Very Risky Investments That Could Make You Very Rich Or Very Poor

Slow and steady is the best way for most people to build wealth. But not for everyone. Some people like the thrill of taking big risks for potentially big rewards. Some people become very good at it. Though very few succeed at such high risk investments. However, the world needs a few high rollers to inspire excitement and perk up the economy.

Some people are already well off financially and can afford to risk part of their net worth for potentially big returns. If you think you might be a potential high roller, and are in a suitable position to take big financial risks; you may want to consider the following very risky investments that could make you very rich or very poor.

Speculating In Commodities

If you are one of the very few people able to profitably speculate on the future prices of commodities such as oil, gas, live cattle, currencies etc., you can become incredibly rich. It takes nerves of steel. It takes the ability to remain calm while risking enormous sums of money. It takes the ability to compete head to head with huge food makers, farm operators and world class speculators like George Soros etc. Most people should stay very far away from commodities.

Selling Stocks Short

During periods of stock market decline, selling stocks short can earn huge profits for those skilled at it. Stocks tend to decline faster, in falling markets, than they rise in bull markets. Selling stocks short is a very risky strategy in which short sellers face potentially unlimited losses. Become an expert at taking small losses. Always remember the old investment motto: “If you can’t take a small loss; you’ll end up taking a big loss”.

Real Estate Short Sales

Real estate short sellers help desperate sellers get out of homes they can no longer afford to keep up. The main issue is finding home sellers desperate enough to part with their homes far below market value. A few good real estate agents and lawyers, experienced in short sales, would come in very handy. So would a highly successful mentor. Most people who try real estate short sales aren’t happy with their results but its a gold mine for a few ultra sharp investors.

Invest In Run Down Apartment Buildings

There is almost never a good reason to buy run down buildings in run down neighborhoods. However, run down apartment buildings in a good, or rising, neighborhoods, can be diamonds in the rough. The key is, once again, do your homework. Get the buildings appraised by trusted experts who’ll give you the straight goods on what repairs need to be made, zoning laws etc. Don’t overpay for the buildings. It is true that “nobody makes land anymore”. However, it is very easy to overpay for real estate. Make sure you have viable plans for dealing with the situations that often come up when dealing with tenants etc. Perhaps consider tearing the building down and replacing it with condos or other value enhancing buildings.

Invest In Raw Land

Figure out where your city is most likely to experience strong growth and buy some land to cash in on it. You are responsible for paying taxes for the land and its upkeep. Check out land use laws very carefully. Figure out ways to profit from the land before you sell it to big developers for mega bucks. Or develop it yourself. Rent it out, hold events to attract tourists etc. Do plenty of careful research and don’t overpay for your land.

Start Your Own “Hot” Company

If you have a keen interest in whatever trend is “hot”right now; (software, green energy or whatever), start your own company. Get truly passionate about your firm and prepare to put in incredible hours. If all goes very well, you could possibly become a major player or sell your company to a major player for mega millions. It does occasionally happen.

Do Network Marketing

Unlike the other high risk opportunities noted here; network marketing doesn’t necessarily require a big cash investment. With many companies, a few hundreds dollars will get your started. Choose a company which provides goods and/or services you’re passionate about. Make sure your chosen firm is stable. A friend of mind built up his network marketing income, with a nutritional company, to more than $ 60,000 per month. Than the company collapsed. Ouch! You don’t want that to happen to you.

The keys to success for virtually everyone who succeeds in risky investments, like these, is to:

1. Choose something you’re super passionate about

2. Develop and always use risk reduction strategies that work for you

3. Do your homework. This can’t be overstated

4. Find mentors who are successfully doing what you wish to do and learn as much as you can from them

5. Become an expert at cutting your losses when things aren’t working out as you hoped