Ask any business tycoon – or perhaps watch interviews if you’re not on a first-name basis – and you’ll notice how all of them talk about reinvesting back into the business or into other areas that’ll grow wealth. Constantly reinvesting money so it doesn’t sit collecting dust – or the smallest amount of interest – is essential. The question is, what avenues of investment are the best for a growing business? It’s all well and good talking about how business tycoons use their money, but they generally have millions to burn.
Below, we’ll look at how up-and-coming businesses can start to reinvest their money wisely to facilitate future growth.
Cryptocurrencies are the most exciting investment option because there is still untapped potential. The crypto market is growing at an astonishing rate, with some coins rising as much as 5 thousand percent in the last year. To put it into perspective, if you were to put $1 on crypto worth $0.0001 and it rose to $0.1, as many do, you’d accumulate a wealth of $10,000. Still, that’s not to say that every crypto worth $0.0001 will ever reach $0.1, but many do – just not overnight.
There are multiple ways of investing in the cryptocurrency market. One option that works well is a market-neutral strategy like pairs trading. You can easily achieve profits through relatively low-risk positions, and the overall fluctuation of the market doesn’t affect the win or loss. A popular trading pair is adausdt which is pairs Cardano and Tether. Ada is pegged to be a hugely successful crypto coin in the future – the Wallet Investor thinks it’s an awesome long-term investment.
The other option is to hold on to crypto and wait for the value to rise. Take the famous DogeCoin that Elon Musk has always advocated. One tweet from Elon about DogeCoin sees the value rise immensely, and although it does fluctuate, the price is currently $0.15 – whereas this time three years ago, it was worth $0.0073. The rise in value is attributed to Tesla accepting Doge as a payment method for products and countless Tweets from Elon Musk himself.
What crypto you invest in should come from your own research and understanding, and take every bit of advice with a pinch of salt. The crypto market is highly volatile. Even though countless sources predict the future value of crypto coins, it’s nearly impossible to know what they’ll actually be.
Reinvesting Back Into The Business
A less complicated reinvestment method is to invest back into the business. Many entrepreneurs will use other forms of investment – like crypto or property, as we’ll discuss further along – and use all the profits from the business to reinvest back into it. The reasons behind reinvesting back into a company are endless, and it just makes sense.
The most obvious reason is that it will help to facilitate future growth and profits. Jeff Bezos is one of the famous entrepreneurs that advocates funneling money back into a business from day one. As he says, it’s not about the money, and the money will come to you in other ways.
It may sound simple, but any money reinvested into a company should go to the areas that need development. Look at new software that’ll streamline processes, funding marketing outsourcing, and product or service development.
The Typical Investment Routes
Some age-old standard investment routes do the trick. These tried and trusted methods offer more security thanks to more regulated trading platforms and a better understanding of how the investment works. The two typical investment routes that are proven to work are stocks and property.
Stocks are one of the most well-known methods of trading. The foundations are similar to cryptocurrency. Stock is essentially a security that proves ownership of a fraction of a company. For example, you could own a $0.01% share in Tesla, and the value of your portion will rise and fall as the market value fluctuates.
Stocks are relatively simple to understand and trade if you are prepared to research companies’ current value and expected trajectory. Like cryptocurrency, stocks work best as a long-term investment, and the timing is everything. For example, many people capitalized on the plummet and eventual rise of airline industries post-pandemic.
Like with crypto, you must do your own research and come to your own stock market conclusions. There’s also the option to use an investment broker to do the hard work for you, as most business tycoons do.
The final investment opportunity is property – possibly the most simple to understand for the average Joe as most people have joined the property ladder one way or another. The easiest route here is the long-term investment of taking out a home loan – or buying outright if you have the funds – and renting a property out. In 20 or so years, the mortgage will have been paid off by tenants, and it’ll be yours to sell.
The only downside to renting out a property is the responsibility that comes with it. As a landlord, you must keep the property in livable conditions. That means issues like leaky taps, broken appliances, and anything that’s generally wrong with the property is yours to fix.
There are numerous investment opportunities for entrepreneurs bearing the fruits of their labor. Reinvestment is the obvious way to grow wealth rather than sitting on the money. There are plenty of online guides and expert advice to seek to ensure you spend your money wisely.