Most people make New Year’s resolutions to save money or earn money. One of the smartest New Year’s resolutions the average income earner can make is to invest. There is such a thing as being too late to invest. Young people are highly encouraged to start investing because your money would have grown by the time you retire. If you wait until late middle age to invest, you won’t be getting much in returns.
Understandably, not everyone has tons of cash to start investing. And you really don’t need millions of dollars in capital to become an investor, says Jason Sugarman, a well-known private equity financier, and a professional investor. Here is a list of relatively low-risk or easy ways for regular people to invest and grow income:
Sometimes known as fixed deposits, term deposits are offered by banks. These financial tools are very much like savings accounts, except that you offer a certain amount of money for investing that matures in a set period of time. For example, you could get a term deposit for $1,000 for one year at an interest rate specified by the bank. Unlike with a savings account, you cannot deposit or withdraw money from a term deposit until it reaches maturity. Term deposits yield higher interest rates than regular savings accounts. If you are in the habit of always spending your savings, then a term deposit is a good way to prevent your worst instincts. This is one of the easiest and least risky investment vehicles around.
Switch to a Self-Directed IRA
The advantage of Roth IRAs is that this type of account gives you more control over how your money is invested than with the traditional option, explains Jason Sugarman. These types of IRAs also incur fewer administration fees, which is one big perk. Your checking account will be directly linked to a self-directed IRA. You will get checkbook control that allows you to have a say in where your retirement funds are invested. Your account will be overseen by a trustee, such as a bank, so you can make sound decisions on investments. More importantly, you can include precious metals in your self-directed IRA, thus diversifying your investments. Precious metals like gold will hedge your retirement savings against currency devaluation in the future.
Could there be a more delicious way to invest? Of course, you cannot drink the wine you bought to invest. The idea here is that wine becomes more valuable with age. If you buy an authentic bottle of red wine for cheap now, this bottle would be a lot more valuable in a decade or two with age. Therefore, wine-investing is a great way to grow your cash in the future with little effort. Keep in mind that cheap bottles of sparkling wine from the grocery store won’t count. Buy well-regarded wines under five years of age, when these bottles are relatively cheap, to cash in several decades in the future.
Also, you could consider investing in a government bond. Keep in mind that while the above investments are “low-risk,” they are not entirely without risk either. But investing in the above is better than not investing at all.