Benefits of short-term investment mechanisms

Short-term investment instruments like invoice financing enable savers to earn money quickly and safely

Thousands of people start investing with the same goal: to make money quickly. And although it is important to bear in mind that when it comes to investing, there are no certainties, several mechanisms can help this profile of savers achieve their goal. So we are indeed talking about short-term investment.

But what does short-term investment consist of? What are its advantages and disadvantages? Is it suitable for all types of people? Which instruments is it best suited to? Knowing the answers to all these questions is essential to designing smart investment strategies.

Let's start by laying the terminological groundwork. As the name suggests, a short-term investment works over short periods. Generally, the term of these operations is less than a year. All those that exceed 365 days would be considered long-term financial investments.

Although the only distinction between the two is their maturity date, this is not a trivial difference. While people who opt for short-term investments can enjoy their profits within a few months, it sometimes takes years before those who have opted for long-term investments receive their profits.

Consequently, short-term investing is an extremely attractive alternative for all investors wishing to earn a quick return. However, before engaging in any operation, it is crucial to understand the benefits and drawbacks of this investment modality.

Short-term investment: advantages and disadvantages

Like everything else, short-term investment has its strengths and weaknesses. To begin with, if the asset on which you have bet gives profits, these can be collected in a short time. In some cases, after thirty days; in others, after three months… But before a year has passed, the investor will be enjoying his money.

In addition, the amount invested does not have to be very high, unlike long-term operations, where the sums of money are usually more considerable. Anyone can start short-term investing, regardless of the amount they inject.

However, the speed at which profits are made usually implies lower levels of profitability unless the risk is very high. In this case, it is usual to increase interest to attract investors, who are more exposed to the dangers of investment.

On the other hand, the market undergoes constant variations, altering the value of the products invested. This forces savers to be constantly alert to these fluctuations. And if there is a crisis in the sector or the company suffers losses, there will hardly be time for the economic situation to stabilize and prices to return to their usual values.

On the other hand, those who decide to invest for the long term do not depend so much on these one-off peaks and do not have to pay attention to the status of their investments daily, increasing their peace of mind.

Who should try this type of investment?

Short-term investment has no barriers. Anyone interested in increasing their wealth can start with this type of investment and look for a product that fits their characteristics. However, a series of questions must be taken into account.

Desperation is not a good travelling companion in the world of finance. And gambling everything on one card is not a wise move. Therefore, no matter how much you want to make money quickly, it is preferable to diversify your investments in different products rather than centralizing them in one that, at first sight, offers very advantageous conditions.

In any case, this type of investment is more accessible than a long-term investment. The saver will not be without his money for more than 365 days. However, when longer-term options are chosen, sometimes it is not possible to enjoy the capital again until several years have passed. And this can only be afforded by people with a financial cushion to draw on.

On the other hand, short-duration mechanisms are also very attractive for those just starting in the investment world. This kind of investor lacks a lot of knowledge on these topics, and it is also common to start with more insignificant amounts, which makes short-term investment an ideal starting point.

Safe short-term investment mechanisms

But which products are best to invest in? Although there is no definite answer, since each saver's needs and conditions condition the choice, some assets are widely used by people inclined to invest in the short term.

If they offer a fixed interest rate, interest-bearing accounts and deposits allow investors to earn profits quickly and, more importantly, safely. The saver knows in advance what the return will be, but it is usually very small.

Next, there are investment funds. There are hundreds of funds, and each one acts differently. Consequently, you can look for one that focuses its investments on short-term fixed-income assets, thus obtaining a return with all possible security guarantees.

Treasury bills are also one of the most popular instruments among people interested in short-term investment. These fixed-income debt securities are issued by governments seeking financing. And, although their yield is not very substantial either, they ensure a return of the money within a few months.

In short, risk is a key factor when you want to make money quickly. While other options, such as the stock market, may provide more benefits, they are more likely to suffer a fall, and the investor incurs losses. Nothing could be further from your original goal.

Profit in 30 days?

But there are other methods of making profits quickly. For example, alternative financing platforms allow investors to multiply their capital quickly.

Inversa Invoice Market, an invoice marketplace where savers can financially support sustainable businesses, is the perfect example. People who register on this crowdfactoring platform gain access to a very extensive marketplace of invoices audited to give them a level of risk. Once they decide which company to finance and the operation is confirmed, they receive the interest immediately. This is as attractive as it is unusual and sets Inversa apart from other players.

The firm can dispose of the money during the stipulated period, except for 10% of the total, which remains out of reach. And most operations are concluded after one, two or three months. Then, at the end of the term, the original amount is returned to the investor. A formula that has captivated countless businesses and savers, who have already financed more than 2,850 invoices for more than 16.5 million euros.

A simple, fast and secure method that meets the expectations of anyone interested in short-term investment.