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If you ever wondered or worried about what your future would be like, investment is a way to secure it.

We are in a fast-paced era where global dynamics are too unstable and unpredictable. Everything keeps on changing rapidly and continuously. In such circumstances, youngsters are becoming more aware of the need to start planning for their future.

The youth of today want to find shortcuts to success. They look for ways to start earning a 6-figure income as soon as possible. Many teenagers have already started earning money online through websites, blogs, social media, etc.

However, most of you may not have any idea on how to plan a secure future.

Let me tell you that the key to afford a quality life is investing your income. Don’t know anything about it? Well, this blog is for you then. Keep reading till the end to learn the essential tips of investment…

  • When to Start?
  • How to Start?
  • What Are The Tips For Investing Beginners?
  • What Are The Easiest Steps to Invest in?
  • How can I Invest a Small Amount of Money?
  • What Are 3 Helpful Tips For Investing Your Money?
  • Is Investing Easy?
  • How do Beginners Buy Stocks?
  • What is The 4% Rule?
  • How Can I Double my Money?
  • What Are Some Alternatives to The 4% Rule?
  • Which Investment is Best And Safe?
  • Is Gold a Good Investment?

When to Start?

Most of the teenagers with a meager salary may feel it is too early to start thinking about investment. But, there is no harm in learning something even if you can’t implement right away, right?  

Read Also: Investing With Intelligence: 7 Tips for Tracking Performance of Your Investment

The best financial advice I have ever received is to begin learning the basics of investment at the earliest possible. Doing that makes you ready to start investing your money the day you earn more than your immediate needs.

How to Start?

Here are some useful tips to get you rolling…

1. Save For Emergencies First

People often try to jump into investment without any back-up fund for emergencies. It leaves them with no cash-in-hand for rainy days and demotivates them to invest any amount further.

The best way to avoid any interruptions in your investment plans is saving enough to cover almost 3-9 months of expenses first.

2. Determine a Goal

A significant investment plan is not possible without a definite goal. There are two reasons to explain why.

First is that the absence of a goal will results in a lack of motivation after a while. Unless you have something exciting to look forward to, you are likely to lose interest

Secondly, you will not be able to choose appropriate investment sources and plans if you don’t know the purpose, you are investing to achieve.

3. Know All Your Options

There are thousands of ways you can invest your funds, such as stock, bonds, real estate, or commodities. Similarly, there are different markets where you can infuse your money like a total stock market, emerging markets, etc.

Understanding these options will take time, but it is better to start late with proper knowledge than to jumpstart and face loss later.

Some of the factors that determine your investment decisions are your targets, age, funds available, and investing horizon.

4. Make Diversification Your Mantra

The most important rule of investment is, “Don’t put all your eggs in one basket.” It means that you should not rely only on a single source or area of finance.

Diversification is necessary because the markets are too uncertain. If you invest all your resources in the same way and the same industry, you will have nothing left if it comes crashing down.

What you should do is to find different options that suit you the best.

5. Take Help from Finance Gurus

Money management is not everyone’s cup of tea. Even if you are good at handling your funds, it does not mean that you will be able to make effective decisions regarding investment.

It needs a lot of knowledge about markets, trends, current rates, etc. to form a fruitful investment plan.

Well, I am not saying that it is necessary to be good at finance to invest your money. There are financial experts to help you with that. Find people with relevant expertise, and they can guide you in the right direction.

6. Keep Yourself Updated

People think that investment just means building a portfolio. However, it is a lot more than that. Your portfolio will not remain suitable for a long time because market trends keep on changing. To keep your investment profitable, you have to stay alert about the current changes in the economy.

Going along with the flow of the markets is only possible if you keep yourself updated.

What Are The Tips For Investing Beginners?

If you are thinking about getting into investment, you are likely unsure of how to start and what you should be investing in. The world of investment can be very intimidating for the first-timer. In fact, it can often be confusing for those who are experienced.

The following are 10 tips that will help you get started in the world of investment.

1. Set Investment Goals

Now it is time to decide what you want to get out of investing. Obviously, your ultimate goal is to make money, but everyone’s needs are different. Things to consider include income, capital appreciation, and safety of capital. Also, consider your age, your personal circumstances, and your financial position.

2. Invest Early

The earlier you start investing, the better. For one thing, the sooner you start, the less money you will need every year to achieve your investing goals. Your earnings will compound over time, so don’t be afraid to start investing, even if you are a college student- or better yet, in your last year of high school.

3. Make Investments Automatic

Set aside a certain amount of money to be automatically invested each month. You can set up automatic investment plans through various brokerage service firms and automated investment services like Wealthfront. By doing this, you will avoid stalling and consistently invest.

