[The following is a guest post.]
Investing your money won’t make you get rich overnight, nor will you amass a fortune in the next six or twelve months. You will, however, steadily build up a nest egg that will help you buy the car you’re lusting after, go on the month-long vacation you need so badly, or keep you afloat when you retire. Whatever you want to save for, your investments will allow you to reach your monetary goals, but only if you keep in mind the best investments for the personal investor.
Make Your Home Work for You
Image via Flickr by James Thompson
Do you own your own home? Then you already have a great investment. While the housing market has its own unique ups and downs, it usually stays abreast with general inflation. Besides, if you’re not going anywhere any time soon, you’ll weather any storm. Your house will typically appreciate in value each year, meaning that this investment also grows steadily. Plus, if you’re smart about your mortgage, you have that to fall back on if you need it.
Build Your Savings with Bonds
Bonds, or fixed-income securities, are some of the most common investments. You have to buy bonds to invest, which means you’re actually lending money to either a company or to the government. You’ll receive interest based on that loan, sort of like you’re a bank. As time goes on, they have to pay back your money in full. Because of the nature of this process, you’re not really risking much—as long as you have enough money to safely lend out in the first place.
Rent It Out
Image via Flickr by bill lapp
Do you have a winter or summer house you don’t often use? Can you turn your basement, attic, or out building into an apartment or small home? Do you have the money to buy, fix up, and rent out a small property? If you answered “yes” to any of these questions, you can invest your money in a rental property. By becoming a landlord, you’ll receive guaranteed monthly income.
Just realize you’re responsible for maintenance and care, especially if you’ve added luxuries in the lease, such as appliances, lawn care, snow removal, and things like that. You may also need to evict someone at some point. That takes a strong will, a lot of determination, and a tough personality.
Branch into Annuities
Annuities are insurance products, and you’ll receive income from them either monthly, every quarter, every year, or in one lump sum. The taxes are usually deferred and you don’t have to meet any limit on contribution, which makes for an solid source of money. To invest in annuities, you can go through an insurance company or you can get help, such as through Annuity Assist by Fisher Investments. You’ll need to get advice about whether to go with a single premium, which you can easily pay on over time, or an immediate or income annuity, which requires fixed payments. The FI annuity calculator can help you keep track of your funds so you always know what to expect.
Start Your Own IRA
Your IRA is essential. Once you’re ready to retire, you want to know you’re taken care of no matter what happens. It’s fine if you also have a 401(K) through your employer, because you can never have too much of a cushion. With an IRA, however, you have so many investment options to consider. You can place your money in a high interest bearing account, which increases your investment over time, and you can easily add extra income into your account, which is sometimes harder with a 401(K).
Invest in Your Hobbies
Image via Flickr by Kate Haskell
If you collect stamps, antique watches, or even special edition toys, you already have an investment. From comic books to antique cars, these items are all incredibly valuable. You might hate the idea of selling your beloved collections, but it’s good to know that when the going gets tough, you can. By selling off just a few, you could have enough money to live on for years.
Stick to Stocks
Stocks come in many forms. While they’re sometimes iffy, a great broker can help. Sometimes taking a risk pays off, but if you’re looking to invest long-term, stick to what you know. Get tips from friends and professionals, consider investing in the companies you use and trust, and make sure you diversify. Never place all your money in a single stock.
With the right investments, you’ll eventually have a lot of money in your nest egg. What’s your favorite way to invest your money?