Suppose you’re someone who has 100 euro. You were planning on going to the grocery shopping with this €100? Please stop and consider some fruitful investment options. In times like these, where even the superpowers are struggling financially, and the economic future seems uncertain, financial stability is indeed at stake. Redundancy is trending, and employers are offering the bare minimum (that is if they’re hiring at all). To have a safe future, you’re recommended to invest. Investment does not require you to submit your CV’s and appear for a nerve-racking interview. It only involves ‘investing’ your hard-earned money somewhere that yields desirable profits. Start investing with €100! Where should you invest in to get a return after six months?
Investing with €100
Investment and risk may be defined as synonyms so you cannot turn a blind eye while investing. You need to analyse the available options carefully and do thorough research before you initiate the process. Although, most returns are yearly based there are several other options with a semi-annual or six months return tag too.
One important thing to remember is that you are opting for a short-term investment because you expect a six months’ return. A short-term investment is beneficial in the sense that it is highly liquid, and the risk is comparatively lower. However, the return would be lower than if invested in a long-term investment option.
The return from a short-term investment is lower than the long term investment because of “Compounding’. You receive interest on your principal amount and then it follows with interest in your previous interest. The pattern continues, and so, the amount grows by a more significant amount.
Know Your Options
Mutual Funds is where the institutions gather money from investors and invest a portfolio of securities. These institutions are often known as Asset Management Companies. There are many different mutual funds which have their objectives. These are; Money Market, Growth Fund, Fixed Income fund, Islamic fund, Fund of funds, Index Tracked fund. If you invest in mutual funds, then the profit adds up, and you do get monthly returns.
Warning: it’s always up to the market if the pay-out is substantial or not. Your investment will not grow by much in six months.
If the yearly pay-out with mark-up is said, 15%, you won’t get much in six months with 100 euros. However, it is always better to earn something than to make nothing at all. If this amount of money lands you into a profitable position, then you can always take it as a worthwhile experience. By adding more money next time, you can earn even more. Therefore, this €100 will function as a test drive for you. The biggest catch is that it is low-cost and straightforward (I know, seems too good to be accurate, but it is that simple). You would find sufficient guidance both online and in offices. More often, there are free of cost counselling sessions available for investing in mutual funds. Moreover, you don’t have to move a leg as experts undertake the entire process.
Investing in a foreign currency is considered not the safest bet because of multiple factors, but if you get your hands on a growing or stable currency, it is a win-win situation for you. Before you proceed to google the most expensive currency in the world, allow yourself to become familiar with certain fundamentals of currency. The following factors hold a lot of importance when planning to invest in a currency:
- Inflation: Since currencies are compared in pairs, it is necessary to look at the inflation situation of the two. When a lower inflation rate prevails in the country as compared to a high inflation rate in another country, the currency of the low inflation country appreciates. It is then advisable to buy and stock on that currency.
- Interest rate: A high-interest rate works towards the betterment of the currency as this attracts investors in the domestic country. The incentive of high profit does the magic, and so the currency tends to appreciate.
- Political situation: If a country has a well-managed political environment, the currency ought to flourish. This is because it builds the confidence of investors in the country as they see a bright future there. When foreign deposits rise, currency appreciates. However, the election phase makes things uncertain, for example, in the USA.
- International trade: If a country has high exports, it’s good news for its currency too. You ask why? Its because as the demand rise for domestic production, the domestic currency becomes high in demand. People tend to buy the money to purchase the products.
- Economic stability: The economic environment plays a massive role in currency value. If the economic conditions are favourable, investors are automatically intrigued.
Keeping all these components in mind, you can buy a currency which seems favourable to Euro. To further assist you, financial advisors at specialist banks are available.
It is an instrument issued by the government in the market. There are three types:
- 1 – T-bills
- 2 – T-notes
- 3 – T-bonds
T-bills is the option for you since you want to earn a return in six months. This one has a life of less than a year, and it is highly liquid. Meaning, they can be exchanged on any day the market is functioning. Even other governments buy treasury bonds. It is safe too as it’s backed by the AAA credit rating of the US federal government. It’s a reliable choice so you can give it a go and start investing with €100.
Online Saving accounts
This is where you deposit your money in a savings account, and then you earn an interest regularly on your original amount. All you have to do then is fulfil the legal procedure like fill out some forms, verify your identity and voila! You’re good to go.
The plus point with online savings is that you can even compare many different interest rates offered by a variety of banks. After you’ve done thorough research, your journey to earning will be just a few clicks away.
This is a form of investment where you buy shares of a company in exchange for quarterly dividend payments. Therefore, you do not need to wait for the entire year or more to receive a return. Stocks are the most famous way of investment, and there are multiples companies available to do so.
We cannot stress enough on the fact of how integral it is to invest in yourself. An investment on yourself goes a long way, beyond your expectations. There are many ways that you can do it. Learn a skill or two, like painting or photography. If you excel at it, you can even become an entrepreneur and sell your skills.
Enrol yourself in online courses, which are really below €100. You can complete multiple courses and even save some amount. You can find these courses on Coursera, edX and some courses are even free of cost. Once you’ve received a formal certification, you can polish your skills by applying to internships and small jobs.
Personal grooming is so essential as it changes your entire profile. It enhances your overall portfolio, and you tend to appear as presentable. You should invest that money to learn a new language. Learning a new language helps as it can take you places. There are many multi-national firms where a specific language is given priority because it requires you to meet and converse with clients belonging to different nationalities.
Become a reseller
This is one of my favourites. You don’t need prior financial knowledge and economic background. All you need is the ability to attract customers and sell. Here’s how you do it:
- You keep an eye out for sales on big brands like Zara, Nike, MAC, NARS, CHARLES & KEITH, Ikea, Primark etc. Then you buy from the brands that you think is your target audience’s favourite.
- During sales time, your stock on the products at prices that are 50%, or even 75% on-off.
- During off sales season, you sell them through social media like Facebook buy & sell groups. You can even make a WhatsApp group and add your friends and family. Write catchy captions and the products sell out like hotcakes.
You wouldn’t believe it, but you can export these items to developing countries like India, Pakistan, Bangladesh, Egypt, Indonesia etc. where there is a huge customer base for these international brands. In just €100, you can do big business, and when you receive a high level of profits, you can even plough back a portion of profits and earn well.
Wherever you decide to invest, do so with utmost care. No matter how insignificant the amount may seem, investing it smartly yields enormous benefits. Consult with family or an expert, explore your options and then proceed to invest finally. Good luck making a fortune out of €100!
Let’s get started! What are the best investment options for October 2020?