How to invest small amounts of money wisely

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Welcome to the course on ”Investment : invest small amounts of Money wisely”

Contrary to popular belief, the stock market is not just for rich people. Investing is one of the best ways for anyone to create wealth and become financially independent. A strategy of investing small amounts continuously can eventually result in what is referred to as the snowball effect, in which small amounts gain in size and momentum and ultimately lead to exponential growth. To accomplish this feat, you must implement a proper strategy and stay patient, disciplined, and diligent.

People who are relatively inexperienced with the financial world may think of online investing as exclusively for big-time traders and representatives of financial institutions who trade stocks and other equities professionally. However, that is not the case. A beginning investors who can devote only a small amount of money to the task can put that money into an online brokerage account and may make it grow through a series of prudent trades.

When you invest in residential real estate, you are getting more than a home or a piece of land upon which to build a home. Real estate investment has become a popular way for people to make money, and it is not uncommon to buy a house or land without any intention of living there. Some people simply buy and hold property, waiting for it to appreciate in value before re-selling it. Having cash for a down payment is the quick and easy way to enter the real estate market, but it’s not your only option. Many people have found ways to start investing in real estate with little or no money of their own. Options include borrowing money as well as a number of more unusual and creative paths to ownership. Course covers important methods to save and invest money wisely to become financially independent.

Чему вы научитесь

Требования

Описание

Welcome to the course on ”Investment : invest small amounts of Money wisely”

Contrary to popular belief, the stock market is not just for rich people. Investing is one of the best ways for anyone to create wealth and become financially independent. A strategy of investing small amounts continuously can eventually result in what is referred to as the snowball effect, in which small amounts gain in size and momentum and ultimately lead to exponential growth. To accomplish this feat, you must implement a proper strategy and stay patient, disciplined, and diligent.

People who are relatively inexperienced with the financial world may think of online investing as exclusively for big-time traders and representatives of financial institutions who trade stocks and other equities professionally. However, that is not the case. A beginning investors who can devote only a small amount of money to the task can put that money into an online brokerage account and may make it grow through a series of prudent trades.

When you invest in residential real estate, you are getting more than a home or a piece of land upon which to build a home. Real estate investment has become a popular way for people to make money, and it is not uncommon to buy a house or land without any intention of living there. Some people simply buy and hold property, waiting for it to appreciate in value before re-selling it. Having cash for a down payment is the quick and easy way to enter the real estate market, but it’s not your only option. Many people have found ways to start investing in real estate with little or no money of their own. Options include borrowing money as well as a number of more unusual and creative paths to ownership. Course covers important methods to save and invest money wisely to become financially independent.

You can get started today with just a few dollars

How to invest small amounts of money wisely

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You shouldn’t wait until you come up with hundreds or even thousands of dollars before opening an investment account. In the past, it was almost a requirement to have quite a bit of money available to make your initial investment in a mutual fund or open a brokerage account. Today, things are quite different. You can now start investing with very little money upfront. Here’s how.

Key Takeaways

  • Invest through a direct purchase plan, which lets you buy stock straight from a company and avoid commissions.
  • You can also use an online brokerage or investing app to invest small amounts of money over time.
  • Buying ETFs will give you exposure to multiple stocks with one purchase, which can help lower your commission costs.
  • Also consider no-load funds that have low investment minimums, which may be easier for you to afford.

Direct Stock Purchase Plans

If investing in individual companies is your goal, you might want to consider Direct Purchase Plans or DPPs for short. As their name suggests, you purchase these stocks directly from the company. There’s no brokerage account, no middleman, and you work directly with the company that issues the stock. One drawback is that not every company offers a DPP so that you may be somewhat limited in your selection.

Companies seldom promote their DPPs, so it’s up to you to find them. You’ll probably have to spend a little time visiting the company’s website and looking through their investor relations section to determine whether or not they offer a direct purchase plan and how to get started.

The real benefit of a DPP is that you aren’t paying a hefty commission to a broker, and you’re given the ability to purchase fractions of shares. For example, say a company you want to invest in is trading at $100 per share, but you only have $50 to invest at the moment. Well, through a DPP, you can usually buy just half of a share, and then you could continue to use small amounts of money to purchase more shares over time. You can’t do this with a traditional broker.

