With many ways to invest your money, figuring out the best place to put it can be a real challenge. Whenever you head online, speak to your bank, or read the news, there’s typically talk about the latest investment schemes and where you should invest your money. Certain stocks become valuable overnight or in a matter of seconds, and you will need to have a good head on your shoulders that can understand the risks, assess the outcome and be agile enough to buy and sell so that you do not make a loss.
Take GameStop, for example. This latest saga is still trending, and it can be a confusing story for many members of the public. However, GameStop stocks saw everyday people invest their money overnight and make a hefty return on their investment. How and why did GameStop stocks become so valuable overnight, though? Well, the website Reddit (a social media website that has forums on what seems like every topic) saw an influx in tips on how people could double their money by investing in GameStop. Elon Musk also posted a tweet about GameStop, and due to Musk’s prowess in the financial world, people took note and listened. Musk’s tweet sent GameStop’s price soaring. In the end, those who invested their money doubled or tripled their earnings. Although this is a rare occurrence on the stock market, it can happen and is an example as to why stocks and such investments could be lifechanging.
However, not all of us are natural-born investors. And while stocks and investment bonds are great ways to invest your money, there are other smart ways you can create a secure future. Investing in property, businesses and even your children are all great and sensible investment schemes if done properly. If you are still unsure as to why and how you can invest for a brighter and more secure future, the following guide should help.
Why Should You Invest Your Money?
There is a plethora of reasons why you should invest your money. Not only does it secure a better future for you, but it also secures a better future for your family and loved ones. Investing your money and being smart with your earnings can reduce any worries and stresses; it can also help your children navigate their lives as they have the resources to head to the university they wish to study at and focus on their studies. This can make a massive difference to their livelihoods.
But what about your mental health? Well, if you diminish the worry of wondering where your money is coming from and how you are going to pay your next set of bills, your mental health can increase quite considerably. Investing in your future means that you are protected and have fewer financial worries. We all understand the negative impact stress can have on our mental health and wellbeing, and a good, solid investment can stop that from happening.
Other greats reasons why you should invest your money include:
· Securing your retirement
· Having more time to relax and enjoy life
· You are protected
· Your loved ones and family are protected
· Added security
· A life that is debt-free
However, for you to unlock and achieve these benefits, you need to understand the proper protocol to investing and the best ways that suit your needs and capabilities.
Read on for the best ways to invest in your future.
1. Exchange-Traded Fund (ETF)
What is an ETF? An ETF is also known as an exchange-traded fund. The term refers to when you buy a selection of stocks or government/corporate bonds in one singular purchase. This collection of stocks and bonds is typically bought for one price and can be sold much like a usual stock. Wealthsimple is a great resource you can use when it comes to looking at the advantages and process of investing in ETFs. They even offer you the option to take a free risk survey so that you can build a completely personalized portfolio. Read their article, ‘what is an ETF’ for full, in-depth knowledge on the different types of ETFs that are available and how you can buy them.
As you will soon see, there are numerous benefits of investing in an ETF. Not only are they less costly for you to purchase, but there is also instant diversification. You can also benefit from added trading flexibility, risk management, and tax benefits.
2. The Stock Market
The stock market and investing in stocks can seem like scary business – and for good reason. However, it is arguably one of the best ways to invest your money and see a hefty return. Of course, you will also need to understand that there is a huge amount of risk associated with stocks and that you may end up losing your money if you are not vigilant enough.
You may want to read up on the stock market and understand how it works. But basically, when you buy a stock, you will own a small potion of that company you have invested into. When/if the property profits, the company will pay you a portion of its profits (usually in dividends). As time goes on, and if the company continues to be valuable, then the price of the shares/stocks you have bought into will become more valuable and rise in price. You can then decide whether you want to sell your stocks.
If you are unsure on how the stock market works but want to invest in stocks, you could always hire a personal stock broker who can do all the heavy work for you. Of course, you will be paying them for their service, so you may consider it more worthwhile to learn about the stock market yourself. If not, here’s a guide on how to find a good stock broker.
3. Investment Bonds
Investment bonds is basically the practice of you lending money to a company or the government. The company or government will then pay you interest on the money you have loaned them over the course of the bond’s lifecycle. While an investment bond doesn’t have a high pay out like a stock, they
are considered less risky. You should weigh up the pros and cons when it comes to an investment bond to see whether the returns are worth the risks associated with it.
If you are able to, investing in property is a wonderful investment option that can have a host of long-term benefits. Real estate rarely loses its value. In fact, as time goes on, real estate only continues to become more valuable. If done properly, well-chosen assets can bring in reliable and predictable cash flow, tax advantages, diversification, and profitable returns. If you invest in real estate and rent out the property, this can become a great source of income many people can live off or put away into their savings. However, rental income isn’t the only means of making money. Depending on the property, you could also generate profits through certain business activities that take place in that property. You may also find that your property appreciates over time.
One core benefit of buying property is that you have full control. The minute you secure the sale and become the owner of the property, it is yours to do with whatever you please. For example, you can decide whether you wish to rent the property out to a single professional, a family, or turn it into a condo. You also get to decide how much you charge for rent and, if you really want/need to, you can sell the property.
5. Physical Commodities
Physical commodities refer to items that you physically own, much like gold and silver. While physical commodities may not be enough to secure a long-term future for you or your family, they can serve the purpose of safeguarding you and your family through hard economic times and help reduce the blow of such circumstances.
One issue with physical commodities is that they are not a huge worthwhile investment when compared to other options. Stocks and property can continue to bring in a primary or secondary income whereas physical commodities cannot. Furthermore, you may have an attachment to your possessions, making it more difficult for you to part ways with the item in question.
Investing in your money is a great and solid way to invest in your future. Not only can it help you live a more stable and comfortable life, but it can also secure the future of your children and grandchildren. Being able to save your money and have a primary or secondary income from an ETF, real estate, or stocks can greatly improve your quality of life as you can reduce stress but also have a comfortable retirement. If you are ever unsure as to how or where to invest your money, there are many resources available to you online so that you can make an educated decision.