Investing can be (and, pretty much IS) the ultimate way to get to financial freedom. 😗 However, investing carries with it an innate, inherent risk. Today, we will be diving deep into how to mitigate investment risks.
There’s no way around it, really. 😕
And, that thought of investment risk? It’s a really easy way to avoid trying it out, and it’s the go-to excuse that people tend to draw on when it comes to sticking to old-school methods of saving money.
Here’s the thing 〰️ wanting to avoid and mitigate risk is human nature. Even if you’re rebellious, it seems a lot scarier to be risky with your money. 💰
But, jumping in and dancing around with risk? It pays off. Plus, if you’re investing right, you’re not going to be jumping in and dancing around with mountains of it.
Can you avoid risk when investing?
Wondering if you can avoid risk when investing? Here’s the short answer: no. At least, not really.
But, here’s the long answer: you can mitigate investment risks by investing the smart way. Also, by following certain tips and strategies within your portfolio. Investing in anything carries at least a small amount of risk, but investing in certain areas (think: volatile assets like cryptocurrency) might carry big risk. 👀
3 Ways to Mitigate Investment Risks
The way we see it, no one ever got anywhere without a little bit of risk — and that goes for reaching financial freedom, too. However, we’re not huge fans of incredibly risky investments that give you anxiety and pits in your stomach. In fact, that’s exactly why we love ❤️ real estate investment as much as we do.
Here are some of our favorite ways to mitigate investment risks.
1. Diversify your portfolio.
If you’re going to invest, you likely know the importance of diversification. After all, you don’t want to put all of your eggs in one basket, ever. This goes for investments, too. While there’s nothing wrong with focusing on a few particular investments, it’s always a good idea to make sure that you’re spreading your eggs out across several different baskets.
Here’s the thing: this doesn’t necessarily mean that you have to have a massive investment portfolio, either. However, if you are only investing in one thing at a time, it’s essential that you’re also saving in alternate vehicles (like 401(k)’s and Roth IRA’s). That act of diversification lowers your risk in itself, and is likely to bring you a better return in the long run.
2. Invest intentionally.
For a lot of people, investing means putting all of your faith into someone like a financial advisor to make your investments for you — and we’re not big fans of that mindset or approach… at all.
Why? Because choosing to invest intentionally in things that you feel passionate about will always, always yield a better outcome for you. While expert advice isn’t a bad thing, we’d caution against putting all of your faith into someone else. Instead, make sure you’re doing your own due diligence. Performing your own due diligence will ensure that you’re investing in things that will actually pay off for YOU — in more ways than one.
3. Invest in hard assets (read: multifamily apartments).
If you’re wanting to stay away from making risky investments, then you need to stay away from volatile assets like cryptocurrency and stocks. While volatile assets can yield you a nice return, they can also yield you a big loss — and there’s really no in between there. Instead, we’d always recommend sticking to hard assets: AKA, real estate.
Here’s why: real estate isn’t at the mercy of the stock market, and neither are multifamily apartments. People always need a place to live. People always need to pay rent or a mortgage to live there. Additionally, people often rent out apartments in large complexes. It just makes sense to invest in assets like these that are proven to provide a cash flow. And of course, a great return, especially if you’re looking to invest in a low-risk, high-return way.
Ready to Start Investing in Multifamily Apartment Syndication?
Do you want to start raking in passive income with low-risk investments that are essentially proven to work? We’re your team — and we’re here to help you mitigate risk, make money, and build a real estate portfolio you’re proud of.