Wouldn’t it be nice if everything was free and you could eat, live and do as you please without the burden of money? We all have to trade time for money to fund our lives, and the more we make, the more we can do.
Earning and spending all you make may not be a bad short-term strategy, but for an easier future, you must consider building a monetary stockpile to be more comfortable later in life.
When is the best time to start investing? The answer is always now, and if you are considering it for the first time, you are in a great position because regardless of your age or what you have, you can begin to build wealth now.
Here are the best investment ideas for beginners.
Idea #1: Emergency Fund
If you want to care for yourself financially and have money to invest regularly, you must first have an emergency nest egg. This should be a fail-safe for financial bumps so they don’t interfere with your regular investing. Having an emergency fund will take care of you in the circumstances like:
- Job loss
- Car repairs
- Medical emergencies
- Home repairs
It is best to build up 3-6 months’ worth of regular earnings in a secure place like the bank, where you can access it when needed.
Idea #2: Mortgage Investing
How about becoming a private lender that helps other people realize their dream of home ownership?
Investing in mortgages is a great investment tool where you become the mortgagee, lending money with an expectation of a greater return within a specified period. The loan is secured through an interest in the property in question, and then if there is a failure to make the repayment, you take ownership.
You make interest on the money lent out, typically set every year but paid out monthly. This can be done through the following:
Private Mortgage
This gives a high-interest rate and is held privately with the help of a broker or asset manager.
Public Mortgage
With a public mortgage investment is a publicly traded fund of mortgages in that you make a direct investment. It can be done through an investment broker or a bank that deals with these investments.
Mortgage Syndication
You can also work with like-minded people to join or form a mortgage syndicate where you acquire a fractional interest in various mortgages. This is for more experienced mortgage investors that can take calculated risks.
Idea #3: Savings Account
To have money to invest regularly, you need to put aside some seed money. A savings account is the perfect place to put your money in a secure location where it can accumulate and grow.
Look for high-yield savings account aside from your regular checking account and start a regular payments to yourself. This builds discipline and structure to serve you when you expand your investment efforts.
Whether saving for a purchase down the road or building a lump sum for another investment, your savings account is the key to investing.
Idea #4: Bank Investments
Now that you are dealing with your bank and growing a savings account, you can look into some of their investment vehicles. These include:
- GICs
- TFSA
- FHSA
- RRSP
- Mutual Funds
- EFTs
The rates of returns vary, and you can shop around at different lending institutions to get the best bang for your buck.
Idea #5: Individual Stocks
Buying stocks is investing in individual companies with a goal of growth and even dividends. You can do this with a financial advisor or be more hands-on with an online broker. Many tools are available to research, plan and predict how the market may go, and you can invest as little or as much as you are willing to risk.
Idea #6: Crypto
Cryptocurrency is a new monetary player where you find an exchange to participate in the buying and selling of digital currency that is not attached to fiat currency. It can be exciting with the meteoric rise of Bitcoin, and there are many platforms and apps to participate in this cutting-edge investment strategy.
Idea #7: Real Estate
Real estate is one of the best ways to make money and gives you the added benefit of owning your residence simultaneously.
You can ride the real estate wave if you can negotiate an acceptable down payment and get a lender to finance a mortgage. At the same time, you can put some money into improving your residence with renovations to sell it down the road for a bigger profit.
There is even real estate crowdfunding, where you own a fractional share of larger commercial properties that you can get into.
These are the best investment ideas for beginners that will allow you to create wealth and build a mindset of disciplined spending so you grow your net worth over time. Work to achieve each of these and then take pride in the fact that you have put yourself and your financial well-being as a top priority indoor life.
