Lots of people are interested in investing their money but aren’t quite sure how to start. Instead of just giving their money to a financial advisor, they’d rather find companies to invest in themselves. This is a much better way to earn a return that’s higher than average. However, finding companies that are considered a good investment can be a little difficult and it can be hard to know where to start.
To help out, we’ve listed a few different methods that you can use to find companies to invest in.
Invest in what you know
One of the best ways to invest your money is simply to invest in what you already know. What we mean by that is to invest in companies that you’re already a consumer and brand advocate of. If you love their products, that probably means that lots of other people do too and is a good sign of the companies future. For example:
- If you think no leggings compare to Lululemon’s, then you should invest in their company.
- If you use Square to collect payments for your small business and think it’s by far the best product on the market, then you should invest in their company.
- If you find freelance work on Fiverr.com and rely on them for income, then you should invest in their company.
Sometimes finding companies to invest in is this easy!
Browse financial statements
Even if you’ve found a few companies that you’re a fan of, you may way to do a little additional research before investing. One of the best ways to find out how a company is performing is to read through their financial statements.
Financial statements are legal documents that companies have to disclose that show how much money they’re making (or not making). You can find these by simply searching “Company Name, Annual Report” or “Company Name, Investor Relations”.
Another good way to find companies to invest in is to find industries that you think are growing or will grow over the next 5-10 years. A few examples of industries that are most likely going to grow over the next 5-10 years are:
- Freelance work
- Electric vehicles
- Space exploration
- Social media
Once you’ve found an industry that you’re confident will continue to grow, just find a few of the key companies in that industry.
One of the most important factors that a company can have is a strong brand. Branding is usually the reason why people will choose Nike over Adidas, McDonald’s over Burger King, or Apple over Android. These companies all over very similar products, yet most people will religiously buy from one company over another.
We hope that you’ve found this article valuable when it comes to finding companies to invest in! If you’re interested in reading a more in-depth article, check out Do Not Save Money.
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