12 Ways To Make Your Money Work For You

Is a majority of your money just sitting in a bank account? Well, if that’s the case, I have news for you: inflation is wrecking your wealth. As more money is printed, the value of your money tanks. So what can be done about this? It’s simple: invest your money.

If you want a chance to become wealthy, you have to do more than just earn money. Many people think you have to be the Wolf on Wall Street to start investing, but that couldn’t be further from the truth. Anyone can grow their money with the right strategy.

The world of investing is full of opportunities, but some strategies work better than others, depending on your goals. Some are better for the short-term while others are a long-term game.

Whatever your goals are, it’s a good idea to try different investments to see which ones work best for you. That’s why today I’m going to give you a list of the 12 best ways to invest your money.

1. Stocks

The stock market is a great place to start investing. This is one of the easiest to understand investing strategies and almost anyone can do it. A stock is, essentially, equity in a corporation. A single share of stock represents fractional ownership in the corporation. Say a company has 10,000,000 shares of stock. If you own one of these shares then you basically own one ten-millionth of the company.

But how does this make you many? Say you buy a stock share at $100 dollars and over the next few months, it raises to $120 per share. If you sell your stock now, you’ll have made a profit of $20. So where do you buy stock? You have the option to either buy through an online brokerage firm or through a face-to-face broker. A good online brokerage to start with is E*trade.

Once you’ve set up your account, you can buy stocks and other investment types. I encourage you to do your research before you buy anything. Stock prices are unpredictable, but if you do some research beforehand, you maximize your chances of success. Stock prices are based on what the public values the company at. If you believe a company is undervalued, then that’s a good stock to buy.

2. Index Fund

Also commonly known as exchange-traded funds, or ETFs, index funds are similar to stock, but they are usually a safer investment for beginners. Index funds use certain rules that track a specific set of underlying investments. Basically, it’s a group of a bunch of different stocks that trades like a normal stock would. This is beneficial because if one company in the fund does badly one year, and all of the other companies in the fund do relatively well, the fund will still continue to increase.

If you look at the charts for many prominent index funds, you’ll see that they generally go up slowly, but steadily over time. This is a safer investment than buy individual stock shares and should be bought for the long-term.

Just like stocks, you can purchase index funds on online brokerages such as E*trade. Some good index funds to buy at the moment I’m writing this article are VUG, DIA, ONEQ, and QQQ. These funds are a stable place to begin, as they’ve been slowly increasing over the years.

3. Options

An option is a deadline-based agreement between a buyer and seller over an underlying asset. This agreement gives the buyer the options, but not the obligation, to buy the underlying asset at a specific price on a specific date. Simply put, you are betting that the prices of a stock are going to be below or above a certain price on a certain date. This a more risky investment since you need to be very knowledgeable to determine whether the price of a stock is likely to change in either direction.

Again, just like stocks and index funds, you can purchase options on online brokerage platforms. I suggest you do your research on these before buying anything since it’s a more advanced investment to get into.

4. Futures

A future is another deadline-based agreement between a buyer and seller over an underlying asset. Futures are similar to options except the option is out of money, the buyer is under no obligation to purchase the stock, but with futures, the buyer has to buy the stock upon expiration no matter the price. This is a tricky and subtle difference, but knowing what your buying is crucially important if you want to be a successful investor. There are other differences, but I’m not going to go into too much depth in this article.

This is another investment that you can purchase through online brokerages. Keep in mind that with most online brokerages you will need to pay a service fee for each transaction. Because of this fact, it’s better to buy things in bulk instead of making several small orders over time. This will reduce the amount of money you spend and increase your profits.

5. REITs

Have you ever wanted to invest in real estate, but never had the amount of cash required to start? If so, real estate investment trusts are a good way to get into the business without having to actually buy a property. REIT stocks created companies that own income-producing real estate. Although these stocks have been increasing lately, don’t just assume that all REITs are a sure bet. If interest rates begin to rise again, it’s likely that many of these stocks will begin to decrease. Also, remember that just because a stock has a high dividend yield this year, it doesn’t mean that it will always be high. Do your homework before purchasing any REIT stock.

REITs can be invested in by using platforms such as Fundrise. Investing in REITs is a great way to diversify your portfolio and is a nice change from the volatile stock market. REITs have historically succeeded in delivering competitive total returns when factoring in the high dividend yields and long-term capital appreciation.

6. Peer-to-Peer Lending

If you want to invest some money for a large return, but are willing to take the risk involved you may not get a full return on your investment, peer-to-peer lending platforms are a nice tool. This is a great alternative to investing in low-yield bonds. Peer-to-peer platforms enable lenders and borrowers to be matched up, so that people who may not be able to get a loan otherwise, are paired with people who want high risk, high return on their investment.

Using services like Funding Circle, Upstart, and Lending Club, you’re able to make upwards of 10% interest on your loans. These interest rates are awesome but remember: unlike bonds, peer-to-peer loans can default, in which case you’ll lose your principle. Since this is the case, it’s a good idea to invest a small amount in many different loans instead of putting all your money into a single one. This strategy decreases your chances of losing a significant amount of money with this investment strategy.

