How can I turn cash into profit?
Increasing Money: Ten Ways to Make More Money
Lana Iliev, February 5th, 2021
In a nutshell:
- There are different ways to increase money: e.g. with savings, on the stock exchange, through
Real estate crowdinvesting
or by buying raw materials (e.g. gold)
- All of these forms of investment differ in the return they bring to the investor and the inherent risk. The general rule is: the more return, the more risk.
- The optimal way to increase money is a balanced portfolio in which you take risks, but also hedge them. Spread your money across multiple asset classes.
Increasing money - who doesn't want that? Read here which common tricks and forms of investment are available and how you can best use your money to increase it either with low risk or in a short time.
Multiply Money: 10 Ways To Build Up Your Wealth
| Secure deposits in savings accounts
Whether savings book, overnight money or fixed-term deposits: savings are easy and safe. On the other hand, a savings account brings little return, of which even less is left in real terms, if inflation is factored in. Some savers even go into the red here instead of increasing their money.
| Buy bonds
Debt securities (bonds) promise investors interest. But be careful: the debtor's creditworthiness is crucial here. Both government bonds and corporate bonds can lead to total loss if the issuer is unable to repay its debts. Bond funds and bond ETFs offer an easy way of spreading risk. Subordinated bonds, on the other hand, carry a higher risk, but also reward investors with attractive yields.
| Invest in stocks
Holders of securities receive profit sharing and increase their money through dividend distributions. In addition, the acquired shares can be traded on the stock exchange and sold at any time.
However, stocks are volatile, which means that their prices fluctuate. Shareholders not infrequently generate substantial profits when share prices rise, but equally high losses threaten when share prices fall. Certain industry knowledge is often indispensable in order to be able to assess the price development of individual stocks.
| Spread risks with funds
Instead of individual shares, you can also purchase shares in equity funds. A fund manager then takes over the buying and trading of the securities for a large group of investors. On the one hand, they benefit from the manager's expertise and, on the other hand, they benefit from the diversification of risk - because the capital they have collected can be used to buy different stocks and build a well-thought-out portfolio.
However, fund managers often charge horrific fees that reduce returns. An alternative are inexpensive ETFs: passively managed funds that track an index. For example, a DAX ETF always shows the development of the securities of the 30 largest German stock corporations.
| Earn interest through real estate crowdinvesting
One way of investing indirectly and with small amounts in real estate and increasing money is real estate crowdinvesting. Here a group of investors joins together as a “crowd” via an internet platform and jointly invests in a real estate project in the form of mezzanine capital. In contrast to crowdfunding, the crowd receives an attractive return on the money paid in here.
The difference to a real estate fund is that investors decide for themselves which real estate projects to invest in. At the same time, the low minimum investment volume customary in crowd investing enables risk to be spread. In this way, investors do not have to blindly rely on the decisions of a fund manager and can still share investment risks.
Crowd investors benefit from fixed interest rates and fixed terms. Investors receive, for example, investment opportunities that are brokered by the crowd investing platform BERGFÜRST 5.0% to 7.0% interest at Terms between one and five years.
Try BERGFÜRST now for free.
| Buy real estate directly
Your own property as an investment: rents generate regular income and after a few years the property can be sold at a profit.
Unfortunately, the return on a property is not that simple. Because caution is also advised when buying real estate: Even the real value of a property harbors costly risks that the layman may not be aware of. In addition, the bursting of a real estate bubble can negate the increase in value of a property. In addition, buying real estate as an investment has other disadvantages: a lot of equity is required and it is usually a long-term investment.
| Invest in real estate funds
If, on the other hand, investors buy shares in real estate funds, you can avoid the dangers and disadvantages of buying real estate and still benefit from the real estate market. You can rely on the expertise of a fund manager, require less start-up capital and can act more quickly and flexibly.
There are open real estate funds, which are characterized by greater flexibility and more security, and closed real estate funds, which in return generate higher returns.
| Dare to do derivatives & day trading
The term derivatives stands for a large number of different financial instruments that are highly complex and are hardly suitable for beginners. Whether certificates, futures, forex trading (currency trading), CFDs or leverage products such as warrants and mini futures: the rich returns are only available to professionals who know what they are doing.
