As an owner of a successful business, you will sooner or later amass a good amount of retained earnings in your business.
Retained earnings are what remains of the net profit after all dividends to shareholders have been issued. These retained earnings are usually kept in the business to re-invest into new products or expansion. However, even after those are taken care of, there might still be considerable funds sitting idle in bank accounts, and that’s almost never good, as inflation will eat away at the real value of those funds.
The key to maintaining the real value of those retained earnings, is, of course, to find stable low-risk investments with high liquidity.
Here are my top places to invest retained earnings:
Nexo – This is a platform where you can lend money to borrowers who put up their crypto as collateral, while you earn a yearly return of 8%. You can withdraw the money at any time, giving you full liquidity.
Iban Wallet – A platform that can earn you between 2.5% and 6% interest depending on the amount invested and the time period you lock up your funds for. Much better than a savings account.
If you are ready to take higher risks, you could invest some of your company’s retained earnings into pure P2P lending platforms. I would suggest using systems like Mintos’ Invest & Acess or Bondora’s Go and Grow to maintain a high degree of liquidity.
What are your thoughts on this? Do you have any other ideas on investing company retained earnings?