Investing for Beginners: Choosing the Assets You Want to Own

Investing is an incredible way to build your wealth and improve your quality of life over time.

If you find the right investment opportunity, you might even decide to take out a loan from somewhere like or borrow extra capital so you can put more cash into your future as quickly as possible. However, most people will start small using the money they have in their savings accounts.

After all, putting cash into a savings account doesn’t deliver much return on investment these days, particularly as interest rates for average consumers continue to suffer.

If you’re thinking of getting started with investing for the first time, here’s your guide to choosing the kind of assets you want to own and deciding how you want to own them.

Picking Assets for your Investment Strategy

Investing can seem like a complicated thing, but at its core, it’s all about placing money down on an asset today, with the belief that you can earn more from it in the future. Productive assets are the ones that gradually gain more value and importance over time. While there are many kinds of asset out there for investors, some of the most common are:

  • Business equity: When you own equity in a company, you’ll be entitled to a share of the losses or profits generated by that company. Some people prefer to buy shares of a publicly-traded business, whereas others acquire small companies outright.
  • Fixed-income security: When you buy fixed income securities, you’re lending money to a bond issuer in exchange for interest and income. There are lots of ways that you can use this strategy to develop wealth over time.
  • Real-estate: Investing in real estate is one of the oldest and best-known ways to build wealth over time. Usually, you’ll buy a property and develop it so that it earns more cash on the market or rent it out to people who need a place to stay.
  • Forex: Investing in Forex means that you invest in the tiny changes in the currency market that happen on a daily basis. There are countless currency pairs to invest in, though some of the most common include GBP and USD.
  • Cryptocurrency: Today, a lot of investors are beginning to explore new forms of investment, like cryptocurrency. When you invest in cryptocurrency, you don’t buy any physical assets, which can make the concept confusing for some.

Decide How You Want to Own Your Assets

Once you’ve chosen the kind of asset class you want to own, then you’ll need to think about how you’re going to take ownership over that investment. Once again, this can be a complicated process depending on your risk and investment strategy. However, there are two pretty common ways that most investors decide to manage their assets.

The first option is to choose outright ownership of an asset. If you choose outright ownership for your investment, then you’re going to be buying things like shares of an individual company directly, so you can see them on your balance sheet on a regular basis. In this situation, you’ll be a shareholder in a company, and you may even get voting rights that help to dictate how the business evolves and grows. Owning shares of a company also gives you increased access to dividend income and an improved net worth.

Since owning a portion of a business can be very expensive, the alternative option is to opt for pooled ownership. With pooled ownership, you mix your cash with the money offered by other people, and buy ownership using a shared entity or structure. This is the option most commonly used through people who invest using mutual funds. Some investors also opt for a pooled ownership strategy using something called a hedge fund.

Pooled funds might not give you complete ownership over a portion of an asset, but they have their own benefits to consider. For instance, index funds, exchange-traded funds, and other solutions using pooled ownership allow people to access relatively diversified portfolios at a much lower rate than they would have been able to get if they were buying assets outright.

Creating an Investment Strategy

There’s no one-size-fits-all strategy to creating the right investment campaign. You’ll need to take your time figuring out what kind of investments are suitable for you based on your ability to handle risk, and the amount of capital you have to work with. The good news is that there are so many different kinds of investment available today, that you’re sure to find something that works for you – even if that means working with a professional.