If you’re looking to build your wealth, you are no doubt trying to find the best ways to invest your money. With all the options available, you aren’t sure of the type of investment that is best for your needs.
We’ve prepared this guide with some of the best types of investments you can make. We’ll discuss their benefits, risk level, and how to manage these investments. This way, you can judge what works best for you.
You want to first make sure that you set aside money to invest. As investing always carries risks, you want to only invest what you can afford to lose.
Now, let’s jump into the types of investments you should consider:
One of the easiest ways to grow your capital is to put it in an account for it to earn interest. These investment opportunities are one of the easiest to start with.
You can add your money to an account and lock it for a fixed duration. The longer the duration, the greater the rate of interest will be. This is a great way to get started and many Americans choose to set aside a portion of their income to add to such accounts.
- Stock Market
The stock market remains a great option for investing. If you want to truly build a lucrative income from the stock market, you must study trading. Trading has a scientific method that goes beyond the ‘buy low, sell high’ mentality.
You also want to consider different forms of stock trading such as options trading or forex trading.
A great way to start is by using a trading app such as Robinhood for buying shares of a company. Apps such as these allow you to invest small amounts as well as purchase portions of shares. They are great options for a beginner or if you have only a small pool of income to invest.
Another great alternative investment that has made strides is cryptocurrency. While this is a relatively new form of investment, it has helped ordinary individuals make fortunes.
The obvious investment is to purchase Bitcoin which is the most popular type of cryptocurrency. But there are also several ‘altcoins’ that can also bring high returns.
For cryptocurrency, you will have to do your due diligence in researching the trends and popularity of different coins. As with stock trading, these are to be held for a long time before you can expect great returns.
As a further investment into cryptocurrency, you might want to consider mining Bitcoin. This involves creating and selling Bitcoins to others. You can also use services to receive a portion of your income in a cryptocurrency of your choice.
- Real Estate
This is a controversial type of investment. You will hear some investors believing that real estate is always the best type of investment. While there are others who avoid it altogether. If you own a great property, you can make great returns if you later sell the property or if you rent it out.
But you have to consider the responsibilities when it comes to real estate. You can purchase a property for $400,000 and in a few years its resale value can shoot up to $1 Million.
But this doesn’t guarantee that you will find a buyer willing to pay this amount. There’s also the chance that you won’t find a buyer at all and you’ll have difficulty getting rid of the property!
If you rent your property or list it on a service such as AirBnB, you always have to adhere to certain laws, guidelines, regulations, and standards.
For example, if your property isn’t cleaned properly you might find a tenant complaining about growing mold. If any of the appliances aren’t working, you might find a tenant unwilling to pay their rent.
Regardless of these struggles, there are investors who have made their fortunes due to real estate investments. You want to consider if you are willing to take the risks and responsibilities associated with real estate.
If you already own a property, consider renting it out on AirBnB whenever you travel. If you can handle this, then you might want to consider buying properties to rent them later.
- Precious Metals
Before we had fiat currency or cryptocurrency, we had precious metals. Even to this day, humans see a great value in a number of different precious metals.
Gold remains an alternative form of currency and is always in demand. When there’s a financial crisis, then it’s in high demand.
Silver is a metal that is used in a number of industries. As a result, many investors like to stock up on silver bullion to later sell them to large industries.
The other major precious metals are Platinum, Palladium, and Copper. The first two metals are predominantly used in the automotive industry. Copper is used primarily in the medical industry.
Platinum and Palladium tend to be more volatile so they are only favored by high-risk investors. However, returns can be favorable.
Copper is usually cheap to buy and can bring great returns. However, most copper investors have to wait years before they can sell their copper bullion.
You have to especially decide what your level of risk is when it comes to precious metals. Low-risk investors prefer Silver and Copper. Moderate-risk investors prefer Gold and the highest-risk investors opt for Platinum and Palladium.
You also need to consider buying Rounds (coins without numismatic value) and/or Bars. Bars hold more weight, and thus, more value.
However, they are costlier and take a while to sell — making them suitable only for long-term investing. Rounds are cheaper and work well for short-term investing. The returns can be lucrative but not enough to make the average person retire!
Choose Your Type of Investment
Now you can choose the type of investment that works best for you. As a general rule, you should always diversify. This means that you should choose at least 2 of the options on this list.
While there are numerous more types of investments, these are the ones that have brought the best returns to beginner and seasoned investors.
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