What is a good investment?
To start, a good investment can be completely different from one person to another. It depends on your current financial situation, along with your financial goals. Nevertheless, there are some key factors that you can look for to identify if something is a good investment for you or not.
Regardless of what assets or markets you’re looking at, here’s what makes something a good investment:
The price history of assets is a good indication of whether you should bother investing or not. Look at something like the Bitcoin price (AUD), it has increased over time, showing you that you could earn money from investing in it. Real estate is another great market for this; look at the average property prices over the years – are they increasing in a certain area at a faster rate than others?
Checking the price history can help you decide if it is worth risking your money or not. History might dictate that something experiences brief down periods, but will ultimately level out and increase in price. Or, it can show that an asset fluctuates too much and can lose value, indicating that it’s too risky to bother investing in it.
It’s quite challenging to come up with a heading for this point, but the technical difficulty of an investment is perhaps the best way to describe what we’re on about. Mainly, how technical or complicated is the investment to understand? Do you need to do lots and lots of research? Are there loads of technical terms to get around? Some investments are very simple to understand and get to grips with, making them ideal. You don’t have to spend days learning different terms; you can invest your money and just sit back and watch the earnings come in.
Contrastingly, other investments are just super complicated. Forex markets can be so hard for you to get your head around, as can cryptocurrency or stocks. Of course, this varies from person to person, which is why it’s hard to pinpoint something that’s specifically a good investment or not. It comes down to your own personal knowledge and what you deem complicated or not.
Ease Of Access
How easy is it for you to access the investment? Some investment opportunities are simple; you find a platform, create an account, deposit money, and you’re good to go. Others take more time and there are possibly more hoops for you to jump through.
Ideally, the best investments are ones that are very easy for you to access. You can start them in minutes and you don’t need to do anything crazy.
It’s important to take time to identify good investments – and bad ones! In fact, the second point is arguably more important as bad investments are the ones that cost you lots of money. If you know what it takes to find something that’s worth investing in, you can grow your wealth and make more money. So, think about the three points above before you invest.
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