According to the data from the Bank of Lithuania, this year, the salary has risen by 9.8% - 3 times more than prices. Positive economic changes encouraged the residents not only to live more freely but also to think about ways to make their money work for them and to increase their personal capital. According to RE expert V. Vanage, one of the possibilities that help to earn money is investing, however, she reminds us that you need to prepare for it and to complete the four main tasks and do not fall for get-rich-quickly adverts.
A usual Lithuanian who does not want to live the whole time from salary to salary is looking for ways how to improve their financial position. The most risk-averse people prefer to keep their money in a sock, even though they know that their savings will not remain the same but will also be devalued as the prices of products and services keep rising. Those who wish to avoid devaluation of their savings, think about an opportunity to invest, but often they do not know how to start. The doubts are encouraged by a vast fear of risk.
'For a starting investor it is really important to find a financing tool where the profit and low risk would be well-combined - says crowdfunding platform Profitus founder, Viktorija Vanage - For this reason, investing through crowdfunding platforms, where you can invest small amounts in already pre-picked and carefully checked projects, is becoming very popular in Lithuania and European Union'.
Before practically trying this investment in the RE tool, V. Vanage, recommends answering the four main questions.
One more critical element when evaluating the risk of investment is LTV (loan-to-value) ratio. It measures the relationship between the loan amount and the market value of the asset securing the loan. For example, if the investors invested 70 thousand euros, and the mortgaged property has a value of 100 thousand euros, the LTV will be 70%. The lower the LTV percentage - the better, however, you shouldn't forget to consider mortgage type.
When you have decided to make your money work for you using crowdfunding platforms, you should not expect to get rich quickly. Although everyone would like to experience such a success story, firstly a habit for investing should be developed, i.e. the money earned should be invested again. Depending on the amount allocated for investment, the financial benefits of investing can be noticed only after a few years. Do not forget that if you are promised to get rich quickly, you can expect that it will be a very high risk to lose all of your invested money.
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