It was American politician and lawyer Frank A. Clark who told us our problem with money isn’t earning it but knowing what to do with it. We can’t ask him to elaborate on his point as he’s no longer around. However, the implication is clear. If you’re not financially literate, your ability to earn money doesn’t matter.
To put it another way, you need to make the money you have work in your favour. Making money work for you will, by and large, be a personal thing. For some, this means investing in a business that turns your starting capital into a lifelong revenue stream. For others, it’s investing in the stock markets. In fact, for the majority of people, the latter is often the best option.
Although a lot of people say they want to run a business, few are actually capable of it. Indeed, that’s why, on average, 60% of start-ups fail within three years. Of course, there are no guarantees in the investment world either. At no point can you say that X shares are definitely going to increase in value. However, with the right information and realistic expectations, it’s certainly possible.
Where to Invest Your Windfall
So, let’s say you’ve come into some money. You’ve won the lottery. How would you invest your lotto winnings? Experts say you should take stock of your win, keep things quiet and then devise a plan. It’s at this point you can heed the words of Clark. The only question now is how? Which financial instruments should you invest in? Again, there are no certainties in this world. However, based on current trends, the following markets appear to be ripe for picking:
Everyone thought Bitcoin was dead, but the reality is that it’s far from it. Like all investments, cryptos took a dip after reaching unprecedented highs in 2017. Those that stayed the course are now reaping the rewards. Bitcoin alone has gone from almost $20,000 in 2017 down to $4,000 and, most recently, back up to $50,000. Cryptocurrencies are volatile but, if you listen to the experts, Bitcoin is the future and there’s still value in the market.
Go green has become a slogan not just for governments but major corporations over the last five years. With the Green New Deal reshaping the world around us, this market is a solid investment. Established energy companies such as Shell and BP are pivoting towards renewable projects. Additionally, start-ups such as NextEra and Enphase are vying to change the industry.
Technology has been a standout performer for the last two decades and it remains a strong option today. The key to investing in tech is specificity. There are many different areas of innovation and you need to target growth areas. Artificial intelligence (AI) is one such area. iRobot (a company that builds consumer robots) has already become a top performer in 2021. Outside of AI, electric car technology is also a tantalising proposition thanks, in part, to Elon Musk and Tesla.
You never know what’s going to happen in the financial world. However, with the right investments, you can make your money work for you. That’s important. Saving is great and you should definitely do it. However, if you want to push your fortunes to the next level, you need to take Clark’s advice and find a suitable investment.