While the volatility of the stock market has a lot of people scratching their heads over their financial future, most stocks are held by about 30% of Americans.
If you’re trying to save money for the future, there are high-yield investments that live outside of the stock market to try. These investments give you money you can count on without having to worry about market volatility.
Here are four low-risk ways to make money in the future.
1. A Killer Savings Account
One of the best ways to ensure you get lots of return on your investment is to not have to invest anything at all. Savings accounts are a great way to put money away for a rainy day, but it’s vital that it grows at the right rate. If you put away $1,000 and it doesn’t grow even as inflation does, that $1,000 will have the purchasing power of just $900 in a decade or so.
That’s why you need to have a strong interest rate on your savings account. There are even some high-interest savings accounts out there to ensure that your money gets a real boost. Rather than gambling with a single cent of your money, a savings account lets you keep your cash and watch it grow — it’s a win-win.
Look for accounts that offer you incentives for keeping your money there. There are lots of large banks that give you hundreds of dollars just for opening an account with them. Check the bank’s reputation and ask around to friends and colleagues before choosing just any bank.
You’ll find the best banks offer competitive interest rates and don’t charge you any fees for opening or maintaining your account. The banks that do shouldn’t be ones that you work with, as their business model isn’t one to help you grow your wealth. They’re more interested in squeezing money from you and every other customer.
2. Peer-to-Peer Lending
The world of microloans, payday loans, and title loans have cracked wide open in recent years. Because of changes to regulation, the broader need for credit, and an increased trust for peer-to-peer systems, more people are using these sources for money. On the other side, more investors see the value of helping people out when they need it while also building their own wealth.
When you buy shares for a company, you’re putting money into a company that could go up or down. Unless you own a majority of the shares, you have very little say as to how the company should be run or what daily decisions get made. When you invest money in a peer lending scenario, you get total control over your investment based on the person you’re investing in.
Some people find lending tricky because you might not get your money back. However, since you can look at the financial status of applicants and see their credit rating, you’ll get an idea of how likely it is you’ll get paid back with interest. When you see what kind of financial history someone has, you get a feeling for how trustworthy they are and can rest easy, knowing they’ll repay you.
With the variety of peer-to-peer lending sites out there, look for the one that has a good rating with people who pay back quickly. You’ll be able to get around 5% back on your investments, which is better than most savings accounts and better than inflation.
If you’re looking for an exciting investment that’s going to keep you on the edge of your seat as you watch it climb, turn around. There are few investments that are quite as boring as a certificate of deposit. However, this is a profoundly low-risk investment to get through your bank, credit union, or an investment broker.
You commit to handing the money over for a set period of time when you sign up for a CD. At the of the term, you get a return on your money that’s already been agreed to, no matter what happens to stocks, interest rates, or commodities. With a CD, you’re entitled to a return on the date that you agree to.
The interest is going to depend on how long your CD’s term is and how much the interest rates were when you invested in it. The interest rates drop from time to time, but if you get a longer CD that lasts for a couple of years, you’ll see a much higher return.
While CDs aren’t as exciting as buying stocks, research both and invest in both for the most diversified type of investment. If you take the time to do your research, you’ll find you can do most of the paperwork online.
No matter what you invest in, doing your work online can be stressful. Thankfully there are several ways to document what you do, so if you want to have paper documentation on hand, learn more here.
4. Credit Card Rewards
While it sounds strange that you’d go toward a credit card for an investment, but if you manage your money smartly, you’ll end up making something in the end. There are so many “cash back” credit cards out there that you should consider when you’re trying to get a return on your regular spending.
With some of the best cards out there, you get the chance for a low-risk return that’s better than what you get with a CD or savings account.
You need to be good with your money if you want to make one of these cards work. It takes discipline and careful planning. You’ll need to put forth an effort to hit the spending limit that they request, usually a few thousand dollars, and then be ready to pay it off ASAP so you avoid credit card interest.
If you’re able to do this well, you’ll be getting essentially free money.
High-Yield Investments Are Waiting to Be Found
There are lots of options when you’re looking for low-risk, high-yield investments. Each of these options has its pros and cons, but as a general rule, if the risk is low that you’ll lose any of your money, that’s an investment worth your while.
If you want to start getting your feet wet in cryptocurrency, check out our latest guide.