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Extra cash? Invest

Extra cash? Invest

Posted on:  , 
Author: ATB Business & Agriculture

Investing capital is essential to growing your business. Why? Because having surplus cash sitting around won’t grow your business or contribute to profits.

Be that as it may, it’s important to invest carefully so that your smart choices will have a positive impact on your future cash flow, and will help ensure that your business is on solid financial footing.

Will the investment yield a return?

Whether you are considering a short-term investment or a long-term investment, the number one priority for your business should be the security of your money. While high risk investments might be tempting, due to their unpredictable nature they can come back to haunt you in the future—especially during a financial downturn when you might need quick access to your capital. The last thing you want is to limit your business’s ability to operate.

Consider talking to a financial advisor about dividend stocks. While many have modest yields, you will be pleasantly surprised by the returns over the long haul.

Can the business be improved without making an investment?

To efficiently run your business, planning the right investment vehicles for today and for the future is key. Due to historic low interest rates, leaving your money in a savings account for extended periods of time is not a smart move, nor is it an efficient use of your cash flow.

A high interest savings account will only give you a slightly better interest rate. Your best move is always to keep 20–25% of your cash on hand while investing the rest using a well thought out investment plan.

How soon will you see a return?

By investing in securities with a proven track record of solid dividend growth, you are assured a return on your investment that will add up impressively over time.

Using the "slow and steady wins the race” philosophy, your end goals can be met with less worry and stress than riskier methods that might yield higher returns on the surface, but will not always prove reliable in the long-term. Just think of all the safety protocols you have for your business; to maintain future growth, you need to keep your cash just as safe. Dividends are an effective way of doing so.

Invest time before money

Before investing in any security, it’s essential to put some time into your homework. Research allows you to learn as much as you can about a company before making the commitment to buy stock. Examining historical data, annual reports, and expert or technical analyses are all sure fire methods to use before making a big financial decision. In the same way that you spend precious hours fine tuning your business so that it is as efficient as a well oiled machine, studying the companies whose securities you are buying is the most efficient way to guarantee a return on your investment.