If you’re ready to start investing, the first step to take is to analyze what your objectives are – it’s essential if you’re going to select the best options for you. Are you looking to create a financial safety net? Do you want to generate additional income to sustain your ideal lifestyle? Or are you thinking of creating long-term security by adding to your pension plan? Also, consider how much effort you want to put into growing your money. The key to success will be to select investments that are best adapted to achieving your aims.
Below we’ve selected four ways to generate the profit you want, including some possibilities that you may not have considered.
- Certificates of Deposit
Certificates of Deposit are a conservative option that offer a higher rate of return than typical savings accounts. To get the most benefit from this type of investment, and avoid penalties, be certain that you won’t need to access the balance until the end of the agreed term- which can be as little as 3 months. They’re a great option if you want to build a nest egg. They’re a risk-free option, and your money will grow steadily.
- Individual Dividend Stocks
If you’re attracted to the stock market, it’s important to understand how it works before risking your money. First, learn how to trade with stock apps – many give you access to a free ‘training’ account. Choosing stocks in well-established so-called’ blue-chip’ companies is a less risky way to get involved in the stock market as they have a track record of generating profits and are more likely to pay regular dividends to their shareholders.
If you don’t have the time or patience to scour the financial press in the effort to locate the ideal companies to invest in, consider using a stock scanner, which will identify ones that meet the criteria you specify.
- Mutual Funds
These days many mutual funds only need a deposit of $100 or even less to get started. The advantage of these funds is that you’ll be taking a share in a portfolio that can be spread over hundreds of different stocks, reducing the risk. They’re a great choice for anyone just getting started and are recommended for long-term investments.
- Music /Wine/Art
So far we’ve highlighted some fairly traditional ways to get started as a new investor. Now let’s look at something a bit different – investing in something you are passionate about, to generate significant returns.
One area that’s trending right now is music royalties. Using a platform, such as ANoteMusic, bid for works from a catalog, then watch your choice as it generates cash or gets traded. While it’s not wise to sink everything you have into these kinds of ‘alternative’ investments, the advantage is that they’ll remain largely unaffected by major changes in the financial markets.
If you’re just getting started, the possibilities for investments are almost endless. The keys are to be sure that you understand the basics of any vehicle you choose; to diversity your portfolio, and to look for long-term returns on your investment.