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There are a lot of ways to invest your money, but very few methods can guarantee that you won’t lose money. Methods that guarantee you won’t lose your principal often pay such a low amount of interest that you’ll lose your purchasing power. On the other hand, methods that offer a lot of potential for growth tend to come with a lot of risk.
Because of this, when a person considers the most safe investments things should be considered: the potential for growth, the potential for loss, and the possibility of a catastrophic loss. A safe investment is not necessarily one in which you won’t lose your original investment, but rather one in which you have the best chance to increase your purchasing power. That means taking on a small amount of risk in exchange for a good chance at growth. Using this criteria, the following four investments seem to be among the best risks out there.
Real Estate
While the last few years have caused many people to shy away from real estate, it is still one of the most safe investments available. The reason is that this is an investment that provides both cash flow and the potential for capital gains. Each piece of property purchased can be rented out in order to generate money on a month to basis, and the original amount invested can almost always be recovered when it is time to sell the property. This means that an investor can get immediate cash flow without having to completely sacrifice his or her starting funds.
In addition, real estate is one of the few investments that has a lot of legal protection. Property can be insured for a relatively small amount compared with it’s value (this is next to impossible with stocks or even government bonds). Making purchases through an LLC can insure that any losses will not affect the personal assets of the investor. This investment also carries a lot of tax advantages, including being able to deduct depreciation and maintenance expenses. There are also several ways to buy and sell property without paying taxes on the profit.
Mobile Home Parks
This is a type of real estate investment, but it focuses on the rental aspect of property ownership. A mobile home park can usually be purchased relatively cheaply because the land is largely undeveloped. After providing utility hook-ups, a landlord only needs to provide basic landscaping and maintenance of the utilities. Tenants are responsible for providing their own homes, as well as taking care of the maintenance issues in those homes.
These parks make money simply by renting the land. There are virtually no maintenance costs, which means that the only carrying costs on the property are the mortgage and taxes. If the value of the land increases, it’s always possible to sell at a profit. Because the carrying costs are low and predictable, it’s easy to get a steady cash flow, and our current economic situation, this asset class is clearly one of the most safe investments right now.
Self-Storage
Owning a self-Storage company might seem like an odd way to invest your money, but this is an often overlooked business. After making an initial investment into the land and building, the carrying costs are relatively low and the potential for profit is high. These businesses require relatively little specialized knowledge, and ongoing costs are typically just utilities, administrative, and advertising. There are virtually no maintenance or repair costs.
The advantage to these businesses is their high profit potential. Each individual unit can be rented out for nearly $100 a month, and a typical storage company can have dozens of units. Units can be rented at any point during the month, so a landlord is not limited to only earning at the beginning of a month.
ATM Machines
Many people are surprised to learn that many ATM machines are not owned by banks. In fact, just about anyone can buy and operate one of these machines anywhere there is power and an internet connection. Once they are purchased and plugged in, there is virtually no cost to run one beyond the utilities.
The potential for profit, however, is great. Each transaction performed on the machine is charged a fee that is handed over directly to the machine’s owner. In the right location, an ATM can run hundreds of transactions a day. Even seldom-used ATMs, however, can still turn a profit for their owner because the cost to run one is virtually nil.
If the ATM is placed in conjunction to another business owned by the investor, the machine can increase the profits of the business. By giving customers access to their cash, they are much more likely to spend it at the business.