Online Brokers and Investing Apps

A second way to start investing with a small amount of money is to sign up with an online discount broker. For just a few dollars, you can create an automatic investment plan that will help you start building your portfolio. Keep in mind that they may impose some account restrictions and fees, but generally speaking, it’s a great way to start investing today without much money.

Another option is to use one of the investing apps that are currently so popular on the market. These apps work differently—some let you round up the change from purchases and invest the difference, while others allow you to invest in fractional shares—but they share a common goal: to help investors build a diversified portfolio with the money they have at hand with a simple click on an iPhone or iPad.

Like online brokers, investing apps can charge service and maintenance fees. The investment choices offered can vary widely; some allow you to invest in predetermined portfolios of exchange-traded funds while others offer individual stocks. Remember also that these individual investments may carry fees. If you’re looking for an investing app to get started with, here are a few to consider:

  • Robinhood
  • Acorns
  • Axos Invest
  • M1 Finance
  • Stash

These apps also have different minimums for getting started. For some, the minimum is $0, but others may expect you to start investing with $100 or more, so choose the app that fits your budget and ability to invest.

Invest in ETFs

Thinking of investing in something like a mutual fund so that you can achieve instant diversification but don’t have the high initial deposit to make it happen? You may want to consider buying shares of an exchange-traded fund. Unlike a mutual fund that may impose a minimum initial investment, ETFs trade like stocks. They have a specific share price and can be purchased through virtually any broker. So, with an ETF, you can buy just a couple of shares as long as you have enough money to buy the shares.

But ETFs don’t come without drawbacks. For one, you have to purchase whole shares. Second, you’re going to typically pay a trading commission each time you make a trade. Since commissions can generally run anywhere from $4.50 to $11, this can quickly eat into your investment. But if you purchase ETFs less frequently and with slightly larger amounts of money, you can keep your transaction costs down.

Fund Companies Offering Low Minimums

One of the biggest and well-known no-load fund companies out there is Vanguard. But guess what? For most of their funds, they require a $3,000 minimum investment just to get started.   For many people, it could take nearly a year to save up that kind of money if they are investing for the first time, and that is to purchase one single fund. Vanguard isn’t alone, and most of the major fund companies have steep initial investment minimums

Luckily, there are some other no-load fund families out there who cater to new investors and don’t impose such high limits. For example, you can check out Charles Schwab, which offers a low $100 minimum on their no-load funds, and T. Rowe Price, which doesn’t have a minimum on investor class funds if you open an account with them.     These are two great low-cost fund families that make it easy for a new investor to get started with even a small amount of money.

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For some people, financial struggles are due to not bringing in enough money. For many others, though, the problem comes from not spending money wisely or from spending more money than they make.

According to Time , nearly 73% of Americans die in debt.

In this article, we’ll take a look at 7 ways that you can start better spending the money you earn in order to help you reach your financial goals.

Get on Track to Start Investing in 14 Days

1. Track Your Finances

Before you can start figuring out how to spend money more wisely, you first need to understand where your money is going. Make a budget and track both your income and your expenses. Once you know where your money is going, you can start looking for opportunities where it could be better spent.

2. Think About the Long-Term Benefits and Drawbacks of Purchases

Far too many purchases are impulse decisions. While this is fine when it’s a $1 chocolate bar at the supermarket, it becomes a problem for larger purchases. Before you buy something, think about how it will affect you in the future.

How long is it going to last? Is it going to put you in debt? Is the value you will get out of it over its lifetime worth the cost?

These are questions you can use to determine if something is really worth buying.

3. Only Put Money on Your Credit Card if You Can Afford to Pay it off Each Month

Credit cards aren’t inherently a hindrance on your finances. After all, they are convenient and many cards offer cash back on your purchases.

However, you should only spend money on your credit card if you are able to fully pay it off at the end of the month.

If you pay off your credit card balance each month, you won’t incur any interest charges and it will essentially be the same as paying cash.

If you don’t pay off your balance each month, though, the interest accrued can quickly spiral out of control.

4. Stop Trying to Impress Other People

The average person spends far too much money merely trying to maintain an image. From fancy cars to brand-name clothing, much of what we buy has more to do with impressing others than it does to do with purchasing something that we actually want and enjoy.

However, “Keeping Up With the Joneses” is an expensive and unnecessary pursuit. Buy the things that you yourself enjoy and don’t fall prey to the feeling that you have to spend money in order to impress other people.

