Quora Answer: What Would be the Best Way to Reinvest up to $15,000 Monthly, excluding Property, for Higher Returns?

The following is my answer to a Quora question: “I have a property management company which creates £15,000 per month profit.  What would be the best way to reinvest this money, outside of property, for higher returns?”

It is a sound strategy to put that money in a different industry, market or field.  That means you have diversified your risk.  Wherever you put your funds you must have several considerations.  The first of which is liquidity.  Because these are funds from your profit, they must be liquid enough that should there be an adverse move in the market, you have sufficient leeway to withdraw some of all of your funds without incurring a major loss.  This excludes any form of fixed deposit, for example. The second consideration is the investment horizon.  You are obviously looking at something variable, and this ties in with your liquidity.  And this is also related to your risk profile.  This essentially narrows it down to funds or collective investment schemes.

In such a case, I would suggest dividing your £15,000 into two portions along the lines of 60/40.  The larger portion should be put aside, perhaps in the money market or something immediately accessible for the cash flow of the business.  If that has already been done, ignore this.  Rather put the 40% into bonds or something safe.  This is to ensure that you have what is close to a capital guaranteed portion of your investment.  If there is a major crash in the market, the bonds will rise, and you have some measure of safety.

Of the remainder, put them into equity securities to generate yield.  You must ensure that whatever you generate must be higher than the inflation rate.  Remember to spread the risk across markets and sectors, but do not indulge in wrappers or derivatives.  This is only for people who do this for a living, and know what they are doing.  Your main business is property, and that is supposed to take up most of your time.  You should not be putting your money in securities that will take up much of your time.

With regards to funds and markets, I would suggest a pivot to East Asia.  That is the growth region of the world with stable economies, and steady growth projected for the next two decades at least.  What you can do also, considering your business expertise, is consider REITS.