Increasing the Size of Your Wallet for Philanthropy

When you think about building wealth and diving into investing, the first thing that might come to mind is retirement saving or major life change events. But there is a lot more you can do with your wealth than that can create memories that will last forever. Most of your money will accumulate through traditional work, but as you grow older and gain knowledge of the financial world, you may find investing to make a profit is a better way to go about it. But how should you invest in ways that aren’t too risky?

Real Estate Investing

Investing in real estate is another way to turn a passion into profits, and it can be more attractive since physical property is something you can see and touch. There are many different ways to invest in real estate, but the main ones are usually through home flipping, turning buildings into rental units for either residential or commercial purposes, and investing in real estate investment trusts (REITs). 

Home flipping and rental property investing are much more hands-on and take a little more expertise in their field. If you’re going to invest in real estate this way, you may want to solicit guidance from places like Bigger Pockets where people have been in the industry for many years. Investing in a REIT is like owning stocks in a real estate firm, although with added tax and dividend benefits. This may be a preferable way to invest in real estate if you prefer a hands-off approach.

Traditional Stock Investing

Probably the best bet to increase your wealth is through the stock market because this is where you can invest in real companies that have major earnings and take a slice of the pie. The stock market is more volatile and considered riskier than the bond market, but earnings can be much greater and you will usually accumulate more wealth in the long run. 

There are a lot of different kinds of stocks ranging from companies who’ve been around for a long time and have a deep financial history, to those who are recent startups. All of these different stocks have their own risks and earnings potentials. It’s usually best to avoid stocks that trade on less-regulated exchanges such as penny stocks and stick to those that have readily available financial information. 

Unless you have a lot of expertise in financial numbers and analytics, you’re probably better off investing in stock through a broker or advisor who has good insights into company finances.

Options Trading Investing

Getting into the stock market and investing in stocks directly or through ETFs and mutual funds is usually the normal way to do it, but there are also vehicles out there known as stock options. These are basically securities that give the investor the right to buy shares of stock at a certain price by a certain date, although the investor doesn’t have to buy and may choose instead to sell the option. 

Options are designated as either call or put options which are based on investor speculation that a stock will either rise or fall in value. One option is a contract that represents 100 shares in a stock. 

Learning about buying and selling options and exercising different investor rights that are part of them can be complex and take a lot of learning. One reason investors will turn to these is that unlike stock shares themselves, which usually only make big gains in long-term investing, options trading can double gains based on a stock increase in a very short period. But they can also be very risky because there is no guarantee a stock will reach its price.

Ways to Be a Philanthropist

Once you’ve accumulated wealth through investing, you may wonder how to best use it for philanthropy. You could help members of your own family who may need some quick emergency cash, or you could give gifts for special occasions. You could also support or start your own philanthropy and in doing so claim tax deductions when you file. Causes you could support include groups like Lion’s Club or the Salvation Army which offer services like Christmas help for needy families, or you could also donate to a local food bank. There are a lot of different community action groups that would probably appreciate your support.

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