4. Look at Your Finances

Before you can begin investing, you need to look at how much money you have to invest. Be realistic about it. Make sure that you leave yourself with enough money to pay for your regular monthly bills, loan payments, etc. You don’t need a lot of money to get started with investing- but there are risks. You don’t want to leave yourself short of paying other important bills.

5. Learn About Investing

Once you have your finances in order, it is time to start learning about investing. Study basic terminology, so you know how to make coherent decisions. Learn about stocks, bonds, mutual funds and certificates of deposits (CD’s). Don’t forget about other details that include diversification, portfolio optimization and market efficiency.

6. Set Up Retirement Accounts

There are many tax advantages to having retirement accounts. In some cases, initial investments are tax-deductible, such as IRA’s and 401 K’s. Others require you to pay taxes up front, but not when you withdraw funds during retirement; these include Roth IRA’s (Individual Retirement Arrangement). Also, make sure to find out if your employer matches personal retirement contributions.

7. Be Wary of Commissions

Professionals will try to talk you into buying investments that give them high commissions. Don’t do this without some serious research. Some so-called professionals are well known for selling products that pay them big commissions, but don’t pay much to their buyers.

8. Diversify Your Investments

The market fluctuates constantly, and things always go up and down. To avoid losing too much money when stocks go down, make sure you have a diversified portfolio. That way, you will have some stocks that are rising, even when others are falling. Another option is to invest in overseas markets since they are notably different from the ones in the United States.

9. Study Your Portfolio

It is important that you always study your portfolio. What is right for your portfolio today, may not be the best for it tomorrow. It is important to know what you have, and where you might need to make changes in the future. When the economic climate shifts, be prepared to make investment changes as well.

10. Keep Informed

It is a good idea to always study the markets. Read up on the things you have invested in, for example, if you have invested in Uranium Stocks you will want to get familiar with the energy industry and how this is changing. Look for resources that keep up with market trends, as well as the global economy.

What Are The Easiest Steps to Invest in?

The truth is, learning how to invest doesn’t have to be complicated. You can learn how to invest your money in a few simple steps:

Step 1: Set goals for your investments.

This is important. Take a step back for a second. What does your dream retirement look like? Have you ever really thought about it? No matter what age or stage of life you’re in, it’s never too early or too late to think about what you want to do in retirement someday. And make no mistake, “someday” is coming—and what it looks like depends on what you do today.

It’s not enough to invest just for the sake of investing. You need to have a strong why, something that keeps you going when times get tough and you’re tempted to jump ship. So, to get started, set up a “dream date” with your spouse (or, if you’re single, meet up with a trusted friend) and talk about some of the things you want to do in your golden years. You might be surprised what you both come up with!

But it’s not enough to dream. You need a plan to turn that dream into reality. Remember, retirement isn’t an age—it’s a financial number. You need to know exactly how much you’ll need to fund your retirement dream! Our handy investment calculator will help you set a goal that you can start working toward today.

You can do this! 

Step 2: Save 15% of your income for retirement.

Okay, let’s dive in. When you’re out of debt and have an emergency fund with three to six months of expenses saved, start investing 15% of your gross income toward retirement.

Why 15%? Because there are some other goals you need to plan for—like paying off your home early or saving for your kid’s college fund. Just remember, when it comes to juggling college savings and your own retirement goals, saving 15% of your income for retirement comes first.

The next step is to decide where to invest your money. Start with your work 401(k) and invest at least enough to receive the full employer match. Then you (and your spouse if you’re married) can invest up to $6,000 a year in a Roth IRA.

And the sooner you start investing, the more compound growth works to your advantage. Here’s what we mean: Let’s say you start investing $800 a month in good growth stock mutual funds when you’re 35. If your investment grows for 30 years at the historic average annual rate of return, you could have over $2.2 million when you retire. How much of that was money you put in? Less than $300,000. The rest was compound growth!

What if you’re starting late with nothing saved at all? There’s still hope. If you start investing at age 50 and invest $800 each month, you could still end up with close to $700,000 by the time you celebrate your 70th birthday. That’s not bad at all!    

Step 3: Choose good growth stock mutual funds.

It’s normal to feel overwhelmed by all the mutual fund options when you’re making your 401(k) selections or talking through your Roth IRA options with a financial advisor. With so many choices, it can be hard to figure out the best way to invest your money.

But choosing the right mutual funds is really simple if you follow this strategy. We recommend keeping your portfolio diversified by spreading your investments evenly across four mutual fund categories:

  • Growth
  • Growth and income
  • Aggressive growth
  • International

Yes, it’s that simple! Keeping your portfolio balanced with these four types of funds can help you minimize your risk and still take advantage of the returns the stock market can offer. If you’re confused about your fund options, talk to a financial advisor or investment professional. They can help you make sense of the details so you feel confident about how your money is invested.

Step 4: Invest with a long-term perspective.

