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:
YouHodler – 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 up to 9%. You can withdraw the money at any time, giving you full liquidity.
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 autoinvest or Bondora’s Go and Grow to maintain a high degree of liquidity.
Real estate investments can also provide relatively safe places to park a company’s money, however, they can be more illiquid, especially if the platforms don’t have a great secondary market.
What are your thoughts on this? Do you have any other ideas on investing company retained earnings?
Thanks for this great article.
Nexo was mentioned in this article as well:
Is it the same one? In this article, there isn’t a link to it. Is it the same one or another?
Jean Galea says
It’s the same one Joseph. I had forgotten to update this article a while back. Sometimes I forget that I’ve written certain articles. I’ve just updated it and changed it to reflect my current recommendations. Nexo is doing well now but I’m not sure I would trust the platform with my money yet.
Thanks for your reply. (for some reason I didn’t receive an email notification when you replied).
Keep up the good work 🙂