As you start to save and increase your income, one of the most important steps you can take is investing your money. Many people struggle to know what to invest in besides the stock market. Granted, the choices are vast and can be quite confusing.
However, if you want to ensure a healthy financial future, ensure your family’s finances are secure and live comfortably in your golden years — investing is an absolute must!
And although there is always some risk with any investing you potentially do, you are risking more by letting your money just sit idly by.
I say this because, you could be missing 20-30+ years of compound interest, which can add up to thousands — if not six-figures of missed investment income.
Below, we will explore investing in the stock market as well as the investment options you have beyond that.
Pin it for later!
What to Invest In
Investing in the Stock Market
The commonplace you should be investing your money is in the stock market. The stock market is where investors all connected to buy and sell investments in stocks or bonds.
Stocks are shares of ownership in a public company, like IBM, GE, etc. You can also invest in various bonds, which represent a loan made by the investor to a borrower (typically corporate or governmental) and receive a fixed income.
Without getting too deep into the stock market, you have options to invest in individual stocks and bonds, ETFs, mutual funds, or index funds.
Of course, I’m simplifying this right now, so if you want a deep dive, I’d recommend reading this about the stock market.
For most people, investing in the stock market is as far as they will go usually because this is where they’ll have a company 401k for retirement, or even an IRA or Roth IRA (individual retirement accounts).
But if you want to obtain wealth and diversify your investments, you’ll want to invest your money beyond just the stock market.
Before Investing Your Money Outside the Stock Market
You Have An Emergency Fund
Before you start investing your money beyond the stock market, ensure you have a stable emergency fund built.
There are a few variations of how much you should have and experts who recommend different amounts. I think it depends on your specific expenses, how stable your income is (and current job market), debts, etc.
That said, I always recommend 6-9 months saved regardless. But you can always be safer and aim for a year’s worth. This fund should cover your expenses if you were to lose your job or have a huge unexpected liability.
Investing in Your Company 401k
Investing in an IRA or Roth IRA
Pay Down Any High-Interest Debt
There is a lot of back and forth on whether one should pay down debt or invest for retirement. I have done both at the same time.
However, before investing your money elsewhere, I think it is essential to tackle any high-interest debt you have first.
Getting rid of debt will give you more peace of mind and will take care of debt that could snowball because of the interest, for example, credit card debt.
Know Your Goals for Investing
Investing Your Money Outside the Stock Market
Investing in physical real estate is one of the most popular options. It’s also where many accelerate their wealth and net worth.
The long-term goal of investing your money in real estate is to either rent or flip the properties to generate income.
However, real estate can be intimidating and time-consuming, with plenty of mistakes to be made.
Real estate crowdfunding sites can be an excellent option for you. Crowdfunding takes the pain out physical real estate for you, yet you still have the benefits and diversification of your investments.
There are pros and cons to both sides of your real estate options, so it’s up to you how you might want to invest.
So why should you potentially consider investing in fine art? Well, art was the top-performing asset class back in 2018, beating gold, real estate, classic cars, and the S&P 500, according to the Wall Street Journal.
Investing in fine art has been around for a long time, but it’s not the most comfortable option to get involved with. Typically, your options are the following with investing money in art:
- Need huge capital to buy well-known works of art (talking millions of dollars)
- Become an accredited investor to have access to private art funds
- Take chances on new artists who may or may not ever gain popularity
Okay, okay, please don’t roll your eyes! I know I’m the one that avoided the whole Bitcoin hype like the plague back in 2017.
But, that’s because I viewed it as oversaturated and way overvalued. I mean, when your grandma and cousins under fifteen are talking about it, you know you should probably avoid investing for the time being.
However, cryptocurrency and blockchain technology are not going away. And there are many investment options for you to consider potentially. I recommend using Coinbase to buy and sell any crypto investments.
And while Bitcoin is the most popular one, there are many other cryptocurrency options like Ripple, Litecoin, and Ethereum, to name a few.
Proceed with caution, do your research, and start small. Cryptocurrency investments are still very new with not a lot of regulation from the SEC quite yet.
- Crude oil
- Natural gas
Another potentially profitable investment option for you is investing in websites. There are a few ways to get involved:
- Buy and hold domains
- Buy and build blogs
- Build websites to flip
Start-ups and Online Businesses
If you are quite business savvy, then investing in other businesses or start-ups might be a potential option for you.
Investing your money in start-ups is typically called “Angel Investing,” and you may need quite a high net worth to be able to get involved.
The other challenge is this. Most start-ups won’t go public on the stock market, netting you a lot of money. And they may never get acquired by another business.
To me, this is one of the riskiest investment options outside of the stock market. But, if you are outstanding and have a fantastic business sense, it can pay off tremendously.
Additionally, you could also invest your money in your own online business. Besides blogs, you can start an Amazon FBA business, maybe a dropshipping business with Shopify, or even invest in one of your money-making hobbies as a business too.
Investing in yourself or your own online business can pay you huge dividends in the future. I have and will continue to invest in myself for the foreseeable future.
Investing your money is one of the most important financial things you can do for yourself and your family. There is no doubt you should be investing in the stock market, but you may want to consider additional options as well.
And you might be wondering which of the above is right for you. Well, it all depends on your financial goals, interests, and risk that you can afford.
There are pros and cons to all the investment options listed above, so it’s your job to figure out what makes the most sense for you.
If you are unsure, you can always consult a trusted financial advisor about these options.
Just take your time and educate yourself on the options. Don’t be in a hurry. Take your time until you feel more confident in your investment choices.