When the market spikes or dips, it’s easy to make emotional decisions about your investments. Just rememberSaving for retirement is a marathon, not a sprint!

In our National Study of Millionaires, we found that financial discipline and consistent investing were their keys to building wealth. That means they put money into their 401(k)s and IRAs like clockwork month in and month out for decades, no matter what was happening on Wall Street. You see, millionaires focus on what they can control, not on what’s out of their control.

And no matter what, don’t cash out your 401(k). Don’t steal from your future to fund your new kitchen remodel or dream vacation. Keep your hands off your retirement accounts until you’re ready to retire, and invest consistently year after year—regardless of what the market is doing. That’s a long-term investing strategy you can count on.

Step 5: Get help from an investing professional.

Listen, you don’t need to have all the answers about long-term retirement investing. But you do want to have someone in your corner who can help you along your financial journey.

That’s why we recommend working with an experienced investing pro who can answer your questions and show you how to get your retirement savings started the right way.

Find a financial advisor who’ll stick with you for the long haul and help you stay on track even when times are tough. If you don’t have an advisor, we can put you in touch with an experienced investing pro in your area.

How can I Invest a Small Amount of Money?

There is a popular myth that investing is for those with lots of knowledge and a tonne of money.

This is simply not true. There are a number of investment platforms where you can get started investing for as little as a £1. The trick is to get in the habit of saving little and often, while taking advantage of tax-free wrappers like ISAs.

1. Drip-feed your cash into investments

You don’t need to have a lump sum to start investing. Actually investing small amounts of money regularly is better than investing a large lump sum in one go.

By investing a small amount of money each month you are less vulnerable to market fluctuations. You also inevitably end up buying more shares when they are cheap and fewer when they are expensive (which is known as pound-cost averaging).

2. Buy an index tracker

Exchange-traded funds or index funds track the performance of a stock market or asset class. ETFs tend to be much cheaper than actively managed funds (where a stock picker selects investments on your behalf). They are a simple and cost-effective way to build a portfolio with little money.

You can put your money in an exchange-traded fund via an investment platform such as AJ Bell Youinvest, Hargreaves Lansdown* or Interactive Investor.

3. Use a robo-adviser

If you invest via a robo-adviser, you let an algorithm do the hard work for you in deciding where your money should be invested.

You can invest through an online fund platform such as Nutmeg or Evestor, which will create a portfolio for you.

The minimum investment with Evestor is just £1. For Nutmeg customers, the minimum investment is £100 or £500 depending on which types of investment account you choose.

It’s called a robo-adviser because it’s not a human fund manager or financial adviser looking after your money, making it a cheaper option.

4. Mitigate your risk

Diversify your assets; in other words, don’t put all your eggs in one basket.

This means spreading your cash across different asset classes, market sectors and countries. This can help level out any fluctuations in prices.

5. Invest for the long-term

Investing small amounts of money every month might seem insignificant, but over 20 or 30 years, you could have built a very significant pot.

If you intend to keep your money invested for decades, you can afford to take more risk than someone who might need access to their cash in the next few years.

Investing is for the long-term because the longer your investment horizon, the more time you have to ride out the bad times as prices will recover.

Investing in a pension is a great way to do this because they attract tax relief from the government (and free cash from employers for those in workplace pension schemes).

6. Open a high-yield savings account

While lots of savings accounts are currently paying next to next to nothing, you could get a better deal if you don’t mind tying your money up for months or even years.

The best rates tend to come from regular saver accounts but they often have conditions attached, such as saving up a certain amount each month.

What Are 3 Helpful Tips For Investing Your Money?

The Strawberry Invest team have put down what we believe are the best ten tips for first time investors to consider. These are not a set of tips that will guarantee huge returns and a market beating portfolio, they are points of advice we think you should certainly consider before you invest your money.

1. Establish a Plan

A to B

Having established that you’d like to invest your money you need to formulate a plan, taking into consideration a few questions: How much can I invest? What can I afford to lose?  What is the goal of my investments? How long am investing for to reach that goal? Do I know all the relevant investment definitions and terminology?

2. Understand Risk

When it comes to investing, you will likely start off with a relatively small pot and might think tax efficiency is not a major concern. Remember, investing is a long term strategy and you need to consider the potential value of your investments in the future.

Consider you’re investing now for your retirement, by the time you reach retirement age you may have acquired a considerable pot.  If you haven’t invested in a tax efficient environment like a pension then you may end up paying a considerable amount of tax. Insure you are aware of this when you open an account.

3. Stick to your plan

Money building up

Once you start investing for the first time you’ll realize it’s very hard to ignore the chatter about market movements, commodities, share tips, inflation, interest rates, dividends, gold price, oil price…it’s endless and is near enough constant with globalized markets. 

A true investor should be looking at long term trends and macroeconomic factors that originally shaped their plan and always keep these as their focus

Is Investing Easy?

