Investment can be very simple yet very tricky. It is those things that you do when you are certain of what you want. I tend to think investing needs you to not only be wise but think critically. The best investment is usually one that has low risk and the return is very high.
Let’s first appreciate that there is no investment that is risk free. If you have one that is risk free then you need to stop calling it an investment. Here are some of the investments that have low risk yet high returns.
It is also known as Peer to peer lending. This is where you lend money to someone hoping that they will give you back with an interest. With the P2P lending you got to be very careful because one can easily run away with your money, leaving you with the pain of loss of money. Hence it is very wise to have a background check on whoever you are loaning, then consider what amount he or she can afford then loan him or her. It got high returns depending on the payment schedule you will be expecting a certain amount after a period of time.
Certificates of deposit
Not many love the certificate of deposit. This is because you have to deposit a certain amount of money, you cannot withdraw it for a specific duration of time. After it matures you get it with a certain interest. The advantage is when you have deposited for a certain interest rate, it becomes fixed and cannot change. If you want to withdraw before time, there is a penalty and mostly the money sums up to 3 month interest rate.
This is a topic that many have an opinion on. This is an investment that you live for your loved ones. They can either be whole life insurance or universal life insurance. They are life insurance that are valued in cash.
Stocks that have high dividends
Do your research and target stock that are good and have high dividends. Not all stock investment offer dividend. It also has its risk in case the company goes down, it goes down with your investment especially if it is individual stock. It is advisable to choose the dividend stock mutual fund.
This is a stock that has both equity and debt features. The preferred stock is usually in between the bond payment and dividend. Compared to the common stock it has low risk yet not many trade with the preferred stock. Its main risk can either be tax or market risk. It usually pay monthly or even quarterly.
Treasury inflation protected securities (TIPS)
This is one of the bonds provided by the US treasury. This is one among the bonds that have the lowest risk. It uses 2 methods to grow. One is usually the interest rate which is usually fixed. The second one is the protection from the inflation which the government guarantees.
These are some of the options available to you.