Unless you’ve spent countless hours educating yourself on how the stock market works, it’s highly likely that you’ll view this investment avenue as complicated, confusing, and possibly not even worth your time.
There is a great deal of new jargon to familiarize yourself with, not to mention the financial implications of investing your hard-earned money into something you don’t understand. If the stock market has confused you to where you don’t see it as a valid investment option, you might like to try these more accessible alternatives.
Precious Metals
Precious metals like gold are a worthwhile consideration for anyone who wants a fast, easy, and tangible asset that has the potential to make money in the long term. Precious metals hedge against inflation, produce no real credit risk and are easy to purchase.
They also bring diversity to a portfolio and have a higher liquidity level than several other investment options. Buying it can be as straightforward as visiting a gold dealer or aligning yourself with a gold IRA company.
Real Estate Investment Trusts
While real estate investments can be a worthwhile option for many people, not everyone has hundreds of thousands of dollars to inject into a property. Although, you might have an adequate amount of money to place into a real estate investment trust (REIT), which allows you to invest in a trust that owns housing, commercial buildings, and even hotels. All rental proceeds are distributed amongst the trust’s owners.
Savings Bonds
When you’re new to investing, stability and safety can be crucial, and savings bonds through the federal government tend to offer that. Savings bonds pay stable interest rates over time and are described as low risk. The only way you stand to lose your money is if the government defaults on its debts.
If this is an option you’d like to consider, you typically have two savings bonds options at your disposal: Series EE and Series I. The former pays a fixed interest rate, while the latter uses the inflation rate to dictate the interest rate.
Corporate Bonds
If stocks don’t make sense to you, corporate bonds might be easier to understand. When companies need to borrow money, they often issue bonds that the general public can purchase directly from the company or on the secondary market.
Over a set period, the bond will pay interest and the face value when it matures. How much you earn in interest can depend on the risks associated with the company defaulting. Unlike stocks, owning a bond doesn’t mean that you own any part of the company. Instead, you earn predictable returns up until your bond matures.
Peer-to-Peer Lending
There can be many risks associated with investing, but peer-to-peer lending is undoubtedly a safer and more straightforward option than several others. Peer-to-peer lending involves contributing small amounts of money to collectively fund an individual’s personal loan.
As they start paying back the loan, you receive interest payments on your loaned portion. This investment option gives you control over the risks you take. You might decide to lend a large sum of money to one customer or spread out the default risk with several smaller sums to more than one customer.
The stock market might be one of the more well-known investment options, but it’s certainly not the only one. These investment alternatives above are a few of many standout options that might appeal when you’re ready to put your money into something worthwhile.
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