There are some people who lose money on the stock market, trading penny stocks. These are the kinds of people that usually shouldn’t throw money around so carelessly. They usually never truly understand what they’re doing, and are gambling with more than just money.
They’re gambling away their future.
The money they use to purchase stocks can be used to make many types of investments. Stocks are just one kind of purchase that can lead to payoffs in the future. However, investing only in stocks can be considered short-sighted, since they can have quick payoffs.
People can also purchase annuities to ensure they have a more comfortable retirement. They can also purchase bonds to essentially invest in the future of their country. People can also pool their money with other investors in mutual funds to get bigger payoffs.
There are many ways to invest, but there’s only one way to secure a better financial future. You have to invest smartly. Keep reading below to learn how.
#1. Stock Up on Stocks
The kind of investment most people think of is stocks. Whenever you purchase a stock, you are essentially staking a small claim that the company will make money. If it makes a lot of money, you get a portion of it equal to the size of your stake.
New technology has also allowed people to purchase stocks without the help of a broker. Apps like Robinhood and Acorns have allowed people to take control of their finances.
However, stocks can also be a poor decision if someone intends on investing long-term. Most people simply haven’t spent as much time in the stock market to have an expert’s level of understanding about it. That means most people are likely to lose what they put in.
Stocks are never an absolutely safe bet. People interested in investing in them should contact a brokerage to ensure they stay safe in the market. There are also other options out there.
#2. Merge Together Many Types of Investments
Stocks aren’t just about companies, though. There are types of sticks, called ETFs, which act a lot similar to stocks. However, instead of staking a claim in a single company when you buy a share, you’re staking a claim in many.
ETFs merge investments in real estate, bonds, stocks, and many other types. They’re a safer bet than tradition stocks since it’s not likely all those types of investments will fail at once. People can buy shares in them through brokers, or through apps like Robinhood since they’re traded just like stocks.
Even if they behave like stocks though, ETFs are a lot safer.
#3. Bond Your Financial Future with Bonds
Bonds are like buying a share of stocks in the government. When you buy bonds, you’re essentially making a bet saying the government will still be around in a decade or more. It’s an extremely safe bet and will result in you having more money as you get closer to retirement.
The only downside to bonds is that they will never return as much money as stocks. Although you’re almost guaranteed not to grow your money as quickly. A $50 bond from 1982 only tripled in value now, while a large share of Apple would have made someone a billionaire.
#4. Love Your Mutuals (Funds)
Most people aren’t patient enough to wait for bonds to pay off. At the same time, most people also aren’t daring enough to dive headfirst into the stock market. It’s safer to be a part of a group.
Through mutual funds, you can join a group of investors, all of whom look out for each other. Mutual funds pool each investor’s money to make large purchases of stocks that may be too expensive for most people. Then, they divide the profit amongst each other based on how much each person originally contributed.
However, along with money, you also pool knowledge of the stock market. Mutual funds lead to better decisions and more profit. However, they can be expensive to join, and you won’t see returns as quickly as investing in individual stocks.
#5. Money Isn’t Real, but Investments Can be
Real estate has always been a safe bet to bet on. Not only are you investing in the development of a community, but you’re also opening an avenue to make money. Real estate is a unique investment that doesn’t just sit there and grow over time.
Instead, you can buy real estate and open it as a rental property. That way, you can make money from renters as the value of the overall property grows over time. That way, the cumulative payoff from investing in real estate will be larger than most other investments.
#6. Pay into an Annuity More Often Than Annually
When it comes to retirement, most people imagine rest, relaxation, and happiness. Unfortunately, you need to pay for all of that, somehow. To do that, you can buy an annuity to essentially pay yourself after retiring.
With an annuity, you’re essentially creating a fund to give yourself a paycheck after you stop working. However, your paycheck will only be as large as the amount you put in before retiring. There are also many different types for different people, which you can learn more about by asking a financial advisor.
#7. Say ‘OK’ To Getting a 401(K)
When you first start working for a company, you will likely be asked if you want to invest in a 401(k) account. You should always say ‘yes’ since the account is essentially a ticket to a comfortable retirement.
It may mean getting a smaller paycheck in the present, but it will pay off later. And since employers usually match your contributions, you’ll get an overall larger payoff for working at the company.
Investing Is Just Buying a Better Future
There are many types of investments you can make, so many that it’s easy to get confused. Navigating the complex maze of financial jargon and false market predictions can seem impossible. Just know that it’s not, and you should be commended for wanting to invest in the first place.
By investing, you’re sacrificing something now to have more of it later. That is always admirable, and as long as you actually invest in something, you should be respected. Just know there are always risks in investing – all you need to do is know how to manage them.
And before you can invest money, you need to have some to start off with. To make money in the first place, keep reading here. We keep you updated with the latest trends in making your own money so that you always know how to get paid!