There are many reasons that people chose to invest their money. Some folks like the thrill of the game. Others enjoy knowing their cash is working hard for them.
But everyone that invests shares one common goal, that is increasing their wealth. Which begs the question how should you invest to ensure you maximize this? Read on to find out.
First of all, let’s look at bonds. These are when you the investor lends money to either the government or a commercial company, who will then pay it back with interest. However, they are not the same a fixed rate saving bond. As this is basically a saving account that you hold over a certain length of time.
Bonds are lower risk than stocks and share, but they are still linked to the markets. That means the return you can make on them will vary depending on the interest rate.
Also when buying bonds, it’s a good idea to look not only at how much they cost but also the yield rate. This is the percentage of the original price you paid for them that you will get back each year that you hold the bond (that the company has your money). Obviously the higher the yield rate, the better the return.
The next is you may wish to consider investing in is real estate. The property you chose to put your money in could be a mountain cabin, an urban apartment, or even a commercial property.
But before you part with you hard earned cash, you must know what you plan to do with the property you invest in. This is because it may be economically sound to buy property to let as a vacation home in some areas, but not others, and you need to make sure that you will get a decent return on your money.
Stocks and Shares
Stocks and shares are probably one of the most famous ways of investing money. However, whether they become profitable for you in the long term is related to many different and complex factors.
In simple terms, a stock is when you buy a small share in the company. This can be held on to or resold as you see fit. Of course, the price that you get when you resell depend on how well the company is doing, how good their reputation is, and how stable the market in which they are operating is.
As well as many other factors such as whether they have been part of a recent merger or hostile takeover.
Most people see stocks and share high risk, but many investors have proved that as long as you invest money that you can afford to do without for a long time, you can usually play the waiting game to your advantage and come out in profit.
The exception to this rule being penny stocks which are more high risk. Although this hasn’t stopped some people making a fortune in quick time by investing their money wisely in this area.