The most financially secure people in the world tend to have one thing in common — they’re not afraid to invest in themselves and in their futures. They also know that the best time to start investing is while you’re young, because that’s when your money has the longest time to grow. But if you haven’t started investing yet, or are still unsure where to start, this list of 10 investments that will make you richer might inspire you to finally begin saving. And if you already have an investment portfolio?
1) Insurance
Insurance is probably one of those things you’ve heard about but never really thought through. Insurance is, basically, a way to hedge your bets. Instead of risking thousands or millions of dollars on a situation that might be far from certain, you simply pay a small monthly fee (or whatever) to have coverage in case something catastrophic happens.
There are different types of insurance, though. There’s health insurance, auto insurance, home insurance and life insurance. The latter is probably more common than you think. Life insurance protects your loved ones financially if something happens to you (for example, your death). It’s one of those things that might seem unnecessary but can actually be incredibly useful down the line – especially since you don’t have to be rich or famous to get it! In fact, a surprising number of people who buy life insurance aren’t wealthy at all. They just want to make sure their family will be taken care of after they die.
2) Savings Account
This is a basic bank account with which you can hold extra money while waiting to decide how best to invest it. When deciding how much to save, consider your short-term goals and your long-term financial plan. It’s generally recommended that everyone should have at least three months of living expenses saved up in case of emergencies, but five is considered even better.
Even if you don’t have an emergency fund, a savings account is still useful. First of all, it can be a great place to keep your extra cash while you wait to decide what kind of investment you want to make.
3) Credit Card
Building credit early on is a good way to ensure financial security down the road. By getting a credit card and using it responsibly, you can work your way up to bigger, better things—like a mortgage or car loan. Just be sure to pay off your balance in full every month, and always check your credit score before applying for new cards. The average cost of an application fee is $30, but it’s even more important to make sure you get approved!
4) Fixed Deposit
If you have a few grand laying around in savings, consider putting it into a fixed deposit (FD). In a fixed deposit, you lend your money to an FD provider for anywhere between 6 months and 5 years. At your bank, that would earn you 0.5% interest; at some specialized providers like Fidelity or Kotak Mahindra Bank, FDs give 8% annualized returns!
5) Mutual Fund/Stocks
A mutual fund is a collection of various assets, all managed by a single company or fund manager. When you invest in a mutual fund, you’re investing in companies without having to pick them one by one. Mutual funds are easy to buy and sell and are generally considered safe investments. Another option that falls under mutual funds is exchange-traded funds (ETFs). ETFs can be traded like stocks, which means they can grow quickly but also drop suddenly and substantially.
6) Buy Gold
Gold is a safe haven for your cash. There are many reasons to buy gold, including that it’s seen as a great way to hedge against inflation. The price of gold moves independently of other stocks and so is often considered a good way to offset risk in your portfolio. But should you really invest in gold? Is there a right time to buy? What kind of returns can you expect from gold investments? These questions will be answered here. If you have been wondering whether or not to buy gold, read on!
7) Smartphone
Smartphones are a business person’s best friend. Not only can you run your entire office from your phone, but it’s also one of the most powerful tools for increasing productivity and efficiency that exists. Research shows that people who work more than 55 hours per week are less productive than those who work 40 hours—and smartphones are great ways to help you manage your time effectively.
8) Car
While you could argue that an expensive car won’t make you rich, we have a different outlook. If a car is reliable, comfortable, and well-equipped to get you where you need to go with minimum hassle (and maximum comfort), then it can be money in your pocket over time by saving money on gas and reducing your chances of getting into an accident. While it might not help you become wealthy per se, a good set of wheels is one way to keep yourself from wasting cash.
9) Home Loan
If you’re an aspiring homeowner, look into a home loan. This is typically a low-interest, fixed-rate loan that allows you to purchase property. Interest rates on these loans are usually lower than credit card or car payments, and have more flexible repayment options than personal loans. If your credit history is limited or non-existent but you have enough income to afford monthly loan payments, some banks may give you a shot at homeownership with no money down.
Home loans come with a variety of interest rates and repayment options. As you shop around for a home loan, consider your budget and what kind of repayment schedule would be best for you. Always read loan agreements carefully before signing to ensure that you’re getting a fair deal.
10) Financial Literacy Education
In order to really take control of your money, it’s a good idea to become educated about how it works. A basic understanding of personal finance can help you make good financial decisions for your future. Check out classes on financial literacy and even try reading some books on money management to get started! You might be surprised at how much more confident you feel when you have a solid grasp on your finances.
