How To Invest Money
Do you have extra money lying in your bank account? When inflation is as high as it has been during 2021 you will lose money if you don’t do anything. You should put your money work for you. It means you should invest wisely.
If you’re one of them who have extra cash, you may consider investing your money. On the other hand you may get yearly bonuses or any other extra cash that you may be able to invest.
Before you go ahead with investing your extra money, ensure all your bills get paid up to date. The pandemic and hard everyday life has left millions of people in bad debt, and it’s wise you first take care of what’s essential.
If you have the money to lose, then investing is a great idea. Let’s look at three ways you can invest $1,400 (which by the way is the amount many Americans got via Stimulus Check):
1. Invest In Index Funds
Index funds consist of some of the most successful and largest companies globally. With an index fund, you can diversify your portfolio, as you’ll own a portion of every company within the fund.
An example is the S&P 500 index fund and includes companies such as Amazon and Apple. The fund’s average rate of return is 7%.
If you invest $1,400 over ten years, your investment can grow to $2,754.01!
2. Invest Directly In A Company
When you invest in a company directly, you’re essentially buying shares in the company. If you’re unsure of where to invest, think about companies that interest you and who won’t be going anywhere in the long run.
Examples of companies to buy shares in include:
- Coca Cola
If you had invested $ 1,400 in Walmart in 2011, one share price was worth about $ 55. You could have been able to buy about 25 shares. In April 2021, you could sell those 25 shares for $ 140. It means that your original $ 1,400 investment could have grown to $ 3,500 in ten years.
3. Invest In Cryptocurrency
Investing in crypto can be appealing. In March 2020, it cost roughly $6,000 for one Bitcoin. Today, you would pay ten times more than that!
Cryptocurrency does have its risks, as it’s unpredictable, unlike stocks. Unless you’re willing to take big risks, it’s recommended you avoid making crypto the central part of your investment portfolio because of its unpredictability.
If you’re looking to diversify your portfolio, then a crypto investment can be good for your investment portfolio.
If you had invested $ 1,400 in Bitcoin in 2015, the price of one Bitcoin was worth about $ 400. In April 2021, Bitcoin had grown and hit its all-time high of $ 60 000. If you had bought three bitcoins in 2015, you could have sold 3 Bitcoins in April 2021 with a price of $ 180,000.
There are several other options, such as investing in a 401(k) or real estate. Index funds are almost a no-brainer investment option, especially in the long run. In contrast, many value the possibility of picking stocks by themselves or investing in emerging things such as bitcoin. Your habits, personal wants, and risk tolerance are the most critical part when choosing the right investment option for you.
Whatever you choose, sit back and let your money work for you! The key to financial freedom is investing. Start investing as soon as possible and don’t fear it! But first, remember to do your own research before you invest. The sooner you can start investing, the sooner you will see results, and compound interest will do the magic.