Banks offer low-interest rates for their savings and fixed deposit accounts. You will not earn high returns by accumulating your savings in one or two bank accounts. You need to take a risk and invest your savings to earn meaningful returns. Here are best ways to invest your savings this year.
Pay off your debts
Paying your debts is not an investment but you cannot achieve financial freedom with accumulating debts. If you have saved some money to invest, consider paying off your credit card and any other debts first. Otherwise, the interest rates and penalties will continue to accumulate. You will use all the returns from investments to pay penalties and interest rates.
Distinguish between bad and good debts. Any amount that you borrow for consumption is a bad debt that should be paid off before undertaking any investment. Some large investments like real estate may require you to borrow some money to buy the best commercial buildings.
Most investors consider gold as a conservative or safe investment. Buying gold stocks is one of your best options if you have limited knowledge on how different investments work. Gold stocks were among the best-performing stocks in the subgroup category in 2016. The same trend continued at the beginning on this year.
The growth rate of gold stocks was higher than that of major stock indices and currencies at the start of the year. Financial analysts expect the trend to continue throughout the year. This may be your best choice if you do not have enough time to learn all the mechanisms and processes of financial markets.\
Most banks are fully recovered from the effects of financial crisis and political volatility. The performance of financial stocks indicates that major banks are now recording their best performance. Consider buying individual stocks for the best performing banks in the stock market. You need to take the time to analyze the performance of different banks over time to pick the best stock to buy.
Following the latest business news and stock, analysis can also give you ideas on the best financial stocks to buy. Alternatively, buy different financial stocks through the Financial Select Sector SPDR ETF or its equivalent in your state. Buying different stocks spreads your risk.
Real estate is among the most popular investments that never go out of fashion. One thing worth noting about investing in real estate is that buying homes is a long-term venture. Do not expect to make money within a few months. In fact, most of the investments that yield the highest returns are long-term ventures.
The location of any home or commercial building that you is the most important consideration in this type of investment. The location influences your earnings and the value of the home. Consider seeking professional help from AssetColumn and other experts to identify the best deals in real estate in your area.
Buying a home for your family is also a form of investment. You save the money you spend on rent every month. In addition, your home increases in value over time. You can resell it in the future and gain more than half of your initial investment in profits.
A Roth IRA is a great investment if you predict that the tax rate will be higher when you retire. With this type of retirement plan, you pay taxes as you deposit money in your retirement account. This means that you will not pay any taxes when withdrawing the cash in the future. You will not incur up-front tax deductions for your Roth IRA contributions.
Another advantage of these retirement contributions is that you can access your contributions at any time free of taxes and penalties. A Roth IRA is recommended for young low-income earners who are likely to pay high tax rates by the time they attain their retirement age. The most important consideration here is the trend of tax rates on retirement accounts.
You can grow your savings in any of the ways outlined above. For each investment option, you need to gather as much information as you can before risking all your savings. Each investment idea is viable and can yield high returns this year and beyond. However, the best approach is to diversify your investments to spread your risks. Instead of spending all your savings on one venture, diversify your investment portfolio to include several of the suggested ideas. A diversified portfolio cushions you against huge losses when markets experience unexpected changes. Remember that the best time to start investing is today.
Here is a Innovation Speaker that will surely blow your next event away!