We all realize the importance of investing our money. We know that multiple streams of income are crucial for our financial wellbeing. It makes it easier for us to pay our bills. It makes it easier for us to pay off our debt.
But how do you invest your money? And more importantly, you want to know how to invest money wisely.
Investing often intimidates people. In fact, a staggering number of people wish to not continue investing.
But we want you to be different. We are going to show you how to invest money wisely.
The Guide on How to Invest Money Wisely
We know that investing money may seem intimidating but we are going to help you gain the confidence you’ve been looking for!
Here’s what you need to know on how to invest your money wisely:
1. Need Any Help?
You can invest all by yourself or seek the help of others. The latter can be done by hiring a professional advisor or by reading great books on investing.
You need to decide how much help you want to take and how much is good for you. For a first-time or novice investor, you may feel obliged to seek the advice of a financial advisor. You may also want to consume as much financial content as possible.
But you also need to trust your own judgment. It is your money after all, and you need to have confidence in your decisions as well.
This should come as no surprise. Whether you want to invest in different companies, participate in international investing, venture into real estate, or interesting things like cryptocurrency – you need to diversify.
You should do your research on where you can make the best returns. You also have to combine this with your risk level and what you understand best. For example, do not invest in cryptocurrency unless you understand the blockchain technology behind it. And if you find cryptocurrency too volatile, then you shouldn’t invest in it – no matter how popular it becomes.
Your peer group, financial advisors, and content you consume can help you in deciding where all you can invest.
3. Risk Tolerance
As we hinted in the previous tip, you need to evaluate your risk tolerance. One of the biggest reasons why people never invest their money is because they are afraid of losing it.
And, truth be told – this is a possibility that you also have to consider. Only invest what you are willing to lose and never see again.
If you have a low-risk tolerance then you want to opt for ‘safer’ options such as the stock market. If you want to risk low amounts of money, you may wish to opt for investing apps such as Robinhood or Acorns where you can make small investments in stocks.
If you want to invest in real estate and have a low-risk tolerance, you can use a service such as Fundrise to make partial investments in real estate.
If you have a higher risk tolerance, then you can invest directly into more expensive stocks or in luxury real estate. For these options, you may wish to consult a financial advisor.
4. Passive Investing
You should consider trying passive investing. This is when you invest money into an asset and then leave it alone until you make a sizeable profit.
Two popular forms of passive investing are to opt for a mutual fund or an exchange-traded fund, known as an ETF. You can invest in these directly or use a Robo-advisor to help you choose and invest in one of these funds.
If you own other assets, they may be able to bring in a passive income. For example, if you owned the rights to a book that sells on Amazon, you could potentially earn money each month if the book continuously sells.
You can also look into a website like Flippa (or Empire Flippers for high-risk investments) where you can purchase an existing website that generates an online income.
5. Invest in an Online Business
As we mentioned in the previous point, there are businesses that generate an income solely online. If you invest in one of these you could potentially be purchasing a gold mine.
If, by any chance, you own a domain name that you do not use – why not monetize it? If you do not wish to sell it, you can create a landing page with advertisements related to your niche. If your domain name is related to dog food, have links to purchase dog food and related products online. This way, someone can access your domain and click the links while you earn a commission.
You can also invest in websites that make money through Google Adsense, Affiliate Marketing, or by selling digital products. These businesses are part of the digital gold rush and you may wish to cash in on it.
While we mentioned online businesses in passive income, there may be some websites that require you to be active. You may have to update the content of the website every now and then – or you can hire a virtual assistant to help you with this.
6. Invest in Precious Metals
Investing in gold and silver is still as popular as ever. These are great alternatives to fiat currency.
If you are an investor who is willing to take huge risks, you may wish to invest in gold bars and gold coins. If you want to take lower risks and have a smaller budget, silver bars and silver coins are usually significantly cheaper.
There are many shops (both physical and online) where you can easily purchase precious metals. We suggest researching what the best places to buy precious metals are.
We also suggest you seek the advice of seasoned investors for this one.
You want to make sure you invest in the right precious metals that will bring you the best returns.
Build Your Wealth
Now that you know how to invest money wisely, we encourage you to take the leap forward and build your wealth.
Be sure to reach out to us to see if you qualify for a cash loan!