Most people get trapped in the mindset of putting money in their checking or savings account and letting it sit. While that is great for building an emergency fund, at a certain point you want to put your money to work. That’s where diversifying and investing will become key.
1. Stock Market
The obvious and most common place to invest your money is the stock market. This can include a brokerage account, 401k’s, IRA’s, and individual stocks of companies.
Many people also invest in a money market fund. It acts just like your savings account. Except, it takes a few days to transfer back to your bank if you need it right away (hence still putting money in your savings account).
But if you are looking to gain a bit more interest or considering investing in tax-advantaged index funds to build higher returns, this can be a great place to start putting your money.
2. Real Estate – Rental Properties
Real estate investing, especially for rental properties can be a bit overwhelming for a newbie, but can also be an incredible wealth builder for your future. While the real estate market may have a recession every now and then with recovery, value for property typically goes up.
However, rental properties can be a lot of work and time-consuming. Yet you can make money on renting out rooms or rehabbing and flip the property.
3. Real Estate Crowdfunding
For those of us who either don’t have enough knowledge or capital to get into actual real estate yet, real estate crowdfunding sites are a nice option. It simply allows you to invest in real estate properties where investors are paid out a return once the project is complete or sold. Investors can also get paid out monthly dividends as well, it all depends on the loans you get involved with.
Typically, this was for accredited investors only but that has changed. More platforms have come out that give others a chance to diversify their wealth. The three I’ve done research on, am in on myself, and have friends that invest include:
4. Invest in Art
Investing in actual art can be a tricky one, but something people have been interested in doing so for years. The reason it is challenging is, investing in current artists can be hard as you really don’t know how they will take off in the near future. People’s taste and popularity of artists can fade or change.
Of course, well-known names like Monet, Van Gogh, and Warhol would cost you millions to buy yourself, not likely good odds for you. The best you can do is choose art you really love, see value in, and to know a bit about the artist you are considering buying.
5. Peer to Peer Lending
This is the practice of lending money to individuals or businesses through online services that match lenders with borrowers. Lenders can earn higher returns compared to savings and investment products offered by banks, while borrowers can borrow money at lower interest rates.
There is the risk of the borrower defaulting on the loans taken out from peer-lending websites. For what I’ve seen, the returns typically do not get much higher than 3-8% but could be something worth trying.
6. Invest in yourself (Side hustle)
One of the best things you can invest some money into is in yourself. By this, I mean starting a online business or a side hustle that has the potential to make you even more money in the near future.
Just like anything else, there are risks with investing in or starting your own business but it can be the best investment you’ll ever make. How many times have you seen others start something for a few grand and then end up make thousands of dollars or sell the business for a nice chunk of change? You never know if you don’t invest in yourself.