It’s hard to tell when the best time is for someone to start investing. But most experts would agree that the earlier you invest, the better. But the question is: What is the best way to invest and grow your hard-earned money?
There are different ways to invest — each having its potential returns and risk levels. Here are six investment options to consider if you wish to start investing this year:
Real Estate
This comes to mind whenever one is looking for a good way to invest their hard-earned cash. For one, you get to build equity. You can buy a property and use it as your primary residence. While the real estate market has its ups and downs, we cannot deny that its value mostly appreciates in time. This means that you can sell it for a higher amount in case you need cash in the future.
You also get to sell your real estate and not have to pay costly taxes such as state capital gain and federal taxes through 1031 exchange properties. Take note that this generally applies to properties that are not owner-occupied.
Investment Bonds
One interesting way to invest your cash is by purchasing an investment bond. This means that you’re loaning your investment to either the government or a company. They use the funds and will pay interest to you during the loan cycle. Such loan type has a lower potential return, but many choose this type of investment because it is less risky than the others.
Stock Market
Buying stocks in the stock market means owning a small portion of a particular company organization of your choice. How much money you get tor receive will depend on the number of shares you own. As the value of companies grows over time, so does the price of shares. You get to keep your stocks and sell them for a price.
Physical Commodities
Such investment includes items you physically own. Take gold and silver as an example. Such commodities are in demand, and their value doesn’t depreciate that much. You can keep them and sell them again for a reasonable price, depending on the quality and weight. The best part is that physical commodities are cheaper to buy than other investment types.
Mutal Funds
Instead of buying a single stock, you can purchase multiple stocks with a single purchase. One good way to do this is by purchasing mutual funds. With this type of investment, a mutual fund manager will manage the stocks. They earn by charging a percentage of your mutual fund investment.
Certificate of Deposit
This offers a higher interest rate than savings accounts. You get to earn higher when depositing your money in a time deposit. The catch is your investment has a maturity date, which means that there is a specified time frame where you cannot withdraw your cash. If you choose to withdraw the funds, the bank will impose a penalty.
One financial advice to keep in mind is to never put all investments in a single basket. One should try to invest in more ways than one. For example, aside from opening up an account for a time deposit, you can start investing in other investments such as real estate and buy stocks in the stock market. This way, you can mitigate risks and increase your chances of achieving financial freedom. Do you plan to start investing soon? Make sure to consider all options and know the pros and cons of each.