Yes, if you approach it responsibly. As it turns out, investing isn’t as hard — or complex — as it might seem.

That’s because there are plenty of tools available to help you. One of the best is stock mutual funds, which are an easy and low-cost way for beginners to invest in the stock market.

These funds are available within your 401(k), IRA or any taxable brokerage account. An S&P 500 fund, which effectively buys you small pieces of ownership in about 500 of the largest U.S. companies, is a good place to start.

The other option, as referenced above, is a robo-advisor, which will build and manage a portfolio for you for a small fee.

Investing in stocks means buying shares of ownership in a public company. Those small shares are known as the company’s stock, and by investing in that stock, you’re hoping the company grows and performs well over time. 

When that happens, your shares may become more valuable, and other investors may be willing to buy them from you for more than you paid for them. That means you could earn a profit if you decide to sell them.

Investing in the stock market is a long game. A good rule of thumb is to have a diversified investment portfolio and stay invested, even when the market has ups and downs, like in early 2022.

How do Beginners Buy Stocks?

To buy stocks, you’ll first need a brokerage account, which you can set up in about 15 minutes. Then, once you’ve added money to the account, you can follow the steps below to find, select and invest in individual companies.

It may seem confusing at first, but buying stocks is really pretty straightforward. Here are five steps to help you buy your first stock:

1. Select an online stockbroker

The easiest way to buy stocks is through an online stockbroker. After opening and funding your account, you can buy stocks through the broker’s website in a matter of minutes. Other options include using a full-service stockbroker, or buying stock directly from the company.

Opening an online brokerage account is as easy as setting up a bank account: You complete an account application, provide proof of identification and choose whether you want to fund the account by mailing a check or transferring funds electronically.

2. Research the stocks you want to buy

Once you’ve set up and funded your brokerage account, it’s time to dive into the business of picking stocks. A good place to start is by researching companies you already know from your experiences as a consumer.

Don’t let the deluge of data and real-time market gyrations overwhelm you as you conduct your research. Keep the objective simple: You’re looking for companies of which you want to become a part owner.

Warren Buffett famously said, “Buy into a company because you want to own it, not because you want the stock to go up.” He’s done pretty well for himself by following that rule.

Once you’ve identified these companies, it’s time to do a little research. Start with the company’s annual report — specifically management’s annual letter to shareholders. The letter will give you a general narrative of what’s happening with the business and provide context for the numbers in the report.

After that, most of the information and analytical tools that you need to evaluate the business will be available on your broker’s website, such as SEC filings, conference call transcripts, quarterly earnings updates and recent news. Most online brokers also provide tutorials on how to use their tools and even basic seminars on how to pick stocks.

3. Decide how many shares to buy

You should feel absolutely no pressure to buy a certain number of shares or fill your entire portfolio with a stock all at once. Consider starting with paper trading, using a stock market simulator, to get your feet wet. With paper trading, you can learn how to buy and sell stock using play money.

Or if you’re ready to put real money down, you can start small — really small. You could purchase just a single share to get a feel for what it’s like to own individual stocks and whether you have the fortitude to ride through the rough patches with minimal sleep loss. You can add to your position over time as you master the shareholder swagger.

New stock investors might also want to consider fractional shares, a relatively new offering from online brokers that allows you to buy a portion of a stock rather than the full share.

What that means is you can get into pricey stocks — companies such as Amazon that are known for their four-figure share prices — with a much smaller investment. SoFi Active Investing, Robinhood and Charles Schwab are among the brokers that offer fractional shares.

Many brokerages offer a tool that converts dollar amounts to shares, too. This can be helpful if you have a set amount you’d like to invest — say, $500 — and want to know how many shares that amount could buy.

4. Choose your stock order type

Don’t be put off by all those numbers and nonsensical word combinations on your broker’s online order page. Refer to this cheat sheet of basic stock-trading terms:

AskFor buyers: The price that sellers are willing to accept for the stock.
BidFor sellers: The price that buyers are willing to pay for the stock.
SpreadThe difference between the highest bid price and the lowest ask price.
Market orderA request to buy or sell a stock ASAP at the best available price.
Limit orderA request to buy or sell a stock only at a specific price or better.
Stop (or stop-loss) orderOnce a stock reaches a certain price, the “stop price” or “stop level,” a market order is executed and the entire order is filled at the prevailing price.
Stop-limit orderWhen the stop price is reached, the trade turns into a limit order and is filled up to the point where specified price limits can be met.

There are a lot more fancy trading moves and complex order types. Don’t bother right now — or maybe ever. Investors have built successful careers buying stocks solely with two order types: market orders and limit orders.

Market orders

With a market order, you’re indicating that you’ll buy or sell the stock at the best available current market price. Because a market order puts no price parameters on the trade, your order will be executed immediately and fully filled, unless you’re trying to buy a million shares and attempt a takeover coup.

