Leaving the relative comfort of a job security to test out the uncertain waters of entrepreneurship is one of the hardest things that fempreneurs have to do when making life decisions. Fempreneurs are however are faced with the stark realities that their earnings are tied to the success of their entrepreneurial pursuit. I have learnt that making strategic investments is one of the key ways in which Fempreneurs can increase their earnings and open up multiple streams of income.
It can be somewhat hard to grow beyond the revenue base of our startups or SMEs. Yet, as a fempreneur, nothing stops you from investing your money outside the core competencies of your business. This piece seeks to explore three ways through which Fempreneurs can invest their money.
The Safe Bet
Investments does not have to be a rollercoaster ride in which you are bumping from exhilarating highs to depressing lows. I strongly believe that an investment doesn't always have to be risky since you are already taking risks in your entrepreneurial pursuit. You can take the safe bet to investments and still earn decent rewards on your investments - doubling your investment is a possibility.
Investing in zero-coupon bonds (including classic U.S. savings bonds) is one of the safest ways for you to invest your money. Zero-coupon bonds are actually one of the easiest (and safest) investments opportunities for busy women to understand.
In simple terms, if you buy Zero-coupon bonds, you are buying bonds at a discount to the maturity amount. For instance, if a $1000 bond (regular) is supposed to pay you a 5% interest per year, a $1000 zero-coupon bond won't necessarily pay you an interest. You'll by a Zero-coupon $1000 bond for $500 - the value of the bond then increases with each passing year until it reaches maturity when you are paid $1000 for your investment.
Zero-coupon bonds do not pay an interest like regular bonds, but your return on investment is already guaranteed when you purchase the bond at a discount to its maturity price.
Speculative Investments
Some women love the thrill and excitement of active investments and safe bets such as zero-coupon bonds are just too boring for them. You should be able to make money from investments without sacrificing the thrills of active investments if you take part in speculative investments such as Forex, options, futures, and penny stocks among others.
Fempreneurs who are willing to take bigger risks can expect to see massive payoffs from speculative investments. For instance, forex allows you to earn money on changes in the economic dynamics that affects the value of a country's currencies. Penny stocks allow you to buy into new startups that are on the verge of a breakout. Options allows you to leverage your bull or bear thesis to earn money off a company without buying or owning the shares of the company.
David Becker, an analyst at Trade-24 says potential speculative investors must invest in their education. In his words, "before you begin making speculative investments, it is important to know about types of accounts, futures market, and forex signals, you should also learn about the risks and how to avoid them".
Contrarian Investing
Contrarian investing is one the investment moves that allows you to smell a buy opportunity when other investors are running for the exits. Contrarian investments provide brave-hearted fempreneurs with an opportunity to buy into great companies that have entered a troubled period in their lifecycles. Paying attention to historical price-to-earnings ratio and book value might provide you with insight on whether a firm is trading in line with its fair value or otherwise.
An otherwise fundamentally sound business might see a slump in its share price because it had a problem with a product, had a lawsuit, or made a mistake in its operations. If you have done your homework and you are sure that the business is fundamentally sound, you might find a buying opportunity in such stocks when other investors have lost hope.
Fempreneurs have the natural inclination to make headways with contrarian investing because of the way they are wired naturally. Being a fempreneur is a contrarian activity in its own right - you could have followed the societal norm to become a stay-at-home mom or you could have chosen to climb the
corporate ladder to build a career somewhere.
I have learnt over time that one of the fastest ways to grow your wealth is to make smart investments. However, you need to be sure that you are not mistaking investments for gambling. The cardinal rule that "you should not invest in any business that you don't understand" should be a key factor that would guide your investment making-decisions.