Are you interested in investments? As you probably know, investing is a sure way to make the future brighter. With strategic investment, you and your family will not have to worry about money even in retirement. If you consider yourself an average saver, you are probably interested in what a good investment means.
Some types of investments, such as shares on the stock exchange and investing in innovative companies in the initial phase (so-called startups) are considered serious investments. However, in such situations, a large amount of money can also be seriously lost. In other words, these are high-risk investments, unless you are already financially secure enough, and they are not the best example of securing the future. In short, the average saver should look for safer investments. How secure they are, also depends on how long you plan to invest.
In the short run, the value of moderately risky investments is difficult to predict. So, you need to look for safer investments if you think you will need the money in a few months or years. With short-term uncertainty, the value of moderate-risk investments increases in the long run. This will make a much higher profit than in the case of a typical low-risk investment. Therefore, if it is acceptable for you to keep the money for two to three decades, these investments are relatively safe with a high rate of return.
Now that we have clarified that, we will try to help you find the best investment for everyday savers.
The safest form of investment provides perhaps the most meager return on money. Still, savings accounts have their value. For example, if you plan to form a black fund (in case you scratch the car or if you drop the phone in a soup or a toilet), a savings account is the right solution. You will have an instant solution for accessing money, without paying special fees. Although the return is low, it still exists, and the same cannot be said for a personal stock where interest does not exist.
Another type of savings account is fixed-rate bonds. The interest rate is higher with them if you do not withdraw money during a fixed period of time. So, if you are ready to ‘lock up’ money for say five years, consider this option as well.
Government and Corporate Bonds
Fixed interest rate bonds work in a similar way, with the fact that in this case a state body or a company issues a receipt. They are riskier and if the entity that releases them does not fulfill its obligations – you will lose your money. However, their interest rate is higher.
Government bonds are generally safer with a lower return on investment than corporate bonds, as the government body is less likely to fail to fulfill its obligations. Still, something like that happened in Argentina in 2005. Independent credit agencies denote organizations that issue bonds according to the degree of probability of default, so weigh the potential risks and profits well before investing.
Voluntary Pension Funds
A voluntary pension fund is an institution to which fund members pay pension contributions for the purpose of saving. By paying relatively small amounts of contributions over a longer period of time, members provide a supplementary pension that is independent of the length of service and that is secure.
The most important characteristics of this type of savings are voluntary and flexible payment – you can choose the amount and dynamics of the amount you pay. In addition to payments to yourself, you can also pay for another natural person (a member of your family or someone else) but the employer can also pay for his employees. You can be a member of the fund regardless of age, employment status, and citizenship.
The advantages of investing in a voluntary pension fund are numerous:
- It gives you security in the ‘Third Age’ when you take the funds
- You determine the amount and dynamics of payments yourself
- You can change the amount you pay
- Private pension does not depend on the length of service
- Tax breaks for employers and employees
As with team sports (on whose outcomes you can bet on online casinos with various payment methods that are collected by the link), investment funds provide an opportunity to make a profit by partnering with other investors. The advantages are numerous:
- You have a professional investment manager who has the knowledge and skills to minimize risk and return money to the maximum;
- Economies of scale, such as lower transmission costs;
- Lower risk with different types of investments.
This type of fund is ideal for long-term investments: although they are relatively volatile in the short run, their value increases in the long run. With that in mind, they may be a little harder to manage.
Different funds invest in different assets – from stocks and indices to bonds and even gold. Some are temporary and others are open-ended. On the other hand, some are riskier than others. If you are a beginner, do not embark on them without professional help. Hire an independent financial advisor who can help you decide which fund is right for you.
Investing in real estate is a pretty logical thing to do. After all, we all have to live somewhere, and inflation can bypass the decline in real estate values. Selling apartments that are bought under construction at a much lower price is certainly a worthwhile investment.
Also, renting apartments, especially in larger cities, is an almost certain additional income. By buying an apartment for these purposes, you will have the opportunity to earn in addition to the value of the property. However, this option is not for everyone. If you do work that involves frequent travel or if you do not have time to maintain it, it may not pay off. In short – think carefully about your lifestyle and how buying a property would affect it.
Other Ways to Reduce Risk
Having more options means you are not investing in just one thing. This reduces the risk and increases the possibility of income. Low risk does not mean that there is no risk at all, so it is best to make a shortlist of investments with different conditions and levels of risk. This way you will be sure that, even when it turns out that a fund does not return the desired investment, you also have one or more backup plans.
Lastly, be sure to consult an independent financial advisor. He will surely know much more about investments than the average person will ever have a chance to find out. After all, his job is to find the best types of investments that will help you meet your financial goals more easily.
Being ready for the future also means thinking about life insurance. By investing in this type of insurance, you provide yourself with capital for a carefree old age, invest in the safety of your immediate family members, and provide them with financial support.
With life insurance, you can be carefree and enjoy the present.