Best Ways to Invest Money in 2021
Don’t fall into the trap of thinking that investing is reserved for the already rich.
I’ll break things down into five questions you should be asking yourself: 1. What are your financial goals? 2. What’s your investment timeframe? 3. How much risk are you prepared to take on? 4. Do you want to select your investments yourself? 5. What type of account is right for you?
What to Consider First
When you buy a stock, you essentially become a shareholder (or owner) of that business — so whenever the company increases in value, your investment will also rise in price.
If you like the sound of the returns and liquidity that stocks can bring but not the high risk and the need to handpick your investments, I’ve got great news: you can opt for a fund instead. Funds let you invest in a mix of different company stocks, therefore offering increased diversification.
Bonds are essentially loans, with the borrowers usually being the government or large companies. Because of who you’re lending to, the risk associated with bonds is low, yet this also means that the returns are lower than other types of assets.
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