In 2022, it’s decided, you are going to invest. Maybe you’ve read the reference Rich Dad, Poor Dad, or maybe you’ve just decided to take charge of your future. But the question is always the same: what type of investment to make?
To help you see more clearly and make the best choices, we offer you 5 investment ideas. We cannot advise you on one type of investment over another. The best investment depends on several parameters such as your budget, your goals or the risk you are willing to take. We also remind you that an investment may involve a certain risk of losing its capital. This is why we advise you to be well informed and to train yourself on the type of investment chosen before you start, and to invest small amounts at first.
Whether you are looking for a small investment that pays off or want to make a larger investment, such as a rental investment for example, we explain what you need to know and the parameters to take into account before taking the plunge.
Investment: definition and principles
First of all, what is an investment? It’s very simple: it is an expense incurred to increase one’s wealth, often in the medium or long term. This profit is called ROI or return on investment.
An investment is not the same as saving or investing, which can earn interest, for example. We are not really talking about investing in life insurance, but rather investing in life insurance. The investment goes further, with the idea of ultimately obtaining a sum of money greater than that invested. It can thus be a means of achieving financial independence .
But be careful, just because you invest a little money doesn’t mean you will get rich. Indeed, one of the great principles of investing is that only risk really pays off, and that means you can lose everything. This is called the “high risk, high reward” (or sometimes “high risk, high return”). This type of investment can be likened to a game of poker, so you have to be prepared to lose your entire initial bet.
Less risky investments tend to be less lucrative, but you are sure not to lose any money. It’s a safer way to build wealth, step by step.
It’s up to you to see what risk you are willing to accept. There are quizzes to determine your risk profile, like this self-report test .
There are generally three types of investors:
- So-called defensive, conservative or cautious investors: they do not wish to take risks and favor security;
- So-called balanced, moderate or neutral investors: they are willing to take a certain amount of risk in order to obtain gains;
- So-called dynamic, aggressive or speculative investors: they are looking for high returns and ready to take a lot of risks.
There is no such thing as a good or bad investor profile, it depends on your personality, your personal situation and your ambitions. The important thing is to know yourself well, to choose suitable investments and avoid unpleasant surprises.
Another important principle: time. An investment is long-term. Don’t expect to hit the jackpot overnight and don’t trust “get rich in 3 months” promises.
Investment: 5 ideas for investing your money
There are a large number of possibilities when it comes to investing, and you are no doubt familiar with several. We are going to present you 5 ideas with real potential, to explore according to your investor profile, your budget and your priorities.
Investment idea # 1: rental investment
Among the most popular investments: real estate. Indeed, buying a property to rent it can be a way of self-financing the purchase and / or to generate a regular income. The French are very attached to the stone, whether for a primary, secondary housing or a rental investment. It is also the first good that we think of when we talk about transmission to our children in the form of an inheritance. This type of investment can be financed through a bank loan. Plus, rates have never been so low!
For your rental investment to be profitable, choose a property that is easy to rent, in an attractive area. If this is a first-time purchase, for example, you can choose to buy a studio that you will rent to students. In this case, aim for a student city, and a student district, near the university for example.
To estimate what this can bring you, the ANIL (National Agency for Information on Housing) provides an online simulator to estimate the income and taxation of a rental investment. This will give you a clear idea of what you could earn with your investment.
You can also decide to buy real estate together, for example with your spouse, a friend or members of your family. This can make it possible to have an overall budget or a larger contribution. In this case, it may be wise to create a company to invest in real estate.
As part of your rental investment, you can also decide to favor seasonal rentals rather than traditional rentals. The rise of platforms like Airbnb and HomeAway has boosted this type of rental. Seasonal rental is often more profitable than traditional rental, especially in tourist towns, even if it requires more effort and daily management. However, there are specialized concierge services to which you can delegate management, in exchange for a commission.
Investment idea # 2: invest in startups and companies
Another investment opportunity: invest in startups and companies in France and abroad. A means of participating in economic development, while securing income.
How it works ? You give a certain amount of money to a startup which in return gives you a number of shares or a percentage of the company. You thus become a shareholder of this company and you have a return on investment in the form of dividends according to the results of the company.
