People see the glamorous life of an investor and assume its the result of financial genius. Overnight success in investing, however, is like winning the lottery.
High risk, high return investments offer you the chance to play your hand on investments that have the potential to bring huge profits. The success comes not from your abilities but from the ability of the investment to perform.
Knowing which investments are capable of bringing a high yield is the hard part. Use your extra cash to try your luck with one of these five high risk, high return investments.
Canadian Income Trust
A less common choice for a high risk, high return investment is a Canadian Income Trust. A Canadian Income Trust is an asset that holds an income producing asset for the purpose of paying out high yields to shareholders.
These trusts are required to pay out 90 percent of net cash flows to ensure investors profit. Investors receive one part of the payout as a return of payment and the other as a taxable distribution.
Cryptocurrencies
Cryptocurrencies are digital currencies that operate outside of the central banking system. Crypto describes the encryption of the currency used to keep each transaction safe. Popular cryptocurrencies are usually derived from Bitcoin, the original cryptocurrency.
Cryptocurrencies go in and out of style. Many investors have gotten rich in a short time frame trading cryptocurrencies. Just as many have lost given the highly volatile crypto trading market.
Angel Investing
Startups need capital to operate. When you invest as an individual into private market investments like startup companies, you are considered an angel investor.
Angel investors gamble on whether the startup looks promising enough to bring large returns.
It’s a huge risk if you have never worked with the entrepreneur, but with giant success stories from companies like Facebook and SnapChat, angel investors can be confident that some ventures will have high yields if they pick the right teams.
REITs
Real Estate Investment Trusts, often called REITs, offer dividends in exchange from tax advantages from the government. The trust invests in commercial and residential real estate which swings high and low depending on the overall housing market.
IPOs
An IPO is an initial public offering of stock on the exchange. Investing in an IPO is a great way to get extremely undervalued stock that has the promise of growing exponentially. A stock that doesn’t have a large following or lots of poor valuation could be good opportunities to double your money quickly.
High Risk, High Return Investments
The trouble with finding high risk, high return investments is that they all require a different process of getting started. Finding these opportunities without the help of a financial advisor means going through the process of creating your own accounts, understanding the rules of the investment and knowing how tax laws affect your profits.
The fun is knowing you beat the odds and have money to show for it. Choose one investment vehicle to start with to avoid getting overwhelmed too soon.
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