Don’t be surprised if the price you pay — or receive, if you’re selling — is not the exact price you were quoted just seconds before. Bid and ask prices fluctuate constantly throughout the day. That’s why a market order is best used when buying stocks that don’t experience wide price swings — large, steady blue-chip stocks as opposed to smaller, more volatile companies.

Good to know:

  • A market order is best for buy-and-hold investors, for whom small differences in price are less important than ensuring that the trade is fully executed.
  • If you place a market order trade “after hours,” when the markets have closed for the day, your order will be placed at the prevailing price when the exchanges next open for trading.
  • Check your broker’s trade execution disclaimer. Some low-cost brokers bundle all customer trade requests to execute all at once at the prevailing price, either at the end of the trading day or a specific time or day of the week.
Limit orders

A limit order gives you more control over the price at which your trade is executed. If XYZ stock is trading at $100 a share and you think a $95 per-share price is more in line with how you value the company, your limit order tells your broker to hold tight and execute your order only when the ask price drops to that level. On the selling side, a limit order tells your broker to part with the shares once the bid rises to the level you set.

Limit orders are a good tool for investors buying and selling smaller company stocks, which tend to experience wider spreads, depending on investor activity. They’re also good for investing during periods of short-term stock market volatility or when stock price is more important than order fulfillment.

There are additional conditions you can place on a limit order to control how long the order will remain open. An “all or none” (AON) order will be executed only when all the shares you wish to trade are available at your price limit.

A “good for day” (GFD) order will expire at the end of the trading day, even if the order has not been fully filled. A “good till canceled” (GTC) order remains in play until the customer pulls the plug or the order expires; that’s anywhere from 60 to 120 days or more.

Good to know:

  • While a limit order guarantees the price you’ll get if the order is executed, there’s no guarantee that the order will be filled fully, partially or even at all. Limit orders are placed on a first-come, first-served basis, and only after market orders are filled, and only if the stock stays within your set parameters long enough for the broker to execute the trade.
  • Limit orders can cost investors more in commissions than market orders. A limit order that can’t be executed in full at one time or during a single trading day may continue to be filled over subsequent days, with transaction costs charged each day a trade is made. If the stock never reaches the level of your limit order by the time it expires, the trade will not be executed.

5. Optimize your stock portfolio

We hope your first stock purchase marks the beginning of a lifelong journey of successful investing. But if things turn difficult, remember that every investor — even Warren Buffett — goes through rough patches.

The key to coming out ahead in the long term is to keep your perspective and concentrate on the things that you can control. Market gyrations aren’t among them. But there are a few things in your control.

Once you’re familiar with the stock purchasing process, take the time to dig into other areas of the investment world. How will mutual funds play a part in your investment story? In addition to a brokerage account, have you set up a retirement account, such as an IRA? Opening a a brokerage account and buying stocks is a great first step, but it’s really just the beginning of your investment journey.

What is The 4% Rule?

The 4% rule is a common rule of thumb in retirement planning to help you avoid running out of money in retirement. It states that you can comfortably withdraw 4% of your savings in your first year of retirement and adjust that amount for inflation for every subsequent year without risking running out of money for at least 30 years. 

It sounds great in theory, and it may work for some in practice. But there’s no one right answer for everyone. And if you’re blindly following this formula without considering whether it’s right for your situation, you could end up either running out of money prematurely or being left with a financial surplus that you could have spent on things you enjoy. 

The 4% rule assumes your investment portfolio contains about 60% stocks and 40% bonds. It also assumes you’ll keep your spending level throughout retirement. If both of these things are true for you and you want to follow the simplest possible retirement withdrawal strategy, the 4% rule may be right for you.

However, you should be aware that the 4% rule is an older rule. Following it no longer necessarily guarantees you won’t run short of funds. It may work depending on how your investments perform, but you can’t count on it being a sure thing, as it was developed when bond interest rates were much higher than they are now. 

How Can I Double my Money?

If you’re seeking future financial security, aim to double your money, and double it again. Here are five money-doubling strategies to consider.

1. A 401(k) company match

The first way to double your money is nearly effortless. If your employer offers a 401(k) plan, it’s usually a very good idea to participate. Better still, since many companies offer matching 401(k) contributions, if you invest at least enough to max out that match, you’ll be collecting as much free money as you can from your company.

Matches often double your contribution, to a certain degree. Some, for example, will match your contributions dollar for dollar, perhaps up to the first 3% or more of your salary that you pitch in. That’s a perfect example of doubling your money: It’s a guaranteed 100% return.

There are other company-match formulas, too, such as matching 50% of your contributions up to 6% of your salary. That one doesn’t double your 6%, but it gives you a total of 3% of your salary.

