Branch Out For New Sources Of Income
Choosing The Right Investment
Now that you have start up capital for your business and investments you can ultimately start branching out figuratively and literally with your money tree. Per your knowledge and skill set you’ll want to pick a potential source of income that capitalizes on your ability. One method would be to launch an ecommerce site to buy products wholesale and generate profit from each transaction. Providing a service is another route one could take. Moreover, if you are particularly knowledgeable about businesses and economies then you may want to pursue trading stocks. Nonetheless whichever path you choose you will have the support of your business fund leveraging your abilities.
Selling a product can be one of the easiest methods to create a secondary source of income as long as you stick to this one principle; buy low and sell high. With ecommerce giants like Amazon, Alibaba, and Ebay, finding wholesale products can be a breeze. Not to mention, with your reserve of capital you’ll have more buying power which will in turn drive price per unit down significantly and increase your chance for profit. While it does sound like a no brainer risk associated with this task varies per the product. Prior to buying the units, you’ll want to take precautions to understand the market.
Providing a service can be as equally rewarding as a first venture. Having the business reserve will allow you to purchase the training or equipment necessary to deliver the service for a profit. With this practice however, you must take extra care to understand the full cost to start the service, complete the service and maintain the business in lieu of customers eg. Unlike purchasing a product to sell you may have monthly overhead built into your operations; other risks include higher overall start up cost and potentially low profits. Furthermore you’ll want to be aware of the longevity of your service if you plan to scale up the business.
Stocks & Bonds
Alternatively to providing a product or service one can put their money to work by investing in stocks or bonds. Of the three options listed here, this one is the most volatile when it comes to risk and reward. On the one hand you can make conservative investments into the bonds market with a fixed yield after an extended term of maturation. On the other hand you can place your money in an ETF or Mutual fund in the hopes that the brokers trading for the fund can beat the market at a higher return on your investment. Lastly would be purchasing individual shares of a company and managing your portfolio solely based on your research. Each of these options has a different level of risk attached to it. In the worst cases, you may see funds disappear overnight take extreme precautions when dealing putting money into the market.
As you can see there a 4 primary ways to make money and each has its own benefits and drawbacks. The idea when starting out is to extend you reach into an area that you are most familiar and comfortable with to prevent loss of interest and more importantly loss of capital. In time if your first endeavor proves to be beneficial then you can double down and triple down into the different classes of money making.
Build on the ideas expressed in Money Seeds chapter six with the final chapter here.