Investing is a good way to grow your wealth, but it can also blow your capital. Click here for a list of safe investments with high returns that you can use to save for your startup. The majority of the American population does not own stocks. That’s a shame because, over the last eight years, we’ve seen incredible growth in the stock market that has solidified retirements and has made individuals rich.
If you’d love to get in on earning returns from investments but aren’t sure that you understand the stock market well enough to buy into individual companies, you’ve got other options!
There are safe investments out there that rise with the stock market and are a lot easier to wrap your head around. Below, we share seven of those investments with you in hopes that we might inspire you to start growing your wealth.
1. High-Interest Savings Accounts
There are few investments that are safer and better yielding than a high-interest savings account.
You might be thinking to yourself that savings accounts don’t yield interest rates that make them worth your while. Unbeknownst to many though, some online savings accounts service returns that are as high as 3% or more. That interest rate comes at zero risks to most savers given that the federal government insures bank deposits up to $250,000.00.
Before high-interest savings accounts were a thing, CDs were go-to safe investments that promised high returns at no risk to investors. CDs, in a lot of ways, are the same as savings accounts. You deposit your money and collect the account’s posted interest rate.
However, there are two catches to CDs that set this investment vehicle apart. First, CDs do not allow you to remove your money from them for a fixed-term without incurring a penalty. For example, if you put your money into a two year CD, you’d have to leave it there for two years to enjoy its benefits.
Second, a CDs advertised interest rate is locked in throughout your term. Savings accounts, on the other hand, have fluctuating rates.
3. Municipal Bonds
When a city’s bridge gives out and needs to be rebuilt, how is the project paid for? In most cases, a municipality will foot the bill by asking people like you to borrow money. It does this by issuing what are called Municipal Bonds.
Municipal Bonds are notes of debt that you buy from your local government that are paid back with interest.
The government is very unlikely to default on its debt since it will sooner take on more debt to repay what it owes. That makes this investment safe and also fulfilling since the money you lend will be put directly into your community.
4. Cashback Credit Cards
Cashback credit cards aren’t on most financial advisor’s safe investment lists. Despite that, by using a credit card that yields anywhere from 1% to 5% cash back on purchases, you’ll certainly be able to build your wealth without risking anything.
You need to work with a credit card that doesn’t charge annual fees and allows you to automatically pay off your monthly balance in-full to ensure that you don’t end up losing money with this investment vehicle.
If you leverage a credit card incorrectly, you will always pay much more in charges than you’ll get back in rewards.
5. An Index Fund
Index funds are more volatile than the other investment options that we’ve shared. Despite that, when you look at their long term returns, you can expect a steady and sizable rise in the money that you pour into them.
To give yourself the best chance at achieving stability, invest in the S&P 100 index which will spread your money across the top 100 companies in the country.
Any time a financial advisor is trying to aggressively sell you on investing in annuities walk away. While annuities can be a solid and secure investment, they also pay large kickbacks to advisors which makes them rife with signs of investment fraud.
Annuities are financial products that are paid out by insurance companies. You put a lump sum of money into them and your insurer pays you a fixed income in your retirement years that theoretically will keep you financially stable until you die.
Again, for many people annuities prove to be a valuable addition to a rounded investment portfolio. For others, annuities end up costing too much in the way of fees and net too little in returns to make them worthwhile.
The safest investment that you can make in life is an investment in yourself. If you take the $10,000 that you have in your pocket and send yourself to college, for example, your lifetime earnings will increase astronomically.
Think hard about changes that you can make to your life today that might make you more confident, educated and valuable to the world around you. Those are the investments that you should be making before doing any deals with bankers, insurers and other financial entities.
Which Safe Investments Will You Choose?
There are several safe investments that promise reasonably high returns to those that take advantage of them. The trouble is picking which investments are right for you.
While we can’t answer that question on your behalf since we don’t know anything about your financial goals, we will say that a high-yield savings account is a great place to start. From there, you’ll have to learn more and park your money in the places that make the most sense to you.
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