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Where to start investing without dying in the attempt – Entrepreneur

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February
9, 2021

4 min read

This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process.

Opinions expressed by Entrepreneur contributors are their own.


The goal in winning the money game is to achieve and maintain financial freedom.

Many try, but few succeed. Why? They handle the worst number in investments, which is 1. That is, they have only one investment. And that makes them more vulnerable in times of uncertainty like the one we are living in now. Because there is a great chance that that 1 will become 0, you will run out of your capital and have to start over.

The secret to investing and not dying in the attempt is to invest in multiple investment vehicles that generate multiple sources of income. In that way, if one stops working, the impact will be minimal and you will have the resources to place them in a new investment and build a new source of income.

One of the reasons people invest in just one investment is because they don’t know where else to invest.

For this reason, I share six business areas where you can invest in 2021.

1. Business or companies

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That is investing in someone else’s company. The easiest way is through crowdfunding platforms. The investment amounts can go from 5000 pesos onwards and the times are normally medium term (four or five years).

2. Real Estate

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Two of the reasons why many people prefer to invest in real estate are the increase in value over time (capital gains), and the fact that it is a tangible investment, that is, you can see your investment. You can also start on crowdfunding platforms, FIBRAS or with a small property that is easy to acquire and sell.

3. Stock Exchange

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The Stock Exchange is an organization that facilitates the sale of securities. The easiest way to get started is through indices like the S & P500, which has the results of the top 500 companies in the United States. Historically, the value of the S & P500 has grown consistently over the years, with some declines in economic downturns, but recovering and exceeding its previous value in no time. You can buy it and let it grow.

4. Metals

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Gold, silver and platinum mainly. Metals are hedge investments against inflation. In economic crises, countries give stimuli to the population for consumption and that consumption is what generates inflation. In those moments is when metals become the stars of the moment.

5. Intellectual Property

Image: Depositphotos.com

One of the easiest ways to make money is through Intellectual Property. For example, if you write a book, develop software or patent an invention, you will be able to receive income through royalties, a license for use or exploitation. Royalties allow you to make money while you sleep.

6. Protection

Image: Depositphotos.com

This is one of the safest areas to invest and where I would recommend starting, for example, with government instruments such as bonds or treasury certificates. To invest you need 100 pesos and although it will not be the vehicle that will give you the most returns, it will be backed by the federal government.

Now that you know the different investment areas, my recommendation is that you start with one and then explore the others.

Remember that the objective is and will be to invest in multiple investment vehicles to generate multiple sources of income that allow us to achieve and maintain our financial freedom.

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Investment

More China coal investments overseas cancelled than commissioned since 2017

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More China-invested overseas coal-fired power capacity was cancelled than commissioned since 2017, research showed on Wednesday, highlighting the obstacles facing the industry as countries work to reduce carbon emissions.

The Centre for Research on Energy and Clean Air (CREA) said that the amount of capacity shelved or cancelled since 2017 was 4.5 times higher than the amount that went into construction over the period.

Coal-fired power is one of the biggest sources of climate-warming carbon dioxide emissions, and the wave of cancellations also reflects rising concerns about the sector’s long-term economic competitiveness.

Since 2016, the top 10 banks involved in global coal financing were all Chinese, and around 12% of all coal plants operating outside of China can be linked to Chinese banks, utilities, equipment manufacturers and construction firms, CREA said.

But although 80 gigawatts of China-backed capacity is still in the pipeline, many of the projects could face further setbacks as public opposition rises and financing becomes more difficult, it added.

China is currently drawing up policies that it says will allow it to bring greenhouse gas emissions to a peak by 2030 and to become carbon-neutral by 2060.

But it was responsible for more than half the world’s coal-fired power generation last year, and it will not start to cut coal consumption until 2026, President Xi Jinping said in April.

Environmental groups have called on China to stop financing coal-fired power entirely and to use the funds to invest in cleaner forms of energy, and there are already signs that it is cutting back on coal investments both at home and abroad.

