There are a number of different ways that you can invest your money, but some investments will yield a far better return than others. You need to choose your investment strategy wisely so that you can make your money work for you and with minimal time and effort spent.
Reasons to Invest
One of the main reasons why people invest their money is because they want to grow what they already have and it is quite possible to do that. Many people invest their money because they want to ensure that they have a stable financial future, and they want to build a nest egg. Or they may want to reach their financial goals more quickly. Whatever the reason, it is a good move to make. Who doesn’t want more of something and especially money?
Financial security is very important to most people and gives you peace of mind and a better quality of life. Having enough money will ensure that you not only have enough money to buy the things that you need but to also live the kind of life that you want to live.
As the saying goes, “money can’t buy happiness,” but you can use it to do many things. Money gives you the freedom to travel to faraway lands and to have a vacation when you need it. You can also use it to enjoy the finer things in life. For many people having enough money also means getting out of debt and not having the stress of having to pay many different bills every month.
Ways top Invest
There are a number of ways to invest, such as in stocks, bonds, or certificates of deposit. There are also many other types of investments that will build your wealth over a duration of time as well.
If you are not afraid of risk, you could always venture into the stock market. It can be unpredictable but has the potential to make you loads of cash. You also need to be able to invest quite a bit of your time learning all that you can about how the stock market works so that you are better able to take full advantage of this investment opportunity.
There are plenty of resources that will help you to understand the stock market such as books, television shows, or of course, the internet. Or you could hire someone to help you, but that’ll cut into your profits. You can invest for a long period of time, or a shorter period of time but it is far better to go in it for the long haul. That way, you’ll be able to ride out a lot of the dips that tend to happen in this type of investment opportunity.
Real Estate, Crowdfunding, and REITs
Real estate is another great investment opportunity with significantly less risk. It does require that you have some money to put down on a property or business though, so that makes it a little tougher to get into the real estate market. You can always apply for a loan to get you started, but you’ll need to have good credit to get approved by your bank or lender.
As with the stock market, you can expect the real estate market to fluctuate somewhat, but that doesn’t typically mean that you will lose a large sum of money. If you are planning to sell a property, you will want to wait for a “good” year to sell so that you either come out even, or so you make the most on your investment.
House flipping is a popular way to make money these days, and once you get in the game, it is easier to gain momentum and to really make good money from real estate investment. With house flipping, you basically buy homes for cheap and then fix them up to re-sell at a much higher price. This takes time, or you may need to hire contractors to do a lot of the work, but the potential to make money is there.
If you don’t want to deal with the whole real estate strategy of flipping homes or dealing with rentals, you could always invest in REITs, also known as Real Estate Investment Trusts. You could also use the advantages of crowdfunding sites like RealityMogul and Funrise.com to get your foot in the door. Crowdfunding is becoming more popular and can have pretty good returns for investors.
Gain the Benefits of Peer-to-Peer Lending
There always seems to be someone who needs a loan, and that means that it could be good for business and good for you if you are a lender. There are many different “lending clubs” that give investors the opportunity to make a profit. Lending Club is one of those companies, and they offer a wide variety of loans. Just as credit card companies make their money on interest, you can stand to make a profit from the money that you lend out through the peer-to-peer structure.
Put Your Eggs in the Right Basket
You may not have thought of a savings account as an investment, but it’s considered to be one because it has the potential to make you money. It is a guaranteed investment, and if you don’t like risk, it is an ideal one for you as well. The only “catch” is that you will most likely need to keep your money in your account as determined by your bank or just to make any money for you. Typically, the higher the amount of money that you keep in your savings account and the duration of time (the longer, the better) will decipher how big your return will be.
Certificates of Deposit
Certificated of deposits, also known as CDs for short, is another type of investment that you would typically make at your bank. You can invest your cash for a specified amount of time, and the time frame will vary from three months to about five years. The longer you leave your money to “season” the better because you will get a much higher yield. This type of account is only ideal if you have money that you can put away and not touch for a very long period of time since you cannot withdraw it early without paying very steep fees.
Money market accounts are similar to a savings account but are strictly based on the account balance rather than the length of time that you keep your money in the account.
The Roth IRA
A Roth IRA is basically a retirement account, and you will use after-tax income to invest in it. You can access your money when you need to, but you will not be able to withdraw any earnings that you have made on your investment. This type of investment account is ideal for retirement, and many employers will match your contributions, so be sure to check with your company to find out if they do and what amount they will match.
No matter what type of investment you decide to use to work for you, there is always the potential to gain great success and wealth. It is always a good idea to try a few different things as well in case one of your investments falls through for one reason or another. Knowledge is wealth, so be sure always to be learning and studying up on the latest investment strategies.