In this blog post, we gave a brief summary on a range of common investment options a potential investor might consider. However, there is a major question remaining: “How do I choose which options are right for me as an investor?” Unfortunately, there is not a simple black-and-white answer. That’s because everyone’s personal situation is different and, perhaps more importantly, everyone is likely to have a different attitude towards the level of risk they are willing to take when they invest. Ultimately, investing is going to be something very personal to you.
Therefore, it’s worthwhile spending some time thinking about your personal situation and your attitude towards risk. These details will help steer you towards certain types of investment options more than others. This is also not a one solution answer even for an individual, as investing is usually about the mix of investments you select. So even a conservative investor with a low tolerance for risk may have one or a few investments with what they perceive as higher risk in their portfolio. However, they will balance this by having the rest of their investment portfolio be lower risk investments.
So, whether you are currently investing or planning to in the future, thinking about what type of investor you are can help you navigate the wide range of investment options available. Overall, what sets different types of investors apart boils down to how much money they have to invest, how actively they want to be involved in selecting and managing their investments, and what is their overall risk tolerance.
Investment funds available
How much money do you have to invest? Your investment options largely depend on the amount of money you have to invest. If you have a considerable amount of money to invest, you may be an accredited investor, which allows you access to high-end investment opportunities only available to those who are accredited, such as Quinlan|MacKay projects. To qualify as an accredited investor, you must be at least one of the following:
- An individual with an annual income more than $200,000 for the past two years or a joint annual income of $300,000 for the past two years with the expectation that the individual or couple will earn the same or greater income the following year.
- An individual or couple with a net worth of more than $1 million, not including the value of the individual’s or couple’s primary residence.
If you do not qualify as an accredited investor (yet), then you can still invest as part of a group, which is often called “crowdfunding.” Crowdfunding is a great opportunity for beginning investors who want a taste of what it’s like to invest. Non-accredited investors can also invest in REITs, which is a great way to start investing in real estate for beginners.
However, accredited investors can still take part in crowdfunding investment efforts, too, if it works well with their portfolio strategy.
How much time do you have to commit to your investing? When starting out, choosing the right investments for your financial goals takes a lot of research, which takes time. According to the investment type you choose, many require some time commitment to manage them while others are completely hands off.
Do you have a full-time career and need someone else to research the quality of potential investments? Or do you have an open schedule, and want to research and manage your investments personally?
This is where many investors ask their financial advisers for their professional suggestions as they are in the industry every day. However, financial advisers often work with companies like Quinlan|MacKay to offer unique investing opportunities for accredited clients.
The question of time is intertwined with your involvement as an investor.
How involved do you want to be with your investments? Investors typically have two options when it comes to their involvement: passive or active.
Many investors choose to be passive, which means they invest money but not the time into an opportunity. A passive investor will have a fund manager to manage their investments. An active investor will manage their investments themselves.
Quinlan|MacKay, however, offers investors a third choice somewhere in between passive and active: semi-passive. Investors passively earn income after actively deciding on the real estate they choose to invest in.
To know whether you are a passive, active or semi-passive investor, ask yourself these questions:
- Do I have the time to do background research?
- Do I want to actively manage my investments? If so, do I have the time to dedicate to it?
- Do I have a background in investing that gives me a competitive edge in the market?
- Do I want someone else to do the research and manage projects for me, but only after I select the investments that appeal to me?
Every investment has risk. What are you willing to risk? If you have a lot of investments in play, then you may be able to afford some riskier investment opportunities. If you’re just starting out and don’t have savings to fall back on, then you might want to stick to lower risk opportunities.
The key question to ask yourself is this: If I lost all of this money with this investment, would it ruin my financial goals or just set me back? If it would ruin your financial goals, then that high risk investment is not the right choice at this time. If it would just set you back and you’re willing to risk it, then go for that high risk investment.
Playing smart when it comes to the amount of risk you’re willing to take will only help you in the long run when it comes to investing. Yes, a few risky investments can work in your favor, but it’s important to be smart with your money, and always consider your financial goals and security before investing. If you want a second opinion, seek out your financial adviser.
Where will you invest?
In conclusion, the world of investing offers many opportunities for everyone at any stage in their investing journey. Understanding your attitude toward risk, your desired amount of involvement and time to commit to investing, as well as the amount of money you have to invest, will help narrow down your investing options. From there, you can decide on the stock market, real estate and more.
To learn about Quinlan|MacKay’s investing strategy, visit this link.