As another new year begins, so begins our many plans to execute. Someone wants to exercise daily to stay fit; others want to spend more time with family or focus on a career with more hard work. Basically what we want is to modify our life in a better way. The question is how we can do that? To live a better life what we need to do is to secure our future. Maybe 2019 can be the year where you can invest your money for future growth. Why you need to invest and where can you invest—you do not need to get confused about all these, here I will provide you 15 best investment option in 2019 for long term growth.
Why do You Need to Invest?
A question can arise in your mind that why do you need to invest? You can just save money. Yes, you definitely can save money by tightening your budget; however, it will not lead you to your plan of early retirement. Saving money would not help you in building wealth as well. Wealth only comes because of investment. Other than that, investment can help you if you are in the middle of a financial crisis.
In short, investment is necessary to have a comfortable future, not only for you but also for your family.
Where to Invest to Get Good Returns?
The primary question is where to invest? Investments are not guaranteed but what you need to have is patience. Time and risk tolerance are two significant things to decide where to put your money? There are options for both long term and short term investment; if you are a beginner, what you need to do is to homework before investing money to minimize the risks and as well as to fit your need.
Let’s discuss the best investments options in 2019:
Commercial banks issue certificates of deposit (CD), where you need to put your money for a specific time and wait for it to mature. In this case, the bank offers you an interest rate (approximately 3%); the interest rate is generally higher than a savings account. These are insured federally.
There are various types of CDs available:
- Fixed: the standard CDs have a fixed rate of interest, you will get the principal amount along with unpaid interest when it gets matured. During this time, if you wish to withdraw it, you will have to pay the penalty.
- Variable rate: where the interest rate is tied to some factors, decided by the bank, you can have benefit when the rate increases, but the opposite situation can happen as well.
- Liquid CD: in this case, you are eligible for early withdrawal, but the interest rates are a bit lower.
- Jumbo: Jumbo CDs are for the higher amount of deposit; usually you will get higher interest in this case.
2. Treasury Securities
The safest investment is Treasury securities because these are backed by the U.S government, which ensures the return of the original principal amount and unpaid interest if any. Mainly these can be classified according to the period and maturity
- T-bills: these are the shortest range maturity bond; the time of this type of investment can vary from 4 weeks to 52 weeks. These are purchased for a price less than their face value, and when it matures, you will get the par value. Interest will be the difference between purchase and maturity price.
- T-notes: maturity terms of t-notes, which are currently available are 2,3,5,7 and ten years. At the time of maturity, you will be paid the par value, and the interest will be paid semiyearly.
- T-bonds: these are long term bonds; the maturity time is 30 years, where you will be paid the higher rates of interest than the others. Same as t-notes you will be the interest semiannually.
3. Savings Bond
The safest type of investment idea would be a Savings Bond. Two types of savings bond are available right now.
- I bond: Here to avoid increased inflation rate, every six months, a fixed interest rate and the inflation rate is added to your deposit.
- EE bond: long term policy, interest would be paid up to 30years, earning a fixed rate is confirmed.
If you withdraw early, you need to pay the penalty, which is the last three months interest.
If you are aware of the stock market, you might have heard that a drastic change is going to happen in 2019. Other than the paper purchase, you can buy stock directly from your computer. For beginners, low-cost shares are the first option. As these are long term policy, you need to keep patience while you are investing in stocks. Low budget stocks also help you in boosting up your 401(k) account. Once you understand the stock market, then you can go for buying individual stocks, where you will invest a certain amount of money every month, and when the price goes down, you will have benefits as you have already bought all.
5. Dividend Stock
If you buy any dividend stocks of a company, you will get some amount of the company’s profit, quarterly. So not only you will get the return in the long term, but also you can make money in the small time. These stocks are generally less risky; these are considered safer than growth stocks; however, before purchasing you need to check with the company overview. You should go for companies with more dividends because that is how you can understand if the company is trustworthy or not. Just don’t be happy with a regular cash payout, after maturity, to gain high returns, reinvest your dividends.
