Are you looking for ways to invest your cash perhaps because you have suddenly received an inheritance from someone close (lucky you!)? Then there are people who are good with their savings but don’t have much idea about what to do with all that money. Worry not! This article offers you a few smart tips to invest your money wisely.
You must have often heard a friend of yours doubled the money in 2-3 years. And this encourages you to look for investment options to make quick money. However, the fact is, when you actually learn how to invest money, this knowledge can help build your wealth and grow it steadily. Rather than believing in hearsays, you should plan properly to grow your money, especially with retirement looming. Whether you do this via commodities trading, or you do it with the methods mentioned in this article, you need to make it a habit to invest your savings. So, let’s take a look at the best places to invest money right now.
Property – One of The Smart Ways to Invest Your Money For Future Returns
If you are looking for the best investment options, then you must consider property investment. It can generate a huge ongoing passive income. In fact, buying property can be an excellent long-term investment opportunity. Why? Because the value of your property increases over time, irrespective of the recession or other emergency situations.
When it comes to buying a property it does require more capital than your investments in stocks or mutual funds. Also, you have to consider the other ongoing costs, e.g. property maintenance, repair, taxes, and the like. But as a tangible asset, a property is a great thing to invest in.
Now that you know real estate is one of the best and safest long-term investment options to grow your money, you should gather adequate information before taking the plunge. According to investment experts, there are few ways to make money quickly in real estate. You can consider property flipping, i.e., buying a low-cost property, renovating it, and selling it at a higher price. You can also buy a property at a prime location and turn it into a vacation rental.
Mutual funds – One of The Popular Affordable Investment Options For All Age Groups
As an investment instrument, the mutual fund has become really popular over the past few years and has attracted investors of all age groups. Why? Because you can start mutual fund investments with very little money and yet get a good return after a few years. However, it is important to diversify your portfolio by including mutual funds from different categories. And when it comes to diversification, you shouldn’t give gold funds a miss!
You may not know that gold is a popular asset among seasoned investors. If you want to hedge your portfolio against risks such as inflation, political unrest, or market turbulence, gold is a good one to look at. The price of gold has significantly underperformed the broader market over the past years. This gives even more reason to add gold funds into your portfolio and diversify it for bigger profits. Of course, it’s always smart to do your research before you invest in any gold mutual fund.
Lending – A Great Way to Grow Your Money Without Risks
While you’re not going to turn into a loan shark overnight, you can invest your cash in peer-to-peer lending. It’s a good way of giving out loans to individuals or businesses with a good credit rating. Those who take the loan repay it with interest. Simply speaking, You act like a bank, that gets paid interest. The repayment amount consists of the principal and the interest.
P2P lending can be worked out directly between the two parties, provided both of them agree to all the terms and conditions. Else, there are P2P lending platforms that will connect you, the Lender with borrowers looking for suitable loans.
The one thing to remember about peer-to-peer lending is that you are not covered by the financial services compensation scheme. So, borrowers defaulting on the loans is an obvious risk that you have to assess before you say ‘yes’ to the deal.
Spread betting – One of The Easy Ways to Invest Your Cash But With Some Risks Involved!
If you want to find a quick way to invest your cash, take a look at spread betting. You don’t have to be a genius in the stock markets to realize that this is actually a great alternative to buying and selling stocks. With spread betting, you can place bets on whether the stocks will go up or down in value. What is the prime benefit of financial spread betting? It needs you to deposit a small amount called margin to get started and not the entire stock value that you purchase.
Let’s say you want to start spread betting on Tesla shares whose current value is around $800 per share. Rather than paying the entire money, you can get started with a deposit worth 20% of the cost. And, yet make a profit on the full value of the stock and not your initial deposit. Great, isn’t it? Also, note that spread betting is tax efficient too. You can bet different amounts at a time so that whatever profit you make, will help boost your investment in general. However, If you decide to start spread betting without adequate knowledge of the financial product, you may end up with huge losses too!
Few Key Points to Remember While Selecting the Smart Ways to Invest Your Cash
As I said in the beginning, when it comes to investing your hard-earned money, don’t get carried away by unrealistic expectations. You might be having a friend who is lucky enough to double his money in 3 years, but it might not be the case for you. So, it is important to focus on these key points while picking up the right investment options for you:-
Know your goal- Are you investing your money for your child’s education, to buy a house after 10 years, or for retirement planning? Be specific and clear about your goals.
Have a specific time horizon in mind- It’s obvious that once you know the goal, the investment time horizon becomes clear too. Let’s assume that you are a young IT professional planning an early retirement. Then you can consider long-term investment products (with some risks involved) that generate great returns after 15-20 years.
Know Your Risk Appetite- I know there are many investors who boast of high-risk tolerance but they are the first to leave when the stock market plunges 30%. So, you need to be really honest with yourself, when assessing your risk tolerance. Ask yourself, do you have the patience and mindset to digest long-term volatility and even stay invested?
Be Systematic and Regular with your investment- No matter whichever option you chose to invest your cash, make sure you do it on a regular basis. An organized investor is always rewarded!
Now that you know the smart ways to invest your money, it’s time to understand which one works best for your money. Take time to weigh the pros and cons of each investment option. Start small and analyze your portfolio from time to time. If needed, you can seek the help of an expert to assess whether your portfolio planning is done the right way. Else, you can always browse various online resources like YouTube videos, blogs, and investment-related portals to learn more about these investment options.