"Do not save what is left after spending, but spend what is left after saving."
– Warren Buffett
The quote makes sense because it is said by one of the world's wealthiest individuals – Warren Buffet. And, believe it not, we all agree with it too!
Having a well-organized savings plan is a way to secure your future! Because even when you will not have a job or any other income source, you will still need money, and hence it must be saved beforehand. Investing at the right place and time is crucial to make your after-retirement life comfortable. This is what most people skip and then regret later.
Today, we will discuss the best ways of financial investment to assist you with your investments.
Why are Financial Investments Important? – Find the Answer!
Building wealth, or say a solid investment portfolio, does not require a lot of money initially. You can start with a few hundred dollars by investing them in the appropriate place. What matters when it comes to savings is the amount you save regularly. Setting aside a certain amount from your monthly salary or income, depending on the level of risk you can take, will surely help. Financial investments are essential to secure your future, prepare for kids' education, and have financial freedom. If you save early, you might not have to work much longer and enjoy the retirement life comfortably.
Analyze your future financial goals and prepare for them starting from a young age. You can start right away; it's never too late to save! Your wealth grows with time if invested at the right place because that's the power of compounding. Plus, investing also makes inflation-beating returns, assisting you during emergencies.
Popular Investment Options to Opt for are:
1. Savings Account Offer Compound Interest
The most popular and simple investment method preferred worldwide is the savings account in any bank. You get monthly, quarterly, or annual interest payouts on your savings, calculated on a compound basis. Keeping your investments in the bank savings account is the safest of all options because it is backed directly by the federal government. You can set aside a certain amount, keep it in the account, and earn regular interest. Government sets the interest on savings accounts and is given to all the account-holders, even if the bank is not doing well financially.
2. Certificates of Deposit
Interest payout on the Certificates of Deposit, or CDs, is a bit high compared to the savings account. However, both services are offered by the banks. CDs offer a higher fixed interest rate on your savings within a predefined period. The investment option is the best for those who do not want the money anytime soon because there is a set lock-in period, and you might need to pay a fee for pre-mature withdrawal.
Moreover, the interest rates are based on the time frame and the amount you invest. So, it's better to clear all the doubts by visiting your preferred bank in advance.
3. Stock Market
Investing in the stock market can give the highest return on investments. But, there are financial risks associated with this investment, and one should consider gaining complete knowledge before investing. Buying shares of a listed company in the stock market exposes you to earn considerable profits. When you become a stockholder, your investment in a company increases when the company grows. So, the possibility of building wealth over a long period is quite high. You can choose from Value stocks, Dividend Stocks, Growth stocks or well-performing funds from S&P, NASDAQ, and NYSE.
But, take note that stocks are a part of a volatile market, and the risk associated with your finances can be high. If the company you have invested in fails or goes bankrupt, you might lose everything. That's why it is suggested to invest in stocks only when you have the proper knowledge and experience. Or else, you can connect with an expert to build and manage your portfolio with well diversified stock/options investments that will help you make substantial profits over the long term.
4. Real Estate (Buy/Sell or Rent)
Buy a property and sell it after a few years to earn adequate profits or offer it for regular rental income. When you own a property and collect monthly rent, it becomes your fixed income that can be used for further investments. In recent years, investing in real estate has become a trend, and almost everybody wishes to invest in real estate. Real estate investments are the finest choice for someone looking for safe, but modest returns. You will need a considerable amount to invest in the beginning. Whether you buy the property to sell after several years or give it on rent, you will have to invest a handsome amount in advance.
There you have it! We have discussed the best ways of financial investment to grow your money. These are easily accessible investment options that are open to all. Get in touch with the professionals before making any investment to reduce the risks and make it worth!
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