What Are the Best Ways to Invest Money?

Investing can be tricky, especially if you don’t know where to start. From small savings plans to traditional stocks, here are some of the most helpful options that will help you save for your future.

1. Real Estate

Couples looking at house
Image Credit: Shutterstock.

Real estate is one of the best passive investing plays, but owning property as a landlord takes some work.

All you need is to score a solid rental in a nice area, and you can kick back while the tenant pays down your mortgage. Plus, you get the bonus of the property value hopefully increasing over several years.

2. Passive Income From Rental Properties

Roman Samborskyi // Shutterstock.

So, your money is making money from the rent and the long-term growth. Just do the math beforehand to calculate your costs, like taxes and repairs.

Investing in real estate investment trusts is another more hands-off way to cash in on rental income and property appreciation.

3. Mutual Funds

Branislav Nenin // Shutterstock

If picking individual stocks sounds overwhelming, mutual funds make diversification a breeze. 

Essentially, this pools together money from many investors into a basket of stocks, bonds, or other assets. Instead of researching many companies to invest in, you let fund managers handle that work.

4. Mixing Funds Periodically

Krakenimages.com // Shutterstock.

Mutual funds also adjust the mix periodically. Your investment is spread out to reduce risk. 

Index funds take this automation even further — they simply track a major market index, like the S&P 500. Set it and forget it.

5. Stocks

Grateful diverse team expressing recognition, appreciation, acknowledge to leader, clapping hands, touching shoulder, congratulating boss on achieve, good work result, applauding promoted coworker
Image Credit: Shutterstock.

You have to know what stocks are if you want to invest. Well, stocks or equities represent actual ownership in a company. When you buy a share, you own a small piece of the corporation.

6. Company Growth

Dean Drobot // Shutterstock.

Stock prices reflect what investors think the company is worth — its assets, earnings, growth potential, etc. While individual stocks carry more risk, they offer rewarding growth as part of a balanced portfolio.

Like mutual funds, index funds simplify stock investing by giving you a ready-made basket of stocks without having to hand-pick them yourself.

7. Target Date Funds

Roman Samborskyi // Shutterstock

Target-date retirement funds get less risky as you age, and often yield a higher return than traditional savings accounts.

The key is going broad across different investment types and avoiding the constant temptation to buy and sell constantly. Time and compound growth are on your side.

8. Automate for Passive Consistency

Portrait of asian male accountant working on desk calculating tax yearly financial papers using calculator and laptop at work, creative young asian businessman.
Image Credit: Shutterstock.

Want to make passive investing even more effortless? Automate it. 

Set up recurring transfers from your bank into your IRA, 401(k), brokerage — whatever accounts you want to fund.

9. Small Amounts Add Up

Roman Samborskyi // Shutterstock.

Even $50 a month will grow tremendously over decades in the market. This “set it and forget it” approach enforces discipline against trying to time purchases or reacting to market swings. Let technology be your auto-pilot!

10. Take It Slow and Let Your Money Grow

Man with money
Image Credit: Shutterstock.

To sum it up, starting with these basic, passive strategies gives you low-risk avenues to build wealth steadily. There’s always time to get fancier with riskier active approaches later. 

But boring, old, passive investing gives you good habits for long-term gains. Cut through the clutter and let your money work itself into a bigger nest egg. Slow and steady wins the race!

Source.

Author: Christopher Alarcon

Title: Journalist

Expertise: personal finance, side hustles, time management

Bio:

Christopher Alarcon is a journalist with a deep passion for personal finance. He has contributed to major online publications, including MSN, Wealth of Geeks, and Business Insider.