Investing has become much easier with the growth of technology that allows us to do it with a finger tap. You can make extra money while you’re sleeping. We’ll talk about why you should start investing, how you can find money in your budget to invest, and the best investment options. It’s everything you need to know on how to make money investing when you’re starting.
Make Extra Money Investing
To reach long term financial goals like retirement, investing is the way to go. Putting money in a savings account will get minimal results because you’re lucky to get a 2 percent interest rate on your principal.
Goldman Sachs data shows that the average return over the last ten years is 13.6 percent. Think about that next time you are considering putting a cash deposit in your savings.
Starting to invest early in life will substantially increase your financial success. If you started investing $200 a month since you were 25, you’d have $520,000 after reaching age 65. Wanting until you’re 35 to invest $200 per month will get you $245,000 at 65. Getting an early start is one of the best ways to make money, as you can see.
How to Save Money to Invest
Try some of these money making ideas and ways to find money to get started investing:
Get enrolled in your employer’s retirement plan
Make extra money with a side hustle
Lose a spending habit to gain some savings
Pay yourself first by automatically transferring a portion of your money income
Budget your money and find things to trim
Set a savings goal to work towards
Best Investment Options
Now that you have that cash deposit available from your savings, it's time to put it to good use by investing it. Check out these ideas on how to make money by investing below.
One of Best Ways to Make Money: Stock Investment
One of the best ways to make money investing is through the stock market. If you are seeking to reach long term financial goals that can be a source of passive income, look for stocks that are low risk, but pay dividends.
If you are looking for a stock investment option that can provide significantly higher returns, look for growth stock funds. These are a diverse group of growth stocks, so at least some risk is eliminated by not having all your eggs in one basket.
Another one of the ways to make money investing that has been popular recently is crowdfunding. Crowdfunding websites, online forums, and social media are places that you might find crowdfunding investment. Basically, how it works is that for a relatively small amount of cash, a public investor gets a portion of the equity in the business venture.
There are a few drawbacks to crowdfunding. It could take years to see a return, the risk of failure is high, and there are scammers to watch out for. But in return, you could get a huge, oversized return like the $2 billion acquisition of crowdfunded Oculus Rift by Facebook. It also levels the playing field with high net-worth individuals who are usually the ones that can participate in early-stage speculative ventures.
Real Estate Investment Trusts (REITs)
Getting into real estate can be very lucrative. But having the capital to buy property is a challenge for many of us. To get into one of the best money making ideas that real estate represents, you can invest in REITs. These are companies that own and manage real estate.
You get the best of both worlds: Ownership into the property that you don’t have to deal with managing. There are different sectors available in the REIT market, including housing, hotel, retail, and commercial.
About the Author
Anjana Paul is a banking professional who is passionate about helping others make better choices when it comes to money. In her spare time she is a freelance writer with years of expertise in the financial industry. She primarily writes about topics such as student loans, building credit, budgeting, retirement and other personal finance topics.