Something on the rich. How to make money on investments if you do not want to follow all the news of the financial market
Miscellaneous / / April 03, 2023
What are investments
There are many ways to make money on existing money - and new ones are constantly appearing. And if stocks were invented back in the 16th century, then only the last decades have been talking about cryptocurrencies and venture funds. Proven and reliable methods are called traditional, and recent and high-risk methods are called new.
In this article, we will talk about traditional methods, because if there is something more or less predictable in a dynamic financial market, then this is it. They include the following.
- Real estate investment. Apartments are still attracting investors. This is an investment in a real object. But the acquisition will not be repulsed quickly - the average profitability is 4–6%, and the payback period is 14 years. Such investments have a high entry threshold - it would be nice to have several million rubles in your pocket.
- Investments in precious metals and stones. First, it's beautiful. But not only: gold bars can be considered as a defensive asset - the metal is usually rises in price during periods of economic downturn. It is unlikely that you will be able to make money quickly by buying gold, but it is quite possible to save savings in the long term.
- Purchase of securities. No, we are not talking about snow-white A4 sheets for the printer, which became a shortage in 2022. These include shares, bonds, promissory notes, bank certificates and other documents. The investor himself chooses the degree of risk. For example, you can buy bonds of a reliable company that bring a small profit. And if you like adrenaline and you have strong nerves, invest in shares of a small firm. You can profit from dynamic growth, but there is also the risk of losing a large part of your investment.
- Futures and options. By buying them, you do not acquire the assets themselves (stocks, bonds, currency), but the opportunity to buy or sell them at a predetermined price. This option is suitable for experienced investors, because asset prices can go negative and you can remain in debt instead of making a profit.
- Mutual investment funds (PIFs). A suitable option for those who do not want to constantly monitor which securities to buy and which to sell. Funds combine investors' money and invest in various assets - stocks, bonds, real estate. They are managed by a special financial organization - a management company (MC). Funds are different. A share (share) in open funds can be bought or sold at any time, in interval funds - in a specific period, for example, once a quarter. Closed-end funds are created for a period of 3 to 15 years and you can purchase a share in them at the time of formation or at pre-planned intervals. It is impossible to redeem a share ahead of time, only resell it to another investor.
Only a Nigerian prince in email spam promises a quick profit from nothing - but there is none. Therefore, it is better to rely on traditional investment tools - they will not lead to enrichment overnight, but will provide an opportunity to save savings. If you are just starting to invest, choose mutual funds that pay out. They allow you to earn on the growth of securities and receive income from dividends and interest (coupons) on bonds every quarter directly to your bank account. For example, you can buy a share in a mutual fund "Fund mixed with income payment». You do not need to buy securities yourself - professionals with experience in the stock market are engaged in management.
Become an investorWhat are the advantages of traditional instruments
1. It's more predictable
The popularity of non-fungible tokens (NFT) is either growing rapidly, or just as rapidly falls. And securities are a tool that has been proven over the years, and serious surprises are unlikely to spoil your financial plans. Of course, investments are always associated with risks. But there are real companies behind stocks and bonds, so you can evaluate how much they earn and whether there is potential for earnings growth in the future. When buying a share in a mutual fund, the management company will always provide a forecast of the average annual return under different scenarios.
In the case of NFTs, the situation is less predictable because it is difficult to explain their value. On the one hand, the buyer of a tokenized tweet or GIF with a cat gets the right to the file, on the other - nothing prevents other users from copying it, since this is not legally allowed regulated. Cryptocurrency market since March 2022 started falling and lost $2 trillion in June alone. Of course, some traders can earn income by buying and selling crypto at the right time of the day, but such tactics require practice and nerves of steel.
2. You don't have to be an expert
Understanding how a stock differs from a bond can still help, but in general, you don't have to be a wolf from Wall Street to receive dividends. It is enough to invest in a mutual fund - it is managed by professionals, and you can start investing with small amounts.
Investors make a profit in different ways. For example, you can buy one or more shares and, if their price rises, sell them. Or you can choose a mutual fund with the payment of intermediate income - then you will not have to sell the shares. The profit will be credited to the bank account within the agreed period, for example, once every three months.
The securities market has transparent regulation and a built infrastructure. It is controlled by the Bank of Russia, so you can check the license of the management company in registry. Another plus is that you can buy and sell Russian securities and fund shares on any day. While it is not easy to convert a rare cryptocurrency quickly and profitably.
