What are your options? You can invest your money in safe and low risk accounts or high risk accounts with high returns. When it comes to investment, you’ll be taking risk. Investments with higher risk can yield high returns. Investment with lower risk will yield low returns. You will have to decide if you can take risks.
If you invest in a low risk account, you’ll not be earning much per year. The return rate on bonds or mutual funds could be around 4-5% whereas stocks returns are 10% annually. Stocks come with higher risk and that’s why you’ll get higher returns. Bonds come with lower risk and they have lower returns. You will have to decide if you want a secure saving or one that will yield a high return. Once you have decided where to invest, you can begin to invest. If you’re new and inexperienced in the stock market then you can put your money in 401K, IRA, money market fund, mutual funds, bonds and real estate because these are low risk and safer than stocks. Stocks are high risk investment and you’ll need to know how to manage them affectively.
Accounts like 401K, IRA or mutual funds are safer but they have a lower return rate. The return rates on these accounts are around 1-5% whereas stocks can be 10% annually. Stocks have a high return rate and you can profit by selling when share price increased. There’re many ways to earn with stocks if you know how to manage it effectively. If you’re investing to build wealth then you should learn how to invest in stocks because there’re companies that are stable and you can earn from them each year. You won’t lose much in companies like Coca-cola. People will always need to drink sweet drinks. Coca-cola is a great company to invest in because it’s high in demand. People will never give up drinking Coca-cola.
One great market that is safe is real estate. Real estate investment is safe because it’s real property and it’s not going anywhere. Real estate is a great investment because it usually increases in price and it doesn’t fall. Ten years from now, a house can double in price. You will profit from the difference and you can sell it or continue to invest in it. If you’re uncertain about stocks you can always invest in real estate. When you want to invest in stocks, you should do your research and invest in companies that are stable, and offer dividends. Companies that offer dividends are the best companies to invest in because you won’t lose much. You’ll be getting a return every cycle. Companies that pay dividends are financially stable and high in demands so they won’t go out of business any time soon.