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Earning Through Investments

By: J.A.J Aaronson - Updated: 31 May 2012 | comments*Discuss
 
Investment Investing Property Stocks

It is very common for people to get bored of their job. It is easy to begin to resent the fact that you have to work for someone else, particularly when you are constantly under pressure to meet deadlines and perform constantly better. In an increasing number of cases, this disillusionment with the world of employment is being translated into positive action in order to try to find an alternative. One such alternative is becoming a professional investor.

There are, of course, a considerable number of very wealthy investors; one need only look at the huge amounts of money made every day on the stock exchange for evidence of this. Of course, in order to reach this position you would need a considerable amount of capital to begin with - or a very good eye for an investment.

A Variety of Options

There are several very popular methods of investment. The most well-known of these is stocks and shares. When you buy shares in a company, you are essentially purchasing a small portion of that organisation. This grants you the right to have your say in the way the company is run, through their annual shareholders' meetings. Furthermore, depending on the company's performance, you may be paid a regular dividend. It is highly unlikely that you would be able to make a living solely from dividends. Rather, professional share dealers make their money on 'capital accumulation'; that is, they buy shares at a lower price than that for which they sell them. It sounds simple, but shares are, in fact, a very high-risk investment as a result of the fluctuations of the market. Most professional investors have a 'balanced' portfolio, meaning that they even out the risk posed by their shares by investing in other, lower-risk prospects such as trusts and bonds.

Property

Another possibility for those who are looking to make investing a full-time occupation is property. Although the recent downturn has rather taken the shine off property investment, most analysts agree that it still presents a good option for long-term investment.Buying a house with the intention of selling it on assumes that you are capable of adding value to the property while it is your possession; you might redecorate, or carry out any structural repairs that are keeping the value down. This is a very labour-intensive prospect, and is also high-risk. There is no guarantee that the market will remain as buoyant as it has done in recent times, and so you risk not making any profit at all - or, even worse, making a loss. Similarly, there is no guarantee that the property will sell once you have completed the work.

Buy to Let

Another option is Buy to Let. This is covered in more detail elsewhere on this site, but essentially involves buying property with the intention of renting it. This often involves less work than buying to sell on, but still poses many of the same risks; although not as prone to fluctuation, the rental market is still subject to many of the same concerns as the property sales market. Before embarking on any such project, therefore, you should seek expert advice in order to help you assess the comparative risks and benefits.

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