5. Figure out What Habits Drain Your Budget

After you start tracking your finances, you can begin looking for habits that may be draining your budget. These habits could include expensive hobbies, eating out too much, spending too much money on clothing, or any number of other financial drains.

Once you figure out which habits are eating up large portions of your income, you can then evaluate whether or not these habits are really necessary.

6. Learn to Value Savings Over Products

Some people are naturally good at saving money and draw enjoyment from growing their wealth. For others, money is something that is spent the moment it reaches their hands, and anything else feels like a wasted opportunity.

If you find yourself in the second camp, try to adopt a mentality that values savings over products. In the end, money invested or money saved will almost always benefit your life more than money spent on products that will wear out or become uninteresting in little time at all.

7. Start Investing Early

Spending your money wisely isn’t just about avoiding unnecessary purchases – it also requires you to take the money that you save and put it towards things that will help you reach your financial goals. With that in mind, there’s no such thing as starting investing too early or investing too little.

No matter how young (or old) that you are or how little money you have to invest, putting your money into quality companies that will grow in value as time goes on is always a wise use of your income.

Need a little extra guidence when it comes to spending money wisely? I’ve created a valuable 14 Day Financial Challenge that will help you get your finances on track.

How to invest small amounts of money wisely

Phil Town is an investment advisor, hedge fund manager, 3x NY Times Best-Selling Author, ex-Grand Canyon river guide, and former Lieutenant in the US Army Special Forces. He and his wife, Melissa, share a passion for horses, polo, and eventing. Phil’s goal is to help you learn how to invest and achieve financial independence.

How much you got?

This article was updated on Dec. 30, 2015.

Got only $20 to put away right now?

It may not sound like much, but you can use it to buy shares in Ford Motor. Or Bank of America. Or Hertz. And those are just a few of the thousands of options available for cash-strapped investors. What if you can spare $100 — or $1,000? Your options are even broader.

We’re not here to tell you where to invest your money. We won’t lay out a handful of stocks on a “buy” list. But what we can tell you is how you can invest your money — the mechanics of investing small, large, and medium amounts of cash. We can even help you choose a broker.

How to invest $20
Let’s start with $20. We’ll assume that you’ve already paid off any high-interest debt and that you have some money stashed in a safe place (like a savings or money market account) that you can get to quickly in case of an emergency expense. Now you find yourself with a little extra dough, and you want to begin investing for your future.

Is it even worth it to invest such a pittance?

Heck yeah it is! One of the best ways to invest small amounts of money cheaply is through Dividend Reinvestment Plans, commonly known as DRIPs. With a DRIP, any cash dividends you receive from a company are automatically reinvested in more of that company’s stock. This means you’re steadily building your position in that company, so your capital gains will increase exponentially over time.

On top of that, DRIPs — along with their cousins, Direct Stock Purchase Plans (DSPP) — allow you to bypass brokers (and their commissions) by purchasing stock directly from the companies or their agents.

Thousands of major corporations offer these types of stock plans — many of them free, or with fees low enough to make it worthwhile to invest as little as $20 or $30 at a time. DRIPs are ideal for those who are starting out with small amounts and want to make frequent purchases (a powerful investing tactic known as dollar-cost averaging). Once you’re in the plan, you can set up an automatic payment plan, and you don’t even have to buy a full share each time you make a contribution.

DRIPs may be one of the surest, steadiest ways to build wealth over your lifetime (just make sure you keep good records for tax purposes). For more details on Drips, see “What if I can only invest small amounts of money every month?”

How to invest a couple of hundred bucks
So you’ve weeded out all the nickels from your spare-change jar and have tallied up a few hundred bucks. Instead of blowing it on snack food and Elvis memorabilia, consider investing it in an index fund. An index fund that tracks the S&P 500 index, for example, will match your returns to those of an investment that has historically returned about 10% per year.

Some index funds require an initial investment as low as $250. This low minimum is usually restricted to individual retirement accounts (IRAs). After your initial investment, you can add as much money as you like, as frequently as you like, with no additional costs or commissions. You can purchase index funds directly from mutual fund companies, so there are no commissions to pay to a middleman.

If you have a few hundred dollars to start with, then this is a great, low-cost way to establish an instant, broadly diversified (500 companies!) stock portfolio.

How to invest $500
Once you’re up to $500, your investment options open up a bit more. You can still buy an index fund, and now you’ll have your pick of fund companies that require higher initial investments. This freedom will enable you to shop around for a fund with the lowest expense ratio.

