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How to Recognize a Good Short-Term Investment

 

Short term investment opportunities are often more desirable because you see results much faster than long term investing. With a few simple steps, you can make sure the investment you're considering is one you should jump on.

Step 1: Define What You're Interested In

Before you even look for short term investing opportunities, you need to define what you're interested in. This will prevent you from being pushed too far outside of your comfort zone and make a bad investment. If you're investing with a partner or spouse, sit down together and make a list of short term investments you're interested in. These could include bonds, flipping houses and other opportunities you've heard are available. Once you know what you want, you can find good investment opportunities.

Step 2: Find Trustworthy People to Work With

Regardless of the type of short term investment you're looking for, you want to work with trustworthy people. If you're looking in bonds, work with an investment professional or bank you know and trust. If you're looking for investment properties, work with a lender and real estate professional you trust. If you don't trust the person you work with, it will show and that could lead to an awkward relationship that doesn't benefit anyone.

Step 3: Get All the Details

Before committing to an investment opportunity, you need to know and understand all of the details of that opportunity. If you're interested in bonds, find out how much the interest is and what your length options are. Shop around town to find the best return rate. If you're interested in investment properties, talk first with a lender to see what kind of money you have to work with. Then, look into the opportunities available in your local area and get the full details and inspection report before committing to a property.

Step 4: Understand the Business

If you're new to investing in properties, you may find a large learning curve. While, it's perfectly normal to make a few mistakes when you first get into short term investing, it can be detrimental to make a large one. You want to see a return and build wealth, not lose money. If you don't know what you're doing, refer to the professionals you're working with and talk to people you know have had success with the same form of investing.

Step 5: Get Everything in Writing

If a partner or investment professional isn't willing to put everything in writing and sign the contract, walk away. You need to know they are just as responsible for the investment as you are. While an investment professional isn't responsible for how bad or good your investment does, they should live up to their integrity codes and have mutual respect.

Short term investment opportunities can be a great way to create and build wealth, if you seek out and screen the right ones. Taking a few extra steps in the process can keep you from losing your hard-earned investment dollars. You want to make money, not give it away.

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