What are the top best short term investment ideas with good return on investment? What investment opportunities have the potential to earn quick money or ROI? I advice you read on to find the answers you seek.
Investing your hard earned money is risky business. However with the right information and proper execution, the risk can be controlled or at least minimized. This article will discuss the top 10 best short term investment ideas for beginners in no particular order.
It’s a known fact that most people prefer to invest for long term, simply because the risk is reduced and reward maximized. But sometimes, you can pull in profits in the short term with minimal risk. However, it is important to note that the word “short term” in this article means a minimum of 1 year and a maximum of 5 years.
If you are considering investing and exiting within a maximum time frame of 30 days to 180 days, then you’ve moved entirely to a different world called “Trading or Flipping.” However, this article will focus on short term investing for investors; not traders or flippers. So if you are ready to learn, below are the 10 best short term investment ideas for beginners.
Top 10 Best Short Term Investment ideas for Beginners in 2020
- Certificates of Deposit (CD)
A certificate of deposit is a type of savings account that has a specific maturity date (quarterly, bi-annually, annually, etc), earns fixed interest, and is fully insured with the Federal Deposit Insurance Commission (FDIC). After maturity, the full amount together with interest may be withdrawn.
- Short-Term Investment Funds
This investment tool allows investors to place funds temporarily on one investment avenue while pooling their own or others resources for a bigger investment scheme, usually for the long term. Examples of these are bank notes, corporate notes, government bills, t-bills, etc.
- Municipal Bonds
Bonds issued by a local government unit or any of its agencies or instrumentalities. As a general rule, income earned on these bonds are tax exempt hence their appeal.
- Treasury Bonds
Bonds issued by the United States government are guaranteed by the same. Simply put, the money that was invested is loaned to the government (that has yet to fail to pay back or honor any of its treasury bonds). This means that repayment of the principal and fixed interest is almost guaranteed.
- Peer to Peer Lending
A very risky investment scheme but has very high rewards. These types of investments have been known to earn 100% interest rates. On the other end of the spectrum, some have experienced total loss of their uninsured investments.
- Money Market Account
This is a type of savings account that offers very high interest rates. However, the deposits involved are substantial and the minimum balance requirement is very high (at least $1,000). Another restriction is the fact that you can only withdraw and/or write checks from the account a certain number of times in a month (i.e. the terms and conditions limit 3 withdrawals per month).
- Stock Dividends
Income earned by shares of stocks in a company. Stock dividends are controlled by the profits of a company as well as the type and amount of stocks you have. This means that the potential for earnings are high particularly if your stocks are substantial and have preferential status.
- Foreign Currency Deposits
These types of deposits involve a foreign currency of whatever type as long as the market for the currency is high. Also, in most cases there is an absolute confidentiality clause when it comes to foreign currency deposits.
- Fixed Savings Deposit
These types of deposits are secured or insured 100% so any money that invested will be returned regardless of the circumstances. However the fixed rate depends upon the maturity date as well as total amount of deposits.
- Regular Savings Account
A savings account is a good short term investment because it earns interest and is insured up to a certain amount with the Federal Deposit Insurance Commission (FDIC).
In conclusion, I want you to know that the rationale or objective behind the top 10 best short term investment ideas is saving your money and getting a little profit from it with very minimal risk. So instead of keeping your money under your bed or in your bank account, you can invest in any institution that provides insurance as well as substantial interest rates or returns.
However, if you are considering a higher return on investment, then you should bear in mind that the risk will be higher and a higher financial IQ will be required to succeed with such investments.
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