Best Way to Invest Money: Simple Ways to Double Your Money
You don’t need thousands of dollars to start investing your money. We a few dollars, you can start building a fortune for you and your family. And the best part, it is a walk in the park. Here is a detailed guide on how to go about it.
How to invest your money
Invest using a robo-advisor
Robo-advisor have become a buzz word in the investment sphere. They make investment a walk in the park through automation. The algorithms that run them ensure that they make precise investment decisions so you can mitigate your losses.
The best part, you don’t have to be an expert to use robo-advisors. All you have to do is answer a few questions so that it can gauge your risk tolerance. After this, it will invest in a diverse low-cost portfolio that suits your profile.
With a fee of $500 or less, you’ll have an easy time making money with the click of a button. Besides, they charge relatively low fees depending on the size of your account. Roboadvisors charge an annual fee which is a small percentage of your investment. Most charge a 0.25% of your investment.
Some robo-advisors you can consider include:
Betterment is ideal for investors on a budget. With $100 you can open an account and let the algorithms do the legwork for you. The best part, there’s no minimum balance required to start investing.
This is an ideal option for people who have an extra buck to invest. All you have to do is link your card to your Acrons account. Recommended for beginners, it comes in an intuitive design ensuring seamless navigation between pages.
Certificates of deposit
Certificates of deposit (CDs) are savings account issued by banks that attract a higher interest rate compared to a savings account. The interest rate is time bound meaning you can only save for a certain period of time. Besides, you cannot withdraw the money until the specified date. Otherwise, you’ll attract a penalty.
CDs are ideal for money you plan to use on a future date. For example, going for vacation. The time period can range from one to five years, or more. on the date of maturity, the financial institution will pay back the money invested and the accrued interest.
Another safe way to invest your money is to get into stock market trading. Thanks to the internet, the entry barrier that was cost is history. Online stock trading platforms have made it easy for wannabe traders to join the bandwagon. With a few dollars, you can start trading blue-chip stocks on the go.
This provides a low-risk opportunity for you to learn the ropes of trading. And as demand grows, there’s a new crop of stock trading platforms that enable you to trade with as low as $1. In fact, most embrace the no-commission approach so you can reap all the profits.
This approach has forced traditional and behemoth brokers to follow suit. Besides, you can buy partial shares of big companies such as Google. That is, if you have $10, you can own a share of Google (how cool is that!). as such, if you have $500, you can invest $10 in five companies instead of investing the whole amount in one company.
some of the best brokers include:
- Jp Morgan
- M1 Finance
These brokers allow you to invest your money with minimal barriers.
High-yield savings accounts
If you want high returns, you can invest your money in an online high-yield savings account. Unlike traditional bank savings accounts, you can access your money any time. They also attract affordable overhead costs making it easy for beginners to open them. Also, thanks to the ease of access of your money, you can use it to save money you need at a specific date.
These savings accounts are ideal for investors who are risk averse. If you need the money invested at later date, this is the savings account you need. and since banks are FDIC-insured, you can rest easy knowing you’ll never lose your savings.
You can open a high-yield savings account with an online bank since they have lower overhead costs. While you can still do so with a traditional bank, the fees charged can be a barrier. On chief benefit of this account is its high liquidity. You can deposit and withdraw your money any time and any place.
Another benefit is most savings accounts do not have minimum balance requirements and monthly fees. You can also transfer money from your high-yield savings account to your bank account.
Real estate market
If you thought you need thousands of dollars to get into real estate, think again. Thanks to real estate crowdfunding, you can own a portion of a commercial property without the headache of managing the property. While you don’t have to shell out the whole amount, it is much expensive compared to other options on this list.
You can invest as much as $7,000 on a single property. Also, there’s minimal diversification when it comes to real estate. Most investors will invest in up to five or less properties. This is unlike stock markets where you can invest in more than five companies.
Having said that, you benefit from owning a piece of property that appreciates in value. Also, you share the costs and risks of owing the property with other investors. Think of it, you do not do any paperwork, no maintenance responsibility, and more.
Through real estate crowdfunding, you can learn the ropes of investing in real estate. And in the future, you can easily own your property since you have the knowledge to buy and manage one.
Some of the best real estate crowdfunding platforms include:
Dividends are a percentage of a company’s profit that are paid to shareholders. Dividend Aristocrats are safest to invest in. these are companies that have a proven track record of paying dividends for a period of more than 25 years. Such companies have withstood different economic hardships. And in those hardships, they were able to pay out dividends to their shareholders.
If you invest your money in dividends, not only will you earn cash in the short term but also enjoy gains in the long term. Dividends can help you build wealth if done right. That is, investing in the right dividend stocks and making investment changes where need be.
Unlike stocks, share prices of some dividends may take time to grow. But thanks to the stability that comes with dividends, most investors are willing to take the risk an invest in them. Experts recommend dividend stocks to advanced and intermediate traders.
However, new entrants can invest in dividend Aristocrats since they have a proven track record. To avoid losses, you should invest in companies that gradually increase their dividend. Avoid companies with high yields since most tend to hit a bump along the way.
Cryptocurrency has become popular in recent years. This virtual currency uses blockchain technology and cryptography for encryption. As such, your transaction cannot be traced. Bitcoin is the leading cryptocurrency in the market and its price is only but increasing. This has seen more traders enter the market making it a payment option for many businesses.
Thanks to this success, governments have started creating their digital currencies. However, cryptocurrencies are volatile. Price for Bitcoin for example is at $50,000 as of writing. This can either go up or down within a short period. Unlike other investment options on this list, investing in crypto is ideal for people who are willing to take bold risks.
If you are a risk-averse investor, avoid investing in crypto. Another risk of cryptocurrency is government regulations. While most countries are embracing it, others are banning it. if your government outlaws it, your investment will have no value. You should also keep in mind that crypto is susceptible to hacking.
It is therefore prudent of you to invest in a robust cold wallet. And thanks to the growing demand, the internet is awash with thousands of fake crypto currencies. This means you should open an account with reputable sites such as Coinbase and Binance.
As you can see, there are many ways to invest your money. Some are ideal for risk-averse investors while others tend to favor risk-seeking ones. Whichever the case, do a thorough research before settling for any of the above. So, which investment method appeals to you? Let us know in the comment section.