Are you an investing beginner? Do you want to know the best ways to invest money for beginners? Then read on. Everybody wants a good and secure future. Isn’t it nice to enjoy your retirement years in comfort with a certain degree of affluence to complement each moment? Sure it does. And the best way to realize this is to invest money early on in life.
Though investing your money is a dependable way of building up wealth, many people are still afraid of trying it on a massive scale. The usual conception of investing is that it has something to do with the stock exchange. Given that stock investing poses great risks of losing everything, not to mention the complicated operation of stock exchange, the common people therefore are apprehensive towards investing.
This impression doesn’t hold any basis at all. While it is true that stock investment is one class of it, there are actually many other ways to invest money for beginners aside from it. In the succeeding discussion, a list of the top 10 ways to invest money for beginners is presented. To free people of the misconception about investing, further information is given for each type.
Top 10 Best Ways to Invest Money for Beginners
It is not surprising at all that when talking about investment, stocks come into mind first. Aside from the fact that stocks are the most popular form of investment, it is also the best performing. In here, investors basically invest on a particular company by buying shares from that company.
Shares represent a small part of ownership of the company. Earnings can come in the form of dividends or in profits when shares are sold for a higher value. Risks of losing are great, though, especially if the company’s performance drops, affecting the value of its shares in the process.
Bonds are investments with a moderate level of risk. Bonds are issued by government agencies or by private companies. Bonds are a form of loan provided by investors to the agency. Hence, investors earn through a fixed interest rate that the agency pay as the loan matures. The safest bond investments are notes and treasury bonds issued by government agencies; they may come cheap but they give profitable yields in the long run.
Another form on investment included in the top 10 best ways to invest money for beginners is the real estate. Properties are stable investments. Actually real estate can turn out to be very lucrative if done the right way. Chunks of land actually appreciate in value over time; they also depreciate in much the same respect.
Lands that appreciate in value are those located in a highly in demand place. For example, if the estate is within a business centred area, then most probably that estate would sell high.
Bank Savings Account
Why go far when investing can be as easy as putting money in the bank. Yes, a savings account actually is an investment in itself. Bank deposits mature overtime and gain interest. Though the return is low, the money is otherwise safe and can be retrieved anytime.
Certificate of Deposits
Certificate of Deposits or CDs are issued by banks. Under this investment, the bank offers an interest rate for the amount of money an investor is willing to put in for a predetermined time span. The compounded interest rate provides for a decent amount of returns. CDs are usually on a span of 6 months to two years.
Another alternative way to investing is by acquiring precious metals such as gold. Precious metals are some of the commodities that actually go up in value rather than depreciate over time. The value of gold goes up especially when other forms of investment or commodities go down. Don’t expect to jump up and down, however, because price appreciation is minimal.
Mutual funds allow an investor to pool in his resources together with other investors for investing in selected securities such as stocks and bonds. A professional manager/firm will handle all the work for the investment, leaving investors with nothing to do but to wait for their earnings.
Risks are minimized in mutual funds because the money is distributed to a diversified portfolio of securities. One good advantage of mutual funds is that investors don’t need to have expertise in investing in order to earn. The asset manager will do all the work for them.
Foreign exchange is another good alternative in investing. However, FOREX is the most risky type of investment. FOREX is investment in international currencies. Much care is given in studying the relationship and correlation of a particular currency to that of other foreign currencies.
What better way to invest than to establish an owned business. For investment savvy people, forming a business can very well provide for a financial freedom if all goes well according to plan. However, starting a business should be carefully researched and studied because putting up a business is very risky. Seeking advice is recommended especially when starting.
Getting yourself insured is probably the best fall back strategy to have. If everything is not going smoothly, at least one will be rest assured to have a good amount of money for retirement. Money invested for insurances are annuities. Though interests are low, it is still much preferable than to have nothing at all.
he above are the 10 best ways to invest your money as a beginner. But it is important you bear in mind that you don’t need to invest in all these investment products; just select one or two, concentrate on it and be the best in it.