Following rule changes implemented by the central bank earlier this year, “clean coal” is no longer eligible for green financing.

Industrial and Commercial Bank of China, the world’s biggest bank by assets and a major source of global coal financing, is also drawing up a “road map” to pull out of the sector, its chief economist Zhou Yueqiu said at the end of May.

 

(Reporting by David Stanway; Editing by Kenneth Maxwell)

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Investment

Bank of Montreal CEO sees growth in U.S. share of earnings

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Bank of Montreal expects its earnings contribution from the U.S. to keep growing, even without any mergers and acquisitions, driven by a much smaller market share than at home and nearly C$1 trillion ($823.38 billion) of assets, Chief Executive Officer Darryl White said on Monday.

“We do think we have plenty of scale,” and the ability to compete with both banks of similar as well as smaller size, White said at a Morgan Stanley conference, adding that the bank’s U.S. market share is between 1% and 5% based on the business line, versus 10% to 35% in Canada. “And we do it off the scale of our global balance sheet of C$950 billion.”

($1 = 1.2145 Canadian dollars)

 

(Reporting by Nichola Saminather; Editing by Leslie Adler)

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GameStop falls 27% on potential share sale

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Shares of GameStop Corp lost more than a quarter of their value on Thursday and other so-called meme stocks also declined in a sell-off that hit a broad range of names favored by retail investors.

The video game retailer’s shares closed down 27.16% at $220.39, their biggest one-day percentage loss in 11 weeks. The drop came a day after GameStop said in a quarterly report that it may sell up to 5 million new shares, sparking concerns of potential dilution for existing shareholders.

“The threat of dilution from the five million-share sale is the dagger in the hearts of GameStop shareholders,” said Jake Dollarhide, chief executive officer of Longbow Asset Management. “The meme trade is not working today, so logic for at least one day has returned.”

Soaring rallies in the shares of GameStop and AMC Entertainment Holdings over the past month have helped reinvigorate the meme stock frenzy that began earlier this year and fueled big moves in a fresh crop of names popular with investors on forums such as Reddit’s WallStreetBets.

Many of those names traded lower on Thursday, with shares of Clover Health Investments Corp down 15.2%, burger chain Wendy’s falling 3.1% and prison operator Geo Group Inc, one of the more recently minted meme stocks, down nearly 20% after surging more than 38% on Wednesday. AMC shares were off more than 13%.

Worries that other companies could leverage recent stock price gains by announcing share sales may be rippling out to the broader meme stock universe, said Jack Ablin, chief investment officer at Cresset Capital.

AMC last week took advantage of a 400% surge in its share price since mid-May to announce a pair of stock offerings.

“It appears that other companies, like GameStop, are hoping to follow AMC’s lead by issuing shares and otherwise profit from the meme stocks run-up,” Ablin said. “Investors are taking a dim view of that strategy.”

Wedbush Securities on Thursday raised its price target on GameStop to $50, from $39. GameStop will likely sell all 5 million new shares but that amount only represents a “modest” dilution of 7%, Wedbush analysts wrote.

GameStop on Wednesday reported stronger-than-expected earnings, and named the former head of Amazon.com Inc’s Australian business as its chief executive officer.

GameStop’s shares rallied more than 1,600% in January when a surge of buying forced bearish investors to unwind their bets in a phenomenon known as a short squeeze.

The company on Wednesday said the U.S. Securities and Exchange Commission had requested documents and information related to an investigation into that trading.

In the past two weeks, the so-called “meme stocks” have received $1.27 billion of retail inflows, Vanda Research said on Wednesday, matching their January peak.

 

(Reporting by Aaron Saldanha and Sagarika Jaisinghani in Bengaluru and Sinead Carew in New York; Additional reporting by Ira Iosebashvili; Editing by Sriraj Kalluvila, Shounak Dasgupta, Jonathan Oatis and Nick Zieminski)

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