Listening to investment advice is crucial in every entrepreneurship and business.
We can say that it is common for people, regardless of the work they do, to seek financial stability, but with the concern of having to carry high debt and loan interest to get it.
For entrepreneurs, knowing how to manage their money in a healthy way is even more important, considering the uncertainties that a business of their own can bring, mainly for beginners.
We know that when money is idle, easily accessible and has no destination, it is easier to spend it irresponsibly and unnecessarily.
That is why we are going to share 7 tips to invest money and have the guarantee that, when you need it, you will have that value available (plus the returns!).
The importance of investing money in different ways
Some investments allow you to spend a small amount, while others require a higher value to get started.
With withdrawal, it works the same way. There are investments you can withdraw at any time, such as savings, and others in which you will only see your money again after six months or a year.
If you investigate the market, you will see that there are investment options available for every profile of entrepreneur, from the insecure to the more daring.
However, it is not advisable to put everything you have (even if it is little) into one investment.
As the financial market suffers many fluctuations, mainly in more fragile economies, if you put all your money in one place, in the event of a fall, you can suffer many damages or even lose all the value invested.
What value to invest?
First, it is important to know that there is no minimum or maximum value to invest, the amount will vary depending on the type of investment and the profile of the entrepreneur.
However, there are some calculations you can make to think of an amount that is ideal to reach your goal.
Start by recording all your fixed expenses, such as rent, financing, electricity, water, health plan, telephone, Internet, monthly bills, taxes, studies, among others. Don’t forget to record the expenses generated by your company, such as space rent (if applicable), production costs and payment of suppliers.
Record a cash flow value, so that the company continues to operate, even if you are not generating as much income.
To perform this control, you can use Excel, Google Drive or financial management tools available online.
Types of investment
There are several types of investments in the world, so we will present the main formats and explain what makes each one different so you can decide the best destination for your money.
When analyzing the advantages and disadvantages that the models present, try also to observe which ones are more suitable to the goals you set for your venture.
Saving is one of the most common forms of investment, probably because it is available in any financial institution.
However, it has lost ground to options that, despite being a little more complex, end up being more profitable for the investor.
To begin with, it is only necessary to find a financial institution with the required documentation in hand and open a savings book. From there, the investor can deposit and withdraw the desired value when needed.
- To have daily liquidity, which is exactly that practicality of being able to withdraw money at any time.
- It’s exempt from income tax.
- It is a safe form of investment, since in several countries it has the protection of protection funds per individual.
- There are no charges.
- In some countries it may be underperforming.
- Although withdrawals can be made at any time, the investor receives the return only when he leaves the money until the date the deposit is one year old or more, i.e. once a year. If you withdraw it earlier, you lose the entire yield.
- For those who have difficulty saving, the daily liquidity resource can encourage unnecessary and early withdrawal of money.
This investment option is a security issued by banks in order to raise money to finance their activities, such as investments or loans to third parties.
To simplify, we can say that, when you invest in a term deposit, you lend your money to the bank and receive in return the payment of interest on the operation, which can be pre- or post-fixed.
In most cases, the longer the application period, the higher the valuation offered.
- It presents greater profitability compared to savings.
- In many countries it is also protected by credit guarantee funds, making it a safe investment.
- It has shorter grace periods compared to other types of investments, allowing the money to be withdrawn after a short period of time from application.
- In many countries it is subject to income tax, with taxation varying according to the term of the investment.
- It requires a minimum initial amount, which can be difficult for those who are starting out and/or do not yet have the stipulated value.
- Normally it cannot be withdrawn before 6 months.
Bills of Exchange
Bills of exchange are a form of savings, where the amount of money to be invested can be withdrawn on a set date and whose returns depend on the market to which the value is associated. One of the most common markets is real estate.
However, in those cases, the investor “lends” the money to the financial institutions that issue it to be offered as credit in the real estate or agribusiness areas, for example.
- It has a higher return in many countries, compared to savings and time deposits.
- They are exempt from income tax for individuals.
- They usually have some credit fund protection.
- They require a higher minimum application, compared to that of the time deposit.
- In the event of a 90-day recovery period, i.e. before this period, the money invested cannot be withdrawn.
Treasury Direct is a program developed to enable the online sale of federal government securities to individuals.
If in the previous options the investor “lends” his money to banks, real estate institutions or others, when choosing Tesoro Directo, the loan is made directly to the federal or national government.
Therefore, the investment is available for the government to invest in public works and, after the determined term, the investor receives the capital back with the corrected value.
- It is an affordable investment, whose minimum values for application are usually low.
- It offers security for the investor because they are guaranteed by the National Treasury.
- It presents high profitability.
- It has daily liquidity.
- The investor loses the return if the redemption is made before the stipulated time.
- Requires payment of fees.
- It is not exempt from income tax.