About half of American adults aren’t actively investing their money. And that means one of two things: Either they spend all of their money on debt and consumeristic behaviors or they are “saving” their money in the bank, and letting inflation destroy it on a daily basis.
In either case, you are losing money, wasting your time working, and setting yourself up to work until you die, since you won’t have money to retire.
The simple solution? Start investing. If you can dedicate a portion of your income to funding investments with high returns, you can actually start multiplying your money.
It’s how every rich person gets rich, and it’s how every retired person retires. It’s not a secret, it’s just a basic discipline.
So if you want to get started, ensuring you can maximize your returns, then read below to learn how to pick your investments the right way.
Investment Basics
First off, it’s important to understand the different types of investments you can make. One of the most foundational is the 401(k). If the company you work for offers a retirement plan, then use it.
They usually provide free investment money into your retirement account, to match the amount that you put in the plan. This should be your first and most important investment account.
Second, you can open a brokerage account to invest in stocks and bonds the normal way. While not tax-advantaged, it’s important to invest as much as you can afford to.
Lastly, understand that you need to diversify. You can’t go all-in on one stock, or you can lose everything if it drops to zero. Instead, plan to diversify across markets, including high risk, high reward assets and low-risk, safer assets.
Choosing Investments With High Returns
The goal of every investor should be to earn the highest return that they can safely manage. This is much easier said than done, as this is also the goal of every fund manager out there.
When it comes to stocks, the companies that will provide the most returns are those that will experience the most growth in the next five to 10 years. Think long-term. Which companies are going to disrupt entire industries like Airbnb, Uber, and Amazon did?
The current favorite is Tesla. But there are many other stocks prepared to soar to the moon.
Also, look at what Silicon Valley is investing in. What companies are the big VCs and angel investors dumping money into? Once those go public, you can bet they are going to skyrocket, since they’ve already proved their worth.
Aside from stocks, you’ll want to pick up some alternative assets, like precious metals. With these, it’s important to look at the market cap. Gold is super valuable, but also super expensive.
It’s likely not going to surge in value, as it rises rather slowly over time, helping to hedge against inflation. An alternative, with higher yield potential, is buying silver.
Silver is priced so low right now, yet is in high demand. At some point, this asset could surge in value, since there is so much room for it to grow.
You Don’t Need a Homerun
There are investments with high returns that you could put your money into right now. While you’re unlikely to big the next big winner, you don’t need to in order to win.
You just need to pick a winner, and that’s easier than finding the needle in the haystack.
Looking for more tips on managing and growing your wealth? Head over to our blog to find other helpful articles now.
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