Investing is usually a risky and long-term strategy. So if you need money to start your business today, investing is probably not the right option. But if you are considering starting a business in a few years and need to save money to start your business, investing might be a reasonable option to help you get the most of of the money you currently have.
Some safe investments you can make are ones where there is no risk. That is usually the option of putting your money in a bank account that gives you a 1-2% interest on your money. That isn't much of a return, but at least you don't risk any money. This essentially helps you keep pace with inflation.
A risky investment is one where you may end up with less money than you had when you began investing. The advantage of such investments is that they typically give you a bigger potential return on your investment. The most common such investment is in the stock market. I personally invest in the stock market and can admit that I have lost more money in the stock market than I would have liked to, and that it took me considerable time to learn how to invest properly before I was able to earn money from the stock market. Even though I now have reasonable experience investing in the stock market, a realistic return is somewhere between 5-10%. And that won't really be too much help for your business.
Another way to invest is to do something called options trading. According to Wikipedia, Option trading strategies are the simultaneous, and often mixed, buying or selling of one or more options that differ in one or more of the options' variables. This is often done to gain exposure to a specific type of opportunity or risk while eliminating other risks as part of a trading strategy. A very straight forward strategy might simply be the buying or selling of a single option, however option strategies often refer to a combination of simultaneous buying and or selling of options.
Options strategies allow to profit from movements in the underlying that are bullish, bearish or neutral. In the case of neutral strategies, they can be further classified into those that are bullish on volatility and those that are bearish on volatility. The option positions used can be long and/or short positions in calls.
You can also browse our fundraising ideas page to get a sense of all the possibilities for raising money for your business. Some of the options are to get loans, grants, donations or try to get an investment. Also, you can work and save money towards your business.
Article by Alex Genadinik