Derivatives are also financial instruments that are used in day trading. Day traders act extremely short-term (within a day) and highly speculative. Day trading should also be left to experts, because investors often lose (gamble) their wealth here instead of increasing it.
| Grant loans with crowdlending
Another way to increase money is crowdlending through providers like auxmoney. Investors lend money to private individuals or companies via an internet platform. The worse the creditworthiness of the loan seeker, the higher the interest and thus the return for the lender.
However, investors should be careful, especially with poor credit ratings. Because if the borrower is not able to pay off their debts, this can mean the total loss of the invested capital.
| Protect yourself with gold
Money can also be increased by investing in gold. The rare precious metal is a real asset that is subject to fluctuations in value, but will probably never be completely worthless. In addition to gold, however, other precious metals such as silver or platinum, as well as raw materials such as oil or diamonds, can also be used for financial investments. However, there are no regular distributions here and investors have to be very patient here too.
In addition to the options listed here, there are a number of other investments, the number of which is constantly growing. The BERGFÜRST guide contains detailed information on various investment options and is constantly updated and expanded.
Try real estate crowdinvesting now for free
Increase money - without risk?
Risk-averse investors tend to invest in safe investments such as fixed-term deposits or overnight deposits. Investment options with deposit protection are particularly low-risk. But the lower the risk, the lower the return. In addition, there is currently a phase of low interest rates. For example, the interest that investors currently receive on a call money account often cannot even compensate for the inflation trend.
Inflation rate and average overnight interest rates from 2016 to 2020
Sources: Federal Statistical Office (Destatis) and overnight money comparison (average overnight interest rate up to € 5,000), as of January 2021
If you forego any risk, you often cannot increase your money at the moment. Risks that are too high can in turn lead to losses. Money can preferably be increased by building a balanced portfolio that contains both safe and high-yield investments and offers a good middle ground.
Increase money - in a short time?
Investors who want to grow money quickly need high returns. Because, of course, wealth grows the fastest the greater the return. Particularly high-yield investment opportunities can be found on the stock exchange and increasingly also in the FinTech sector.
Money can also be increased quickly with fixed-interest investments, provided that the interest rates are high enough. With the so-called 72 rule, taking into account the compound interest effect, you can calculate how long it takes to double the invested capital with a fixed interest rate:
|=||Number of years until the invested capital is doubled|
A few percentage points can make a huge difference. With investment opportunities brokered by the crowdinvesting platform BERGFÜRST, for example, investors receive fixed interest between 5.0% and 7.0% on their investment, while fixed-term investors currently receive between 0.6% and 1.6% interest *.
While investors with a fixed-term deposit account have to wait 48 years for their invested capital to double, with investment options brokered by BERGFÜRST this can theoretically be the case after 12 years:
* For investment periods between one and three years.
at an interest rate of 1.5%
|After 48 years you will theoretically receive € 200,000|
|€ 100,000 at an interest rate of 6.0%|
|After 12 years you get theoretically 200,000|
Please note that fixed-term deposits are covered by the statutory deposit protection and therefore have a higher security profile than other financial investments such as the investment options brokered by BERGFÜRST. In order to avoid the risk of a total loss, you should always diversify your portfolio and ensure that there is sufficient risk diversification.
Make money online
Increasing digitization enables investors to have a number of new types of investment opportunities. In addition, you can now work at any time and from anywhere to increase your own money.
Ways to increase money online include crowd investing, crowdlending and day trading (see above). In addition, there are new areas such as social trading, robo advisors and cryptocurrencies. In addition, new, innovative ways of enabling internet-based capital investments are constantly emerging. Would you like to invest money free of charge in just a few clicks? Then the BERGFÜRST platform might be right for you.
Increase money with low start-up capital
For investors who only have a small amount of start-up capital, savings plans are worthwhile. Small sums are regularly paid into a savings plan and invested immediately. In this way, little money can be increased continuously over the years.
Classic Bank savings plans bring only very low returns due to the ongoing low interest rate phase. However, it can also be Stocks, funds and ETFs save. Even with real estate crowdinvesting, investors can use the Savings plan on BERGFÜRST save monthly.
Invest now without a minimum investment and secure € 10 starting credit!
Image Copyright: 88studio / Shutterstock.com
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