The four best investments in 2021
Last year was one of extremes. Since March 2020, the global economy has been turned upside down. Healthy companies have gone under, while other small companies – manufacturers of face masks, to name but a few – experienced a huge growth. For the latter group, this leads to a frequently heard follow-up question: what are good investments now, in these still economically unstable times?
Incidentally, this question does not only apply to companies that have exploded in size and turnover in a short period of time. Many entrepreneurs have farmed above average during the corona crisis. Countless web shops saw their turnover skyrocket, and what about shops for building materials? In addition, savings have increased considerably in recent months. After all, money could not be spent in the catering industry or on holidays. In short: in the Netherlands a lot of money is waiting to be invested wisely.
Why should you invest as an entrepreneur?
Before we get to the top four, let's take one more step back. Because why would you want to invest at all? Wouldn't it be wiser to save an egg for the thirst?
Of course there is nothing wrong with keeping savings on hand. However, there are three drawbacks to this. First, money in your savings account slowly but surely evaporates. You no longer receive interest, but under the influence of inflation, your savings become worth less every year. 'In the past' inflation was compensated by interest, but those times are over.
Secondly, you pay annual wealth tax on high savings. Now that is also the case if you invest that money in real estate, stocks or whatever, but in that case there is something in return that (if all goes well) grows in value. The value of your savings is actually shrinking. So you pay tax on something that is worth less every year. That's a shame.
Third, you pay negative interest on really high savings. That limit is lowered every time at many banks. So you get to the point where you have to pay negative interest more and more quickly. Then you are paying triple.
So it's high time, if you haven't already, to seriously consider investing your money. But in what? We have listed the most beautiful modern options for 2021 for you.
1. crowdfunding: making a good idea possible
Many people think of a digital collection box when they hear the word crowdfunding. Collect small amounts from a lot of people to pay for one big charity, for example. However, a large part of crowdfunding initiatives consists of investment opportunities. You then buy part of an idea that has not yet been implemented, as it were. If the required amount is reached and the idea is eventually implemented, you will benefit from it or be the first to receive a copy of a new product. For some investments, that can yield serious money.
There are countless crowdfunding platforms active. Browse through all investment opportunities and determine if there are any initiatives that offer you a nice ROI (return on investment) in the long term if you get involved early. Sometimes you have to deposit a minimum amount, so pay attention to that.
2. Green means of production
When the dust of the corona crisis has settled, there will be massive investments worldwide by countless governments and major parties in green energy and other climate-related projects. partly to climate goals but also certainly to get the economy up and running again. So now is an excellent time to invest in parties that participate in such projects.
Think of producers of solar panels and wind turbines, but also, for example, parties that help Dutch households get rid of gas. The value of these types of companies will increase enormously in the coming years.
3. Digital Yet Unique: NFTs
The very first tweet posted by Twitter founder Jack Dorsey sold for a whopping $ 2.9 million: a so-called NFT, a non-replaceable token. Anyone who dares to invest heavily in NFTs now has the chance to be wealthy in a few years' time. Or lose all his money, because it could go that way too. The fact is that the NFT market is still relatively unknown to the general public. So perhaps the time to get in.
What is an NFT?
But what exactly are NFTs? The abbreviation stands for Non-Fungible Token, in other words: a piece of digital code that cannot be forged. Buying an NFT buys ownership of a piece of content that only exists digitally. For example, a meme, a movie, a digital artwork or a piece of audio, such as a song. Such an NFT is stored in a blockchain. You may know that term from cryptocurrency, such as Ethereum or Bitcoin. Every transaction is recorded in the blockchain. In this way, everyone can verify who is the owner of a particular NFT at any time.
Does ownership mean you have copyright? No, it stays with the maker. Does it mean that other people can no longer see, hear or use the piece of content? Also not. Compare it with owning a painting in a museum. Anyone can still view it and have replicas of it hanging in their living room, but there is only one owner of one original, and that is the holder of the NFT. An NFT gives monetary value to digital content that would otherwise have no value.
To give an impression: the NFT market was worth about 250 million dollars at the end of 2020 and that value is expected to rise sharply in the coming years.
4. Digital Cryptocurrency
Probably the best (and most fun!) way to invest your money in 2021: cryptocurrency. Not quite mainstream yet, but already a lot more famous (and therefore less diffuse) than NFTs. Many interested parties mistakenly assume that they have already missed the crypto boat. “Bitcoin, you should have bought that in 2017.” Simply not true. Crypto is still very young and we have not seen its full potential yet. Still an excellent time to get in, so!
But what are those cryptos anyway? Most people know Bitcoin, Ethereum is a second known, but in the meantime there are already thousands of different digital currencies. They are all slightly different, but for the average investor, the differences in detail do not even matter that much.
If you want to get into crypto now, it might be wise to delve into what reliable, future-proof cryptos are, where you run relatively little risk of losing your money. That could be Bitcoin, although Bitcoin has been criticized a lot lately because the entire blockchain behind that currency now consumes more energy than a country like Switzerland.
Alternatives could be cryptos like Power Ledger (which bets on green energy) or Cardano (designed by scientists). But do your homework yourself and determine whether cryptocurrencies are something for you. The fact is certain: many people have already become rich and there is still a long future ahead of us. So think twice before you (perhaps again) decide not to invest.