Investing is an exciting, yet challenging world. They say that famous singer Barbara Streisand likes to dabble in day trading when she has the time – that’s the buying and selling of very volatile stocks in a single day and is essentially a type of gambling generally reserved for the wealthy. But you don’t have to be a rich celebrity to invest your money and make a nice return.
For a young person just starting to think about the adventure of investing and growing their money there are two things to think about: First, in some ways you want to be very careful in the beginning to choose solid investments, at least until you understand the art of investing better. After that, then you may find that you want to get into investments that offer a better return on investment, since you presumably have a long time to grow your money before you retire. Stocks are a good example of higher payoff but more risky investments.
If you are just starting out in the world of financial investment begin by creating a portfolio of some solid, safe investments, including the following:
1. The evergreen sector: Bonds.
Bonds are always a relatively safe investment, and while the returns are low compared to stocks they are much higher than a simple savings account or interest baring checking account. A bond is a financial asset that can be bought or sold. In short, say a company needs some extra money to buy some more raw materials or whatever else their business needs.
One way that they can get this money is through bonds; this is where investors, such as yourself, buy bonds where the money goes to the company in need and they promise to pay it back. It’s a lot like making a loan, and the bond manager oversees all the details, pooling your money with that of other investors to meet the needs of the company and to get you an almost guaranteed return on your investment. You can purchase bonds through almost any investment agency.
2. Invest in a most stable sector: Gold.
Gold has been an investment vehicle for mankind for thousands of years. Gold is a mineral, mined from the earth, and as such it is not renewable, meaning, the quantities are limited.
Gold is useful to man in so many ways, not just as ornamentation but in circuitry, electronics and many other things. Thus, even if someone opened a tomb tomorrow and found millions of dollars’ worth of ancient gold, or started a new gold rush in some state, gold would still be highly sought after and always a good, safe investment.
3. Invest in structured settlements and annuities.
Another solid investment vehicle is structured settlements or annuities. This is how these work: when a person is injured, say on the job or in an accident, they may be rewarded a large sum of money. Often, the court does not provide this as a lump sum; instead, they order the money to be invested in an annuity and the person to receive regular payments over a number of years.
Often, these people do not want payments – they need the lump sum for some reason. So, they opt to sell structured settlements in order to put cash in their pockets now. There are companies who buy these payments, or who can help you to invest in them, letting you put a lump sum of money into the pocket of someone who needs it now and providing you a nice return on your investment into the future.
4. Invest in medical and health insurance today for tension free tomorrow.
When it comes to your career they say that the best place you can invest is in yourself; in many ways the same is true when it comes to financial investments. When you invest in good medical care and health insurance you are making a wise decision. It can prevent stress if you get sick or injured. It protects your family.
If you have a high deductible health plan through your employer you may qualify for the relatively new HSA, or health savings account. These are similar to a 401K, allowing you to save money that can be invested into mutual funds and grow; the money can be put in pre-tax, it grows tax free, and then, as long as you use it for approved medical expenses, it can be spent tax free.
5. The most modern trend of investment: Real Estate investment.
Another investment that is both classic and modern, both investment and life choice, is real estate. While real estate has its ups and downs, like anything, it is still a very strong investment choice. Investing in real estate can be as simple as buying your own home. Or, it can mean investing in a house that you plan to rent out, or in property that you intend to renovate and sell, or simply land that you plan to hold on to until time naturally increases its value and then sell it at a profit.
As you can see from the above, even at an introductory level there are many options for making investments. Start relatively easy, make sound investments that are highly likely to lead to growth, and get used to how investing works before you move into the more challenging world of stocks.