Entering the world of investment can be intimidating at first. There are a number of investments that are advertised through word of mouth and in the media, and it’s often hard to make sense of all the different options. For beginners, it’s important to start small and get a feel for a particular market.
If you want to secure your financial future and even start saving extra money for retirement, then these are four investment options that beginners should know about.
One of the most popular investments, but also one that takes some learning. Stocks can be highly volatile at times (as shown by recent events on the US stock market), but can allow for significant returns. Tech stocks have shown the most growth in recent years, and the largest tech companies show excellent recovery after market downturns.
Retirement Fund (Traditional/Roth IRA Etc, 401k.)
With a retirement fund you will have a long term investment that ensures your future stability. Retirement can be expensive, so it’s important to start as early as possible. Exploring options with an employer is the best way to get started on an investment fund. Taxes are typically deferred on these funds, making them the ideal safety net for retirement investing.
Certificate of Deposit / Term Deposit
Banks and other financial institutions offer long term deposit plans that have better interest than a typical savings account. You won’t be able to access your money between the initial deposit and the maturity of the term, so this is a good option if you struggle to maintain discipline with regular savings. You can keep growing a certificate of deposit by reinvesting the amount and the interest gained, while also adding a top-up to the deposit at the end of the term. Shop around for interest rates at different banks to find the best return on this type of investment.
Bonds for Beginners
Secured investments in the form of bonds can be a low cost way to invest. Small businesses and even larger organizations like churches offer bonds to fund projects. These are low cost to buy into, and the interest returns can be much higher than other investments. Church bonds in particular are extremely stable and can be excellent for diversifying an investment portfolio, or they can simply be used as a first investment.
Reinvesting the money that you earn will allow you to grow your net worth and create better options for your future. Start small, and only invest what you can afford to lose value on. As you become more experienced, you’ll be able to spot the best investments in any category, allowing larger gains and more future security.
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