If your ultimate goal in life is to become wealthy, then you have a lot more to do than just earn money. A well-paid job can give you the necessary push to start growing your wealth, but the best way to actually make money is to invest money.
You may be thinking that you are young or that this is not the time to start investing, since you just started working on your career, but it’s never too early to start working on your goals. If you can, start investing as soon as possible, even if you are just fresh out of high school or college. This will only give you more time to grow your resources and is the best way to learn how to be financially independent.
To give you a better idea of where your money should go, here are the most fruitful investment opportunities to consider.
Robo-advisors
If you are a novice investor, Robo-advisors can be a great place to start your journey. They are basically financial advisors that use algorithms to provide investors with advice on what their next move should be.
Because so many people have recently started considering investments, Robo-advisors have become very popular. They are easy to use, convenient, affordable, and usually have very low investment minimums. This allows even those who don’t necessarily have huge financial resources.
Many Robo-advisor platforms allow you to start with as little as $500 and have very low annual fees. Some of these platforms won’t ask you to pay fees at all before one of your investments reaches a certain level ($10,000 or less). This allows you to play it safe and learn the tricks before actually having to factor in costs.
Mutual Funds
Mutual funds are professionally managed investments, where your money is pooled in a group with other investors. The fund is administered by a fund manager, who then uses the money to buy securities for the entire group.
If you are a beginner investor, it’s better to start out with mutual funds than with individual stocks until you get ahold of the game. Mutual funds allow you to invest in a broader portfolio of companies, ensuring you get enough diversity to balance things out in case one of these investments go wrong.
These types of funds are not only safer, but they also allow you to start investing even though you don’t have tens of thousands of dollars, as they are less expensive in terms of commissions. You either have to pay one trading commission or none at all when you buy a mutual fund straight from the fund company itself.
Forex
Forex trading has gained tremendous popularity amongst beginner traders, especially since now you can find almost any type of information about trading currencies online. To put it simply, forex trading means trading currencies in pairs, against each other, in an attempt to make profits.
While forex trading is often recommended for more experienced investors, many brokers offer the option to create demo accounts, where you can learn almost everything about the forex market. It is recommended you start out with a demo account, especially if it’s your first time entering the trading world, to get your feet in the water and understand what forex trading is all about.
Reading tips online and using trading indicators effectively will make your journey towards financial safety much easier and enjoyable. Do your research, join forex communities, and discuss with other traders to learn how to manage risks and invest your money properly.
Bonds
Whether you choose municipal, treasury, or corporate bonds, these are all great options to grow your wealth. Bonds basically count as a debt security, which raises capital for investors based on the success of other entities. They are used to finance new businesses, local projects, and even governments, and while there is no such thing as a risk-free investment, government bonds are about as close as you can get to that.
When investing in bonds, you can choose from a variety of options, including corporate, municipal, US savings bonds, Series I savings bonds, and junk bonds, all of which have their own perks. Profits can be made by investing in bonds, but also by reselling them at a higher price later on, so they are a very versatile form of investment. They do, however, pay out lower returns than stocks, but in the long term, some bond investments tend to be more profitable and secure.
Stocks
Mutual funds, Robo-advisors, and bonds are a great way to start, but if you want to take the matter into your own hands and venture into the unknown, consider investing in individual stocks. Don’t go all-in from the beginning, though, as you risk jeopardizing your financial safety. Take it slow and steady, test the waters, and focus on learning as much as you can. Once you get more comfortable with investing, you can go ahead and experiment more.
The stock market may be scary at first, but it is one of the best environments to grow your wealth. Read as much as you can, stay up to date with the news, join forums and online communities, and start gathering as much information as you can. Once you start learning things one by one, the stock market won’t seem as terrifying as it used to.
Real Estate
Real estate will always be a good sector for investments, as properties tend to hold their value for a long time. There are many ways you can invest in real estate, depending on how much money and time you have.
You can purchase properties and sell them at a later time when prices are higher, flip houses and resell them, or simply purchasing homes with the intent of renting them. The last one is probably less time-consuming and has the potential for a huge ROI. In fact, there are many people who receive a very steady income from renting out one or two properties.