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How to Invest Money and Make It Grow?

Learn how to grow your money through investing. Investing is one of the best ways to achieve financial freedom but there are required skills and knowledge to succeed. Aside from your knowledge and skills, you also have to “take risk”, do not be afraid to risk because you can manage risk, minimize it by equipping yourself a skills and knowledge. As the old saying goes, in investing you should know what you are doing to avoid loss of capital investment.Before Investing MoneyBefore you invest money, make sure you have prepared the following important things. Make sure you have paid all your debts or liabilities. Make sure before you invest you have your cash reserve or the emergency funds needed to help you in case there is an emergency so that you will never pull out your investment.The ideal amount of emergency funds should at least 3 to 6 months of your income. So, if your income is $2,500 per month. You should have $15,000 emergency funds good for 6 months.You should also have to buy a life insurance. A life insurance is for protection. You need life insurance just in case something bad happened to you. Life insurance can help your family to recover from financial losses in case you died.The ideal life insurance coverage should at least 3 years of your total annual income. If your annual income is $60,000, you should buy a life insurance that has a face amount of $18,000 good for 3 years to help your family to recover from financial losses.After you have paid your debts, have emergency funds and bought insurance, it’s time to know your risk appetite.Know Your Risk AppetiteIt always depends on your age, of course if you’re still young, you can take high risk and for mid 40s to 50′s you have to take medium risk and for 50s and above, they should only take low risk investments.For low risk investments, money market funds, time deposits and bonds are appropriate investments.For medium risk investments, combination of bonds with equities are appropriate investments.For high risk, you can choose to invest purely on stock equities.Make an Investment GoalAfter you analyze your risk appetite, you have to make an investment goal. What is an investment goal? It is goal wherein you should know the purpose of your investments, how much should your investment cost your every month or annually. When should you start investing and when is your plan to redeem your investments.Take Investing ActionA plan is good if you work for it. You can never see a result of your investments if you didn’t work your plan. You have to take action, just do one thing at a time. From opening your investment account, funding your investment account. And if you choose to invest in the stock market, you should buy your first stocks, you don’t need to be afraid. All is easy especially if you really want to grow your money. Just ask the financial advisor or financial experts, there are advisors in the bank or any financial investments firms.Achieve Financial FreedomSaving is good because it will teach you the habit of managing your money. If you are disciplined money saver, you will also be a disciplined investor. Ste aside money from your salary or income every month and fund your investments account such as mutual funds, stock broker account or fund your savings account intended to use as a business capitalI hope you do learn many things in this article. To achieve financial freedom, you must “take risk” and reap the rewards someday. Thank you for reading this article, I wish you a prosperity and financial freedom. If you have time, read other financial blogs, business and finance books and magazines or attend financial literacy seminars.

Peer-To-Peer Lending, Microloans, and Crowdfunding

The financial crisis has had at least one interesting side effect: the rise of alternative and increasingly creative forms of financing. During the economic recession, and continuing to today, credit and other traditional forms of start up financing became more difficult to obtain. As a result, entrepreneurs began looking to newer, less-traditional forms of raising capital that cut out the financial intermediaries (banks, for instance) that are typically present in the process.

Peer-to-peer (also known as person-to-person or P2P) lending is a process of borrowing directly from individuals; in most instances, the lender and the borrower never meet. There are a variety of ways this happens, but generally, the process is relatively simple: The borrower registers on one of the many peer-to-peer web sites and is then matched up with a number of lenders who are interested in investing based on the borrower and the interest rate, among other things.

The P2P industry has been growing rapidly over the past few years: In 2005, there was $118 million in outstanding P2P loans; by 2011, that number had reached more than $500 million. P2P web sites make a profit by charging the borrowers an interest rate (usually 2 to 5 percent) on top of what the lenders require. The overall success rate of getting a loan through a P2P process is about 10 percent. Microfinancing has become more popular recently because new ventures are requiring less financing than in previous years.

In the same vein, one creative funding source that has evolved in recent years is crowdfunding. Crowdfunding (or crowd financing), like P2P, involves getting individuals to pool their resources to finance a project without a typical financial intermediary. Unlike P2P, however, the lenders (also known as (“crowdfunders”) often do not engage in crowdfunding strictly for financial gain. In fact, the “lenders” often actually act more like donors. In a typical transaction, an entrepreneur can go onto a crowdfunding web site, propose the amount needed for the project, and, if the amount pledged is met crowdfunders, receive the funds. Usually, the crowdfunders receive something in return, like a product from the business (a DVD or CD from the film or album produced, for instance) but not their money back, if the project is funded, so the funds are not donations in the strict sense. In fact, studies show that for the majority of backers, the reward is the main motivator of their monetary pledge. Crowdfunding sites generally make a profit by taking a small percentage (about 5 percent) from the projects funded before the money goes to the entrepreneur.

3 Things To Know Before Starting Your Crowdfunding Campaign

Crowdfunding has definitely taken over our lives, be it funding your dream idea or be it funding your neighbor’s operation. As with any new and developing means to make things simpler, crowdfunding comes with its own set of pre-existing conditions and context.

It has become extremely easy for anyone to start a crowdfunding campaign. However, the most important part lies in knowing about what you’re signing up for. If you’re someone who has a vague idea about crowdfunding, then it is important to do your due diligence before you go ahead with a crowdfunding campaign. Crowdfunding platforms are usually for-profit platforms (not to say that not for profit crowdfunding platforms do not exist) and they come with their rules and regulations, it is best to know these three things before you choose to launch a crowdfunding campaign for your cause, be it creative, medicinal or entrepreneurial.

1- Know your platform

There are some platforms that deal particularly with creative causes, some with medical and some work extensively with entrepreneurial pursuits. Depending on your case, it is important to evaluate the platform accordingly. Most crowdfunding platforms usually charge a fee for them to host your campaign. You may also incur different expenses depending on the added services you sign up for.

These platforms also come along with their own target audience, if you set up a campaign for your medical fundraising in a creative platform, know that there’s a serious mismatch in your target audience that tags along with it. It is also worth understanding that niche platforms usually specialize in one particular type of fundraising and it is best to leverage that for the good of your campaign, in terms of context, reach, marketing and audience etc.

2- Know your costs

With platforms charging their fees and the expenses that are incurred for any marketing efforts or promotional efforts, it is vital to have a buffer amount. Always take into consideration the fluctuation in different currencies (if the platform allows for donations from abroad) and the money that will be lost on the levied tax (depending on where you live). It is important to think about the PR costs and the promotional efforts if your cause is creative or entrepreneurial in nature. Marketing has the potential for a game changer, so it is important to not skimp on that and leverage the funds required.

3- Know your audience

It is important to be able to translate the value of your campaign to your audience. Regardless of the nature of your campaign (medical, creative and/or entrepreneurial), it is critical to be able to convey the urgency of your campaign to your audience. It is essential to building trust, transparency, and openness for your campaign. This enables you to be able to connect with your audience. If someone is willing to donate money to your cause, naturally they would want to know the details and the updates in the long term.

Understand that it is very important to be able to communicate your terms to your potential donors. It is of monumental importance to understand how you can communicate the terms of your cause. Empathy works well with medical causes, with entrepreneurial causes the pitch should revolve more around tangibility and with creative causes, it should revolve around your history with the creative field and the scope of your project.

These 3 things are inextricably linked to the topic of crowdfunding. It is important to voice your beliefs and start a movement through this practice. It is equally important to know what you’re signing up for while you’re doing that.