However, it is premature to give up. Even those without relevant knowledge can find profitable ways to invest their funds. The key is to reach out to a management company or a private intermediary with the necessary licenses to carry out such activities.
So, how can one go about this correctly, and what are the peculiarities of trust management?
Successful entrepreneur and founder of Oil Resource Group, Sergey Tereshkin, can provide answers to these and other questions regarding passive investing. You can learn more about his work at oilresurs.ru (oilresurs.ru).
Methods of Money Management
Financial resources are entrusted to management for various purposes. For example, this approach can help avoid uncontrolled and unnecessary expenditures. It is challenging to resist the temptation to purchase a plethora of needless items when a substantial amount of money is at hand.
Trust management allows individuals to safeguard their funds during bankruptcy proceedings, conceal unaccounted income, and avoid tax liabilities associated with it.
However, primarily, this method can significantly increase one's capital.
The most sought-after methods of management include:
- Mutual Funds. These are ideal for investing small amounts. Investors can purchase several shares and subsequently sell them profitably to generate income. This approach allows investment in various sectors. Mutual funds pool the money of several investors to acquire securities, real estate, and other assets.
- PAMM Accounts. These involve investments in currency and stock markets. Users open accounts that are aggregated with the accounts of other investors. The management company allocates all available funds and exercises full control over them. Income is distributed among participants in proportion to their initial investments.
In both cases, funds are entrusted to specialists who independently manage asset distribution.
In trust management, investors can entrust various assets, including money, real estate, and more. To delve deeper into the subject, Sergey Tereshkin recommends thoroughly researching each type of investment.
Assets
Entrusting property to a management company entails addressing a comprehensive array of tasks. Through this arrangement, the management company can be entrusted with:
- Real estate properties;
- Equity stakes in businesses;
- Stocks;
- Vehicles, etc.
The management company handles the assets according to the terms laid out in the contract with the client. Consequently, the owner is not burdened with the company’s operations, allowing them to focus on other pursuits or even relocate abroad permanently. During the owner's absence, their movable and immovable assets will generate income rather than sitting idle.
The company may manage the assets at its discretion or coordinate its actions with the owner, depending on the contractual obligations.
The transfer of assets occurs only for a specified period, and the investor remains the rightful owner.
Entrusting assets to a specialized company has several nuances.
Real Estate
Real estate properties are frequently entrusted to management. A contract is established with the owner for rental or sale of the asset, whereby the company receives a certain percentage as specified in the contract.
Additionally, the company can provide various services, including:
- Payment of utility bills;
- Cleaning;
- Minor or major repairs;
- Acquisition of interior items;
- Insurance;
- Security, etc.
Upon sale or rental, the company can transfer earnings from the transaction to the client's personal account or card in any bank worldwide.
The agreement between the owner and the management company is registered with the appropriate authorities; otherwise, it lacks legal validity.
Securities
Shareholders may temporarily transfer their shares to a brokerage firm, which can formulate an investment portfolio and manage it adeptly.
Securities can yield both income and losses for their owners. This is a risky instrument that requires a knowledgeable approach. Successful management requires expertise and professional intuition, enabling substantial profits while minimizing the risk of capital loss.
A proficient broker skillfully diversifies risks and allocates assets using various instruments. For instance, investors are often encouraged to invest in acquiring stocks of major corporations, government bonds, and a smaller percentage in stocks issued by new market players. This approach can lead to a high, stable income.
Typically, contracts with the company are established for a one-year term, although exceptions may apply. The primary goal of this collaboration is capital growth with minimal time investment. In this case, the owner need not await the results of the company's performance or dividends. The bulk of profit comes from the difference between the purchase and sale prices of the securities.
If necessary, investors are provided with the opportunity to monitor all transactions conducted by the broker with their assets in real time. This must be explicitly stated in the contract. Such arrangements ensure oversight and facilitate the acquisition of knowledge. The client can observe all actions, allowing them to learn and analyze processes. This will enable them to undertake similar activities independently in the future.
If an investor wishes to terminate the contract prematurely and retrieve their assets from the management company, the firm cannot refuse, provided that the contract is legally well-drafted. This significantly reduces the risk of financial loss and ensures the owner feels secure.