You should also seriously consider opening a discount brokerage account. You’ll want to focus on the account option that best serves your needs; some accounts require a minimum initial deposit, and some don’t. That means you can open up an account with whatever investing money you have available and start researching, and perhaps purchasing, individual companies. (Or, if you’re enamored of index investing, you can easily invest in the SPDR S&P 500 ETF (NYSEMKT: SPY) , a stock-like investment that mimics the performance of the S&P 500.)

The key here is to keep your costs of investing (including brokerage fees) to less than 2% of the transaction value. So if you’re planning to add to your position in stocks a few times a month, then a DRIP or an index fund may still be the way to go.

How to invest $1,000-plus
What can you do with a grand? Obviously, with $1,000 you can open up a discount brokerage account, but consider the rewards if you can scrape up an additional $1,000 a year to add to your original investment.

Say you have 30 years until retirement. If you start with $1,000 and invest an additional $1,000 each year, and your money earns 10% annually, then in 30 years you’ll have about $200,000. Keep at it for another 10 years, and your money will more than double to $532,000. That seems worth it to us. And if you have earned income, you can set up a Roth IRA, and you won’t even pay any taxes on your savings when you withdraw them in retirement.

Again, even at this level, the key is to keep fees from eating up your earnings. So make sure the costs of investing (including brokerage commissions, stamps to mail in checks, and books that help you learn to invest) are less than 2% of your account’s overall worth. With small accounts, that can be a challenge, but with such low commissions being offered by discount brokers, it’s definitely doable.

Many people think it requires a large sum of money to start investing. Here are 10 ways to invest small amounts of money that you might consider.

How to Invest Small Amounts of Money

1. Contribute to Your Employer-Sponsored Retirement Plan

If you work for an employer that offers a retirement plan like a 401(k), 403(b), a SIMPLE IRA or another type of defined contribution retirement plan, you have the opportunity to contribute a portion of your salary each pay period. Depending upon the rules of your plan, your contribution rate can be as little as 1% of your pay all the way up to the maximum annual limits of $19,000 and $25,000 for those 50 or over for 2019. These limits increase to $19,500 and $26,000 for 2020.

2. Contribute to an IRA

The annual limits for an IRA contribution are $6,000 for those under 50 and $7,000 for those who are 50 or over at any point during the year. The 2020 contribution limits are unchanged. Those limits are maximums, you can contribute any amount you are comfortable with up to those levels. These limits apply to all types of IRAs including traditional (both pre-tax and after-tax contributions) and Roth accounts.

3. Dividend Reinvestment Plans (DRIPs)

Dividend reinvestment plans are established by some companies to allow shareholders to reinvest their dividends from the stock into additional shares in the company as opposed to receiving these dividend payments in cash.

Generally, there are no, or very low fees connected with reinvesting in the shares. Additionally, DRIP participants are able to purchase fractional shares which is not the case when buying shares on the open market via their brokerage account.

Note that even though you are not receiving a cash payment, these dividends must be reported as taxable income.

DRIPs are a painless way to reinvest your dividends and have the money grow over time if the stock does well.

4. Robo Advisers

There are a number of robo advisers that have hit the investing scene over the past decade. These advisers use algorithms to allocate investor’s portfolios, usually employing a number of ETFs to implement these allocations.

Many robo advisers have low minimum investments, for example Betterment has no minimum required investment for its basic service.

Robo advisers can be a good way to invest in a managed, diversified portfolio with a low minimum investment.

5. Mutual Funds

The minimum investment for many mutual funds are often low. Some have no minimum, while others may be in the $500 to $3,000 range. Overall, these minimums are quite low in the whole scheme of things.

A number of fund companies offer lower minimums for investments made in IRA accounts or in custodial accounts for minors. They may also offer low or no minimums if you may regular periodic automatic investments into one or more of their funds.

6. Paying Down Debt

Although not an investment per se, applying an extra amount, even $50 or $100 per month toward paying down debt can be a solid investment in terms of the amount of money this can save you over time. Reducing the amount on a credit card, for example, can result in significant savings in the interest paid over time.

Paying extra on your monthly mortgage payment for homeowners can result in significant interest savings over time and can help you pay off your mortgage early.

These types of interest savings are very real and can add up to a lot of money over time that can be used for other purposes.

