Investing your money is a great way to build wealth over time. Because of the internet, there is so much free information about how to best invest your hard-earned money. When you invest, you are buying financial assets with the goal of those assets appreciating in value.
Below are some short-term and long-term ways to invest your money.
1. Art
Investing in art is a unique investment option with a low correlation to stocks or other traditional investments. When stock prices drop, art tends to hold its value. This is a great way to preserve wealth even if the economy worsens. It’s a tangible asset, making it do well during periods of high inflation. A perk of investing in art, lets you see and enjoy your investments daily, which isn’t actually possible with stocks.
A possible con with investing in art is the lack of liquidity. If you have to access cash or liquidate your investment, you’ll need to sell it through an auction, art gallery, or private collector, which can be time-consuming. Art is best for long-term investment.
2. Real Estate or REIG
If you’ve never heard of real estate investment groups, they are almost like small mutual funds that invest in rental properties. This is great for those who want to own rentals without having to deal with the hassle of running them, as it’s more hands-off than owning. Typically, in an investment group, a company buys apartment complexes or condos and lets investors purchase them through the company.
On the other hand, when investing in real estate, you should make sure if there is a high level of risk, that it balances out with a high possible reward. You shouldn’t put money into real estate or any other investment if you cannot afford to lose that money. Owning rental properties is an excellent opportunity for those who have DIY renovation skills and the patience to manage tenants.
3. Certificate Of Deposit
You can purchase CDs from your bank or online bank as well. They usually offer higher rates than a savings account since your locking up your money for a specific period of time. You should consider Certificates of Deposit for short-term savings that you won’t need to access until three months to five years from purchase.
4. Money Market Funds
A money market mutual fund has minimal credit risk and is appropriate for customers who have a short-term investment goal. They are easily liquidated and usually pay a higher rate than having your money in the bank. Money market funds are short-term and can be purchased through an investment fund company.
Unlike CDs, money market funds are not insured by the Federal Deposit Insurance Corporation, so there is the risk you could lose your money.
5. Stocks, ETFs and Mutual Funds
Exchange trade funds and mutual funds both offer a wide variety of asset classes, such as commodities, stocks, bonds, and others. They are usually more diversified than a single stock and can create an expanded portfolio when funds from many asset classes are combined. Exchange trade funds can be purchased or sold through a stock exchange. Mutual funds can be purchased directly from the company that manages the fund.
Final Thoughts
When looking for investment options, there are many choices for where to invest your money. Stocks, bonds, CDs, exchange-traded funds, mutual funds, real estate, and art are all good investments, no matter what level of experience you have.
Building wealth requires consistency and dedication. If you haven’t invested in a short-term or long-term asset, take time to decide which works best for you and get started as soon as possible.
