You need to spend money to make money, that’s how the old saying goes. There is some truth in that but it makes it sound a lot easier than it actually is. What it really means is that once you’ve got a good chunk of money behind you, you can invest it and watch it grow. But only if you invest it right. There are endless possibilities for places that you can invest your money but you’ve got to be careful. A lot of those investment opportunities aren’t going to be lucrative and in some cases, people will be looking to prey on you and take your hard earned cash. Markets are changing all the time so things that might have been a good investment a few years back aren’t going to be worth your time now. One solid example of this is timeshares; they were all the rage about ten years ago but now, people are desperately trying, and failing, to offload them because they’re losing money on it every year. The best way to make sure you don’t get stung is to keep on top of the latest investment trends. Check out this list of investment opportunities that you should be considering this year.
Peer To Peer Lending
The way that people borrow money is changing. The bank isn’t your only option for a loan these days. There are crowdfunding sites where people can generate capital through lots of small donations, and more recently, we’ve seen the rise of peer to peer lending. These sites help link up investors with consumers in need of loans. One of the primary benefits of peer to peer lending is that you can spread out your investment through a series of smaller loans and massively reduce the risk of people missing out on payments. If you loan all of your money in one lump and that person can’t pay, you’re out of pocket. With peer to peer lending, if a few people struggle to make repayments, you’ll still be recouping the majority of your investment. However, that shouldn’t really be an issue when you’re using peer to peer lending streams because the sites will vet any borrowers and only accept people with a good credit rating that are in a position to repay any money that they borrow.
Investing in property is always a safe place to put your money, as long as you’re sensible about it. The first thing to consider is whether you’re going to rent a residential property or a vacation home. Vacation homes are good because you can charge higher rates, however, they won’t be full all year round. Another benefit is that you and your family can use the vacation home whenever you like so you’ll be making big savings every year when you get away for a few weeks.
Buying a residential property means that you’ll have long-term tenants. It takes less work when it comes to finding people to rent the property than a vacation home does, but there will be more upkeep to handle.
When you first start out, don’t overstretch yourself otherwise you could end up losing it all. For your first investment property, buy an apartment instead of an expensive house. Once you’ve rented it out and you’re bringing in some money, then you can start looking into a second, larger property. If you pace yourself as you grow, you can turn that small investment into a property empire in the space of a few decades.
Online Savings Accounts
If you’re not looking to take any risks with your investment, then an online savings account is a good idea. There are plenty of high-interest accounts out there so shop around for the best deal. The returns aren’t going to be huge on your savings account but there is no risk involved. Keep an eye on the markets and move the money around to keep it in the highest interest accounts that you can find. You should also consider the withdrawal limits when you’re choosing an account. Some of the higher interest accounts don’t allow for regular withdrawals, whereas the lower interest accounts will let you take the money out more often. You need to work out what your needs are; if you aren’t going to need to access the money for a long while, go for a higher interest account but if you’ll need to live on your investment you’ll have to settle for a lower interest rate.
Retirement accounts are a brilliant investment for anybody. If you don’t set yourself up for retirement, you could find yourself in trouble when you get older. However, you can also use them as a clever investment tool. Most retirement accounts charge you a hefty fee for withdrawing early so they aren’t going to work as an investment tool. But there are some retirement accounts that don’t charge you these fees. A Roth IRA account doesn’t charge you early withdrawal fees and the money you put in is after taxes so there’s no income tax to pay on withdrawals either. That means that you can benefit from the high-interest rates on these retirement accounts, but you can also take out the money should you ever need it. It might be best to leave it in there until you retire though.
Certificate Of Deposits
Most banks will offer you better results on fixed term interest accounts so you can seriously benefit from them as an investment tool. The most common terms are three or five years. Before you consider investing in one of these accounts, make sure that you definitely won’t need any of the money until the term is up. You deposit the money and let it sit, and then once the term is up, you can take it out again, complete with all of the interest. Some of them give you the ability to take the interest out as monthly payments but this is pretty counterproductive if you’re trying to make the investment grow. It’s far better to wait until the term is up and take it all out at the same time.
Municipal bonds are another very popular investment strategy at the minute. There are a few different types but most people tend to focus on the tax-exempt ones because they allow you to keep your entire investment at the end of the term. You loan money for a set period and you’ll receive interest payments until the end of that term. If you need to see a quick return on your money then this is probably one of your best options. You should be aware that there is a fair amount of risk involved as the person issuing the bond might not be able to meet the interest repayment.
Pay Off Debt
This isn’t so much an investment opportunity but it is a way to use your extra cash to boost your finances. If you’ve got a lot of high-interest debt, that’s eating into your monthly finances by a huge amount. If you’ve got a good chunk of cash to spare then why not use it to pay off those debts. You won’t technically be seeing a return on an investment but you will have extra money in the bank each month, just as you would with an investment.
Real Estate Stocks
Playing the stock market is an incredibly high-risk investment opportunity so it isn’t for the faint of hearted. If you can’t afford to lose the money then the stock market isn’t the best option. You need to be prepared to lose your investment if you’re playing the stocks. One of the safest stocks to invest in at the moment is the real estate market. The industry is set to rise for the next few years at least so you are pretty certain to see a return when you come to sell. One of the best things to do if you’re considering investing in the stock market is to seek the help of a professional, it will reduce the risks by a long way.
Another low-risk way of playing the stock market is through index funds. An index fund combines the stocks of lots of different companies in a given market area. If you pick an industry that is on the rise, you stand to make a decent return. The returns that you can make are smaller than you would normally make investing in stocks but the risks are significantly lower.
Robo-advisor sounds like something out of a sci-fi film but it’s actually pretty straightforward. If you’ve looked over the rest of the list and you’re still hesitant about trying to handle your investments yourself, then they might be the solution. Investment companies can create a piece of software that is specifically tailored to your financial portfolio. You’ll have to take a questionnaire to determine your investment goals and build a program around that. It will then be able to give you suggestions and advice on where to invest your cash.