Smart Ways To Invest Your Money

Building wealth is a gradual process that requires patience and intelligent strategies. It is a marathon and not a sprint. However, before you put your hard-earned money into an investment scheme, it is better to understand how every plan works. Learn the opportunities and risks associated with an investment plan you choose to pursue.

You can consider various investment plans; what works for you may not necessarily work for someone else. Several factors determine investment plans – your budget, involvement level, and risk tolerance.

You can go for short-term or long-term investments, depending on your goals. Several short-term investments offer the security of your funds while taking advantage of compounding. Conducting due diligence and learning financial education before deciding which scheme to select is essential to avoid falling into fraudulent get-rich-quick schemes.

Some of these short-term investments to consider include:

Money Market Funds

Money market funds invest in short-term assets that are easy to liquidate. These investments are made through fund a fund manager and usually offer high rates of return than cash at the bank.

When you invest in money market funds, the fund manager buys a range of short-term, high-quality bank, government, or corporate debt.

A money market fund is suitable for finances you may need soon but wouldn’t mind exposing them to a small risk.

Treasury Bills and Bonds

Treasury bills secure short-term investments maturing in three to one year. You can purchase treasury bills at a discount, meaning you have the authority to choose the amount to receive when the account matures and pay the lesser amount when making a purchase.

A Treasury bond is a loan you advance the government where you earn interest over a period, mainly one year and above.

They are risk-free investments. However, the returns are lower compared to other investments. Government bonds are suitable for a conservative investor who prefers less volatility.

Corporate Bonds

Corporate bonds work the same way as treasury bonds; the difference is that you loan money to companies here. They offer higher returns than government bonds and are best fit for someone looking for higher incomes but willing to expose their investment to more risk.

Games of chance 

If you play your cards well with games of chance, you qualify to be a short-term investor.  There are a lot of events to bet ranging from spots, live dealer games to casinos. Luckily, you can get almost everything under the sweepstakes casino real money sites listed. 

Certificates of Deposit

Also known as CD, a certificate of deposit is a savings account offering a fixed interest rate for a given period. The banks issue them and provide higher returns than the regular savings accounts.

Investing in short-term CDs is an intelligent idea if you foresee the rise of rates soon, as you can re-invest your funds at a higher rate upon the CDs’ maturity.

A certificate of deposit works well for the risk-averse person willing to lock their funds for a defined short period. Therefore, if you have the money you require, you can invest it in CDs.

Dividend Stocks

Dividends are payments paid by companies to shareholders from the profits made by the company. Dividend stocks offer stable income to shareholders, although they may not rise quickly.

As a young investor, you may look for companies with a solid record of consecutively growing dividends. These companies are called dividend growers, and although they may not have high yields, they can potentially increase your portfolio in the long run.

You can re-invest the dividends to grow the portfolio where you do not need the money in the short run. This is suitable for young investors looking for a long-term investment plan. However, if you need regular short-term income, you can withdraw the dividends every time they are due.

Real Estate Investment Trusts (REITs)

Traditional real estate investments involve buying and selling properties for profits. It also includes owning property and renting it out. 

However, other clever ways to invest in real estate require less involvement. One of these ways is REITs, where companies owning income-generating properties such as malls, hotels, and offices offer regular dividend payments to investors. You can purchase REITs on private or public stock markets.

Investing is Not Only About Numbers

Building wealth requires patience and dedication. Evaluating all factors before investing your hard-earned money in an investment scheme is excellent. Always consider your options to ensure your money is working for you.

Other clever investment ways include Exchange Traded Funds, Cryptocurrencies, alternative investments, and index funds.