Do you want to grow your wealth in 2024? Investing your money is a great place to start. While there is risk in any type of investment, there are options less risky than others.
Your money can go in a number of savings accounts, investment properties or endeavors and more. If you're a beginner to the world of investing, building a portfolio with low-risk options is ideal.
If you're looking for high potential gains in 2024, here are a few options to consider when placing your money.
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A high-yield savings account is an ideal way to get your foot in the door to investing. Many banks, including Goldman Sachs and Capital One, have high-yield savings accounts you can open quickly and easily online.
High-yield savings accounts operate very similarly to a traditional savings account, but pay higher interest on deposited money, normally around 5%.
These accounts are ideal places to put money that you may need on a short-term basis, since you will have easy access to it. This is a great place for an account like an emergency fund, where three to six months worth of expenses should be.
Another great aspect of high-yield savings accounts is that many banks allow users to set up different "buckets," so you can separate your money based on various goals.
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A certificate of deposit or CD account offers higher interest rates than a savings account.
With a CD account, you won’t have easy access to your money like you do in a high-yield savings account.
CD accounts are ideal for situations where you won’t need access to money for a while. CD accounts offer a fixed interest rate for a given period of time. Time periods can be as short as three to six months or as long as three to five years.
If you have a sum of money saved up for something like a down payment for a home or wedding, you can place it in a CD account. You will earn high interest rates while the money sits for a given amount of time. This is preferred over keeping it in a traditional savings account without garnering much interest.
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Keep in mind, you won’t be able to take out your money without big penalties with a CD. Make sure the money you put into a CD account is cash you won't need access to until the term is up.
There are various kinds of bonds you can invest in. Two examples of popular choices are government and corporate bonds.
Government and corporate bonds work pretty much the same way, except one is a loan to the government and the other is to a company.
Bonds can provide reliable growth, but the return is not as high as other investment choices. However, bonds can be a great way to diversify a portfolio.
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There are a great number of stocks you can invest in. However, investing in the stock market is where many risks come into play.
When it comes to stocks, there is a common misconception that the only way to invest and make money is by finding individual companies to invest in, and hoping they will hit big.
While that is a strategy you can follow, it’s a pretty risky one. A safer strategy is investing in index funds like the S&P 500 and Nasdaq-100 index funds.
"Buy into a company because you want to own it, not because you want the stock to go up," Warren Buffett, chairman and CEO of Berkshire Hathaway, famously said in a Forbes profile from 1974.
While these stocks aren’t going to grow rapidly, and will drop, they are considered a pretty safe investment. The S&P 500 and Nasdaq-100 are similar in the sense that they involve large, successful companies.
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The S&P 500 is based on 500 of the largest American companies. Amazon, Berkshire Hathaway and Tesla are examples of companies that are part of the S&P 500.
The Nasdaq-100 is based on the biggest technology companies. This allows you to invest in the tech sector without having to choose individual companies to invest in. Apple and Alphabet are examples of companies among the Nasdaq-100.
Real estate can be a great investment to add to a portfolio once other investments have been set up.
In order to invest in real estate, you’ll need to have a sum of money available for the down payment at minimum. If real estate is something you are interested in, but you don’t have enough money for a down payment yet, spend a year researching the topic and saving as much as possible.
To make money off real estate, there are a couple of options to consider. The first is to buy a property, renovate it and then sell it for a higher value.
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Another option is to purchase a property, and rent it out. This could be a vacation-style home, or a long-term rental.
Not only is real estate a bit of a risky investment, but it will also require extra work on your part, such as the upkeep of the property and screening potential tenants.
Although real estate can be risky, there is also great potential for wealth.