6. Growth Stocks
Both Dividend stocks and growth stocks are kinds of similar, but growth stocks belong to tech companies. However, growth stocks don’t pay out cash quarterly, what they do is they can return up to 20% or more. These stocks are liquid; you can sell them any time you want to, and you need to choose the right company where you won’t lose all your money. Growth stocks rise at a faster pace than others, but the negative thing can also happen.
7. Preferred Stocks
A safer version of stock but a riskier version of bonds is preferred stocks. You will get a regular payout from this one; the risk is that they can suspend their dividend partners anytime due to some unavoidable circumstances, and you cannot do anything about it.
8. P2P Lending
Peer to peer lending enables you to lend money to a borrower, from whom you can gain interest. This process is done with or without intermediates. Many intermediate websites are to be found on the internet, always go for those websites which are federally insured, and lend money to the low-risk borrowers. Thus you can make money from the interest as well as you can have the assurance of the return of the principal capital. Some p2p lending websites are Lendingclub, Upstart, and Funding Circle, etc.
9. Real Estate
No matter what happens in the market, people will always need a home to stay. So Real estate is a major investment to manage your portfolio. The question is how to invest?
- The first and relaxed type of making money in return would be if you have a spare room, rent it to Airbnb, and earn money every week.
- If you don’t have a spare room, but you have the capital to buy and renovate a property then do it, you will be able to resell the property or rent that property, thus you will earn money.
- REITs or Real Estate Investment Trusts are a different option if you don’t want to deal with the physical property and being cursed as a landlord. REIT allows you to take the profit of the real estate market without any hassle. REITs are issued by companies who own a commercial building, or hotels or apartments. While buying REIT, you need to have a brokerage account.
A tip: you should buy the publicly traded REITs while purchasing through an online broker.
10. Money Market Account
If you need an account with higher interest rates and considerably liquid, so if any time you are in an emergency, you can have access to your money, then money market accounts are suitable for you. The threshold amount of deposit is higher in this scenario. Make sure that your money market accounts are FDIC insured.
As per the federal rules, you can withdraw money from your money market account, but more than three check transactions are not allowed.
11. Corporate Bonds
These kinds of bonds are issued to the investors by the corporation. Generally, these are short term funds; the maturity time varies from 1 to 5 years, which makes the interest rates less risky to decrease. However, these bonds are not FDIC insured, so if the company is facing some downfall, or there is no financial stability, then the bonds will be affected. You need to make your fund on high quality corporate.
12. Paying off Debt
If you currently have a high-interest credit card or any ongoing loan such as student loan or vehicle loan, you should consider paying off the debt. It will help you in getting a good credit score. During a survey, a result was announced that most of the people tend to pay off the minimum amount, and when the rest of the balance gets out of their budget, they start to worry. If you pay off a credit card which costs you approximately 17% interest, in that case, you will have 17% in return, and that is how you can save a lot.
No investment is more excellent than investing in own-self. You, yourself, have control over your career. You can understand what is right for you or what is not. Try to spend more in your career which will help you in getting the return in the future. Educate yourself, enroll yourself in a management course, or go for a career conference, or earn a certificate that will help you to grow in your field.
14. Startup Business
Startup Business is the future. If you want 2019 to be your year, you need to find out several ways of earning money. You might have given a thought about starting your own business, or any of your family members has given a thought about it but didn’t dare to do it. Well, you need to start sometime, so why not this year. You can have a passion of yours like baking, cooking, dancing, or you might know some other languages. Turn your passion into small business ideas, and invest gradually in them.
Without good health, you cannot do anything about your wealth. So you need to maintain your wellness. How to do it? You need to pay attention to your health. Being healthy can bring positive vibes in your life. Join a gym class or start meditating, try avoiding preserved food and if possible try to eat as much organic food as possible. Be healthy, and be happy.
I hope this guide will help you with decent investing ideas. Do not over think, it would not lead you anywhere; just choose what is right for you; do some research before investing. Do not spend everything in one go, learn first, gradually increase your investment and you will have a better future. Have a great 2019. May this and the upcoming year be prosperous for you.