First of all, congratulations! Investing your money is the most reliable way to create wealth over time. If you’re a first-time investor, we’re here to help you get started. It’s time to make your money work for you.
Before you put your hard-earned cash into an investment vehicle, you’ll need a basic understanding of how to invest your money the right way. Here are some of the best ways to invest money:
Stocks are investments in a company's future success. When you invest in a company's stock, you profit along with them.
Just as borrowing money is a part of life for most people, companies and municipalities also borrow money by using bonds.
This popular investment vehicle tracks a market index and can help balance your portfolio.
However, there's no one-size-fits-all answer here. The best way to invest your money is whichever way works best for you. To figure that out, you’ll want to consider:
1. Your style
2. Your budget
3. Your risk tolerance.
On the other hand, passive investing is the equivalent of putting an airplane on autopilot versus flying it manually. You'll still get good results over the long run, and the effort required is far less.
In a nutshell, passive investing involves putting your money to work in investment vehicles where someone else is doing the hard work -- mutual fund investing is an example of this strategy. Or you could use a hybrid approach. For example, you could hire a financial or investment advisor to construct and implement an investment strategy on your behalf.
More simplicity, more stability, more predictability
· Hands-off approach
· Moderate returns
· Tax advantages
More work, more risk, more potential reward
· You do the investing yourself (or through a portfolio manager)
· Lots of research
· Potential for huge, life-changing returns