3. There are tax incentives
And it's always nice. For example, owners of mutual funds pay income tax (personal income tax) on the sale of shares only in a few cases:
- If you invested in the fund before January 1, 2014.
- They owned shares for less than three years and earned more than 3 million rubles on investments in a year. Moreover, the tax is paid on income above this amount, and not on the whole.
From personal income tax released citizens who sell securities of the high-tech sector of the economy. You can check which documents are included in the list Online Moscow exchange.
Also, new rules is not a subject to a tax VAT purchase of diamonds and precious metals. In addition, in 2022-2023 canceled personal income tax from the sale of gold bars.
4. You can choose different investment periods
If your task is to save savings, invest for 5-10 years. For example, in stocks, precious metals and corporate bonds. And to earn money for a vacation or pleasant little things will allow medium-term investments for a period of a year. You can consider federal loan bonds (OFZ) - these are securities issued by the Ministry of Finance of the Russian Federation. OFZ give the holder the right to a certain income depending on the term of the bond, the amount and payment procedure of which are determined at the time of issue. And on the day the papers are returned, their face value will be returned to you.
Corporate bonds with a high credit rating of A are considered reliable. It indicates the ability of the company that issued the securities to meet financial obligations. In Russia, the rating can assign four agencies. In addition to A, there are documents with a rating of B - medium in reliability, C - close to bankruptcy, D - survived the default.
If you want to immediately invest in different stocks or bonds, you can buy a share in a mutual fund. Some mutual funds offer investors to receive regular payments. With such income, you can buy a better ticket or a more expensive gadget. At the same time, you will not have to take money from the main savings, which means that you will be able to achieve larger goals.
How to start investing
1. Decide on your goals
Think about what you want: to receive regular passive income, gradually build up capital, or maximize profits. The set of securities in which you invest will depend on this. If you are a beginner, start with the simplest tools.
Determine start-up capital. Never invest your last money, especially if you plan to buy shares of young companies. Income from securities is not guaranteed, and therefore you need to spend free money on investments that will not be needed in the near future.
It is better to give preference to Russian securities of well-known companies. It can be difficult to invest in the American or European market right now. Access to the markets of other countries is still very limited, besides, it will be difficult for a novice investor to analyze companies from China or India on their own.
2. Distribute attachments
The wisdom of the saying about eggs in different baskets has not been canceled. Don't invest in the stocks of one company or industry. As a rule, the prices for such securities behave in the same way: together they either rise or fall. It is better to invest in different directions. For example, in order to receive income on the general growth of the market, you can buy a share in a fund that invests in the shares of "blue chips" - large reliable companies. And if you want to make money in the mining sector, choose a mutual fund that invests in securities of enterprises in this industry. In addition, there are "gold" funds - they allow you to receive income when the price of precious metal rises and at the same time do not rack your brains where to store coins or bars.
If you are new to the stock market, choose clear tools and trusted intermediaries. Pervaya Management Company has been operating in Russia for 27 years and offers its clients investment instruments based on their goals, risk profile and planning horizon. For example, you can invest inIncome Bond Fund" or in "Equity fund with income». They work on a similar principle - they invest in securities of large Russian companies from different industries. And shareholders once a quarter receive income to a bank account. You can dispose of the funds received at your discretion - invest again or spend. To become an investor, just apply online.
Buy a share in the fund3. Periodically evaluate portfolio performance
It is better to invest small money, but regularly and for a long time. Even if at the start an increase in profitability by 3-5% per annum seems insignificant to you, in the long run it can lead to impressive results. Review your portfolio from time to time and buy more assets. Such a rebalancing is needed, even if you invest in mutual funds.
More time and effort will be needed if you invest on your own. The main thing is not to twitch at every price fluctuation. It's okay in the stock market. It makes sense to sell shares when there are major business risks - for example, the adoption of laws that significantly affect the operation of the company. And it’s also worth parting with securities if the company has been accumulating a debt load for years. There is a possibility that it will not cope with financial obligations.
JSC UK "Pervaya" was registered by the Moscow Registration Chamber on 04/01/1996. License of the Federal Securities Commission of Russia for the management of investment funds, mutual investment funds and non-state pension funds No. 21-000-1-00010 dated 12.09.1996. License of the Federal Securities Commission of Russia No. 045‑06044‑001000 dated 07.06.2002 for the management of securities.