After making their first significant profit, entrepreneurs must learn how to invest wisely in order to see their business grow. Buying appreciable assets to create multiple income streams is an excellent way to provide a source of profit, even if the worst should happen. Investor Mike Eisenga is passionate about helping fellow entrepreneurs. In this article, he shares the assets that are well-suited to entrepreneurs.
The stock market can be an aggressive investment strategy. Investors can research and purchase individual stocks, or they can build a portfolio of stocks through a mutual fund, index fund, or exchange-traded fund (ETF).
A diverse portfolio can minimize the financial impact of an underperforming stock selection, as well as providing the means by which your investments can grow over the long term.
Entrepreneurs can invest their money in real estate. This includes the home that you purchase for yourself, as any improvements you make will usually add to its value.
According to Mike Eisenga, “Real estate is a great example of alternative investments, along with real estate investment trusts, real estate limited partnerships, real estate development corporations, and directly owned property.”
Some entrepreneurs choose to buy houses with the intention of selling them for a profit (sometimes known as “flipping”). However, this can take some time and may also demand some improvements before the home can be sold. The profit will also depend on the status of the housing market.
Rental properties can be a solid investment for entrepreneurs who are willing to take the time to maintain the property and screen potential tenants.
Real estate, therefore, represents a more demanding investment, which can be prohibitive for younger entrepreneurs. But those who make these investments can reap great rewards over time, since real estate offers considerably less risk than stock options.
Certificate of Deposit
A certificate of deposit (CD) allows you to loan money to the bank for a predetermined length of time. In return, you generate a modest amount of interest. Term lengths are typically three months to five years, so you won’t have access to your money until the term matures.
On the one hand, CDs are a low-risk financial investment. On the other hand, the interest accrued is very small. Young entrepreneurs can afford to be more aggressive with their investments by pursuing another financial vehicle.
Believe it or not, many young entrepreneurs have turned to the art world for investment opportunities. Artwork can be purchased at auction and then “flipped” and sold at a profit.
This takes a little bit of expertise, especially when it comes to evaluating a piece of artwork. But young investors can take advantage of online art communities to buy, sell, and trade artwork for sizable profits.
Creating Your Own Product
Finally, don’t neglect the wealth-generating potential of your own products. Creating an eBook, for example, requires a specific time commitment, but once it’s been created, it can generate income over time.
In the end, the greatest investment you can make is in yourself. Young entrepreneurs should remember to tap into their own money-making potential and creativity, where their stores are truly unlimited.
About Michael Eisenga
With years of real estate investment experience, Mike Eisenga understands the world of investment. Currently, Mike is a commercial real estate investor and entrepreneur, but his prior experience ranges from property management to community outreach. Mike’s also served as mayor of Columbus in Wisconsin and remains active in supporting his local community.