The best ways to invest your money in 2020
If you’re looking to expand your investment portfolio or invest for the first time, you might find yourself overwhelmed by the number of options out there. We’re going to save you some time by sharing some of the best ways to invest your money for sustainable financial growth. The secret is diversification.
- Why you need to invest your money to make money
- Stocks and real estate, two of the most common ways that Americans invest their money
- Other ways you can invest your money to make more money today
- Get up to 7% APR on crypto-collateralized loans with MyConstant
Investment is not a get-rich-quick scheme. It’s a long game. While short term investments can be a bit hit or miss, if you invest successfully, you can sustainably grow your money long term.
The secret is diversification, or not putting your money all in one place.
Why you need to invest your money to make money
Once upon a time, banks were a good option for steady, low-risk returns. After all, banks have the advantages of FDIC insurance on your deposits and a reassuring physical building you can walk into to demand your money. They also used to offer staggering rates of over 8% APR on savings accounts.
Today, savings accounts rarely offer interest higher than 1%. When you compare this with the current rate of inflation, investing in banks sets you up for losses in the long run.
There are plenty of ways to invest your money that don’t involve banks.
Banks may no longer be a good option for steady lower-risk returns, but there are plenty of other options available to investors.
And with plenty of options available to investors, the best way to invest money is to diversify.
Stocks and real estate, two of the most common ways that Americans invest their money
One of the most popular places to invest a lot of money is the stock market. When you buy stocks, you own a small portion of the company. As the company’s net worth increases, so does the value of your stock.
The advantages of stocks
The most significant advantage of stocks is that you own a portion of the company. This means that if the company goes on to enjoy billions of dollars in profit, you’ll be taken along for the ride. You even get voting rights based on the number of shares you own.
Let’s take an example where you invest $10 in a 0.1% share of a company worth $10,000. In ten years, the company is worth $100,000. Your 0.1% share is no longer worth $10, it is worth $100. Fast-forward ten years and your share could be worth $1000.
The more you invest, the more profit you stand to make. You can also opt-out at any time and exchange your stocks for cash.
The disadvantages of stocks
Generally, stocks are considered to be a high-risk investment. The stock market can be volatile and although rare, it can crash at any time.
It is therefore not recommended to invest all of your money in stocks. You can avoid market losses by diversifying your investment portfolio.
Investing in real estate provides you with a long-term, steady cash flow, tax advantages, and broad diversification.
The advantages of real estate
Owning property builds equity and increases your net worth. Real estate values tend to increase over time at a rate that beats inflation and provides long term security.
By owning property and renting it out to other people, you can also enjoy the perks of passive income and steady cash flow. Landlords also benefit from tax deductions for any money spent renovating or repairing the property.
The disadvantages of real estate
Acting as a landlord can be time-consuming, especially when it comes to property maintenance. If anything goes wrong on the property, you’ll be responsible for fixing it, not to mention payment disputes with tenants.
What’s more, real estate is not a liquid asset meaning you cannot easily cash out in an economic emergency. When you do decide to sell up, it can take some time to get your property off the market and release your assets.
Peer to Peer Lending
Peer-to-Peer lending (P2P) allows you to obtain loans online directly from others; cutting out the middleman financial institutions skimming profits off the top. Though the practice has only been around since 2005, it’s popularity has grown rapidly with many P2P lending sites entering the arena.
The advantages of P2P lending
P2P lending lets you earn a passive income more quickly than placing your money in a savings account. If you don’t have the time to read complex company reports and watch the stock market fluctuate, P2P is also a great option for you. Moreover, it’s a solid way to diversify your investments.
The disadvantages of P2P lending
As with any kind of investment, the moment money leaves your hand it’s at risk. Many platforms are filled with untrustworthy borrowers who may default on their loans and lose you money. Also, to make a profit, you generally need to leave your funds invested for a long period.
Today, reputable P2P sites like MyConstant collateralize loans with crypto to prevent defaults.If you’re curious about trying more secure P2P lending, check us out. We provide excellent rates (up to 7%) on loans and feature numerous blogs to guide you through the tricky world of investing.
Other ways you can invest your money to make more money today
But enough of the stuff you already knew. There are dozens of other ways you can invest money to make it grow.
Mutual funds are a popular investment choice in the U.S. They are funded by shareholders that trade and professionally manage holdings. The fees are high but the risk is reduced for investors because an experienced portfolio manager manages all investments in a mutual fund.
Gold & silver
Gold negatively correlates with stocks and bonds so it’s seen as an ideal method of diversifying an investment portfolio. Investing in precious metals both protects and accumulates wealth in the long term.
However, it can be difficult for the average investor to become directly involved in commodities trading. Fortunately, new platforms like DGX have made buying gold more accessible to you by tying the value to the blockchain.
When you invest in cryptocurrencies, you don’t rely on banks or other traditional institutions to hold your investment. Your money is yours and will continue to grow with interest over time.
Despite high market volatility, a long term investment in crypto has historically brought high returns. And there are more ways than ever to earn off crypto than just barebones trading.
Get up to 7% APR on crypto-collateralized loans with MyConstant
The best way to invest is a mixture of stocks, commodities, and fixed-income products. We created MyConstant as an option for investors looking for a bit of everything.
When you invest your crypto on MyConstant, you can earn an additional 9% APY, which is significantly higher than the 0.06% average banks pay in the U.S. You also get 24/7 customer support by email or phone.
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