Are investments worth the risk in the current economic climate? Let’s have a look. It is common to invest in brands that you believe will be around for a long time. Some names are so big that their products cross our paths daily, even if we do not purchase them. These familiar companies usually give us the warm and fuzzies, leading us to assume (or hope) they’ll always be there.
We instruct our broker to invest, but we are never guaranteed return on that investment. If it fails, who is to blame? It is not always the broker that was in the wrong, but when they swindled you out of your life savings contact a breach of fiduciary duty attorney. Alternatively, perhaps the growth projections were flawed.
The trouble with this is that market conditions can take their toll if a company is large enough. Sometimes it’s a significant change in the industry or a new competitor emerges and squeezes them out. It could also be something as simple as changing tastes.
Even companies that have been around for decades can sometimes fail to stay afloat. One way or another, the result is the same: investors lost money.
Photo, Joshua Mayo.
What is Investing?
Investment is when you put your money in an asset that will give back the money, plus more in the future. You can make money in two ways: by getting paid interest (which is when you get paid for allowing someone to use your money) and by selling an asset later on for more money than what you bought it for.
You are putting your money into an asset that will give you profit. Risk is how likely it is for something to happen with the asset. The less risky it is, the safer it is and vice versa. Not all assets are equal when it comes to risk. Some are more profitable than others, depending on how much of a success they become in the future.
Are investments worth the risk?
While it may seem like a silly question, many people would say no. They know that even though they might make money in the short run, their investment could fail to pay them back within a few months or years.
The truth is that not all investments are worth the risk because not every investment is the same. Some investments are safer than others, making them less likely to fail and more likely to give you a return on your money in the future.
Photo, Pixasquare.
Property
One type of investment that is almost guaranteed to pay off for you down the road is purchasing land or property. For example, say that you buy a house today. Over time, that house will likely become worth more money. As this happens, you can sell it and make some extra cash to put towards something else.
Business Owner
Another type of investment that is almost guaranteed to pay off is owning a business or part of a business. When you do this, your initial investment gives you partial ownership of the company. If the company grows, your investment becomes worth more. If you were to sell the company, later on, you would make even more money because of this increased value.
Photo, Aidan Hancock.
Stocks
Of course, there are also risky investments that may or may not pay off for you, depending on how they fare down the road. For example, buying stocks is considered a riskier investment because there is no guarantee that the company you are investing in will become successful. With this being said, stocks can also be worth more money later on if the company has success with its product or service.
You Decide
The point of all of this is to show you that not all investments are created equal. Some have a higher risk, while others have a lower risk, meaning a safer investment. This is why it’s crucial to think about investing your money wisely so that you can have the best chance at making a profit in the future.
