Where Experts Think You Should Invest Your Money
Whether you’re a new investor or want to relook your current strategy, it can be hard to determine where to put your money for the best returns.
After all, what can be a good investment idea this year can be a risky one the next.
That said, here are expert-approved tips to invest your money to make the most profit this year.
Precious Metals IRA
For starters, a precious metal IRA is a special type of an IRS-approved self-directed individual retirement account.
Unlike a traditional retirement account like 401 (k) or IRA, it doesn’t limit you to paper-based assets like bonds, mutual funds, and stocks.
Inversely, this account allows you to invest in physical gold coins, bars. And IRS-approved precious metals like platinum, silver, and palladium.
Further, operating a precious metals IRA account enables you to diversify your retirement benefit on your portfolio on a tax-deferred basis. It also lets you maintain a preferential tax treatment.
In essence, this means that you can transfer or roll over the portion of your current IRA account into a gold IRA without tax implications.
On top of that, operating a precious metal IRA account allows you to leverage an annual contribution of $6,000 if you’re 50 years old or younger and $7,000 if you’re over fifty.
The primary reasons you’d want to invest your money in a precious metal IRA include:
- It helps protect your money, especially when currencies, governments, and markets falter
- It hedges your investment against inflation and deflation
- Data shows precious metals like gold and silver have greater profit potential in the long run than most assets
High-Yield Savings Accounts
High-yield savings and management accounts offer higher interest rates than brick-and-mortar banks checking or savings accounts.
A high-yield savings account is ideal if you only need to access your cash occasionally. Or are looking for a short-term investment option.
Still, you should keep in mind that you can only conduct a maximum of six transactions per month with a savings account. On the other hand, cash management accounts are more flexible and sometimes offer higher interest rates.
If you’re a new investor, it would be best to keep three to six months’ worth of your expenses in a savings or cash management account before directing your cash to other investment strategies.
Certificates of Deposit
A certificate of deposit, also known as a CD, is a savings account. One offering fixed interest rates for a predetermined period. This account is federally insured, making it an attractive investment option.
A CD is a great place to put the money you know you’ll need at a fixed date in the future. Typical lengths range from one to five years.
It is essential to mention, though, that you’re likely to pay a fee if you want to get your money before the defined period. So, don’t invest in a CD with the cash you might need soon.
Money Market Funds
Moreover, money market funds are different from money market accounts, so it’s crucial to know the difference before investing.
In addition, money market funds, at their core, are bank deposit accounts similar to savings accounts.
When you invest in a money market fund, your cash buys a variety of high-quality, short-term government, corporate, or bank debt.
Money market funds are ideal for the money you may need soon. But are willing to take a little bit more risk. You can also invest in a money market fund if you’re looking for a safer option than stocks.
College Savings Funds
You can invest in a college savings fund if you’re a parent/
With a backdrop of $1.6 trillion of student tuition debt, operating a college savings fund is one of the best investment strategies you can pursue.
As an investor, you’ll want to consider tax-efficient savings to help you grow your money or the future.
College savings funds are great for young families and parents keen on securing their kid’s future.
The Bottom Line
Investing can help create another income stream, fund your retirement, get you out of a financial mess. And secure your family’s future.
Most importantly, investing enables you to grow wealth, help meet your financial goals and boost your purchasing power over time.
Even with all the benefits, it is also crucial to assess potential gains and the risks involved.
While the options highlighted in this article aren’t the only ways to invest, they’re excellent places to get started, especially if you’re looking for safer choices.