Apart from working, investing your money is also a medium of making money. Hoarding your savings may help you keep your money aside, but it does not make it grow. Investing your money by buying assets that increase in value over time is a great way to build your wealth. Investing makes your money or assets work for you and help you gain more.
When you do not invest your money, you end up spending it in your daily or unexpected expenses. Utilizing your extra cash for investment purposes helps you earn higher returns, reach financial goals, and reduce taxable income.
There are a myriad of investment plans available in the market. We have listed a few of the best investment plans that you can invest in –
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Peer-to-peer lending is one of the best short-term investments possible. It is a totally different type of investment. Instead of investing your money in stocks, you lend your money to people. Platforms like Lending Club and Prosper allow you to lend your money to individuals in small increments and the rate of return is more than 5%.
If you screen your loans properly and choose only the best rated loans, you will be able to earn a decent amount of money in return without much risk of losing money.
Stock Market and Mutual Funds
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Mutual Funds are a great way to earn interest and diversify your investment. You can invest your money in equity funds, fixed-income funds or balanced funds depending upon the risk you want to take.
Investments in the stock market can earn huge returns but they do involve higher risks. There are a variety of options available in the stock market, where you can consider investing your money depending on the risks involved.
If you are new to these ways, you can start by investing in Exchange-traded Funds (ETFs) and Index Funds. You have to create your brokerage account, or there are companies like Betterment that help you invest in ETFs and do not charge for managing it.
There are online brokerage firms like Ally Financial, E-Trade and TD Ameritrade that allow you to have more control over your investments and charge low fees.
High Interest Savings Account
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Investing in best high yield savings account is a risk-free way to earn interest on your money. You have to look for a bank that provides good customer service, easy access and deposits, online management of your account and has a good reputation. You just need to open your account and deposit your money and you will earn a nominal amount of interest just by keeping your money in the account.
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Government entities issue municipal bonds when they need to borrow money. These bonds are also known as munis. These bonds are sometimes exempted from income tax and if not, they do minimize exposure to taxes. Municipal bonds are comparatively safer because the chances of borrower defaulting are very low.
You can choose from these options depending on return and the risk factors involved. Investing your money can help you reach your financial goals quickly. The returns from your investments can help you achieve your major financial goals like buying a car, buying a house or starting your own business. If you want to increase your money and are willing to take some risks, start investing today!