With everything happening in the world right now, you could be thinking that this is not the best time to talk about investing. The truth is, there’s no better time. If you want your wealth to keep growing, you have to start by learning where to put your money right away.
There are countless investment options for beginners, including mutual funds, stock markets, and peer-to-peer lending. The good thing is that advances in technology can now allow you to invest as little as $5 a month using your smartphone.
Today, there’s certainly no shortage of investment information out there. However, it would be helpful if you could filter through the noise to ensure you make a sound investment decision right from the start. So here are some great investment options to choose from:
If you’re looking for a short-term investment, peer-to-peer lending or P2P lending is a great option to consider. Instead of buying stocks from a company, you would be lending money to individuals or businesses with the understanding that they will pay you back with interest at an agreed time in the future. Generally, P2P lending is safe, but it still involves a few risks. The best way to go about it is to conduct adequate research on the rates assigned by P2P lending companies, and to diversify your portfolio across different loans. P2P lending typically provides a higher ROI relative to many investment options.
The Stock Market
The stock market is among the most profitable investment options for investors. By buying a stock, you end up owning a portion of a company linked to the stock you have bought. When a company realizes profits from its operations, you’ll get paid in dividends according to the number of shares you have. Also, as the company’s value grows over time, the price of the shares you own increases proportionately. This means that you can sell your shares in the future for a profit.
A bond is a fixed-income investment through which an investor loans money to either a company or a government. Some investment bonds are fixed-term while others run for an unspecified term. Bonds are generally regarded as safer investment options than stocks; however, their returns are typically much lower. Still, you could lose money if you sell a bond before its maturity date or if an issuer defaults on their payment.
Robo advisors are financial advisors that can manage your investment with little to no human intervention. They provide digital financial services based on computer algorithms. Robo advisors are a great way to launch your investment because you can start with a small amount of capital, and they will do most of the work for you. However, you still need to keep your eyes on your money as they do the heavy lifting. When compared to human investment managers, Robo advisors charge far less – usually 0.25% to 0.5% of your balance per year due to low overheads.
If you’re also looking to learn about making investments, Robo advisors can get you up to speed. Some Robo advisors provide educational tools and content, while others allow you to customize your portfolio to some extent, just in case you’ll need to experiment in the future.
A mutual fund is a centrally-managed fund that pools funds from retail or institutional investors to buy securities. The fund enables you to buy an array of stocks rather than investing in a single stock. Over the year, a mutual fund pays off almost all the money realized.
Mutual funds are mostly safe, and new investors shouldn’t be worried about short-term fluctuations. Nonetheless, it is important to choose a mutual fund that’s in sync with your investment goals. Choosing the right mutual fund plan can be quite confusing, so an experienced financial advisor like Trust Point Inc can help clear up any confusion.
A savings account is easily the safest way to invest your money. Although other investment options attract more returns than a savings account, the idea is to put money in an interest-earning account and allow your investment to grow steadily with little to no risk.
Regardless of how much you earn or have, investing your money in a profitable venture can be a good way to create another source of income, fund your retirement in the future, or even bail you out of a financial jam in the time to come.
A sound investment strategy provides the surest way of building your wealth over time. As you scan different investment options, be sure to consult your local investment expert so they can help you place your money in a manner that meets your investment goals.