New to investing? You’re in the right place. If you’re unsure exactly which ways there are to invest your money, then you’re in the right place. Investing can be confusing for newcomers, but it needn’t be. There are actually a number of different ways to make your money grow.
Picking the right type of investment shouldn’t be a decision you take lightly. Some people prefer higher risks with more potential gains, while others like a low-risk slow growth strategy. It’s important that you do the right analysis prior to any investment. This article is only a guide. Before you invest your own money you’ll need to do some additional research. Remember, never invest more than you’re willing to lose. A sensible investment strategy could be to diversify and spread your risk rather than putting all your eggs in one basket.
You’ll also want to decide if you want “growth” investments or “dividend” ones. While you can get some that are a mix, people generally like to gamble on cheap stocks or investments that they think are going to have huge growth OR they like to pick steady investments that give a good return on investment in dividends or yields each year. The best investments have both, but these aren’t always easy to find.
So what different types of investments are there?
1. Investment funds
If you like the idea of investing in stocks and shared but don’t really know where to start, you might want to pick an investment fund. These funds are often open to the public and will use the money they raise to invest in a wide range of different things to make up a portfolio. They’ll normally be run by experts so all you have to do is sit back and count the money. Some will require a certain amount is invested, and some (but not all) will tie your money up for a period of time.
When you start looking for investment funds, you’ll be able to decide what sort of risk strategy you’re happy with. You can check how much each fund has paid out or grown in the last few years. You can get investment funds with from 7 to even as much as 30% a year, but the higher return funds will come with more risk. Do some research and pick one that’s right for you.
Cryptocurrencies like BitCoin have taken the investment industry by storm in recent years. While you might have missed the BitCoin boom, there are thousands of other lower value coins that are still getting a lot of interest. This is an extremely high-risk strategy that really has no guaranteed returns, but if you pick the right coin, you could see huge growth in your investment. Tread carefully with cryptocurrencies, but be aware that they are here to stay as a real investment, and you can make some real money with them.
Property is one of the most tried-and-tested ways to invest there is. While property markets can fluctuate, it’s considered low-risk since you actually have a property backing up your investment. That’s real bricks and mortar rather than some virtual asset. Property is a popular investment because while your principle should grow in a regular market, you could also get a yield of up to 7% renting it out. So it’s win-win. If you want to buy-to-let, you should be able to find rental yields that cover your mortgage and then some, providing you an annual return before you even look at the house price growth.
If you’d rather take a more sedate and risk-free approach to invest, you might want to try one of many ISA funds. These have slightly lower returns, but they’re super secure and easy to jump into.
5. Lending clubs
These lending clubs have increased in popularity in recent years, and for good reason. You can now lend in a peer-to-peer manner to thousands of small businesses or individuals. Returns could be as much as 9%, but you can lower this if you’d like to riskless.
Have you ever noticed how much foreign exchange currencies fluctuate on a day to day basis? You can make the most of this by “gambling” on them going up and down. This is a more immediate type of investment that requires you being switched on and concentrating rather something where you can sit back and relax. Remember, this is a really high-risk type of investment and lots of people lose more than they gain. It’s not for the faint-hearted.
A more traditional way to invest your money over long periods could be with stocks. There are tons of different trading platforms online that you could start using. Some might charge a small percentage of transactions while others will charge a flat fee. Pick one that works for you and how much you intend to invest.
With stocks, it’s good to do a lot of research and spread your investments accordingly. Remember that your investments could go down. Stick to more secure stocks if you don’t want to risk as much. The best investment newsletter could help your research a lot.
8. Savings accounts
One of the lowest risk ways to invest is with a simple savings account. Shop around for the best rates and leave your money somewhere super secure.
9. Local businesses
If there are businesses in your area that need some financial backing, you could be there to help in exchange for some of their equity. This is a bit of a risky investment, but with the right business, the upside could be huge.
Similarly to forex, you can also trade commodities online. This is another risky one, but if you know what you’re doing you could make a lot.
Investment bonds, especially government-backed ones, are a reasonably low-risk investment that should give you a decent return over a longer time period. This type of investment might be more for you if you don’t want to take big risks.