5 Ways to Invest Alongside Your Business
5 Ways to Invest Alongside Your Business
When launching a business, or managing one toward growth, one of the most important things to do is to keep capital on hand. In our ‘5 Steps to Starting a Profitable Business’, we alluded to the idea that this need can, in some cases, lead you to take on inadvisable investments. In an effort to keep profits coming, and to be “everything to everybody,” you might be tempted to simply take payments from anyone who’s offering. This, however, can result in obligations you don’t want. And given the time commitment involved in satisfying clients, it may not be worth it financially anyway. Ultimately, this is why efforts to keep capital on hand tend to come down to strategy and management more than raw business, at least in the early going. It will require that you reinvest profits strategically, and perhaps that you secure loans or external investments if and when you need them. For some independent business owners though, the personal investment can be another avenue to explore. To be clear, I am not suggesting that you take business funds and invest them in an external market. This is not only risky, but it may also be unfair to any partners or employees you might have. If you want to invest your personal earnings from the business, however, or perhaps your own savings, you may wind up finding a way to develop a side revenue stream that can help to fund the business. A lot has to go right, and there is still risk involved. But the following methods can conceivably help you invest in your business.
1. Passive Market Investments
As you might be aware, the investing community has embraced mobile apps in recent years. This has resulted in the emergence of a variety of services that — in slightly different ways — will actually take your money and invest it for you. Now, it’s not quite as easy as it sounds. You’ll still have some say over your activity, and as CNN Money’s overview of investment apps correctly conveys, you’ll need to do a thorough assessment of your financial standing and your trading goals before you get started. In theory, though, putting a small amount of money into one of these apps can essentially start up a fund. If it performs successfully, you may yield a little bit more money to pump back into your business.
2. High-Yield Savings Accounts
A high-yield savings account can take a few different forms, but basically the idea is to seek out savings account options that provide a little bit more interest than the standard option your everyday bank likely provides you with. Sometimes you’ll find that one service simply offers a more favorable rate than a competitor; sometimes you can agree to leave money saved for a longer period of time in exchange for more of a return. In any case, this is effectively a way of putting some money into an account for the time being, and taking more money back out in time. You won’t make a significant profit, but every little bit can help when you’re growing a business!
3. Forex Trading
Forex trading means trading currency values against each other — through this market is somewhat misunderstood. While you are in effect trading currencies, the trading process is not very much like, say, exchanging currency in an airport or at an international destination. Rather, it’s something that may be more familiar. FXCM compares forex to stock trading, in that you are basically making trades according to your assessment of value. You don’t literally buy, say, Euros with U.S. dollars. Instead, if you think the Euro is going to be more valuable, you “buy” the EUR/USD pair — or, if you think the dollar will be more valuable, “sell” the pair. It’s actually a fairly busy process, with trades being conducted all around the world, at all hours. But this actually speaks to why it can be a suitable option for a businesswoman. Because the forex market is constantly active, it’s one that you can trade-in your spare time, whenever you’re able.
4. Cryptocurrency Trading
Cryptocurrency is infamously volatile, which may make it a particularly bold avenue for people looking to invest alongside business ventures. That said, there are three reasons it’s on my list. The first is that functionally, once you master the oddity of crypto wallets and trading platforms, the process is simple — not unlike stock or forex trading. The second is that, like forex, crypto markets are available at all times, making them interesting options for people who need to invest only in their spare time. And the third is that there are ways to avoid some of the risks in crypto trading; The Telegraph wrote about staying safe in crypto markets and highlighted some of these ways, such as diversifying, avoiding the fear of missing out on the next big surge, and taking advantage of leverage. None of these strategies make cryptocurrency safe, but they do make it more worthy of consideration.
5. Business-Related Side Projects
My last tip isn’t actually an investment method in the traditional sense. But in a sense, it’s a way of investing your time, and perhaps some small funds, in a side project that may yield profits for your business. I’m talking specifically about using what you’re doing with your business to start a blog or a podcast, either conveying your expertise or discussing your process. With a bit of clever marketing, you can start to generate at least a small amount of income from an interesting blog; and though most podcasts don’t make much, Listen Notes explains how to profit in a number of ways from launching your own (such as by sponsors, paid content, or donations and crowdfunding). Keep in mind, I’m not suggesting these as core business ventures unto themselves. But as side projects, they may bring in even a small amount of money that could help your primary business.