What Will Make You the Most Money?
There are many different types of investments that you can put your money in. All of them have their upside and downsides. Gold, real estate, bonds, and stocks are just a few examples of investment types. You’ve probably come across a few of these in researching what to do with your money. Let’s get into what they all mean and what you can do with them.
First, you can invest in gold. But keep this in mind, gold is a commodity — so if you are investing in gold, be aware that your protection against a price drop, your moat, is based on scarcity and fear. If you think the world is going to be a more fearful place in the future, gold is good.
The thing to remember is that betting on commodities is usually just that — betting.
It’s not Rule #1 investing unless you KNOW that scarcity is going to create the demand to drive the price.
2. Real Estate
You can invest in housing and real estate. I like any good Rule #1 investment – Publicly traded businesses, private businesses, apartments, farms and trailer parks are all good as long as you treat them the same as an investment.
The hardest part about investing in real estate is getting a house that is 50% off of what it’s worth. If you can do that though, you can make some decent returns investing in real estate.
However, it might be easier to invest in the stock market, make the same returns or better, and not have to deal with having a bunch of rental properties to take care of.
You can invest in bonds. Why do people invest in bonds?
Because they’re considered “safe” and very “low risk”.
This might be true, but a bond might only net you a 3% return on your money over multiple years.
What does this mean?
It means that when you take your money out of the bond, you’ll have less buying power than when you put it in because the growth rate could even keep up with the rate of inflation.
There is nothing “safe” about running out of money in retirement because your rates of return couldn’t keep up with inflation.
4. Mutual Funds
You can invest in mutual funds. A mutual fund is a pool of funds from many investors that are diversified into many different things including, stocks, bonds, and other assets.
They’re operated by money managers who invest your money for you, and attempt to get good returns. There are A TON of downsides.
The biggest one being that most mutual funds don’t actually make positive returns, but you still have to pay the money manager a percentage of your money.
5. Invest in Individual Companies
Fifth, you can learn how to invest in individual companies or stocks. I don’t want to tell you that this is the safest, easiest, and best way to make money… but it’s the best way to make money. Learning how to invest will enrich your life.
Start by looking at the companies that you love and that you understand.
You can make better returns in the stock market and retire a lot faster than with any other investment type.
Last, let’s talk about what kinds of things are NOT investments. Things like a new car, your TV, your couch or bed. Things that lose value over time from you owning them are not considered investments. It’s important that you live within your means when it comes to this stuff.
Bottom line: Put your money into the only type of investment that’s guaranteed to make you money. The stock market.
Learn how to invest safely and securely with minimal risk during my free transformational investing webinar.