2. The magic of compounding

Compounding is simply math that demonstrates how numbers (such as interest or stock investments) can grow over time. Check out the table below, showing how much a single investment of just $1,000 can grow, at an average annual rate of 8%:

Over This Period……$1,000 Will Grow to:
5 years$1,469
10 years$2,159
15 years$3,172
20 years$4,661
25 years$6,848
30 years$10,063
35 years$14,785
40 years$21,724
45 years$31,920
50 years$46,902
55 years$68,914
60 years$101,257

Calculations by author.

You see that your original $1,000 more than doubles in 10 years, and more than doubles again after 20 years, and 30 years, and so on. You’ll double your money even faster if you’re not waiting for a single investment to grow and are instead adding to your investments over time. For example:

Growing at 8% for$10,000 Invested Annually Becomes:$15,000 Invested Annually Becomes:$20,000 Invested Annually Becomes:
5 years$63,359$95,039$126,718
10 years$156,455$234,683$312,910
15 years$293,243$439,865$586,486
20 years$494,229$741,344$988,458
25 years$789,544$1,184,316$1,579,088
30 years$1,223,459$1,835,189$2,446,918

3. Dividends

Investing in dividend-paying stocks is another good way to work on doubling your money. They’re stocks like any other, with their prices rising over time as long as the companies are healthy and growing. But along with that usual stock-price appreciation come dividend payments, which also tend to grow over time. That’s a powerful one-two punch.

Imagine Hats for Cats Inc. (ticker: SNZZY), paying $2 per year in dividends and increasing that payout by 10% annually. In a mere seven years, the dividend will have grown to $3.90, having nearly doubled, so you’d be collecting nearly twice as much in cash per year from your shares. As long as the company kept performing well, your income would keep growing over time — along with the stock price.

4. Growth stocks

Growth stocks are a great way to not only double your money, but potentially triple or quadruple it, or more. Growth stocks sometimes can be more volatile and risky, though, and they’re often trading at rather lofty levels. So approach them carefully, and aim to buy the ones that seem the most undervalued while offering a lot of potential.

5. Value stocks

Another way to double your money in stocks is via value investing, which entails less risk than growth investing because value investors seek a margin of safety before committing their hard-earned dollars to any stock.

Don’t assume that being a value investor dooms you to slower-growing companies, either. Even growth stocks can be undervalued at times, offering the best of both worlds.

For example, Meta Platforms (the company formerly known as Facebook) was recently trading with a price-to-earnings (P/E) ratio of 23.6, considerably lower than its five-year average of 30.9, and a price-to-sales ratio of 8.5, also below its five-year average of 10.7.

It’s a company that reported its third-quarter revenue was up 35% year over year and earnings per share up 19%. It’s clearly both a growth stock and a value stock.

These are some of the many ways you might go about doubling your money. They’re not the only ones, though. You might, for example, invest in real estate successfully, or take on a side gig or two to double the money with which you can invest. However you do it, aim to increase your assets significantly over the years ahead.

What Are Some Alternatives to The 4% Rule?

There are other retirement withdrawal strategies that are slightly more dynamic than the 4% rule.

The Center for Retirement Research at Boston College has proposed a system in which you base your annual retirement withdrawals off the IRS required minimum distribution (RMD) tables.

RMDs are the amounts you must begin taking from all retirement accounts except Roth IRAs once you’ve reached age 72, unless you’re still working and own no more than 5% of the company you work for. You divide your account balance by the distribution period next to your age to figure out how much you must withdraw every year. 

The Center for Retirement Research used this as its jumping-off point and calculated annual withdrawal amounts as a percentage of total account balance beginning at 65, when it claims you can safely withdraw 3.13% of your retirement savings, until age 100, when you can withdraw 15.67%.

This formula has some of the same flaws as the 4% rule. Changing market conditions may affect what you can safely withdraw, and you’re limited to smaller amounts when you’re younger and may want to spend more. But you could make up for this somewhat by spending any earned interest and dividends in addition to the percentages recommended. 

An even better approach is to ignore cookie-cutter strategies altogether. Talk to a financial advisor about your plans for retirement and how they will affect your spending habits. An advisor will help you determine how much you need to save and how much you can comfortably spend each year to avoid running out of money too soon. 

Make sure you choose a fee-only financial advisor. Those who earn commissions when you buy certain investments can make recommendations based on their best interests rather than yours. Always ask for a copy of an advisor’s fee schedule so you understand what you’re signing up for.

Which Investment is Best And Safe?

1. High-yield savings accounts

While not technically an investment, savings accounts offer a modest return on your money. You’ll find the highest-yielding options by searching online, and you can get a bit more yield if you’re willing to check out the rate tables and shop around.

Why invest: A savings account is completely safe in the sense that you’ll never lose money. Most accounts are government-insured up to $250,000 per account type per bank, so you’ll be compensated even if the financial institution fails.

