It is often said that, in a largely capitalist world, the rich keep getting rich and the poor keep getting poor. It is a sad tale. The problem, one might imagine, is a poor saving culture. But this is not so. It is rather the lack of investment culture. Where the rich invest in bonds and assets, the poor leave their money to sit idly in the bank.
To save money is a good thing indeed, but the saved money does not grow. It remains the same until its eventual usage. By investing, we give our money a chance to multiply. You can find a reliable investment company by assessing customer reviews on reputable platforms.
Having established the need to invest money, what are the types of investment we can undertake to grow our money. In this article, we will be looking at a few of them:
One of the easiest ways you can grow your money is by investing in commodities. It is the go-to choice of new investors because of the low risk associated with it. Precious metals like gold and diamonds are some of the popular commodity choices. They do not require a massive warehouse to hold and their value increases with time especially when there’s fear of scarcity. The only downside of commodity investments is that the returns, just like its risk, are usually low.
By buying a stock in a company, you buy a share of the company and hence become a partial owner. When the company makes money, you earn a percentage commensurate to your share. It gets even juicier: if the company value increases, your stock value increases — by which time, you could decide to sell your stock at a profit and walk away from the business.
3. Real Estate
Real Estate is all the rave now and for good reason. There is money to be made in land and homes because shelter is an essential part of human life. The downside of real estate investment is that it is physically demanding. But if you can put in the work, acquire a property at less than the market price, then the stress would be worthwhile when you sell it for a load of profit.
4. Retirement Plans
Investing using a retirement plan may seem like regular saving because it involves setting aside some cash for the future, but there’s a distinguishing element. There are two major retirement plans: 401k and IRA. The IRA also has two divisions: the traditional and the Roth. Roth is tax-free. The money you set aside using the Roth plan is pre-taxed. So when you take out your money at a future time and invest it, no tax is collected on your income
5. Investment Funds
Whether mutual funds or index funds, investment funds hold the promise of a profit. In mutual funds, a financial manager oversees your funds. He invests them into many stocks and tries to get returns on them. In index funds, managers are absent. This means that you get to keep the bulk of your profit if your investment pays off. Because the funds are usually invested into multiple stocks, the risk is also lower.
By investing, you relieve the pressure on yourself and let your money work for you. So what are you waiting for?