Do you want guaranteed profits? Is there such a thing?

As promise, today I'm going to share to you two ways of guaranteed gains or earnings. I'd like to tickle your brains on the two ways (there are much more) of growing your money 'safely':

1. Private lending
2. Buying solid gold at a discount

But before you read through the whole stuff below, have you read my previous post entitled "Are you still afraid to invest in the stock market? Do you want guaranteed earnings?"? I suggest you read it first as I discussed why people are still afraid of the stock market and the thus the reason to learn other ways of investing.
Private Lending

Private lending is the method of the rich to grow there money without much difficulty. It has been around for centuries, long before banks have surfaced. So how does private lending work?

Simple. Businessmen with growing businesses sometimes need capital to realize their growth potentials. And the typical place they get the needed capital is through the commercial banks. Most of the times, however, the banks disapprove the loans when your financial statements are not pretty or if your business proposal is not that impressive. Thus, the business idea does not materialize anymore. But not anymore, because of private lending. Unlike the banks where they as you for financial documents to approve or disapprove your loan, you can borrow money from private lenders simply by getting the lender's trust and agreeing to their terms and conditions. So, instead of borrowing from the bank at 12% interest per year. one can borrow from a private lender with the same interest rate but now without the hassle of getting for a loan approval.

Thus, private lending is one way that you can earn passive income with virtually no risk. One downside of private lending if you arte the private lender is that you need to have a lot of liquidity. Another risk is when you lend your money to a scoundrel or a lousy businessman. Therefore, in private lending, you make sure that there is a "collateral" or a certain guarantee. Let me explain.

In real estate investing, private lenders lend their money to real estate investors to buy a property at an interest rate of 12% per year but the money is also guaranteed such that the lender gets the property should the investor defaults on the investment or could not sell the property fast enough.

Some private lenders lend their money at 2% per month (24% per year), 3% per month (36% per year) or even 4% per month (48% per year). These rates really depend on the kind of business that your lendee is into. Just make sure that you lend your money to a legal business activity and not the kind that runs away with your precious money. I personally plan to invest in the business of my uncle in Cebu City with a guaranteed income of 5% every 45 days (40% per year). Not bad, don't you think?


So, is private lending interesting?


Buying Solid Gold at a Discount

The second way to earn guaranteed income is similar to lending where the collateral is a precious metal. Income can come from this form of investing by buying solid (real) gold at a discount. This is not gold trading that is represented by a paper or a certificate but real gold that you can hold on your hand. So, how does this work?

If you are interested in this kind of investing, you will buy gold from a registered solid gold seller at the current market price and hold on to your solid gold for six months. During this time, the issuing company gives you a monthly discount of 1.5% in the form of vouchers for the next six months which equates to a total discount of 9%. This 9% is in fact your actual gain. After the end of the six months, you can either keep the gold (and sell it in the future at a higher price), return the gold and get your original money back (remember you already earned 9% in this six-month stretch) or roll it over by buying it back (retain the money with them) for the next six months for another 9% gain. In one year, you would have already grown your money 18%. Let me give you a sample computation.

If you buy solid gold worth PhP100,000.00 and keep it for six months, you will get a monthly gain (in the form of a discount) of P1,500.00 for the next six months for a total of P9,000.00. If you roll it for another six months, you gain another P9,000.00 for a total annual gain of P18,000.00. Quite small, don't you think? But what if you have a million pesos to spare? You will get PhP180,000.00 per year or a monthly passive income of PhP15,000.00. Now, that can be significant money you can pay for your monthly bills or other needs.


How I Do It Personally?

Today, my cash is mostly into stocks but I am currently studying how to invest money in the forex (foreign exchange) which I will share to you in a future post. I also intend to invest part of my savings account (money for emergencies) in solid gold which will earn me 18% per year instead of a measly 0.5% in the bank. At least money is tied up only for six months at every point in time. As I also mentioned above, I will invest some of my investment account (another bank account where I put my investments) into my uncle's business, which will earn me a good 40% per year.

As you can see, there are a lot of options for you to grow your money. Now that you know these little ways, which investment method have you decided to go for? Is it stock market investing, private lending or buying gold at a discount? Can you share your thoughts with me here?


May you achieve true success!

Bryan

PS1. What does the Bible say about wealth? Is money the root of all evil? Visit http://www.beyondprofit.blogspot.com/.

PS2. If you want to invest in real estate properties, visit www.houseforsalephilippineswithphoto.blogspot.com.

PS3. If you want to get financial literacy training for free, go to www.wealthacademy-philippines.blogspot.com.

Investing Pinoy