List of Ways to Invest Your Money
Unique Ideas to Invest Your Money Based on Time, Risk and Amount of Money
So you've saved some money and want to invest. There are so many ways to invest your money depending on the amount of money you have, your investment time frame, and how much risk you are willing to take. Let's explore several options to help give you ideas as to what investment options are best for you.
Small Amount of Money. If you have a few hundred dollars to invest, the best options are a savings account or a money market account. If you are saving money each month to add to your investments, you can buy mutual funds or stocks directly using monthly payments. You can do this directly with a mutual fund company like T Rowe Price, Fidelity or Vanguard. Also, many companies offer programs where you can invest a fixed sum each month and buy shares in their stock with no trading fees and in small amounts. Savings bonds are also available in low denominations and offer similar returns to savings account, but slightly higher as they are a longer term investment.
A Lot of Money. If you have thousands of dollars saved there are many ways you can invest it. After keeping a few thousand dollars in a savings account, you can purchase stocks, bonds, mutual funds, ETFs, bond funds, real estate funds, REITs, gold or other precious metals. You can also purchase CDs from a local bank that offer slightly better rates of return than a savings account.
A Really Lot of Money. Once you have over a hundred thousand dollars saved more investment opportunities open up. You can invest in individual real estate (commercial, residential, or income), you could invest in a business (your own or someone elses), or if you have a million dollars of net worth, you could invest in a hedge fund. And of course, you can still invest in stocks and bonds.
Short Time Frame. If you have a short time frame (weeks or months) you need to invest in very liquid assets that do not fluctuate to wildly. This includes savings accounts, money markets and short term CDs.
Medium Time Frame. If you have a few years to invest, you should find investments that offer higher returns such as stocks, bonds, mutual funds, bond funds and ETFs. Although these ways to invest are risky, the risk is mitigated over time.
Long Time Frame. If you have a decade or longer to invest, you can buy any of the previous investments, as well as long term investments in real estate or a small business. You can also increase exposure to foreign markets and riskier, specialized funds.
Low Risk. Your investment risk depends on a lot of factors, including how long you have to invest, what money you are investing, and most importantly, your tolerance for risk. Low risk investments consist of savings accounts, money markets, CDs, government bonds, and savings bonds.
Medium Risk. Medium risk investments include well diversified mutual funds, real estate investments, gold, corporate bonds and bond funds.
High Risk. High risk investments include individual stocks, specialized mutual funds in volatile industries (like technology or emerging markets), hedge funds, stock options and any small business or startup investments.
See Also: Investing for Beginners