The Best Investment Options Right Now
For the vast majority of us, if you want to enjoy a comfortable living, you’ve got to invest. But for many people, investing can be a very risky venture. When you are just dipping your toe into investing you may believe everything to be risky. And yes, with any investment comes risk but this is why we’ve got to arm ourselves with the essential bits of knowledge so we can invest wisely. But what are these investments? (Image Credits: Lukas/Pexels)
It’s a very common investment. While people flip properties to sell them on if you have the ability to manage your own properties, being a landlord or landlady and renting out a property is a very lucrative option. You need to find something that has the most property for sale. In other words, finding something with a bit more “property” means finding something that has a bit more going for it which can be more attractive to potential renters.
The big mistake many property owners make is that they buy something incredibly cheap but don’t bother to renovate it properly. As a result, this means lots of little fixes overtime which eats into your money but also can prove to be a major frustration, especially at 3 in the morning if your tenant is calling you because of a burst pipe! But from the perspective of investments, it’s one of the least liquid around. In other words, if you want cash quickly, this isn’t the best approach. But if you are looking to play the long game you can very easily make a considerable amount of money over time investing in a property as long as you make a smart purchase.
High Yield Savings Accounts
One of the simplest forms of investment is finding a savings account that provides an accessible vehicle for your cash. Not only does it help you if you need to access cash quickly but a savings account has few overhead costs. As a result, you can get a good interest rate, especially if you go to an online bank. The one main risk associated with high yield savings accounts is inflation. If you try to reinvest you could end up earning less.
Dividend Stock Funds
If you are considering investing in stocks you may think about day trading as a starting point. Day trading is a good way to get a feel for the environment but also gives you an exit strategy. But if you’re looking for a safe option within the stock market using stocks that pay dividends may be the option for you. Dividends are part of a company’s profit that is paid out to shareholders. This means that in order to see any decent return you have to be invested in the long-term. But it also helps you to earn cash in the short-term.
Any dividend comes with risks but if you are considering buying individual stocks it’s worth waiting for a year or so until you get to grips with the process and see how your stock is doing. Naturally, if you invest in companies with a long history of dividend increases, this may seem like a sensible option. But no matter the company, a crisis could be around the corner, as so many businesses have learned recently.
Certificates of Deposit
Also known as CDs, this is something worth considering if you are getting frustrated with your limited returns on your savings accounts. These certificates of deposit are issued by banks and come with certain maturity dates going from several weeks to several years. But this means you cannot withdraw the money for a specific period of time without financial penalty. It’s a very safe investment and can yield high payouts, which is useful for people who need to lock up their money for a while. While they are considered a safe investment they do come with some reinvestment risk, especially when interest rates fall.
Learning to invest is for many people about the long game. It’s about placing your trust in something and learning to watch it over time before withdrawing the funds. But this is why so many people are tentative when it comes to stocks and shares. While stock is always a risk the same thing can be said of real estate and even savings accounts. As such when you think about investing it’s not necessarily about planning what you will do with the high return you get but rather, you need to get into the frame of mind that you may only make a slight return on your investment. For some people, this isn’t music to their ears but if you invested $10 and ended up with $14, that is still a profit!