Are you wondering how to invest in a startup or business? The answer is simple: through crowdfunding or crowdlending platforms . Many startups and small businesses today use this bias to raise funds and launch their projects.
Among the most popular platforms: KissKissBankBank, October, Pretup, Ulule, Wedogood or even WiSEED. Sowefund is also a good platform for investing in French startups. On each of these platforms, study the projects presented, the business plan and the proposed conditions. Sometimes, rather than an equity investment, you can invest in the form of a loan.
We also recommend LITA, a participatory investment platform dedicated to companies with a social, societal or environmental vocation from € 100. A good solution to invest in a startup or business for good, with a small investment that pays off!
If you have significant sums to invest (more than 10,000 €), you can also consider becoming a member of a business angel club.
Investment idea n ° 3: invest in the stock market
When we think of investment, we often think of financial investment and the stock market, one of the classic and oldest ways of making your heritage grow! But, before venturing into this field, it is essential to have solid financial knowledge and to master the – sometimes complex – functioning of the Stock Exchange.
Indeed, investing in the stock market is risky, and you can lose everything if you make the wrong choices! The stock market price of a company can go down very quickly in the event of a crisis or scandal. In 2020, the pandemic thus led to a drop in values across the world.
There are nevertheless “moves” to be made, and a stock market investment can be very profitable provided you make the right choices. You can also invest in ETFs which are less risky and which can bring you good growth on your investment. But it takes work and constant attention to scrutinize developments, anticipate and adjust your portfolio.
Contrary to what one might think, the stock market price has – despite the crashes – much greater and more stable growth than real estate in France since the last century. In any case, both stock market and real estate investment require solid knowledge to reduce the risk of loss of capital.
If you want to refine your knowledge and learn how to invest in the stock market, we recommend that you read the book “The Stock Exchange for Dummies”, go to the Saver 3.0 blog or read the book of the same name. You can also take an online course , for example on the Udemy platform which offers a number of them on the subject.
Financial investment idea # 4: buy cryptocurrency
Another idea of financial investment in 2022: cryptocurrencies. They are attracting a growing number of entrepreneurs as Bitcoin hit a new all-time high of $ 30,000 in early 2022.
As with the stock market, investing in cryptocurrencies cannot be improvised. Take the time to study the subject and understand its inner workings before investing your first euros. Because there too, it is double or even and many have lost feathers!
There is no shortage of resources to learn cryptocurrencies. For example, we recommend the cryptocurrency training “trader, sell and place” from Frank Houbre, CEO of Business Dynamite and also an expert in dropshipping. We interviewed him some time ago on his entrepreneurial journey .
There is also a book “Bitcoin and Cryptocurrency for Dummies”.
Investment idea # 5: invest in precious items
Last idea: acquire precious objects that will increase in value such as bottles of wine, works of art, antiques or even vintage cars. If you are passionate about one of these areas, this is a good way to combine passion and investment! Investing in gold is also an investment as old as the world, but still as relevant as ever. In each financial crisis such as today’s, gold remains a safe haven that has not lost its aura.
For valuables, be careful, scams are flourishing and it is better to take the time to learn and check the references of players offering this type of investment. In wine, for example, players approved by the AMF (Autorité des Marchés Financiers) include Cavissima and U’Wine.
And, as with any investment, a long-term approach should be favored. We repeat: do not expect to become rich overnight. Miracle solutions do not exist!
5 investment ideas in 2021
- Buy real estate to rent it out
- Finance startups or companies
- Invest in the stock market
- Buy cryptocurrency
- Invest in valuable goods
Bonus: investment advice and personal finance
If you are interested in the subject of investment and personal finance, we recommend the Snowball newsletter launched by Yoann Lopez. Ex Chief Marketing Officer of the freelance platform Comet, Yoann decided at the end of 2020 to devote himself entirely to Snowball in the face of the success of his side project. He tackles topics like the psychology of money (see his LinkedIn post ) and shares his experiences like buying a building. The newsletter exists in a free version and a premium paid version. Note: the Premium version is free for students!
There you have it, we hope that this article will have shed some interesting light on the investment possibilities, participatory investment solutions, the best investment for you, rental investment or what you need to know to invest in the stock market. We wish you success in your investment projects!