The preservation and increase of capital are the basis of almost any goal. Whether it is paying for a child's education, securing a comfortable pension or achieving financial independence, what a person invests in plays a huge role in his success, but it is not just about choosing winning stocks or buying precious metals. When investing, an investor must learn to make the right decisions based on their goals and capabilities. Money management plays a particularly important role in times of economic and political instability, as it was at the height of the COVID-19 pandemic when many people lost their jobs. But what is better to invest in? Below, we will analyse the most attractive assets, from mutual funds and currencies to real estate in Cairo.
- How to prepare for investing?
- Investing for Passive Income
- Mutual funds
- Precious metals
- Bank deposit
- Real estate
- Expert advice: where to invest money in 2023
- How to invest profitably abroad
- Real estate investment in Cairo
How to prepare for investing?
Here are some recommendations that will be useful for novice investors:
- Start as early as possible. Investing when you are young is one of the best ways to receive a good return on your money. Assets work like a snowball — the more time goes by, the more money they gather. Of course, there will be ups and downs in the stock market, but investing when you are young means that an entrepreneur will have decades to survive the fluctuations, gain experience and eventually increase his income.
- Decide on the amount to invest. How much a person should invest depends on their financial situation and goals. Some invest to make their retirement comfortable, while others want to buy a car. The goal can be anything, and the investor must decide in what period he will be able to achieve it. Given the time frame, the entrepreneur will be able to determine the percentage of income that he will spend monthly on investments.
- Find a property for investment. Having determined the goals, the period and the amount that he will put aside monthly, the investor will find the right direction for his capital.
Here are the most common and profitable options.
Investing for Passive Income
As a rule, most investors invest in one or more of the following assets:
Not all people who have created a financial cushion are ready to buy securities, currencies or precious metals. To develop the right strategy, beginners need not only theoretical knowledge but also experience in the field that interests them. Therefore, novice investors should pay attention to mutual funds.
A mutual fund is an organisation to combine the funds of several investors into one amount and invests this amount in various assets, for example, in securities. Such associations are great for beginners because they can invest a small amount, and highly qualified specialists who have extensive work experience will manage the funds.
Moreover, the advantages of mutual funds include the following factors:
- Small expenses. Such organisations require less investment than self-investment.
- High liquidity. An investor can sell a share in a mutual fund at any time and not face additional losses.
- High profitability. The return on investment in mutual funds can significantly exceed the profit from bank deposits.
The foreign exchange market is another common arena for investors. Here are a few reasons why it deserves attention:
- Diversification. Investors can use the currency to balance their portfolio, especially if it is focused on stocks.
- Accessible information. Unlike the securities market, up-to-date news affecting currency prices is available to everyone. There are no insiders in this arena. Since the currency's valuation is determined by actual cash flow, as well as political and economic events, investors can independently analyse and make forecasts.
- Capital gains. Currencies are akin to commodities and stocks because they can also rise in value.
Gold, silver and other varieties of precious metals are other attractive asset for investment. These are the following 2 advantages of such investments:
- Protection against inflation. The biggest argument for investing in precious metals is how well they keep their value in the face of inflation. Stocks and currencies may fluctuate, but gold, silver and platinum, as a rule, retain their value despite all market downturns.
- Scarcity. Let's face it, people do not have the opportunity to forever extract precious metals from the ground. This resource continues to decline, which is why it will always be in high demand.
A bank deposit is one of the simplest, but the least effective ways to increase funds. In most cases, people who want to protect their finances from inflation choose this method because they will have a small income from such schemes. There are virtually no risks associated with bank deposits. The main thing for an investor is to choose a reliable financial institution that cares about its reputation.
In addition, the disadvantage of this method of multiplying funds is its duration. Banking programs usually last for several years.
Investing in real estate can become an extremely profitable activity. This is particularly true for those who are willing to hold on to property purchased over an extended period for capital gains. Here are the key advantages that make real estate a profitable investment:
- The opportunity to purchase properties at prices below the market value. Sometimes, investors can invest in real estate at below-market prices, especially when the seller needs to make a deal quickly, and the buyer has enough money to meet this need. To take advantage of such anomalies, it is necessary to know a lot about prices in the local market. It is easier for people to constantly invest in residential and commercial real estate.
- Stable cash flow. An investor renting out real estate generates an influx of monthly rental payments. Depending on mortgage expenses, taxes, maintenance, etc., the net profit can be significant.
- Capital gains. If the investor chooses the right location, the property he has purchased will increase in price over a long period. He can rent out the property and sell it a few years later to achieve significant capital gains. There is also the "fix and flip" strategy, in which investors buy real estate, improve it with cosmetic repairs and resell it at a higher price.
- Protection against inflation. The continued rise in inflation tends to reduce the returns received from most types of investments. Such trends do not affect real estate, which is becoming more expensive faster than the general price level. One of the reasons for this is that investors consider residential and commercial units as a protection against inflation, and therefore their value will rise.
- Greater control over investments. Most investors buy stocks or bonds, the income from which can increase or decrease depending on external factors. The real estate situation is completely different. Owners of residential and commercial units can search for the best deals, control costs, choose tenants and decide when it's time to resell them. By participating in all aspects of the investment process, they can influence their income.
Expert advice: where to invest money in 2023
Most people know that investments do not have to be kept simple. Savings under the mattress or in a regular bank account are wasteful because in such cases they are lost. If you place $500 in a box, after a while there will still be the same amount in the box, even as inflation increases, the boxed funds will be powerless. Therefore, sooner or later everyone thinks about how to best invest.
Many experts agree that real estate is the most profitable investment. Residential and commercial units can bring both stable rental income for a long time and significant capital gains after resale. The main thing is to choose the right property, and it is best to do it abroad.
How to invest profitably abroad
What is better to invest abroad? If we talk about real estate, of course, it is worth choosing properties in popular tourist destinations, for example, houses in Cairo.
The Egyptian capital attracts both tourists and ex-pats planning to buy or rent housing. Local real estate brings high rental income and capital gains, and the country's favorable tax policy allows investors to get the most out of their investments. In addition, it has the following advantages:
- Relatively low prices. The cost of real estate in Cairo, as a rule, is 25-40% lower than in the capitals of other countries with a developed tourist industry. Moreover, development companies offer an initial payment of only 5%, as many potential buyers do not have a lot of money to cover a large deposit.
- Strategic location. Cairo’s transport system, including an international airport and modern trains, allows residents to reach anywhere in Europe in the shortest possible time. This is another reason why foreigners are interested in real estate in the Egyptian capital.
Real estate investment in Cairo
To find a property that will meet your tastes and financial capabilities, please visit the official website. Its catalog contains the best villas, duplexes, studios and apartments in Cairo. Highly qualified specialists are in charge of approaching the situation of each client, therefore, no matter what goal the buyer has, he will certainly achieve it.