Investment or business? Which is more profitable?

I agree, many will now begin to say that it is possible to combine these two areas and will undoubtedly be right. And still, where is it more profitable to invest your money? Business or investments in reliable instruments? Let’s try to thoroughly understand the pros and cons of each of these areas.

On my blog, I tell you about investing in stocks, bonds, and other instruments, but recently I have been deeply involved in business, which allows me to compare the two areas of income. Today I want to tell you what is more profitable and what brings more difficulties.

I want to start with thinking about what is easier, to invest or to build your own business? I’ll tell you right away, without further ado, nothing is easier and there is nothing complicated in these areas. Everywhere has its challenges and everywhere has its advantages.

Investments require attention and money, as well as take a lot of time and nerves. Business requires both and a lot more. But each of these directions has its charms and its prospects. These two directions can cooperate and even complement each other, but let’s talk about them in order.

Investments as a way to make a profit

Investments require an initial investment to start earning. Yes, this is the main disadvantage of this direction. You will not make a profit unless you invest a large sum of money. Agree, it is difficult to live on the profit of a portfolio of 1000 dollars. You need to invest about 5000 dollars to feel at least some income.

In business by the way the same story, business constantly requires an investment of money. But in business, you can start with a much smaller amount to make money. There are many examples when people invested very little and received huge profits.

An example would be the banal sale of Christmas trees at New Year (the investment is minimal, the return is huge). It does not work that way with investments. Here you need to be able to wait or invest the entire amount in very risky assets, which would be a big mistake.

Also, in business, you can go to investors or a bank for a loan to start your own business. Once you start your project, you can gradually pay back the money from the profits. It is extremely forbidden to use borrowed or loaned money in investments because you can lose everything in one day and it will be very difficult to pay it back.

Business as the main source of income

A business – is an interesting, long-term endeavor that can replace your job and investments. A well-established business can bring you much more enjoyment and money than just investing money in anticipation of possible profits. To achieve this, you will need to put a lot of time and effort into growing your business.

Over time, when you get to the point where you have some spare cash left over, you can easily start investing and it’s the right thing to do, money has to work.

The opposite of course is also possible, but it would not be right, now I’ll explain why: Having a sufficiently large investment portfolio, in which you get a good monthly profit, you can start a business with this money.

But remember, the profits made from investing in stocks in the past do not guarantee the same profits in the future. This can play havoc with you. One month your portfolio will go into deficit, there are no profits, respectively, you have nothing to invest in the business. You won’t have enough free money turnover to pay your bills. You will have to withdraw some amount of cash from the body of the deposit, thereby reducing the profit on the portfolio in the future.

This can happen more than once until your business starts generating sufficient profits, but by then you will be left without an investment portfolio. For this reason, the option to start a business on a profit from investments is not correct and not profitable.

Business or investment. Difficulties of directions

There are difficulties in any business and any direction. The question is how to treat these problems. Some people find it easier to run a business, while others enjoy investing their free money. Difficulties in business will be constant, both with a lack of money and with taxes and partners. This is normal but temporary, and in time you will cease to be frightened and alarmed.

There are just as many difficulties in investments. From the banal lack of money to form a diversified portfolio to the deep drawdown in which your portfolio can easily go. Over time, just like in business, you will stop worrying about it and start to take losses lightly.

A well-balanced investment portfolio will minimize all of your losses and produce consistent profits over the long term. You’ll come to this too when you start to study the direction of your investments.

Conclusions on two directions
It is difficult to answer the question of what is more profitable and what is less risky, to each his own, probably. Someone invests money easily and gets a solid profit, and someone builds a large company, which subsequently operates without his participation and brings passive income.

One thing is certain, if you want to succeed in business, go down this road and you’ll experience all the charms of victories and failures, but after you get what you want, you will not be scared and will not stop. It will be worth it.

If you think that investing is easier and you have free money, then no one forbids you to try this direction. But remember, you can lose everything in one day, as well as make a profit. If it all works out, you’ll experience the pleasure of passive income and you may never think about opening your own business.

Look for yourself, try it out, it’s all in your hands. Read interesting books, study investor blogs. Open new directions. Increase financial literacy. Good luck, whichever direction you choose!

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