7 Investment Ideas for Newbie Investors

7 Investment Ideas for Newbie Investors

There is a lot of contradictory info about choices in investing and a lot more stuff related to investment. But all of this confusion boils down to how and where to begin investing for a newbie. 

A lot of the expert advisors usually prefer people to just get out there and start investing. But usually don’t have a clear explanation of how the hell you do it. So, due to the lack of appropriate information, most people hesitate to make a move into the investment industry. 

We don’t want you to back out like that, so read the article till the very end to find out about the top 7 investment ideas that will give you a lot of help getting started with investments. So, without any further ADO let’s get into it. 

1. Receiving Interest Income from Certificate of Deposit 

This is one of the places where you can put investment money in order to receive the fastest but not the highest growth. Mostly, people tell you to put your money in different apps and stuff which is very risky. So, if you are new in the field of investment, it’s way better and safe to invest at your local bank. 

Now, you might ask how to invest at your bank? There’s an answer. All you need to do is deposit the money you’ve got into the bank and just make more money by giving the bank permission to use your money. It’s not that they won’t be able to use your money if you don’t allow it, they’ll do it anyway. This is the reason the bank will pay you an amount of interest if you have money in your savings account

In the subheading we mentioned certificate of deposit, now what’s that. Let’s Know about the certificate of deposit now, shall we? A CD or certificate of deposit is the debt instrument issued by the bank to people like you who invest money in the bank. A person who lends money to the bank with a CD has now become an investor. So, the investor lends a certain amount of money to the bank for a certain period of time. The bank on the other side takes the money with a promise to return it along with interest.  

The way a bank makes money is by lending money to its customers. A fraction of the money is yours so a part of the profit will also belong to you. The bank charges a higher amount of interest to the borrowers than the amount it pays to you. In the CD, you can decide the span of time you’ll lend the money to the bank. Interest amount will be distributed to you either monthly, quarterly or annually based on the type of CD you purchase. 

2. Invest in Roth Individual Retirement Account 

If you are among most people that don’t have access to an employer-sponsored retirement fund, then open a Roth individual retirement account or Roth IRA. You can invest in stuff like mutual funds and exchange-traded funds through Roth IRA, by doing so your investments grow tax-free. So, that’s a good profit. 

But a Roth IRA is a retirement fund, access to the money pre-retirement is very much limited. There will be no shortage of penalties if you use the funds before reaching a certain age. But, there will be no tax deduction when you use the money after retirement. This is the reason most people prefer putting money into retirement funds as an investment

3. Get in the Stock Market With Very Less Money

When it comes to entering the stock market, the cost is what stops most people at the start. But in the present, you’ll not have to worry about the money because thanks to the internet you can get into the stock market with very little upfront money. 

Until recently, stockbrokers charged an extremely large amount of commissions as you bought or sold a stock. This just made it straight-up impossible to invest in the stock market without hundreds and thousands of dollars. 

But now, you can put in as little as a few dollars to get familiar with the stock market and to learn investment before actually making a huge commitment. The increasing number of options has made it possible to get into the stock market with as little as a dollar or two. Which is insane if you consider the amount of money buying a stock took before a couple of years. 

4. Consider Getting into Real Estate 

This just completely blew my mind after getting to know that you no longer had to have a lot of money nor good credit to set foot in real estate. There is this new category of investment called real estate crowdfunding. You might ask, what’s that? Well, you can take it to be the short form of a great thing that is gonna help you make your dreams of getting into real estate come true. 

Okay, but actually it is a new investment procedure or category which makes it possible for you to own shares of an estate or commercial property without being the landlord. If you are looking into investing quite a lot of money, crowdfunding real estate is a perfect choice. 

5. Low Initial Investment Mutual Funds  

While mutual funds are a good place to invest your hard-earned money, most mutual fund companies need a high initial investment. It will most commonly be around $500 to $5000. As a newbie in investment, such a large amount might not be your way to go. 

If that’s the case, most of the mutual fund companies will come to an agreement for having lesser initial investment if you agree to automatic monthly investments. The monthly investment can be somewhere between $50 to $100. If you are wondering how to set up the automatic deposit situation, you can get that information from the human resource department. 

6. Give a Robo-Advisor the Control for Your Investments  

Robo-advisor literally makes investing a piece of cake. You don’t need any sort of experience in investing if you opt for a Robo-advisor. It will ask you simple questions to know your goal and will invest your money in a low-cost portfolio of stocks that are highly diversified. 

A robo-advisor will need around $500 or less to get started with investing. It will charge an annual fee which will be equal to 0.25% of the balance. Which means if you invest in $10,000 the annual fee would be $25. 

7. Save Up First  

In order for you to invest in anything, you’ll first have to save. Even small sums of money can turn into a lot in a certain period of time. Don’t just go about planning where to invest when you barely have any money. Saving actually doesn’t take a lot of work and adjustment in lifestyle. Even if you save $10 a week, it will turn into $500 in a year which can be used to make various types of investments.

Conclusion:

Saving up really does seem like a lot of work but starts with small sums and when you do make quite a bit, be sure you are investing in the right places.

Author Bio:
Nishil is a passionate writer, hungry for new innovation. New trends fill him with tons of enthusiasm to uncover hidden topics. Speakaudible covers a wide range of subjects related to audiobooks.