Personal Investments That Can Hurt a Start-up

  • September 16th, 2013
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InvestmentsWhile there are a lot of worthwhile investments out there, such as mortgages and life insurance, there are many places to put your money that are not so good. When you are running your own business, you need to consider that you may need to be careful with your money. Therefore you need to consider which types of investments you should avoid.

High Risk

A high risk investment could lead to you losing some or even all of the money that you have in it. This means that you should only ever do these if you can afford to lose the money. The return might have good potential but there is never a guarantee. When you are running a start-up, you do not want to take large financial risks as you may need the money for the business.

Long Term

Most investments should be long term in order to make sure that they have enough time to make money. However, tying your money up when you have a start-up could be a problem as you may find that you need it to support you or the business and you cannot get to it.

Tied Up

Sometimes when you make an investment, you have to tie it up for a certain period of time and cannot get it out. This means that you could need money, but cannot get to the fund that you have. It is wise to have money available when you have a start-up, just in case.

High Fees

Some investments have high fees and you may find that you are paying out more than you are gaining. These should be avoided all of the time, but it is even more important when you have a new business that you may need to finance

Expensive

Some investments need a large sum of money to be put in to them. It may be an investment that you feel cannot be missed but you need to be careful. If you sink a lot of money in to something like this, then it will leave you very little to be able to spend anywhere else. This could mean that if the business needs financial help, you will not have the money to do it.

If you have a start-up business, it is so important to be careful with your investments. Make sure that you leave yourself enough money so that you can pay yourself if the business cannot or can invest in the business if necessary. It can give you peace of mind as well; if you know that your money is available should you need it. It would be bad, if you had money invested that you could not get hold of and so had to borrow money, perhaps using payday loans, overdrafts, credit cards or other expensive ways to get money, when you could have financed things yourself. So think carefully about where you are putting your money and make sure that you leave some in a place that is low risk and easy to get at, just in case.

 

Travis-HolmesTravis Holmes is a financial blogger with a passion for frugal business. He believes a Balanced wallet is a balanced business.

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