7. Treasury Securities

Treasury securities come in a range of maturities ranging form short-term Treasury Bills (also know as T-Bills) to longer term bonds. These are debt obligations of the United States Treasury and are perhaps the safest investment available. They can and do, however, fluctuate in value based on the direction of interest rates just as with any type of bond.

If you buy via the Treasury’s online portal, Treasury Direct, you can buy Treasury securities for as little as $100. Your bid will be entered into the system and you will receive the securities at the average auction price for that session.

8. Investment Crowdfunding Platforms

Investment crowdfunding platforms allow investors to essentially pool their money to fund investments into start-up businesses, real estate ventures and other ventures.

The Jumpstart Your Business Startups Act of 2012 (the JOBS Act) opened up these types of investment opportunities to smaller investors. Previously, only accredited investors could invest in venture-capital-type opportunities.

Different crowdfunding platforms will have different minimums. Examples of crowdfunding investment platforms include: Kickfurther, Seedinvest and WeFunder.

Be sure you understand all of the rules and terms surrounding this type of investment including the ability to access some or all of your investment if needed. Many of these platforms have limited liquidity in terms of accessing your money. You will also want to perform due diligence on the platform’s principals as to their background and experience in the venture capital space.

9. Round Up Your Purchases

Some banks and financial institutions have programs that will round up your purchases on a debit card to the next dollar. They will then deposit these amounts into a savings account in your name.

While this doesn’t seem like a lot of money, it can add up over time. Think about how much you spend on things like gas, groceries and other purchases over the course of a given month. These small amounts can add up and this a is completely painless way to save a few extra dollars each month.

10. Health Savings Account (HSA)

If you have access to a high deductible health insurance plan via your employer or privately, you can fund a health savings account or HSA. These accounts let you defer as much $3,550 for a single person and $7,100 for a family into an HSA for 2020 on a pre-tax basis. You can add an additional $1,000 for those who are 55 or over.

Money comes out of the HSA tax-free for qualified medical expenses. If the money is not used during your working years, the HSA can serve as a retirement plan for covering medical expenses including Medicare premiums.

Portfolio Analysis is a crucial task for anyone investing their money and expecting to multiply their income, that is where data science helps.

How to invest small amounts of money wisely

In a previous blog, I described the basic terminology that we would be using through the following analysis, so do check it out if you are new to finance!

Have you ever wondered how to decide which stocks to buy when you want to invest? Apart from studying different stocks and making decisions just based on our human biases, it actually is beneficial to let computers find relations in the data. Combining our analysis with that of the computer can give us a best-of-both-worlds scenario and that is what a lot of investors do in the market today. Basically, you need to start by creating a portfolio of say 10 stocks that you are interested in buying, and then based on the past performance of these stocks, let your computer tell you how much to invest where. It may even suggest that you short a few stocks, but if you only want to take long positions, just swap out the stock with another and again optimize the portfolio. So through this blog, we will be focusing on how to create a portfolio using a computer.

Note: For any matrix e, eᵗ means e transpose. Due to the limitation of editing on medium editor, we cannot get “ T” instead of “ t” in superscript.

I will be explaining the Markowitz Mean-Variance Models for Portfolio Analysis and the Modern Portfolio Theory. These have been in play for a long time and many investment agencies use it to this day for portfolio optimizations. I have followed each concept with examples and a code, and if the math gets tough for you, you can use the code directly to analyze the results for your choice of portfolios.

Markowitz Models are at the foundation of the Portfolio Theory. According to Markowitz, investors care about just two parameters while investing, i.e., return and risk. According to him, portfolio diversification enables us to make tradeoffs between these two parameters. These models are useful for investors trying to construct efficient portfolios using ETFs(Exchange-Traded Funds). ETF is a type of security that tracks an index, sector, commodity, or other asset, but which can be purchased or sold on a stock exchange the same as a regular stock.(Definition from Investopedia )

In the Markowitz Models, a few assumptions are:

  • Investors are risk-averse(we all want to minimize the risk in our investments)
  • Investors are rational(we abide by logic while investing)
  • All investors have access to the same information(which we do because of the internet)

The essence of this theory is that the risk of individual assets is not relevant. What is important to us is how each asset contributes to the risk and return of the entire portfolio. This essence is realized when we use the covariance matrix to calculate the total risk.

