Real Estate, Crypto & Forex
Exploring other investment vehicles
REAL ESTATE
Real estate investing involves the purchase, ownership, management, rental, and or sale of real estate for profit. Improvement of real estate property as part of a real estate investment strategy is generally considered to be a sub-specialty of real estate investing called real estate development. — Wikipedia
When individuals want to invest in properties can do so in various ways, some include:
- Owning houses as a landlord: Here an individual has paid for the house or is still paying a mortgage on the house but importantly has tenants that pay rent. It is important to understand that the individual doesn’t have to be the one managing the house as managing the houses can be outsourced. Managing tenants and managing houses can be stressful.
Ownership and rental income is what matters.
- Real Estate Groups: These are groups where people use their money to invest and buy out units of real estate properties. This is similar to mutual funds however, here the management is in charge and is paid compensation as agreed but individuals own the properties they buy through the group. The management of the tenants and maintenance of the properties also rests on the management of the group which they might decide to outsource too.
- REITs: A REIT is a company, trust, or association that invests real estate properties. Real estate properties include offices, apartment buildings, data centers, hotels, warehouses, condos, etc.
Some REITs can be traded like stocks and bought and sold on the stock exchange.
REITs are required to pay out dividends from the proceedings of real estate investments. REITs are similar to mutual funds where the money is pooled from numerous investors.
- House Flipping: Just like buying stocks and selling when their prices increase. People buy real estate properties and flip them for higher prices sometimes after slight or major refurbishing (mostly done for residential buildings).
Bottom line: People buy rental properties lease or sell them for capital gains or as a source of steady income.
CRYPTOCURRENCY
Cryptocurrency or crypto as usually abbreviated is the latest fiat currency in circulation. Instead of paper, or any physical representation of this currency, it is a purely digital currency. This means it is online — up in the clouds.
Crypto is traded based on its price and not any underlying value, just like gold. Its volatility is what makes it very attractive to aggressive investors. It’s bought through exchanges (just like stocks) and is stored in wallets… electronic wallets, please.
It’s quite simple, buy when a price is low, sell when the price is high.
Read a preview on cryptocurrency as an investment option here.
Forex
Trading currencies is what forex means. The foreign exchange (forex) market is a global decentralized or over-the-counter market for the trading of currencies.
You buy and sell currencies (Dollars, Sterling Pounds, Euro)through a broker and make profit on the differences in prices.
A long position is when you buy a currency with the expectation of that currency to rise in the future.
A short position is buy a currency with the expectation of it to fall.
