Every person with extra money in their Bank is looking for the perfect business to invest in. It’s not an easy decision to invest your money as it always carries some level of risks, but on the other hand, if you do due diligence and take a calculated risk, you are likely to make a lot of money and if you don’t, you will learn a lot. The interest rate is very low around the world and inflation is very high, so no amount you have in your bank that you would received a decent interest from the bank so it is good idea to try alternative tool where to get your money to work a lot hard for you and investing is one of the way you can do this . However it requires one to make informed choice , take critical decision and to focus on long-term goals and gain instead of instant result.
Here are some of the best ways you can invest your money in 2021.
1. INVESTING IN THE STOCK MARKET.
Stock market from the research have yield not less that 7.7% return on average . So if You think of it, it is better to invest than leaving your money in the bank receiving small amount of interest you would not get ahead or become rich from it. To be successful one must put his money where it would yield maximum potential .
Investing in stocks is when an individual or another firm purchases a fraction of ownership in a company. Investing in stocks is not very hard if you understand the game anyone can invest as long you have extra money with you. Here are things that one needs to know before investing in a stock.
- Identify a broker: when you are searching for a brokerage platform, you need to look for one that does not charge you on commissions or one that charges less than 0.2% maximum. The stock broker also needs to be reputable and regulated by reputable market investment and securities.
- Identify the stocks: when you are now sure of the broker to use, you need at this moment to look for stocks to invest in. there are different types of stocks but for a start, I recommend anyone to invest in income stocks (Dividend stocks), which are stocks that pay investors a percentage of its profits in accordance to respective ownership percentage paid by quarterly or yearly.
- Research and purchase: once you have identified the stocks, its time to research and see if there is potential for growth. You will need to know the company politics and everything about its operations. When you have done due-diligence on different companies, you can now purchase stocks that have potential for growth and guarantees dividends. Investing in index fund is a good way to investing in stock buying a group of companies that are link together such S&P 500 in the US or FTSE 100 in the UK instead of buying individual stock. You can do dollar cost averaging where you divide the amount to invest in a periodic purchase of stocks or assets in order to reduce the impact of volatility on your stocks or asset purchase. You invest regardless of the price and at different period.
- Monitoring and re-investing: when you have purchased stocks in different companies, you will need to continue monitoring your investments. When your portfolio is doing great, you will need to re-invest your dividends in the company that is doing well in the market and congratulations you are now an investor.
2. INVESTING IN TREASURY securities (bonds, notes, and bills)
As an investor with money, when you choose this method to invest, it means you will purchase government securities through the central bank which have a fixed maturity period (means you lend the government money). These government securities can either be treasury bonds, treasury notes, or treasury bills.
Government bonds: these are the longest maturing government securities which can take to a minimum of 15 years to the period of maturity. when an investor purchases a treasury bond, he or she buys it at a discount rate, for example, if you buy a treasury bond with a value of $1000, you can purchase it at $950 and have an option to resale in a secondary market at a higher price or equivalent to the bond value or hold it until maturity to earn more.
The government notes: government notes are similar to government bonds, but with a wide range of maturity periods, the period can be short term, medium, and long term but no longer than 10 years. Treasury notes are auctioned by the government through the central bank. Investors once acquire the note, can resale them to secondary markets such as the bank and the brokers.
Government bills: these are short-term government securities with a maturity period of less than a year. Similar to bonds and notes, treasury bills are auctioned to investors through the central bank and can also be sold before maturity time.
Having understood these different forms of government securities that you can purchase, therefore, its the time for you to invest. If you want to invest in these government securities which carry less to no risk, you can visit your countries central bank and learn about their auction dates.
In summary, I would love to encourage anyone who has any extra money to invest their money through these discussed methods. if you have any questions, I would love to respond through the comment section.
