Investment isn’t just for suit-and-tie-wearing bankers and analysts who like to look at graphs all day long. An investment is anything that generates a return.
One of the easiest ways to invest—although most people don’t see it as an investment—is to lend money to a friend or family member who needs it and agree on an interest rate beforehand. Naturally, this should be someone you trust to eventually pay you back.
Maybe a relative needs some extra money to buy a new car, or maybe they have some debt they need to pay off and you’re willing to offer a lower interest rate than what their bank or credit card company charges. Either way, this is an easy way of generating extra revenue on the side without needing to do anything.
Of course, the downside of this approach is that it requires initial capital—that is, you need to have money to lend to people to begin with. The more you lend someone, the more you will receive back in interest. Of course, this also increases the risk, because then you’ve lost a larger amount of money if they can’t or won’t pay you back. This is why it is very important that you carefully select only those individuals that you trust to not only be willing to pay you back the money, but also have the means to earn back the money they need to pay you in the first place.
If you don’t know anyone trustworthy who wants a loan in Bitcoin, there are also websites such as Bitbond that provide “peer-to-peer lending” will connect you with individuals who need one instead. These are typically people who are running or trying to startup small businesses and who need more capital.
If you use websites like these, you should make sure that they do credit checks on the borrower to reduce the likelihood that they will default on the loan or simply take the money and run. You may also want to consider making investments manually rather than letting the platform automatically distribute your assets for you, so that you can vet each candidate yourself and make sure they meet your standard.
Another alternative to this is to use a website that functions more like a bank, and engages in fractional-reserve lending. This approach may be simpler than peer-to-peer lending, since you only need to give your money to one entity and have them manage it instead of diversifying it over many individuals who need loans, but it may also introduce more risk if they company does not manage the money properly or is not trustworthy.