How to invest in business projects (startup): 9 ways 11 best investment sites
Four well-known investment gurus - Warren Buffett, Ray Dalio, Joel Greenblatt and George Soros differ from each other in their working style, but they are united by a desire to get the most out of their investments under certain risk limits. What bets have these investors made for 2021?
When I look at the list of assets that Berkshire Hathaway acquired in Q3, I wonder if I messed up something. Is this really the holding of the famous Warren Buffett? Among the new major acquisitions, we see technology, pharmaceutical, telecommunications companies.
I have to admit that Berkshire has changed a lot lately. Consider, for example, the fact that in the portfolio of this company Apple shares occupy almost 48%. This fact alone can cross out a lot that has been written about Buffett in those smart books that millions of investors around the world have learned from. The world is changing, and along with it, the investment strategy of the world famous guru, or rather, of that new generation of managers who are plotting a new route and are engaged in operational navigation of this famous "ship", is undergoing a strong change.
What potential assets from Buffett's list have I looked at? This is primarily Merck & Co., Inc. (MRK) and Pfizer Inc. (PFE). First, both companies are heavily undervalued and have not been at the forefront of growth this year. Their shares fell by 11.2% and 1.7%, respectively (here and in the case are data for November 27). And this despite the fact that Pfizer has every reason to become, together with the German BioNtech, the "parent" of the first registered vaccine against COVID-19 in the United States.
It is also important for a private investor that we are talking about two global pharmaceutical "monsters", the capitalization of each of which exceeds $ 200 billion. I think that the fact that both Pfizer and Merck pay very worthy for the present time dividends: for the first they are 4.14% per year, for the second - 3.23%. And one more factor: the new US President Joe Biden traditionally supports the policy of accessibility of medicine for all segments of the population and, most likely, will continue to work to promote the Obamacare program.
Many have read the book "Principles" by Ray Dalio, and for the rest it can be explained that investing in his company Bridgewater Associates LP is a powerful "machine" operating according to certain principles and algorithms that are developed and quickly changed to the basis of historical models of the stock market, using Big Data and modern computer systems. There are no random decisions here.
Let's see what Ray Dalio bought at the end of the year: a trading company Walmart Inc. (WMT), The Coca-Cola Company (KO), PepsiCo, Inc. (PEP), McDonald's Corporation (MCD) - and so on. It would seem that this is a typical set of Warren Buffett, which every more or less experienced investor knows about, but now it is bought by one of the largest hedge funds in the world. What's the matter?
Most likely, the company's models have concluded that next year we will have a kind of "shape-shifter": those papers that were in the shadows during the pandemic will come to the fore. And one more thing: after 11 years of a bull market, it is reasonable to have in your portfolio, along with growth stocks, some defensive assets that are almost always afloat: you always need to eat and drink, even during the steepest crash in the stock market.
For those investors who do not want to take too much risk and prefer the old classical approach, I would recommend taking two assets from Dalio's list. The first is PepsiCo, Inc. (PEP) - Never understood why Buffett preferred Coca-Cola his entire life. And, of course, where without our favorite McDonald's. Even in such a difficult time, both assets were in positive territory: the burger maker grew by 10.5% YTD, only slightly behind the S&P 500 broad market index - + 12.6%. Pepsi is up 5.8%. Both companies pay good dividends: Pepsi 2.86% and McDonald’s 2.41%.
The next guru is Joel Greenblatt. This name is heard in the press much less often than the name of Buffett or Dalio, but he is a very wise man and has achieved a lot. His "Little Book of the Stock Market Winner" can often be found on various lists of the world's bestsellers.
Hello everyone, Maxim Seryakov from the People's IPO accelerator for attracting investments. I would like to share my experience in attracting loans from private investors.
One of the frequent questions that arises in the mind of an entrepreneur is “what to offer the investor in terms of conditions: so that it would be beneficial for me and the investor to be interested”?
As a rule, this question is faced by absolutely everyone who attracts investment. You can attract a share, that is, sell part of your own business, or you can borrow at interest (loan). Today we will analyze in more detail exactly loans, since 90% of investors give them exactly.
The standard scheme that most people use:
- fixed interest (from 15 to 35% per annum)
- monthly payments (from months to a year)
- the body of the debt at the end of the term (from 1 to 5 years old).
This scheme is optimal, since the body of capital is fully in business during the duration of the contract and can be scrolled an unlimited number of times.
But besides the standard there are a number of other schemes
Depending on your business model, you can agree with the investor on conditions that will be beneficial to you.
Fixed or dynamic% on a loan with a return on the body (% on a loan as a% of revenue or net profit)
You pay the investor during the entire period a percentage of the revenue or net profit of the entire business, or a specific store / point / branch, etc.