7. Cryptocurrencies

Cryptocurrencies are digital currencies that use encryption techniques are used to create and transfer their units. This market has exploded in recent years. The first few investors in this innovative currency are self-made millionaires today. For example, you could buy a few thousand bitcoins in 2009 for tens of dollars. If you’d purchase this currency back then, your bitcoin portfolio would be worth hundreds of thousands of dollars today.

So why should you invest in these currencies when the price has already gone up so much? If these investments exploded so much in just about ten years, imagine the possibilities if the prices keep increasing at this rate.

There’s also the possibility of new currencies to come out that are even more popular than bitcoin and you can get in on the investment while they’re still cheap. Now I’m not saying that their prices are for sure going to increase, but I’m willing to take the risk. That being said, don’t invest any money into cryptocurrencies that you’re not willing to lose since there’s no sure bet that these currencies will be worth much of anything down the road.

Cryptocurrencies can be purchased using services such as Coinbase. I describe how to invest in cryptocurrencies in more detail here.

8. Real Estate

The most popular form of investing in real estate is making passive income from rental properties. Now, this is a good investment to get into if you have a large chunk of money to put down. Investing in real estate can be extremely lucrative, but it usually requires a hefty upfront investment. Though, once you own a property, you have the potential to make passive income with it for life. The beauty of having a mortgage on a rental property is that your tenants will be, essentially, paying off your mortgage. There are many more advantages to investing in real estate which I describe in more detail here.

To invest in real estate you can use services such as LoopNet and Realtor to find properties in your area. Like all of these other investment strategies, it’s important to do your own research before purchasing anything. Additionally, don’t just rely on real estate agents to get buying opportunities. If you do your own marketing, you may be able to find even better deals.

Whatever you do, don’t buy properties at their retail market value. You’ll want to be able to sell your property for a small profit if the investment doesn’t work out for some reason. Make sure to only buy a property if you can get for at least 10% below the retail market value.

9. Saving’s account

This is a little obvious, but putting your money into a savings account can make you money via dividend yields. Although this is an easy, low-risk way to make money, you shouldn’t expect high returns on your investment. Currently, you can get a rate of return of about 1%. This is a very large amount of money unless you have a huge savings account. This isn’t the most exciting investment, but it’s better than nothing.

A great thing about this investment is that it’s super liquid. You’re able to easily get your money by going to an ATM, while if you own stock, for example, you won’t be able to redeem those funds until you’ve sold the stock, transferred the money from your brokerage account to your bank, and redeemed the money from either an ATM or the bank itself.

You can start a savings account in any bank or credit union very easily. Do some research and find a bank that is the most suitable for your needs. Joining a well-established bank will greatly reduce the risk on your investment.

10. Robo-Investor

Do you want to invest in the stock market, but you have no idea which stocks to begin with? Well, luckily, there are services that can help you. Using a robo-advisor service is an easy way to invest your money since they do all the work for you. These services use a computer algorithm to pick which stocks to invest in for you.

Of course, nothing is guaranteed, but these algorithms will generally make you a nice return on your investment. With the recent surge in popularity of this investment strategy, it’s a great way to grow your money at a low cost.

A couple of good companies that offer these services are Wealthfront and Betterment. They charge a small fee on your earnings, but it’s well worth it for the service they provide.

11. 401k

A 401k is a retirement savings plan provided by an employer. Contributions are deducted from the employee’s paycheck before taxation and are tax-deferred until withdrawn after retirement. This allows you to cut your tax bill by taking advantage of the pre-tax contributions. On top of that, you’ll have a nice chunk of change by the time you’re looking to retire.

If that isn’t exciting enough, most employers will match a percentage of the contribution you make. This means more money in your pocket when you retire. Some employers will match your contributions with company stock. If the company does well down the road, this can be a great benefit. But, what happens if you switch employers? Not to worry; your retirement assets can be transferred from one employer to another.

If you want to start a 401k, get in touch with your employer and ask them what the company can offer you. Ask them what the limits are and how much of your contributions, if any, they’re willing to match.

12. Your own business

This is easier said than done. In fact, this may be the hardest investment option on this list. You’ll need to put an immense amount of work into starting your own business if you want it to be successful. It’s important to find something you’re passionate about. If you’re building a business in an area that you’re not excited about, you’ll soon find yourself miserable hating the work you do. Solve this problem before it begins and think of something that you like and are talented at.

Additionally, you need to have patience when you first start. Most likely, your business isn’t going to be profitable in the first year or even a few years. But if you stick with it, do plenty of research, and put a respectable amount of time into it, you can build something great.

Some things you need to consider before starting your business: What permits, insurance, and licenses will you need? Do you need a retail space? Should you choose a high-risk or low-risk business? How will to obtain your product? How will you store your product? Should you make a website? What are the chances your business will succeed? How will you gain customers? How will your customer purchase your product? How much upfront cost will you incur? How much will it cost to operate your business? How will you grow your business?

There are many details that need to sort out in order for your business to be as successful as possible. Figuring out these details at the start will save you from difficulties later on.

Are there any other awesome ways to invest money that I haven’t listed here? Let me know in the comment section!

Thanks!