Top 5 Profitable Investment Ideas: Are you looking for a profitable investment to invest and grow your savings? Unfortunately, you have no idea what to invest in. We share 5 investment ideas that could suit you depending on your objectives, the amount of your savings, and your investor profile.
Please note, however, that some of these investment ideas may require specific technical skills. Also, if you have not already done so, we recommend that you first read our guide dedicated to investing for beginners.
Profitable investment idea #1: Real estate
Certainly, investing in real estate is a fairly conventional investment idea. However, most individuals are unaware that there are plenty of ways to invest in real estate and that it is an investment idea suitable for all budgets.
Rental investment, the most widespread real estate investment idea
The most widespread idea of investment in real estate remains rental investment in your name. The idea is relatively simple on paper:
- you buy real estate
- you rent it out and collect the rent
- you can eventually resell it in the hope of generating real estate capital gains.
In practice, rental investment is much more complex. To maximize the profitability of your investment, you will resort to a bank loan which will need to be offset with the rents received to maximize your cash flow.
For these purposes, you will need to find a suitable property (preferably a good deal) and carry out work to make it more attractive to tenants (and thus limit the risks of rental vacancies). At the same time, you will need to think about the type of rental and the resulting taxation to limit tax friction (LMNP or property income).
Then, it will be necessary to ensure the rental management of the property or delegate it to a real estate agency for higher management fees. [Top 5 Profitable Investment Ideas]
Is seasonal rental, a viable alternative to rental investment?
Very popular since the appearance of collaborative economy platforms, seasonal rental is often presented as the Holy Grail of real estate investment. While it is undoubtedly possible to generate higher profitability with seasonal rentals, many savers are unaware that this investment idea comes at the cost of much higher management fees.
You will either have to personally assume the time-consuming responsibility of welcoming customers (which can quickly turn into a full-time job) and maintaining the accommodation, or you will have to delegate it to a concierge service in return for a significant commission.
Paperstone, indirect real estate investment
As you will have understood, real estate is an investment idea requiring skills, money, and time to make the project viable. Despite this, real estate undoubtedly remains an asset offering attractive profitability for a relatively low level of risk.
Therefore, it is possible to invest indirectly in real estate thanks to stone paper. For a low entry fee (1000 euros), you can benefit from the performance of the real estate market by purchasing shares in SCPI (real estate investment company), OPCI (real estate collective investment organization), or SIIC (real estate investment company).
listed real estate investment). These companies specializing in real estate aim to manage and operate a large real estate portfolio so that by investing in them you receive the profits generated without getting involved in management. In short, an excellent idea for making a passive investment in real estate. [Top 5 Profitable Investment Ideas]
Profitable investment idea #2: Invest in the stock market
Not very original, investing in the stock market remains an investment idea that deserves to be addressed as it can feed certain fantasies (beware of survivor bias ) and generate disappointments.
Indeed, the term “invest in the stock market” is extremely broad since it brings together all assets listed on a secondary market (second-hand market): shares, bonds, investment fund shares, but also everything a bunch of derivative products (futures, CDS, CFDs, etc.)
Advice from Goodvest: If you invest in stocks or risky assets on the stock market, always favor the long term to smooth out market volatility. Doing day-to-day trading is extremely risky, especially since numerous studies (including several Nobel Prize winners) have demonstrated the highly random nature of the gains generated with this type of practice.
Listed company shares to build your financial portfolio
If you feel like a wise investor, you can invest in the stock market by purchasing shares of listed companies. Generally speaking, it is accepted that the shares of listed companies offer an expected return of 8% per year.
To do this, you will ideally need to build a diversified portfolio made up of company shares from different sectors of activity and located in different locations (geographic diversification). You can then make arbitrages and rebalances based on your sense of opportunity. [Top 5 Profitable Investment Ideas]
Be careful though, investing in listed shares is an investment idea requiring advanced financial literacy. Fortunately, there are other equally viable alternatives for investing in the stock market, much more suitable for non-experts.
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