Investing is no longer just for the wealthy or experienced – it’s becoming increasingly popular among young people looking to build wealth early. But where should you start? Whether you’re still in college or starting your first job, these investment options are perfect for beginners seeking clever, low-risk ways to grow their money.
Once our primary needs and emergency fund reserves are met, there’s no harm in investing. Investing offers numerous benefits, including increasing assets, protecting against inflation, achieving financial freedom, and more.
A wide variety of investment options are available today. If you think investing is limited to stocks, you’re not entirely correct. What are the different types of investments?
Here are some examples of investment instruments that you can choose from.
Gold & Precious Metals: A Safe Haven Investment
Precious metals, or gold, are the easiest form of investment you can choose. This classic investment is suitable for those seeking clear intrinsic value. This physical investment carries relatively low risk. Its value tends to be stable and continues to increase annually. The value of gold has experienced significant appreciation in recent months.
If you want to invest in gold, choose gold bullion over jewelry. Gold bullion is valued purely by its weight. It’s essential to have secure storage for your gold. You can use a safe at home or rent a deposit box from a bank.
Real Estate: Long-Term Wealth Through Property
Another form of physical investment is real estate, also known as property. This investment is considered long-term because it requires holding the investment for a considerable period to achieve a return. There are various ways to invest, from purchasing land, building a property on it, and selling it when the price is high enough. Alternatively, you can rent out the property and earn income from the rental income.
This investment is considered low-risk because prices tend to rise steadily over time. However, the concern is that assets like buildings can deteriorate, so maintenance is crucial to maintain the property’s value.
Time Deposits: Simple & Secure Bank Investments
A time deposit is similar to saving money in a bank, but the difference is the higher interest rate compared to a savings account. The more money you deposit, the higher the interest rate will usually be. Furthermore, there’s a maturity date unlike savings accounts. Time deposit terms vary, with a maximum of 12 months, and some banks offer terms as long as 24 months.
Despite the higher interest rate, the money cannot be withdrawn at any time until the predetermined term is met. Therefore, carefully consider the most suitable term for this investment.
Stocks: High Potential, Higher Risk Investment
This instrument is one of the most popular forms of investment. Shares represent proof of ownership in a company. Returns on investment come in the form of dividends and the growth in the stock’s value when traded. However, it’s essential to note that not all companies distribute dividends to their shareholders.
This instrument can be considered very promising, but it carries a relatively high risk. Prospective investors should thoroughly understand this instrument before making an investment. Detailed analysis is also required when trading these securities.
Mutual Funds: Beginner-Friendly & Diversified
A mutual fund is an investment instrument in which funds from several investors are pooled into a single pool and then invested in capital market instruments within an investment manager’s portfolio. This instrument is ideal for beginning investors with limited funds. Before purchasing a mutual fund, ensure you choose a product that aligns with your risk profile, needs, and desired market preferences.
Government Bonds: Lower-Risk & Reliable Returns
The government bonds are considered one of the safest investment instruments due to their low risk. Government bonds are debt securities issued by the government and subsequently offered to the public.
Some types of government bonds can only be purchased for a specific period. Furthermore, not all of these bonds can be traded on the secondary market. The terms of these bonds vary.
There are various types of government bonds; choose the bond that best suits your needs and available funds. Some types are only offered for a limited time, so be sure to stay informed if you’re considering this investment.
Before we start investing, there are several key factors to consider. These include a stable income, sufficient needs, an emergency fund, and sufficient knowledge of the investment instruments and risks we choose to invest in. Because if investments are not made carefully, significant losses await us. Absorb as much information and knowledge as possible. Don’t be afraid to invest to maximize your profits.
