Sunday, June 03, 2007

Loosing Money From Your Business Investments

In life, things doesn't always go according to plan or the way we want it to turn out. Even the best laid plans maybe sidetracked by events may or may not be in our control. As in life, business investments don't always go our way. Sometimes we make money and sometimes we don't. The reason we go into business or invest in things is to earn profits, but for one reason or another, businesses fail or profits do not materialize from your investments.

There are numerous reasons why a business fail. It can either be mismanagement, poor sales, poor choice of location or simply the climate is not right for your business. When this happen, it can be disheartening especially if this is your first business venture. But instead of giving up and sinking into depression. This is a perfect opportunity to study what did we do wrong and pick ourselves up and prepare to start over again, but this time we are armed with more experience and what it takes to succeed.

For investments, there are varying degrees of risk which depends on the type of investment we would like to place our money in. But the general rule is the greater the risk, the greater the profits. Time deposits has the least amount of risk, but the returns are low. Top commercial banks in the country like Metrobank, BPI or Banco de oro offer low returns for their time deposits but at the cost of almost no risk to you. Smaller less known banks may offer interest greater than any of the top banks but are riskier. Each depositor is insured up to 250k pesos so that's an added insurance to time deposit investors which is guarantee that you will get your money bank in an event of the bank going under as long as you don't exceed the amount.

Higher risk investments like UITFs, mutual funds and the stock market offer significantly higher returns but often lock in you money for an uncertain period of time. Stocks particularly are unpredictable. Sometimes you get your investments back in a few days, sometimes months or even years in the case of the 1997 Asian financial crisis in which stocks bought during its highest levels are now just recovering. That's 10 years of your money locked in stocks which is only now about to breaking even.

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