Wise people know the importance of saving money. However, those who are wiser go one step further and invest their money instead. The question is, which are the right products to invest your money into? The following are a few options that are worth considering:
- Real Estate
Many people think that real estate investments are risky, and they are right to some extent as the market fluctuates a lot from time to time. However, investment in commercial and residential properties is generally a good idea. Think about it- even if the market goes down for a while, the people are going to need a place to stay, right?
A common reason why people don’t invest in real estate is that they don’t have enough savings to purchase an entire building or apartment. This is where REITs that stand for Real Estate Investment Trusts come in.
REITs allow you to invest in real estate without dealing with legal red tape, formalities, and the hassles of being a landlord. It essentially allows you to invest small amounts of money in properties. This makes the option easily accessible to a larger demographic. What’s more, you can also expect decent returns of up to 11-12%.
There is no dearth of people who scoff at the idea of putting money in insurance plans like health insurance, home insurance, etc. It could be because they don’t see the immediate value in the action even though the long-term benefits of insurance plans can be substantial.
There are many benefits of insurance products. For instance, if you have home insurance, then if something happens to your house or apartment (flooding, fire, etc.), then you can use loss of use coverage to get compensation for the money you spend on temporary lodging arrangements (hotel or rental apartment). In the same way, if you have health insurance, then you can cover huge medical expenses with ease and you don’t even have to arrange the money during emergencies as the insurance providers offer cashless policies these days.
- P2P Lending
Peer-to-Peer lending is another thing that’s trending a lot today. This is because people want flexible financial products that are also readily accessible. P2P loans are available online, have few formalities, and the funds are transferred within 24-48 hours.
There are many platforms like Prosper that allow you to loan money to people just like the banks. The interest rate you can expect to earn varies from 6% to 10% or even higher. The actual value depends on the risk quotient and the platform you pick. This brings us to an important point that you need to remember- the risks in P2P lending. These include loan defaults which happen when a borrower is unable to or simply refuses to repay the loan, insolvency which can happen if the investment company itself shuts down, etc. So, choose this investment option and the facilitator firm wisely.
If you have a high-risk appetite, then you can also consider another popular investment option which is the stock market. It’s loved by people across the globe because by buying stocks that carry a high risk, you can increase the chances of gaining high returns.
Investing in stocks can be quite interesting and engaging as you can increase your returns by doing research and using acumen rather than waiting for a fixed ROI which is typical with mutual funds, fixed deposit schemes, etc. So, you can diversify on the basis of the size, industry, and growth pattern of different companies. You can also learn how stock market trends work. The more knowledge about portfolio management and market you gain, the higher can be your odds of earning a good amount of money.
Creating an ideal investment portfolio isn’t a herculean task. You just need to consider your risk appetite, long-term and short-term financial goals, and your personal preferences. However, there are certain investments are recommended by most experts. These are shared above for your understanding. Good luck!