To briefly summarize the math terminology that we will use:

  1. We want to invest X amount in the assets A₁, A₂, ……, Aₙ at the time tₒ. For this blog, every asset that we consider in a portfolio will be a risky asset.
  2. Xₜ is the amount invested in Aₜ such that , ∑ Xₜ = X. Xₜ can be positive or negative. If Xₜ P:(A₁, A₂, ……, Aₙ) is known as our portfolio
  3. wₜ = Xₜ / X = Proportion of total investment in iᵗʰ asset ∑ wₜ = 1.
  4. rᵢ = rate of return of the asset Aᵢ, which is a random variable with the value

How to invest small amounts of money wisely

Here rᵢⱼ = return of iᵗʰ asset at Tⱼ time, j=1,2,…. n.

6. μᵢ = E(rᵢ) = Mean/Expected return of iᵗʰ asset for time:

Saving is a prerequisite for investing. To boost your net worth and achieve your financial goals, you need to acquaint yourself with useful money-saving tips and reliable investment strategies that can help you become a successful investor.

Whether young or old, you should start thinking about how you can invest and save to build your wealth. In this article, we explore some of the tips that can help you save and invest your money wisely. Keep reading and learn how you can achieve that.

Ways to Save and Invest Your Money Wisely in 2020

To be a successful investor, you must be good at saving money. Here are the simple tips and principles that can help you build your savings and invest your money wisely.

1. Start Saving and Investing Early

Saving money requires self-discipline. As soon as you start earning income, you should start saving and investing. The amount of wealth that you will accumulate in the future will depend on the time you began to save and invest your earnings.

You must not wait to have a lot of money to start saving or investing. Any amount of cash you save or invest will compound exponentially so long as you start early. The earlier you begin, the more wealth you will build, regardless of the amount of money you invest.

2. Automate Your Savings and Investment Contributions

If you always forget to contribute money to your savings accounts, you can automate your contributions. Without automation, you may even get tempted to spend the money meant for savings or investment. So, automation is the best solution for procrastinated savings.

To automate savings, you can request your employer to send part of your salary to your savings accounts. Also, you can authorize your bank to transfer some money from your bank account to your investment account, for at least every month.

3. Set Your Short-Term and Long-Term Investment Goals

Setting financial goals can help you pick a stance on what you intend to achieve within a specific duration. Generally, saving is convenient for short-term goals like emergencies, while an investment is ideal for long-term financial goals.

You should never withdraw all your savings and use it to invest. Instead, look for ways to help you increase your earnings to get more funds, which you can invest in your long-term goals. You may only invest using your savings when you have substantial cash reserves.

4. Invest in Tax-Advantaged Savings Plans

The Canadian government offers various tax-deferred savings plans to help you save and invest without getting taxed. Some of the government-registered plans that you can invest in include RESPs, RRSP, and TFSA. Let’s briefly look at how they operate.

Registered Education Savings Plan (RESP)

According to knowledgefirstfinancial.ca, an RESP is a savings account that can help you save for your children’s post-secondary education without getting taxed. It comes with numerous benefits, including guaranteed grants from the government and tax-free growth of investments.

RESP is a reliable long-term investment option. Thankfully, RESP providers like the Heritage Education Fund are ready to guide and help you invest successfully in RESP. You can read the Heritage RESP Reviews to learn more about the company.

Registered Retirement Savings Plan (RRSP)

An RRSP is a tax-advantaged plan that can help you save or invest for your retirement more efficiently without getting taxed. Once you open the account, you will be contributing towards it every year when filing your annual tax returns.

Tax-Free Savings Account

A TFSA is another tax-deferred plan that can help you save for short-term goals such as emergencies, weddings, birthday parties, or vacations. You can withdraw your money at any time without getting taxed.

5. Diversify Your Investment Options

To become a successful investor, you should invest in a wide range of investment options that are reliable and profitable. Some of the choices you can consider include the stocks market, mutual funds, exchange-traded funds, and bonds.

However, each investment option has unique sets of risks. You should understand all the investment options you plan to venture into before risking. For instance, stocks carry a lot of risks as they can change daily, but have huge returns when their value increases.

Bonds can be less risky because they provide fixed, but low returns. Generally, you need to invest in options that offer huge returns but are less risky.

Final Words

The secret to increasing your net worth is to start saving and investing early as soon as you begin earning. It doesn’t matter the amount of money you have, whether small or big. When saving money, remember to automate your monthly contributions. Also, ensure that you evaluate the risk tolerance of every investment option before you invest.