Where Should You Be Investing Your Money?
The truth is that investing is highly accessible, so pretty much anyone with some spare cash can get started. Of course, there are good and bad investments. So where should you be investing your money? Let’s take a look.
A Good Savings Account
Putting your money into a good savings account isn’t an investment in the traditional sense, but it is valuable — and will help your money to grow. It’s worth looking at the interest rate that you’re currently getting if your money is with a traditional bank, as it’s unlikely to be as good as what you can find with an online savings account. This is a good option for people who are new to the financial planning world. Once you have 3 – 6 months’ worth of living expenses in a high-yield savings account, you can begin to think about allocating money to other investments.
Index funds should form a part of everyone’s long-term investing strategy. They won’t make you rich overnight, but that’s a good thing — it means there’s no volatility. Index funds such as the S&P 500 index fund offer a reliable way for younger investors to build good wealth over a long period. Of course, there’s no such thing as a guaranteed good investment, but if there was one, then index funds would be it. They routinely experience around a 7% return each year and have performed consistently well for several decades. If index funds ever fail, then there’d be big problems, so you can have relative peace of mind that if the ship does sink, then at least everyone will be going down with you.
Investing in Real Estate
The wealthy have always known that real value lies in real estate. It’s one of the best investments that you can make, providing you get it right. Some markets do crash and there’s a possibility of losing the money. However, in general, most experts believe real estate to be a safe and reliable way to build long-term wealth. Historically, investing in the property market would mean buying a property and then selling it for a profit or renting it to get a fixed income. But there are other options, too. For instance, there’s real estate syndication, which offers a plethora of ways to earn money via property — take a read of the article ‘12 Ways You Can Earn Money as a Real Estate Syndicator’ to get a better idea of the options available to you. It’s worth keeping in mind that it’s often difficult to liquefy property assets, so it should be considered a long-term investment.
Left Field Investments
There are many investment fields available to new and experienced investors, and not all of them are traditional. It’s also possible to make alternative investments which, over time, can yield a greater return on investment than other options. Examples of these alternative investments would be cryptocurrencies, as well as precious metals such as silver and gold. Even things like whisky and stamps can fall into this class. These types of investments are considered to be riskier than other options and require greater levels of understanding.
Investing in Bonds
Investing in bonds isn’t for everyone. It’s usually best for people who have already earned their fortune and are looking to keep their fortune. So what are bonds? They’re essentially loans to a government or company. Since these entities are largely stable, so too are the bonds. In fact, the stability of bonds is what makes them such an appealing proposition for people looking to retain their financial health, because even during times of uncertainty, bond performance tends to stay the same.
How Do You Choose What’s Right For You?
As we’ve seen, there are a host of different investment opportunities available to you. So how do you pick one which is right for you? This depends on a few answers. For example, will you need to access the money you’re investing in the near future, or are you planning to make it a long-term investment? You’ll also need to think about how much risk you’re willing to take, and how much help you need — some investments are highly beginner-friendly, while others will require the services of a broker.
This is a contributed post.