Investment

Fundrise Investment: Is it Worth Investing?

The stock market is an unpredictable beast. No one can be sure which stocks will rise in value and which will fall. However, this volatility also means that those who invest their money wisely can see a significant return. The alternative market has become more and more popular over the last decade as investors look for opportunities that give them a chance to see returns that are higher than what they would get from traditional investments.

Investing in smaller companies, real estate, or another type of alternative asset is something many investors do as part of their long-term financial strategy; but there are plenty of other alternative investment options out there. An investment fund gives smaller investors access to larger amounts of capital from other investors.

A Fundrise investment might be right for you if you want to invest in one of these types of funds with a minimum initial investment of $1,000 or less. Keep reading to learn more about different types of investment funds like Fundrise and what you need to know before investing in one.

What is a Fundrise Investment?

Fundrise is an online equity crowdfunding platform. You can invest in the company’s investment funds. You can also invest in the company itself by purchasing shares in its portfolio. An investment fund gives smaller investors access to larger amounts of capital from other investors.

That’s why it’s often possible to invest in funds with minimum initial investment of as low as $1,000. There are two main types of funds — equity and debt. The way you make money on these investment funds depends on the type of fund you choose.

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Equity Investments

Equity investments are when you buy stocks in a company. The goal isn’t to get a set amount of cash back at a certain time like with a loan. Instead, you’re hoping that the value of the stock goes up so you can sell it later at a higher price. When you invest in equity funds, you’re buying shares in a company.

You’re hoping the price of the shares will go up so you can sell them later at a higher price. When the value of the shares goes up, you make money.

Debt Investments

When you invest in a debt fund, you’re lending money to a borrower. The borrower agrees to pay you back over a certain period with interest. At the end of the term, you get your original investment plus the interest. When you invest in debt funds, you’re lending money to a borrower.

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You’re hoping the borrower will be able to pay you back at a certain date with interest. When the borrower pays you back, you earn a profit. Debt funds generally have a set amount of money you make back. For example, you could invest in a fund that lends money to entrepreneurs. If the loan is $10,000 and the borrower agrees to pay back the loan in five years, you’re earning $1,000 in interest.

Real Estate Investments

Real estate is a type of equity fund. You’re investing in a fund that buys properties. The fund manager buys properties using your money. You make money when the fund manager sells the properties at a higher price than what they paid for them. Real estate investments can be risky. The value of the property can go up or down depending on factors like supply and demand and interest rates.

Mutual Fund Investment

A mutual fund is a type of investment fund that holds a group of stocks. You’re buying into a fund that holds a group of stocks. You’re hoping the investments in the fund will go up so you can sell them later at a higher price. Higher-risk equity funds tend to have a higher chance of a big payoff, while lower-risk funds tend to have lower but more consistent returns.

Summing up

There are lots of different investment funds available. If you want to invest in a fund, it’s a good idea to research it thoroughly first. Find out the fund’s past performance and understand what type of fund it is and how it works.

When you’re ready to invest in a fund, check to see if you can use an online investment platform like Fundrise to make your initial investment. Online investment platforms make it easy to invest in multiple funds and manage your financial goals.

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