If you are looking out for the right kind of investment to keep your money growing for a lifetime, it can actually be very difficult to pick any one form of investment. Moreover, before you decide to invest all your money in any one particular form, it is actually very important to have an understanding of all the different forms of investment options available out there in the market, the risks involved with each type of investment; and the liquidity offered, in case of an emergency. Below mentioned are some of the best investment options that can offer you great yield to keep your money growing and to secure your life forever.
Cryptocurrencies:
Cryptocurrency has become a hotbed for money-making over the past decade. It is a digital currency that can be used as a medium of exchange through digital modes. One of the most popular cryptocurrencies in today’s market is surely Bitcoin; currently, endless others are following the same path. However, there is no individual authority or entity backing up the world of cryptocurrency; it is completely dependent on the behavior of its users; therefore, it is one of the most volatile forms of investment that you could put your money in. Surely, if you do your research well and invest your money at the right time, in the right cryptocurrency, it can actually completely transform your entire life.
- Suitable for: Risk seekers and people who have some extra money that would not affect their lives. Not suitable for people seeking a safe and stable investment.
- Liquidity: Most cryptocurrencies are highly liquid in nature. You can actually buy or sell them any time of the day, with a single click on your smartphone or laptop.
Real Estate:
Buying and selling real estate property to gain profit is one of the common, traditional, and effective forms of wealth-creating for the lifetime. Real estate investments are overall considered safe and secure. However, it is very important for you to choose the property, wisely from the right location, if you are actually looking forward to a huge appreciation in the upcoming few years.
- Suitable for: People who already have ample wealth and are looking forward to expanding their investment portfolio. Perfect for people seeking long-term returns.
- Liquidity: Real Estate Investments are not at all liquid. In case you need money at any point of time in your life, it may take months, or even years to find the right buyer who may be ready to pay the amount that you anticipated.
Individual Stocks:
Stocks actually represent the ownership of the holder in respective companies. Individual stocks actually hold the potential of providing you with the best possible returns, in collaboration with really high volatility. However, if you are able to pick the stocks of the eminent companies at the right point of time, they can actually make you loaded with money if the company’s portfolio goes in the right direction. It is very important to have deep knowledge of the stock market as well as the financial details of the company that you plan to invest in.
- Suitable for: People seeking high returns and are ready to take a risk. It is advisable for all to not expand their stock holdings over 10% of their overall investments.
- Liquidity: Stocks are quite liquid. However, they are not meant to be used as an emergency fund. They can be highly unpredictable and might experience a dip along with the stock exchange. They are meant to be kept only as a long-term investment.
Dividend Stocks:
Along with providing growth like an individual stock, dividend stocks actually allow the investors to have a fixed income over fixed intervals of time. Various companies pay a part of their profits to their stockholders. You can narrow down the companies which have been paying dividends to their investors over the past years and invest in the same. The overall price of a dividend stock may not fall or rise as quickly as an individual stock as dividends are mostly offered by companies that have quite stable and strong financial back-ups.
- Suitable for: People seeking a regular income along with overall investment growth.
- Liquidity: Dividend stocks are considered quite liquid as they are not expected to fall or rise exponentially, allowing you an opportunity to withdraw your money whenever you desire.
Mutual Funds:
If you are unable to get hold of the stock market and are a bit worried about taking on the risk of investing directly in the stocks of particular companies, you can decide to invest in mutual funds. Mutual funds can be a collection of stocks, bonds, or a combination of both; managed by a highly professional finance professional or a team. Mutual funds have been designed to minimize your losses through investments, in different assets, in case of a crash of either one of them. Mutual funds are considered one of the best investments for people heading towards a life goal and offer pretty decent returns. Equity Mutual Funds are designed to yield really high returns but are volatile, whereas, Debt funds offer returns on a lower side with pretty stable growth. You can also plan to invest in Hybrid Mutual Funds which are a combination of Equity and Debt Mutual Funds.
- Suitable for: People saving for their retirement, people saving for a particular goal, people having a long-term investment span.
- Liquidity: Debt Mutual Funds are quite liquid in form; however, equity mutual funds are not that liquid. Some of the mutual funds may even come in with a minimum lock-in period.
Exchange-trading Funds:
ETFs are quite similar to mutual funds. However, one invests in ETFs much more like a stock rather than mutual funds. ETFs are diversified pools of investments including securities, bonds, and various other assets.
- Suitable for: People who have a low amount of money to invest and do not fulfill the criteria for minimum investments in mutual funds.
