Investing isn’t just for the wealthy. If you have a few thousand or even less than a hundred dollars saved, remember that it always pays to use some techniques that will help your money grow bigger – to make the most of it.
Investment methods can be classified in two ways – according to the degree of risk or the time period over which the yield may be derived from them. So you have to choose between high to low risk investments or short to long term investments. Imagine a pyramidal pile of your hard-earned money; ideally, the base of the pile should be invested in low risk, long term investments (after accounting for your day-to-day expenses), the middle pile in short term investments, with moderate risk and the smallest portion of the pyramid peak, into high risk, high return investments.
Here are some of the best investment options that can grant you financial freedom in the future.
Savings Account
A safe, cut and dried method of saving money is the savings bank account. Banks offer you a set interest for the amount of money you deposit with them per month. The interest rate can be anything from 2 percent to more than 2.5 percent. Bank accounts are known to be the safest and most flexible, if not the best way to invest money. Though the yield is low, the advantage of investing in savings accounts is the freedom to withdraw money anytime, as long as a minimum amount is maintained.
Company Stocks
Investing in a company by purchasing shares through a stock broker is one of the most popular types of investing. Each share represents your small portion of ownership of the company. Although you can make decent money after you sell the shares when the value goes up, you can also lose a lot of money if the company does not do well and the value drops.
Life Insurance
When an investor pays a life insurance company to payback money to them over a period of time in small increments, this is called an annuity. Depending on the specific company, the investor can choose to receive payments until he is deceased or can set up a stop date. Since the insurance company may go bankrupt, there is moderate risk involved, although many states cover up to $100,000 in the event of a company defaulting.
Money Market placements/Certificates of Deposit
Other than bank accounts banks also offer ‘Certificate of Deposits’. Under this scheme, the banks offer a set interest for the amount of money you deposit with them for a set amount of time. The timespan varies from case to case, but the general span is six months to two years. The banks offer decent compounded interest on your deposits. ‘Certificate of Deposits (CDs)’ are a time honored and time tested way of investing money. It is also one of the safest ways of investing money. Banks offer a higher percentage on fixed time deposits or Individual Retirement Account CDs.
Properties
Investing in real estate is another popular type of investment. Depending on your method of investing, real estate investing can become extremely lucrative if done in the proper locations and the correct way. You can purchase homes to fix them up and sell them for a higher price, or you can purchase homes to turn around and rent them to tenants for a slightly higher cost.