Multiplying your money through smart investments is a good idea. There are many ways to do that. Investing it smartly could earn you great returns which you can reinvest or live off. You can invest safely at first and then get into a few risky ventures which might offer better returns. But always remember, do not put all your eggs in one basket. Spread out your money and multiply your returns through smarter investment.
Tips to multiply your returns through smarter investment
The Classic Approach
If you’re just starting out, better play safe in the beginning. It will take some time for you to know where to invest money to get good returns. So invest in some blue-chip stocks and bonds. Your money will not double in one year, but you will still earn some return. Apply the rule 72 to calculate how long it will take to double your investment. You have to divide the expected annual rate of interest by 72. For example, if the expected return rate is 8% into 72, you should have a portfolio which would double in 9 years. And in 18, years your investment will quadruple. Not so bad!
If you want to multiply your returns through smarter investment, mutual funds are one of the best ways to diversify your investment. Mutual funds are nothing but a collection of bonds, stocks, and commodities which are managed altogether by an investment advisor who is registered. As these bonds are diversified, they are low risk and are usually recommended for long-term investment. You can start out with very small investments with mutual funds.
Sometimes you have to take some risks, and find out how to invest money to make money fast. You can sometimes multiply your returns through smarter investment, by buying stocks of good companies which may be down for the time being due to some superficial reasons. When a stock is ‘oversold’, it is time for you to pick them up. The way to find out when a stock is oversold is to check the ‘price-to-earnings’ ratio as well as ‘book value’. When any company falls below these averages for systemic or superficial reasons, you can make a smart move and invest in these companies.
Invest in silver or gold
Investing in silver or gold can be used as a hedge for other investments. You might have noticed that the price of silver and gold rise in unstable times, whereas stock market may plummet. But do invest in secure storage options if you intend to buy the metals in physical quantities.
Money market account
It’s an account which is a savings account that needs high minimum balance but pays a high rate of interest. Your money is not completely at your disposal, however, and the bank may set limits on the amount you can withdraw. You cannot depend on this account for any emergencies.
Investing in real estate
When you’re planning on where to invest money to get good returns, you can invest in real estate. You can buy property or invest in a fund (real estate investment fund). Real estate is a good investment which can pay you well in the long run. Follow the real estate market, and sell when you want to for the best price you can get in the short term.
Build your emergency fund
Always try to save at least 6 months of living expenses so that you have enough money in times of need. Keep this money separate from your investment account/s.
Retirement plans are the best way to earn some tax-free money. Your employer might match the contribution to your retirement plan, and both of you put in the equal amount of money, you’d have a nice nest egg by the time you retire. Find out which plans are tax-free at the time of withdrawal to get the best benefit. This is one of the secure ways to multiply your returns through smarter investment.
You can multiply your returns through smarter investment, even if you’re a novice. Buying shares in companies or sectors you’re familiar with can lead to successful investments. Start with amounts as less as 20 or 30 dollars and buy directly from the companies, till you learn about the stock market. Then you can up the stakes a little, and enjoy your money making money!