Tips for Building a Business Fund Via Investment
Gathering startup capital is one of the biggest challenges people face when launching their own businesses. Even so, as was discussed in the article ‘How to Finance My Company Without Any Funds?’, there are plenty of options to explore to build a business fund.
Business founders will turn to government assistance, micro-credits, crowdfunding, investment funds and more in order to raise the capital they need to get started. Another option that isn’t discussed as often, however, is to turn to personal investment as a means of growing a business fund.
To be clear, this is an uncommon and unorthodox way to raise a business fund. Personal investment is inherently risky, and also takes time to pay off. It is thus not always ideal for this specific purpose. For those who are looking at any and all possibilities though, or for those who may have struggled with other methods, we’ve decided to explore some of the ways in which aspiring business owners can invest with hopes of sprouting startup capital.
Buy Into an Index Fund
An index fund is typically thought of as more of a long-term venture — and sometimes even as an alternative to other forms of retirement savings. However, there’s nothing mandating that buying into an index fund has to be a long-term play, and CNBC referred to this as a “smart investment” in part because costs and fees are low. That aspect of things ought to be particularly appealing to those looking to start their own businesses (for whom every last bit of money matters a great deal). Basically, this is an opportunity to buy into a strategically organised fund designed to minimise risk, keep up with market gains, and ultimately provide a return. It won’t be a massive boon, but it can produce pieces of the sum you need to launch your business.
Learn to Read Trading Charts
Another option is of course to take on personal stock, commodity, or even forex investment. This is generally not advisable without real education and expertise, but for those who want to try to build a fund through direct market trading, it is at least essential to learn how to read the charts. Anyone can look at a basic chart and tell if an asset has gained or lost value, and how much. But successful traders also learn other ways of assessing markets visually and ultimately gaining actionable insights. For instance, a Medium piece by CryptoGrinders explains how a “candlestick” chart gives a more thorough overview of how an asset performs each day. And FXCM uses a variety of examples to show how a “heat map” shows a trader a more comprehensive view of a total market, rather than a single asset. Learning to use these options is a means of developing a firmer grasp on investment markets, and increasing the likelihood of success. Though again, personal investment of this kind is typically best left to experts.
Explore High-Yield Savings Options
If you’re an aspiring business leader looking for ways to grow a fund but prioritizing a safe and conservative approach, high-yield savings can be can interesting option. This is basically a savings account with specific conditions — such as a certain minimum investment, or a minimum term — that ultimately provides a greater return than the average, regular account. Now, this return typically isn’t massive over a short period of time. But it does comes with very little risk, and it’s a particularly interesting option for an aspiring founder who has some funding on hand, but isn’t ready to start. In that scenario, there’s more money to put into an account for growth, and there’s time to let it grow. The growth will be marginal, but every little bit counts, and it can certainly help to get a business off the ground.
The point in identifying all of these options is not to suggest that they’re always strategic avenues for raising business capital. Most often, in fact, they are not. But it’s still important for anyone to build a business fund and seeking startup capital to consider all of the angles, and there are some cases in which a personal investment venture can pay off.
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