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Ways to invest money


Ways to invest money range far and wide. There are numerous different ways to invest money, each of which has positive qualities and negative qualities. The problem is that most people are not aware of all the different ways to invest money. Most people are aware of stock market and real estate investments but are not familiar with other good ways to invest money such as bank accounts, bonds, Certificate of Deposits (CD), and mutual funds.

Bank accounts are commonly known as the safest and most flexible ways to invest money. Even if you are young and are conducting a student job search, this can be your first business. When you open a checking or savings account with a bank they will offer a set interest for the amount of money you deposit with them each month. Typically the interest rate is anywhere between 2.0 to 2.5%. As you can imagine, the reason bank accounts are considered the safest of ways to invest money is because there is no risk. There is no possible way to lose money on bank accounts. The absolute worst that could happen is that you will not gain any interest on the money you deposit, but at least you will still have all the money deposited. However, in the world of investments, no risk comes with little reward. Bank accounts are definitely not a quick cash investment. Even at 2.5% it will take a few years before you really notice any capital gains, depending on how much money is actually gaining interest of course. All in all of all the ways to invest money bank accounts are definitely the safest and most fitting for someone who has never invested money before or does not have much capital up front.

Aside from bank accounts, bonds are also ways to invest money through banks as well as some companies. Bonds, like bank accounts, are considered one of the safest ways to invest money because there is no way to lose money with bonds. Usually, bonds pay an interest around 7%, much higher then the interest that a bank account will pay. However, bonds are untouchable for a certain period of time, usually 4 years. After the time period is completed is when the investor will receive all the money gained through interest of that span. Due to fact that bonds are a long term investment they should be invested only when there is no immediate need for cash. Certificate of deposits are almost exactly identical to bonds in the concept that you deposit money into an account that gains about 7% interest each year and it can't be accessed until the agreed time frame is complete. However, certificate of deposits typically have a less time frame then bonds usually between three months to six years. Also, you can continuously deposit money in certificate of deposits to increase the amount of interest you are gaining where as bonds are set from the first initial investment. However, if you decide to access the certificate of deposit before the time period is complete there are harsh penalties, usually being that you will forfeit any gains accumulated while the account was gaining interest. In any case, while they may take a longer road to financial gains, both bonds and certificate of deposits, like bank accounts, are the safest of ways to invest money.

Historically, mutual funds have been considered one of the better ways to invest money due to the fact that they are cost efficient and easy to get in to. Mutual funds allow you to combine your money with other investors with a predetermined objective investment. Each mutual fund possesses a fund manager who is responsible for investing the combined money into specific securities, usually stocks or bonds. This eases the stress of researching the stock market because now you don't have to figure out what stocks and bonds to buy. Also, mutual funds allow you to buy multiple stocks rather then only one stock and also allow you to buy different kind of stocks, then adding bonds, and so forth. This can all be done within a few hours in a mutual fund while it could take weeks if you do it all on your own. Mutual funds are the ideal investment opportunity for those looking to get a little help while still gaining big rewards.

So there are more ways to invest money. It is not just about the stock market and real estate. Although stocks and real estate still might be considered the high reward investments, bank accounts, bonds, certificate of deposits, and mutual funds are much safer and still yield high returns. So the next time you are looking for a great investment opportunity, look outside the box. You might just find something more to your liking.