7 Ways To Invest Money

I believe among readers there is an honest desire to invest, but there is also a feeling that gives us pause.  That is because we are not familiar to investing and what we can invest in.  Below I will lay out 7 ways to invest money and why.  I hope this helps to direct you towards the option(s) which may be right for you.  In any case, whatever you invest your money in, make it a priority to get as educated as possible.  The more informed you are the better off you and your money will be.  I say that because the more comfortable and understanding you are with your investments the more likely you are to be patience with your investment plan.  This is not to say take no action until you know everything, no!

7 Ways to Invest Money

1. Rental Real Estate
2. 401K
3. Roth IRA
4. Options Trading
5. Online Business
6. Stocks/ETFs
7. Gold

Why Rental Real Estate?

Everyone needs to have a place to stay, so real estate as an asset is so practical. It is a basic human need, alongside food and clothing.  It is a physical tangible asset which you have the potential to add value to.  If you buy rental real estate, you have the potential to make money in 4 ways.  They are as follows:

1. Positive cash flow from rents after expenses
2. Appreciation of the market value of the real estate over time
3. Equity gained through principal pay-down
4. Depreciation of real estate over time often shields cash flow made from income tax

Why 401K?

401K is a vehicle in which you can invest your money in stocks and bonds.  The specialness of the 401K is the ability to get, sometimes, a $ for $ match of your contribution from your employer.  Although, this is often only up to certain percentage of your salary.  This vehicle also provides the ability for securities you chose to grow tax deferred within it, unless, you utilize Roth 401K, in which case you pay income tax up front.  However, if Roth 401K is used, growth of income is tax exempt within an account after that.  I suggest to invest only up to the employer match in low cost index fund.  The reason I caution only to the match is to get the free money because companies often offer lack luster options that are typically higher in expense cost.  Thus, better to use remaining investment for IRA in a brokerage account.  Not only do you get more control, but more options as well.  Only return to max out employer 401K if you still have money after Roth options exhausted.

Why Roth IRA?

Roth is also a vehicle like the 401K, but the tax is paid up front on income you are investing; however, whatever is gained is all yours and if you and the market does good over time, all the more for you in making for comfortable retirement for you and/or your family.  If you did up to maximum percentage of employer match in 401K and still have money to invest, think Roth next.  Each adult can contribute $5500 each year into a Roth IRA.

Why Options Trading?

Options trading gives you the potential to earn weekly, monthly, yearly, etc cash-flow by leveraging cash and/or stocks and ETFs.  When you use options trading techniques, you will also have the ability to hold onto the wealth acquired via 401K and Roth IRA.  If used properly, you will not have to liquidate all your assets to pay monthly expenses in retirement.

Don’t Drain Your 401K For A Pension Payment

Why Online Business?

You can potentially reach the world to sell your goods and services.  It often doesn’t take a lot of money to start up either.  Online is the now and the future, so might as well figure out how you can make a niche for yourself now.

Why Stocks/ETFs?

Because they are ownership interests in companies that produce or provide goods and services which generate droves of revenue and potential profits.  Shareholders get to partake in the success of a company in the form of dividends and/or stock/ETF appreciation in value over time driven by a company’s consistent and growing earnings.

Why Gold?

Gold has been real money over 2000 years.  Unlike fiat currencies which loss value due to manipulation over time, gold is gold.  Its value is not in flux, it’s the currency which it is valued against which is.  It is a time tested store of value.

In Closing

These are the 7 ways to invest money that I personally lean towards.  One thing to note about investing is that seeing returns often takes time, so you must be patient.  I have really only started investing 7 years ago, but over time, I’ve done quite well towards my goal of financial freedom.  Over this time, these 7 ways to invest money has been the asset class or vehicle I have used to do so.  If you find these are some of the same things you are interested in, follow my blog as I will continue to share my experience and what I’m learning along the way.