Risk: Cash doesn’t lose dollar value, though inflation can erode its purchasing power.

2. Series I savings bonds

A Series I savings bond is a low-risk bond that adjusts for inflation, helping protect your investment. When inflation rises, the bond’s interest rate is adjusted upward. But when inflation falls, the bond’s payment falls as well. You can buy the Series I bond from TreasuryDirect.gov, which is operated by the U.S. Department of the Treasury.

“The I bond is a good choice for protection against inflation because you get a fixed rate and an inflation rate added to that every six months,” says McKayla Braden, former senior advisor for the Department of the Treasury, referring to an inflation premium that’s revised twice a year.

Why invest: The Series I bond adjusts its payment semi-annually depending on the inflation rate. With the high inflation levels seen in 2021, the bond is paying out a sizable yield. That will adjust higher if inflation rises, too. So the bond helps protect your investment against the ravages of increasing prices.

Risk: Savings bonds are backed by the U.S. government, so they’re considered about as safe as an investment comes. However, don’t forget that the bond’s interest payment will fall if and when inflation settles back down.

If a U.S. savings bond is redeemed before five years, a penalty of the last three months’ interest is charged.

3. Short-term certificates of deposit

Bank CDs are always loss-proof in an FDIC-backed account, unless you take the money out early. To find the best rates, you’ll want to shop around online and compare what banks offer. With interest rates slated to rise in 2022, it may make sense to own short-term CDs and then reinvest as rates move up. You’ll want to avoid being locked into below-market CDs for too long.

An alternative to a short-term CD is a no-penalty CD, which lets you dodge the typical penalty for early withdrawal. So you can withdraw your money and then move it into a higher-paying CD without the usual costs.

Why invest: If you leave the CD intact until the term ends the bank promises to pay you a set rate of interest over the specified term.

Some savings accounts pay higher rates of interest than some CDs, but those so-called high-yield accounts may require a large deposit.

Risk: If you remove funds from a CD early, you’ll usually lose some of the interest you earned. Some banks also hit you with a loss of a portion of principal as well, so it’s important to read the rules and check rates before you purchase a CD.

Additionally, if you lock yourself into a longer-term CD and overall rates rise, you’ll be earning a lower yield. To get a market rate, you’ll need to cancel the CD and will typically have to pay a penalty to do so.

4. Money market funds

Money market funds are pools of CDs, short-term bonds and other low-risk investments grouped together to diversify risk, and are typically sold by brokerage firms and mutual fund companies.

Why invest: Unlike a CD, a money market fund is liquid, which means you typically can take out your funds at any time without being penalized.

Risk: Money market funds usually are pretty safe, says Ben Wacek, founder and financial planner of Guide Financial Planning in Minneapolis.

“The bank tells you what rate you’ll get, and its goal is that the value per share won’t be less than $1,” he says.

5. Treasury bills, notes, bonds and TIPS

The U.S. Treasury also issues Treasury bills, Treasury notes, Treasury bonds and Treasury inflation-protected securities, or TIPS:

  • Treasury bills mature in one year or sooner.
  • Treasury notes stretch out up to 10 years.
  • Treasury bonds mature up to 30 years.
  • TIPS are securities whose principal value goes up or down depending on the direction of inflation.

Why invest: All of these are highly liquid securities that can be bought and sold either directly or through mutual funds.

Risk: If you keep Treasurys until they mature, you generally won’t lose any money, unless you buy a negative-yielding bond. If you sell them sooner than maturity, you could lose some of your principal, since the value will fluctuate as interest rates rise and fall. Rising interest rates make the value of existing bonds fall, and vice versa.

6. Corporate bonds

Companies also issue bonds, which can come in relatively low-risk varieties (issued by large profitable companies) down to very risky ones. The lowest of the low are known as high-yield bonds or “junk bonds.”

“There are high-yield corporate bonds that are low rate, low quality,” says Cheryl Krueger, founder of Growing Fortunes Financial Partners in Schaumburg, Illinois. “I consider those more risky because you have not just the interest rate risk, but the default risk as well.”

  • Interest-rate risk: The market value of a bond can fluctuate as interest rates change. Bond values move up when rates fall and bond values move down when rates rise.
  • Default risk: The company could fail to make good on its promise to make the interest and principal payments, potentially leaving you with nothing on the investment.

Why invest: To mitigate interest-rate risk, investors can select bonds that mature in the next few years. Longer-term bonds are more sensitive to changes in interest rates. To lower default risk, investors can select high-quality bonds from reputable large companies, or buy funds that invest in a diversified portfolio of these bonds.

Risk: Bonds are generally thought to be lower risk than stocks, though neither asset class is risk-free.

