Obviously, if you have some start-up capital to invest, your first priority would be to assess the risk of any particular investment. It is logical and prudent to assess the possibility of actually getting your capital back, even before considering the actual performance itself. Ultimately, once you’ve ensured that your return on capital is acceptably low risk, you can consider the size of the actual return itself. Here are some ideas to consider as you push yourself to invest some capital.
The first thing that the most experienced investors do, to assess a new possible investment, is to compare it with the simplest and safest investment of all, which is the humble term bank deposit. Putting your money in the bank is the most common investment of all. Many also use it as a benchmark to measure other investments. By comparing the two returns and looking at the risk of the potential new investment over the virtually zero risk of the banks, you can determine if it is worth continuing with the investment.
Ultimately, there is an even safer way to invest than even a bank. When you deposit money in a bank, all you get for your money is a piece of paper showing your balance or a statement. This is acceptable to everyone, but if you really think about it, you have given all your capital to a bank and all you got in return is a statement that you have your money with them.
The safest of all investments is one in which you get something of tangible quality and value that reflects the money you put in your hands. This tangible object must have a market ready for it to be a safer investment than even a bank. A house or car or any other item that was purchased below intrinsic market value is in your hands as the money came out of your hands, so it is actually safer than a bank as long as your purchase was made correctly.