New To Investments? Here’s How To Make Your Money Grow

| March 31, 2016 | 0 Comments

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There’s no point leaving your money just sitting around in a bank account. Especially not just a current account. If you want to think about investing your money to make a profit, you will have to consider putting it somewhere else. Somewhere where it has a much better chance of turning over profit, rather than just sitting stagnant.

 

Investment beginners can often be very anxious and nervous about moving their money around too much. Especially when it means placing it in a risky investment. However, most investments do come with a risk attached to them. That is just the nature of money and finances! The good thing to know, though, is that the pros often outweigh the cons. So you may never be affected by any risk factors.

So how should newbies start investing their hard-earned cash? Some methods of investing are best suited to those with a lot of money, so it is better to work your way up to these. There are plenty of ways you can successfully invest smaller stashes of cash though. Here are some of the best methods for beginners.

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Think About Your Goals

This may not be an actual way of investing, but you will need to seriously consider your goals if you want to be successful in making a profit. First of all, figure out your short term goals. Why are you saving your money? For a car? For a fancy holiday? Or maybe you are investing some of your company’s capital so you can afford a plush new office. Whatever the reason, you need a concrete goal so that you have something to aim for. If you have something to aim for, you are less likely to become fed up with investing and pull your money out too early. If you do withdraw cash at an early stage, you could incur charges and fees. Having a goal will also allow you to come up with an investment plan. This is especially useful if you have other irons in the fire and have invested your money in many different ways. Being better organized will also help you keep an eye on the economy. So you will know if you should pull your money out before, for example, a stock market crash.

Now that you have figured out your goals, onto the real opportunities!

401k Investment Plans

If you are employed by a company, it is a good idea to consider investing in their 401k plan. The plan is sponsored by your employer and allows you to build up a considerable amount of your earnings. These are usually put towards retirement and other valuable savings. The money is taken out of your wages before tax has been taken off. You won’t pay any taxes on your 401k plan cash until you begin to withdraw it. As well as it being tax-free, your employer will match what you put it. Most employers offer these investment opportunities instead of a pension plan. One of the benefits of the 401k is that you can control exactly how much money you are investing. And you also have the chance to split your savings across bonds and stocks. So you can be a bit more adventurous with your money if you wish. There are some restrictions when it comes to investing in a 401k plan to bear in mind. You can’t access any savings straight away, and there you will have to wait a certain amount of time to withdraw. If you don’t wait, you’ll be charged fees.

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The Stock Market

You can start investing on the NASDAQ stock market with only a thousand dollars. So what are you waiting for?! It isn’t easy investing with just a minimal amount of funds, but it is certainly doable. And, if done right, will be a great way to reap profits! You need to know in which stocks to put your money. Some financial institutions have minimum deposits, so $1,000 may not be enough to buy stocks with those. Rather than having your application denied, research all the different companies on the stock markets. Then you can see who has a minimum deposit requirement. When investing in the stock market, there are two options. Stocks or mutual funds and bonds. While stocks are more restrictive when it comes to minimum funds, mutual funds and bonds are better suited to the beginner. What makes these easier is you can often purchase them in your local bank. Once you have placed your money in NASDAQ, you just need to sit back and watch your money grow! There is also the chance that stocks and shares will fall in price, meaning you could lose some money. However, over time, they may build back up again. So sometimes, you’ve just got to be brave and sit through a rough patch. But that’s just one of the risks involved with investing!

Property

If you have a considerable amount of cash to invest, you could think about placing it in a property. All you need to do is buy a piece of real estate. Then, hopefully, over time it will increase in value. You might have to help it on its way, though with some maintenance. People often buy cheap, run-down properties and do them up so they can sell them looking their best for a profit. Before you commit to a buy, though, you should certainly think about potential properties. It’s no good buying the first house you see. Some areas are better to invest in than others. This could be for a variety of reasons. Usually, it is because the area is currently not at its best, but is in the first stages of regeneration. To get an idea of an area’s current housing market, you could always check online at Realty websites. Another way to invest in property is to let the house out. Buy a property, decorate it and do it up, and then put it on the rental market. This then gives you a regular cash injection that you can place into a savings account.

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Invest in Gold

This may sound old fashioned and like something people did a hundred of years ago. But investing in gold is actually a very good way of making some extra cash. It also super easy for beginners to do! Not only is it pretty easy to get involved with, but it is also a great way to diversify your investment portfolio. And the more diverse your portfolio is, the less likely you’ll be to get stung if one of your investment loses some cash. So what do you need to know about putting your cash in gold? Well, first off, you can invest in physical gold or stocks in the gold market. Physical gold is a finite currency. So it won’t become worthless in a few years time, unlike some jewels and gemstones might. One thing to remember about physical gold is that is seen as passing wealth on from one generation to a next. See it as saving for a rainy day. Your other option is investing in paper gold. This means you are investing in the companies who mine for the precious metal. When doing this, it is a great idea to diversify, and spread your money over a number of these companies. That way, if one goes bust, you won’t have lost all your cash.This way of investing in gold is just like investing in shares. It is basically a bet on the future of the gold market. If the price of gold ever goes down then, unfortunately, so does your investment. But if it increases, then you will be in profit!

 

Savings Accounts

A savings account is possibly the less risky of all these investment methods. It doesn’t require much effort on your part either! You simply need to find an account that offers a high rate of interest. Open it and deposit your money. Then you can sit back and watch the investment add up each month. There are, of course, some things you will need to bear in mind when hunting for the right account. Some accounts will require you to deposit a certain amount each month. Otherwise, you may be charged. There could also be restrictions on the amount you can withdraw. As always, read the small print very carefully before you sign on any dotted lines!

Investment is a great way to help you plan for a secure future. However, like most things in life, it does come with its fair share of risks. The methods outlined in this post are fairly low-risk. Especially when you compare them to other more advanced investment opportunities. So if beginners stick to this guide, they should be able to make a tidy profit out of not a huge sum of cash. Once the money starts to build, you can move your money around and take bigger leaps of faith! You never know, you may start off with one of these investments and end up making a million on the stock market in a few years time!

Category: Investment

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