risk – 100 Steps Mission

Now that we have covered the basics of investing and the stock market, you might still be wondering whether investing is the right move for you. This challenge starts with looking at reasons to invest, followed by some reasons to hold off investing, after which you should be able to make a more informed decision.

Why should you invest?

Let’s start with some of the main reasons that makes investing worthwhile to many.

Investing is an alternative to saving: by setting money aside people hope to grow it and with time build up a nice small capital.
Over long periods of time, the stock market generally goes up. Even if there is the occasional crash when stock prices go down, if you have the time and the patience to sit it out and wait, the market will recover again.
On average the markets go up by somewhere between 7-10% yearly. That is more than most yearly inflation rates;
The market average is also normally higher than interest rates offered on saving accounts;
Another fun advantage of investing: many people like to track their shares and see how they are doing with their investments.

Continue reading “Day 23 / 31 Should you Invest?” →

Step 71 of the 100 steps mission to financial independence: Investing through Crowdfunding — Step 71: Investing through Crowdfunding

Once you’ve got a taste for investing, you’ll likely want to investigate other options that allow you to invest some money, either to diversify your portfolio, support a small start-up, increase returns or simply for fun to see what happens.

A hugely popular new way of investing (or indeed raising money if you are on the other side of it) is crowdfunding. Crowdfunding is a way for companies, entrepreneurs and start-ups to get together a sum of money to set up a business, launch a new product or expand and open a new project or department.

Types of crowdfunding

There are different types of crowdfunding:

In P2P (peer-to-peer) lending, capital is raised by getting many different loans of small amounts together. Instead of getting one loan of $30.000 from the bank, entrepreneur(s) might get as many as 200 different people lending them amounts between $50 and $1000 for example. Like with a bank loan, the entrepreneurs are then paying the loans back over time with interest to their investors.
Pre-sales in which people can pre-order even before a product has been produced. Those initial investors will get a first release or even a small present several times a year (for example a new exclusive wine or another small new release).
Selling shares and having people invest in your company in return for a small ownership in your company.

Continue reading “Step 71: Investing through Crowdfunding” →