The Best Places to Put Your Money
We aren’t all lucky enough to have a lot of cash gifted to us in the form of trust funds, family money or a lottery windfall. Most of us have to invest the money we have made via hard work in order to make it grow.
If you have managed to create a little pile of cash, you have options beyond a standard bank account in order to see some extra returns on it. Of course, you should seek some professional advice when it comes to your money and only make investments if you are sure you can afford to lose that money. Naturally, higher risk investments tend to come with higher rewards, but you should only do what you are comfortable with.
The internet has opened up so many more options, and they’re all fun to explore. The variety and accessibility mean that even if you only want to test the waters with 5 dollars/euros/pounds to play with, it is totally possible.
Stock On Apps
Mobile applications and chat applications are leading the way in micro-investments. Great examples are Plum, which works in a facebook chat. You can save money and invest in a range of places. Plum breaks down the investment choices and the type of risk associated. Plus it gives details of the companies the money is split between. You can put smaller amounts in and see how the stocks and shares perform before making more significant deposits. Options are Growth, Tech, Ethical, Balanced, and Emerging Markets. Here are some other app options:
- Acorn - Automated investments of a regular amount
- Robinhood - Great for free stock trades (meaning that you pay no commission)
- Stockpile - Great for gifting stocks to people
- TD Ameritrade - Has great features and might be the most well known
- Wealthfront - Intelligently helps you maximize your investments
- Stash- Great for beginners who want to learn about building a portfolio
Ah, no, not the ones you burned in high school to give to your friends. Certificates of Deposit are pretty easy to access through credits unions and through banks. The great perk of CDs is that much like savings accounts they are FDIC-Insured. They offer a pretty tasty rate of interest, and of course, that goes double for more significant funds or the ones that are open for long periods of time. Usually, CDs have a requirement that you keep your cash in there for a set amount of time. There is typically a penalty if you choose to take the money out early, you may lose three months interest, or of course, there might be something else in the contract.
These are pretty low in terms of risk. Similar to an IOU, these are issued by companies, municipalities, governments, and states. When you buy bonds, you are essentially borrowing sums of money to these entities. The ‘swap’ or exchange here is that the bond issuer pays interest for the life of the bond. The bonds available, types of risks that are involved, as well as having varying maturity periods, penalties for withdrawal, commissions, and some will have additional risks depending on the institute in which you have made the purchase are all points to consider.
If you have some spare cash, a great thing to do is to put it into start-up businesses. In the early stages, you can negotiate a pretty decent deal in terms of what you will get out of it. Equity in the business, percentage of future earnings, a seat at the table. It is all down to what you want out of it. Seedrs is a great way to dabble in investing in start-up businesses. There are ample projects that need substantial investments and smaller companies that lean on the eco side of things. They’re much more likely to need less in terms of finance. Kickstarter, Indiegogo and Go Fund me are all great options to check out.
Of course, when you head into business funding you should be aware that many businesses fail, and you can’t be guaranteed what you’ve put in (like most investments) - but you may become more attached to the people behind it.
If you are interested in investing in businesses but aren’t sure where to start then checking out a private equity fund makes total sense for you. Check out bswllc.com for more information.
High-Yield Bank Accounts
Like a regular bank account but better. If you have a more substantial lump sum that you want to put somewhere safe, these FDIC protected accounts are ideal. The reason they have such a high-interest rate is that typically they are pretty strict on their deposit requirements. You can often do these online. But only if you have been with the same bank for a while.
Pretty simple and pretty great.
Something that your future self will thank you for is setting up and maintaining a good pension and retirement fund. Often retirement is the one time that we have a lot of available time, but not always the available cash. A lost of recent studies seem to show that many young people no longer have savings, and in fact, will go on holiday rather than save.
And while seeing the world is lovely at any age, wouldn’t it be more delightful when you don't have to head back to the office straight after?
Another perk of retirement funds is that there are a number of tax benefits that can help boost the value of your retirement fund by up to 50%, depending upon your circumstances and income.
Choosing where to put your money is a lot of fun, and you don't need to have thousands or even millions to do it. Keeping an eye on stock markets, playing with pennies and doing a lot of research pays dividends in the end.