An investment that makes money will not necessarily yield an immediate return. Some investments take years to mature properly and provide a significant return. If you’re interested in investing money to make money, you must consider your short-term and long-term financial objectives.
There are many ways to invest, each with pros and cons regarding whether they’re worth pursuing according to your objectives.
1. Study, Educate, and Learn
Speak with a financial advisor. Study investment products. Compare their rate of return. Analyze stocks if you want to go that route. You can make thousands of investments, some lucrative and others a waste of time.
The more you know and are better informed about investment opportunities, the more likely you’ll be positioned to maximize your return.
2. Know Your Risk Tolerance
Understanding your risk tolerance depends on how much money you invest, how old you are, and available resources.
Any investment can lose money. You want to minimize this risk at all costs. If it does happen, you want as many protections to ensure you can regain your wealth over time.
3. Start a High-Yield Savings Account
A high-yield savings account is the most stable and effective way to invest and save money. Put in a little at a time if that’s all you can afford.
Twenty dollars off every paycheque is a strategy that many people use. They watch it slowly build over time into something more, in addition to the interest they earn long-term on every penny they put here.
4. Mortgage Investments In Real Estate
Real estate has historically been one of the strongest investment products in the country. Investing in the right type of real estate and location can reap long-term rewards once the mortgage investment is fully paid and you earn passive income through renting and other strategies.
If you want to make money short-term and long-term, mortgage investments and real estate are the best ways to arrange it.
5. Individual Stocks Investing
Anyone can start investing in stocks with as little as a few dollars. Apps like Wealthsimple and others can be downloaded onto your smartphone, connected to your chequing account, and any individual can start investing today in individual stocks.
However, this is high-risk investing for someone who doesn’t know what they’re investing in. This requires significant research to minimize the risks of volatility, and even then, the risk of losing your money in the stock market still exists.
6. Invest in Mutual Funds
Long-term investing requires looking at where the most stable growth is. Mutual funds spread out risk across multiple stocks, bonds, and assets. You invest in the mutual fund, not the investment asset itself. As the mutual fund rises in value, so does your investment, and you’re hedged against any single investment losses.
However, the minimum investment for a mutual fund can be thousands of dollars, requiring an investor to save enough for that initial buy-in.
7. Invest in Index Funds
Index funds are mutual funds that hold stocks tied to a specific market index, such as the S&P 500. You earn a return on an index fund equal to the underlying index’s performance.
This is different than a mutual fund which is actively managed by a professional, having stocks and assets traded in and out according to what the trader wants. Index funds often provide access to strong returns long-term but may not be the right type of product for short-term investors.
8. Invest During Times of Uncertainty
Uncertainty and instability can cause stocks and investments of all types, including mortgage investments, to dip in value. For an investor looking to invest in new products, when values are low, that’s when to get in, and then you can cash out once there is stability and values have rebounded. While volatility can feel scary, capitalizing on short-term lows is a strong way to make money.
9. Exchange-Traded Funds
ETFs, or exchange-traded funds, pool individual stocks together. You invest in an ETF, and you invest in a collection of stocks or securities. ETFs are sold like stocks; you buy them like an individual stock. They are an excellent investment for long-term money-making and are recommended for investors who want low-risk investing.
It’s also important to note that, unlike mutual funds, ETFs do not require a minimum investment.
10. Cryptocurrency Is High-Risk
Many young investors looking to make money by investing money jump to wanting to invest in cryptocurrencies like Bitcoin and Ethereum. Crypto is not a smart investment product for any beginner. It’s incredibly volatile.
Even experienced, knowledgeable crypto investors can lose their entire portfolio, betting on the wrong coin. Cryptocurrency is largely untested as a long-term investment strategy, and its short-term returns vary from coin to coin.