Let's reveal the features of the 10 best ways to invest in 2021. Because the inflation rate in Russia for 5 years was 31.06%, for 2021 - 3.05%. These numbers help to understand how much money is depreciating, and where it is definitely not worth investing.
Basic principles and types of investments
Investing is the alienation of funds for profit in the future. There are certain principles in effective investments that help to achieve the set objectives while minimizing risks.
The basic principles are:
- competently setting goals;
- writing a strategic plan;
- creating a risk profile;
- determining whether investor to devote time to manage investments or it is necessary to transfer funds to the management of professionals;
- constant market analysis;
- the ability to give up assets that do not bring profit.
Highly profitable investments should be permanent, regardless of whether you plan to receive passive or active income.
Main types of investments
Investment types can be classified according to different criteria, therefore, those listed in the table are not the only possible ones. However, there is no right or wrong division.
The rules of correct investment
The first rule of investing is to take care to save your money. It is not worth investing money only in those projects that guarantee high returns in the first days of investment.
Basic investment rules are as follows:
- Use only free money for investments. Do not take loans or loans for investment. There is always a risk of loss.
- Assess the risks and potential returns before making a profitable investment.
- Remember to diversify your investments. To reduce the risk of possible loss of capital or income from it, it is necessary to distribute the contribution between various investment objects. The classic version in world practice is 10% for each project.
But the most effective way of distributing funds: 50% - a conservative portfolio (real estate, bonds, precious metals), 30% - a moderate portfolio (business projects, stocks), 20% - an aggressive portfolio (cryptocurrencies, foreign exchange market).
Author: Ivanova Svetlana Sergeevna Published November 2, 2021 Updated June 20, 2021
The life of an investor with a sufficient budget is almost cloudless, because you can invest the accumulated capital in thousands of areas, enterprises and ideas. But what if the budget is limited, and the desire to gain financial independence has long been haunted? The moment has come to think less and do more. By investing in investment projects, there is a chance to gain stable passive income, using promising business ideas, energy and knowledge of other people.
Brief content of the article
Pros and Cons
The advantages of investing in business are quite obvious:
- unlimited potential income;
- diversification of risks by investing in various directions;
- access to full management of each process; li >
- a wide range of promising areas. Much depends on the budget - investors can invest both in a small toy store and in an oil-producing corporation.
The disadvantages of investing in start-up projects include the following points:
- Risks. The chances of being left without investments and subsequent profits are high in any entrepreneurial business, but when investing in a startup, the risks double.
- Unpredictable period. Even an innovative idea, formed and ready to enter the market, can pay off for years.
- Seasonality or irregularity. Profit largely depends on the chosen area. And, if you really wanted to invest in an online store focused on the sale of ski equipment, then it is almost pointless to count on an influx of profits in the summer.
- Additional attachments. Force majeure, new business ideas, non-standard concepts - before implementing a business plan, you often have to use an additional budget.
- Conflict of interest. Competitors, an oversaturated business sphere - it's hard to even imagine what problems you will have to face in the future.
- Additional load. Even when buying a ready-made business plan, counting on an easy and cloudless start is pointless. You will have to delve into the nuances and details personally and often with bitter experience, otherwise passive income will never become stable.
How you can invest in business projects: ways
Purchase of a business share
A common variant of financial cooperation, which involves paying for a part of an already working or launched business idea. In some situations, shares are distributed not in terms of the volume of investments, but also taking into account the personal contribution to the development of a joint business. Situations are not uncommon when someone pays a share, and someone has to manage the rest of the processes.
Investments are aerobatics in business, an opportunity to significantly increase your capital. Especially if it is an investment in a business. Under this concept, it is customary to understand the placement of free funds in commercial activities and financial instruments with the subsequent receipt of profit.
Various types of values (property, non-property, intellectual) are used as free funds. What forms of investment exist, what is their difference, as well as the pros and cons - let's understand in more detail.
Why invest in business
There is a misconception in Russia about long-term investment opportunities. Some believe that entrepreneurs can become investors who own capital and talent. Others say that investing is risky, especially given the current political situation.
This interpretation is fundamentally wrong. The investment business opens up new "horizons" for the investor: it makes him financially independent, helps to gain confidence in the future, to realize himself, and provides a passive but stable income.
With the right approach, even people who do not have much savings can start investing. To do this, you do not need to have an economic education - today there are many areas that are not related to economics.
Pros and Cons
Investing in business has positive and negative sides. Let's try to figure out what will be an unconditional plus and what a sad minus in terms of investment.
Forms of business investment
Investments in business are conventionally divided according to several criteria. We will analyze each of them below. So read carefully and try not to skip options.
Because one of them can serve as an impetus to your wealth.