- Liquidity: ETFs are considered quite liquid. However, keep a check on the minimum lock-in period, in case applicable.
U.S. Treasury Bonds:
If you wish to play completely safe and build a lifelong investment, you need not think twice before investing in U.S. Treasury Bonds. Treasury Bonds are protected from any kind of inflations; however, do not provide as good a yield as mutual funds or ETFs. If you are not interested in buying Treasury Bonds from the secondary market, you can also invest in mutual funds or ETFs that comprise solely of U.S. Treasury Bonds.
- Suitable for: People looking forward to highly stable, secure, and low-yield investment returns. Advisable for people nearing retirement.
- Liquidity: U.S. Treasury Bonds are quite liquid in nature. You can sell them off in the secondary market whenever you desire to encash your investment.
Gold:
Many investors seek gold as one of the safest investments in the world. Gold prices may actually fluctuate to a great extent, just like the stock prices. However, as per research, it has shown that gold has always fetched a pretty awesome return over long-term investments. With the digitalization of the world, you can even seek to invest in gold through online platforms. With the help of digital gold, you would not be liable for keeping a track of physical gold; however, the exact value of gold would be kept safe and secure in your trading account for you to sell off in the future.
- Suitable for: Long-term investors, people who are looking forward to diversifying their investment portfolio.
- Liquidity: Gold is not considered very liquid as you may not always be able to sell it off at a profit. However, in times of emergency, you can actually sell it off easily but without assurance of good returns.
Certificates of Deposit:
A certificate of Deposit can actually be termed as a saving account that offers a fixed interest rate over the tenure of a defined period. CDs usually have fixed tenures and the most common ones range from 1, 3, and 5 years. CDs offer decent interest rates, however, not as good as mutual funds. If you have a defined goal in mind to fulfill over a defined period of time, CDs might be the best option for you to invest in.
- Suitable for: People seeking a safe and stable investment return. It is best suited for people who have a target to achieve over a certain period of time.
- Liquidity: CDs are not at all liquid. Investors may not be able to withdraw their investment before its maturity period. It is advisable only to invest that much money in CDs that you may not need in the near future.
High Yield Savings Account:
Cash Management Accounts and online savings accounts offer many high interest rates as compared to traditional bank accounts. If you wish to invest in a program that offers you decent returns along with allowing you the freedom of withdrawing your money any time you desire, there could not be a better money-making investment than putting your money in a High Yield Savings Account. High Yield Accounts usually provide more flexibility as well as higher interest rate as compared to savings accounts and can be one of the best forms of keeping your emergency funds or vacation funds invested for good returns.
- Suitable for: High Yield Savings Accounts are perfect for people with a small amount of money to be invested for a short term. It is advisable to keep at least 3-6 months’ worth of investment in a High Yield Savings account as an emergency fund, which can also double up over time if you do not withdraw it.
- Liquidity: High Yield Savings Accounts are highly liquid and offer you a fixed number of withdrawals on a quarterly or yearly basis.
Rental Property:
Investing in Rental Property cannot only secure your future but can also allow you to have a fixed income on monthly basis. Moreover, if you are able to invest in a good property at decent rates, it can actually help you make a fortune over the years. You can seek to invest in Rental Housing as well as Commercial property that can act as an amazing cash flow when it comes to your retirement. However, it is very important to hunt down decent tenants and deal with them on a regular basis if you do not wish for them to start defaulting on rent due to financial crashes or unemployment.
- Suitable for: People seeking a fixed income after retirement, people looking forward to diversifying their portfolio, people looking forward to long-term investment.
- Liquidity: Rental Properties are not at all liquid. You may not be able to sell them off whenever you desire. It can actually be a great hassle to hunt down the right buyer and sell off your property in a given time frame.
Municipal Bond Funds:
Municipal Bond Funds are actually an amalgamation of various different municipal bonds issued by the local or the state government. Municipal Bond Funds are usually exempted from federal as well as state income taxes, thus are a perfect investment for people who want some relief from their endless tax deductions. Moreover, Municipal Bonds pay a much better interest rate as compared to CDs.
- Suitable for: Municipal Bond Funds are one of the best investments for people residing in high tax states. However, they are not advisable for people who fall in low tax brackets.
- Liquidity: Most of the Bonds can actually be withdrawn without any hassle at any point in time; however, others may have a fixed tenure or an early withdrawal fee.
Going through all the above-mentioned investment options would certainly make it very easy for you to pick the platform that you wish to invest in. Figure out your life targets, risk handling capability and you would be good to go!