Investing is a very important part of your financial health as it can help you grow your money significantly more than the average savings account. It’s literally what enables ordinary people to retire on a million dollars.
However, it can be overwhelming for the average person to learn how to invest. We all know we should be adding to our 401 (k) retirement accounts (yes, that’s an investment!), But what else can you do to get your money growing? There are so many different options that it feels like we’re playing.
And to a certain extent, it’s a game of chance. Investments are associated with different risks. It just depends on how much you want to lose. So we’ve rounded up some of the funnest investments there can be also high risk plus a safe but consistently rewarding option to consider.
Three of the riskiest investments to put your money in
There is no doubt that Bitcoin is exciting. Lots of wealthy tech entrepreneurs are huge fans, and the secrecy it came from creates an undeniable allure. The promise of a decentralized payment method? Such a cool concept.
Bitcoin remains a speculative investment for the time being. Certified financial planner Robin Hartill says, “People invest in the company because they believe that other investors will keep raising the price, not because they see value in it.”
That said, the price can fluctuate like crazy. It peaked at $ 20,000 and has fallen below $ 4,000. It’s incredibly voltalite with no rhyme or reason, which makes it a very risky investment. So, if you can’t afford to lose a large chunk of your money, it is best to avoid it.
2. Gold and silver
There’s a reason the term “gold standard” exists – gold (and silver) are often viewed as a hedge against a bear market because they have held their value throughout history, Hartill says.
In fact, she says gold and silver can be a great way to diversify your portfolio, “but anything above 5% to 10% is risky.”
Because of their rarity (especially gold), they are very volatile. When a new gold mine is found, the price can suddenly drop. In addition, both metals tended to underperform compared to the S&P 500 in the long term.
And then there is an entirely different risk of keeping a gold bar in your underwear drawer …
Do you collect postage stamps, vintage Coca-Cola signage or shot glasses? Many people collect things as a hobby – if they bet their collections will become a profitable investment, things get risky.
Hartill says it’s okay to spend a reasonable amount curating a collection if it’s something you enjoy. “But if your plans are based on some day selling the collection for a profit, you are taking a great risk.”
Why? For one thing, these assets are not liquid. You can’t just take them to a bank and exchange them for cash. They can be very hard to sell, so you make a large investment but can’t find a way out.
There is also no set price for a collector’s item, as it is only worth what someone wants to pay for it. That means you may have to sell your collection for a higher discount than planned. plus You pay 28% of capital gains tax on profits. To put that in perspective, it’s almost twice the tax a middle-income earner would pay on long-held stocks.
One of the safest ways to invest
It’s no secret that the market has seen fair ups and downs, especially over the past year. However, you shouldn’t assume that this is a massive risk. While there will always be a risk associated with an investment, the stock market has historically shown a return of around 7% compared to the previous year.
Although the markets are unpredictable, they still rise over time. It’s a long-term strategy to grow your wealth without buying beanie babies and crossing your fingers for someone to pay $ 5,000 for Patti the Platypus.
If you haven’t invested yet and have some cash to spare, you can start small. You don’t have to throw thousands of dollars on full stocks to invest. In fact, you can get started with as little as $ 1. *
We like Hidebecause it allows you to choose from hundreds of stocks and funds to build your own investment portfolio. But it makes it easy by dividing them into categories based on your personal goals. Would you like to invest conservatively now? Totally understand! Would you like to dive with a moderate or aggressive risk? Do what you feel
Plus, Stash lets you invest in fractions of stocks, which means you can invest in funds that you normally can’t afford.
If you Join Now (it takes two minutes) Stash will give you $ 5 after adding $ 5 to your investment account. Subscription plans start at $ 1 per month. **
* For securities priced above $ 1,000, fractional purchases start at $ 0.05.
** You also bear the standard fees and costs included in the pricing of the ETFs on your account, as well as fees for various ancillary services charged by Stash and the custodian.
The Penny Hoarder is a paid affiliate / affiliate of Stash. Investment advice from Stash Investments LLC, an SEC registered investment advisor. This material is distributed for informational and educational purposes only and is not intended as investment, legal, accounting, or tax advice. Investing involves risks.
This article originally appeared on www.thepennyhoarder.com