money. The sooner you invest, the more interests can accrue, the more money you can make in the long-run.
In this article, we would be considering how you can invest in real estate and cryptocurrency when you have more than a few thousands but not the millions that you wish you have.
Real Estate Investment
Real estate business investment has become one of the most popular ways people make money. It is very common to buy houses or lands without any intention whatsoever to live there. People simply buy and hold property; wait for the property to appreciate in value before re-selling it. Having cash to buy all the properties you wish to acquire for the purpose of investment is an easy way to begin the real estate business, but it is not the only way to enter into the real estate business. A lot of persons have acquired different levels of success by investing in the real estate business with little or no property. There are more creative paths to owning a property. These other ways include;
Investing without a down payment
This would require you to look for a seller that may be willing to finance you. This means, a seller might be motivated enough to grant you a loan or ask that you pay for the property over a period of time (say, 6 months). You can make payments on a lease agreement until you have the money to buy the said property. You can also acquire the property without a down payment by trading it for something else. For example, a contractor could decide to offer a seller labor in exchange for a down payment.
Take over mortgage payments
If you want to invest in a real estate property but you have little money and cannot afford a down payment, you can offer to take over mortgage payments in exchange for the property. Some mortgage loans have specific instructions that prevent these types of transactions; you would need to investigate the mortgage loan before you go ahead to make this type of offer. You can also offer to take over the sellers’ debts such as credit card payments instead of the down payment.
Co-investing for a down payment
You have the idea on how to make profit off real estate business by investing in it but you are short of cash. The next best thing to do is to bring a partner who may fund the whole process or likely bring a percentage of the funding. If you partner decides to do the whole funding then, the role of managing the business is entirely yours. You would however need to write up a contract for you and your partner. This contract must show in clear terms; who is responsible for what and how the profits should be divided.
If you have little money and you want to make a real estate investment, you can borrow money from family members or friends. Another option is taking out a home equity loan. Find a bank that would allow you take out a loan for a down payment on top of the mortgage loan you have on your property. In this type of approach, your home is used as a collateral on the second mortgage. Make sure to pay this loan on time to avoid losing your home. You can also consider taking a loan from a micro lender. Internet micro lending services help borrowers find lenders for small loans.
Work with an experienced real estate broker
An experienced real estate broker can assist you in finding properties that may not require a down payment. It will cost you nothing to find and work with someone experienced in what you intend investing in. You can find a real estate broker by having your friends refer you to the brokers they have worked with. You can also look up the brokers on the real estate company’s website they are affiliated with.
Search online for properties that offer incentives
You can look up properties on real estate marketing sites like; homepath.com and Fannie Mae. You may be lucky to find a property that requires little or no down payment.
Bitcoin is a type of cryptocurrency. It is a digital currency with a peer-to-peer payment system. Bitcoin has recently gained attention in the world, causing the process of investing in it to become easier than ever before. I advise that you do not buy into bitcoin investment until you are sure you understand the risk involved.
Although bitcoin is a very unstable commodity; with its value rising and falling from time to time, the key to making huge returns from investing in this business is knowing when the value of bitcoin tends to rise and when it would fall. As at October 2013, the price of bitcoin was between 120 to 125 dollars per bitcoin while in 2014, the price spiked to about 350 dollars per bitcoin. You have the responsibility of studying these fluctuations in the market. You would need to go online and read up lot of materials available on investing in bitcoin. This would help you understand better.
With your little money, you can buy bitcoins when the dollar exchange rate is low and resell when the exchange rate becomes high. Although the bitcoin market is quite volatile and extremely difficult to predict, there are predictions by some experts in cryptocurrency on the rise and fall of bitcoin. You should read their prediction articles online so that you remain on the right path.
Remember, the key to building wealth is developing good money managerial skills. You can start turning your small cash into huge bucks by investing them. No matter how small the money is, there are 1 or 2 investments you can make with it.