44 percent of Americans say that they don’t know the best ways to invest their money.
Despite having money to invest, they refrain from doing it as they don’t know how to get started. They fear choosing high-risk investments and losing all their money. They know saving money in a bank isn’t the best option yet there feel they have no other alternative.
If you’re one of these people, what can you do to overcome this investment challenge?
To help you out, here are eight wise investments you can make with guaranteed ROI.
1. Precious Metals
Precious metals such as gold and silver offer a low-risk, high-return investment opportunity. These metals are always appreciating thereby hedging your investment against inflation. So, compare different precious metals to decide the ones to buy.
You may however wonder “where can I buy gold and silver?” You claim that you’ve never seen any store in your neighborhood with a sign “gold for sale”. To counter this challenge, use the internet to search for precious metals dealers.
You want to find a company that’ll educate you on the different ways you can invest in gold and silver.
Here are some of the ways you can invest in precious metals:
• Buy silver and gold bars
• Buy bullion coins
• Invest in precious metals Exchange-traded funds (ETFs) and stocks
Compare these precious metals investing options to pick the one that works best for you.
2. High-Yield Savings Accounts
If you’re searching for a zero-risk investment, then consider a high-yield saving account. This account pays 20-25 times higher interest than the national average of a traditional savings account.
Here are things to help you compare different high-yield saving account options:
• Interest rates
• Initial deposit amount
• Minimum account balance
• Transaction fees and other charges
Your goal is to open a high-yield saving account with a bank that offers friendly terms, competitive interest rates and top-class customer support.
3. Money Market Mutual Funds
Although you would like to invest in money market instruments, you don’t know how to get started. You feel it’ll take you forever to learn how the money market works. One of the easiest ways is to invest in a money market mutual fund.
A mutual fund pools money from investors and invests it in stock, bonds, and other assets. The fund assigns money managers to oversee all investment activities. These financial experts decide on your behalf the money market instruments to buy and when to liquidate.
Given these managers are highly trained, you can rely on them for a high return on investment. Besides, they know how to manage risk, so you should feel at ease investing your money with them.
4. Treasury Bills and Treasury Bonds
Treasury bills and treasury bonds are among the most popular low-risk investments. These investments offer you a chance to lend money to the government. So, what is the difference between treasury bills (T-Bills) and treasury bonds (T-Bonds)?
The main difference between the T-Bills and T-bonds is their maturity periods. The treasury bills have a maturity duration of one year or less. T-bonds on the other hand have a maturity of 10-30 years.
So, if you’re looking for a low-risk short-term investment opportunity, buy T-bills. For the long-term, invest in treasury bonds.
5. Corporate Bonds
One of the ways companies can raise funds is to issue debt by selling corporate bonds. The companies invite interested investors to loan them money and they’re paid interest until the bond matures. At maturity, the companies return the amount originally invested.
Unlike government bonds that are 100% risk free, corporate bonds might be risky. Due to the “risky” nature, corporate bonds offer a higher return than government bonds. To minimize risk, carefully review a company before buying its corporate bonds.
Only lend money to companies that you are familiar with and that have a solid financial foundation.
6. Certificates of Deposit
Certificates of deposit (CDs) offer a safe way to save and grow your money. CDs are financial instruments offered by banks that give you a premium interest rate on your money. To earn this interest, you must agree not to withdraw the money until a certain period elapses.
Certificates of deposits are safer than stocks and bonds making them a perfect low-risk investment. Besides, CDs provide a guaranteed return, which means you know exactly how much money you’ll earn.
7. Preferred Stocks
One of the drawbacks of investing in the stock market is that there is no guaranteed income. You can hold a company’s shares for years without receiving any dividends. To overcome this challenge, invested in preferred stocks.
Preferred shares offer predetermined fixed dividends which are paid on a regular schedule. You know the exact dividends you’ll be receiving when buying the preferred stocks. However, the board of directors can vote not to pay preferred stocks dividends for a given year.
To counter this problem, invest in cumulative preferred shares, where the company must pay all missed dividends at a later date.
Also, owning preferred stocks means you’ll be paid before the common shareholders when the company goes under.
Grow Your Money by Choosing Wise Investments
To make money work for you, consider the above wise investments. You want to compare these investment options to pick the ones that fit your needs. The goal is to pick a low-risk investment that offers a guaranteed return.
Also, look for investment options that you can explore with the money you have now. The idea is to start with the little money you have and grow it by picking smart investments.
Please check out our other Finance blogs for more investment tips.