“Bondholders are higher in the pecking order than stockholders, so if the company goes bankrupt, bondholders get their money back before stockholders,” Wacek says.

7. Dividend-paying stocks

Stocks aren’t as safe as cash, savings accounts or government debt, but they’re generally less risky than high-fliers like options or futures. Dividend stocks are considered safer than high-growth stocks, because they pay cash dividends, helping to limit their volatility but not eliminating it. So dividend stocks will fluctuate with the market but may not fall as far when the market is depressed.

Why invest: Stocks that pay dividends are generally perceived as less risky than those that don’t.

“I wouldn’t say a dividend-paying stock is a low-risk investment because there were dividend-paying stocks that lost 20 percent or 30 percent in 2008,” Wacek says. “But in general, it’s lower risk than a growth stock.”

That’s because dividend-paying companies tend to be more stable and mature, and they offer the dividend, as well as the possibility of stock-price appreciation.

“You’re not depending on only the value of that stock, which can fluctuate, but you’re getting paid a regular income from that stock, too,” Wacek says.

Risk: One risk for dividend stocks is if the company runs into tough times and declares a loss, forcing it to trim or eliminate its dividend entirely, which will hurt the stock price.

8. Preferred stocks

Preferred stocks are more like lower-grade bonds than common stocks. Still, their values may fluctuate substantially if the market falls or if interest rates rise.

Why invest: Like a bond, preferred stock makes a regular cash payout. But, unusually, companies that issue preferred stock may be able to suspend the dividend in some circumstances, though often the company has to make up any missed payments. And the company has to pay dividends on preferred stock before dividends can be paid to common stockholders.

Risk: Preferred stock is like a riskier version of a bond, but is generally safer than a stock. They are often referred to as hybrid securities because holders of preferred stock get paid out after bondholders but before stockholders. Preferred stocks typically trade on a stock exchange like other stocks and need to be analyzed carefully before purchasing.

9. Money market accounts

A money market account may feel much like a savings account, and it offers many of the same benefits, including a debit card and interest payments. A money market account may require a higher minimum deposit than a savings account, however.

Why invest: Rates on money market accounts may be higher than comparable savings accounts. Plus you’ll have the flexibility to spend the cash if you need it, though the money market account may have a limit on your monthly withdrawals, similar to a savings account.

Risk: Money market accounts are protected by the FDIC, with guarantees up to $250,000 per depositor per bank. So money market accounts present no risk to your principal. Perhaps the biggest risk is the cost of having too much money in your account and not earning enough interest to outpace inflation, meaning you could lose purchasing power over time.

10. Fixed annuities

An annuity is a contract, often made with an insurance company, that will pay a certain level of income over some time period in exchange for an upfront payment. The annuity can be structured many ways, such as to pay over a fixed period such as 20 years or until the death of the client.

With a fixed annuity, the contract promises to pay a specific sum of money, usually monthly, over a period of time. You can contribute a lump sum and take your payout starting immediately, or pay into it over time and have the annuity begin paying out at some future date (such as your retirement date.)

Why invest: A fixed annuity can provide you with a guaranteed income and return, giving you greater financial security, especially during periods when you are no longer working.

An annuity can also offer you a way to grow your income on a tax-deferred basis, and you can contribute an unlimited amount to the account. Annuities may also come with a range of other benefits, such as death benefits or minimum guaranteed payouts, depending on the contract.

Risk: Annuity contracts are notoriously complex, and so you may not be getting exactly what you expect if you don’t read the contract’s fine print very closely.

Read Also: How to Invest in Startups without being wealthy for as low as $100

Annuities are fairly liquid, meaning it can be hard or impossible to get out of one without incurring a significant penalty. If inflation rises substantially in the future, your guaranteed payout may not look as attractive either.

Is Gold a Good Investment?

Gold is respected throughout the world for its value and rich history, which has been interwoven into cultures for thousands of years. Coins containing gold appeared around 650 B.C., and the first pure gold coins were struck during the rein of King Croesus of Lydia about 100 years later.

Throughout the centuries, people have continued to hold gold for various reasons. Societies, and now economies, have placed value on gold, thus perpetuating its worth. It is the metal we fall back on when other forms of currency don’t work, which means it always has some value as insurance against tough times.

Below are eight practical reasons to think about owning some gold today.

  • A History of Holding Its Value
  • Weakness of the U.S. Dollar
  • Inflation Hedge
  • Deflation Protection
  • Geopolitical Uncertainty
  • Supply Constraints
  • Increasing Demand
  • Portfolio Diversification

Gold should be an important part of a diversified investment portfolio because its price increases in response to events that cause the value of paper investments, such as stocks and bonds, to decline.

Although the price of gold can be volatile in the short term, it has always maintained its value over the long term. Through the years, it has served as a hedge against inflation and the erosion of major currencies, and thus is an investment well worth considering.

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