Where to invest my money (9 main alternatives)
You want to invest your money in order to make it grow, but still do not know where to do it? The following is a list with the 9 main investment alternatives that exist in the market, which will help you to choose the right one for you.
Each alternative includes a brief description of the same, their advantages and disadvantages, and a comment staff to help you compare it better with others.
where to invest my money
Related: How to invest my money (step-by-step guide)
shares
The shares are securities issued by companies in order to be financed, and that give who has certain rights such as the right to receive dividends in the event that the issuing company the deal and get utilities.
investing in shares
investing in shares means to buy these titles for the purpose of selling them later at a higher price when they had at the time of purchase (and thus obtain a gain), and/or receive dividends (and thus Obtain an income).
Benefits of the actions:
they have a high potential for profitability (at the investing in shares you can get a much higher profitability that could be achieved by investing in traditional investment instruments such as savings accounts and term deposits). You
don't need a lot of capital to start investing in them (although it should be borne in mind that due to the commissions to be paid at the time of purchase, invest in them a small amount may not be cost-effective).
have a high degree of liquidity (the actions can be easily converted into cash as they can sell quickly).
Disadvantages of actions:
carry a high risk (where the market is traded is a highly volatile market where any event economic, political or social can significantly affect the value of an action from one moment to another).
You need to have technical knowledge that will enable one to invest adequately in them.
Investing in stocks is an attractive alternative where an investor can get a good return on their money, but usually, when you invest in the medium to long term and has patience enough to not rush to sell them before the first fall of the market.
Bonds
Bonds are debt securities that some companies, governments and other entities issued in order to be financed, and that give to the one who has the right to receive the periodic payment of interest that are fixed in advance and which do not vary during the life of these.
Invest in Bonds
Investing in bonds means to buy these titles in order to receive the periodic payment of interest, and thus obtain an income.
Advantages of the bonuses:
offer a higher return potential of other fixed income instruments such as savings accounts and term deposits
are a low-risk investment (before investing in a bonus one knows how much are the interests that are going to receive, and are sure that they will not vary until the expiration of the bonus).
not required technical knowledge to begin to invest in them.
Disadvantages of the bonuses:
offer little potential for profitability in comparison with variable income instruments such as stocks.
Unlike other fixed income instruments such as savings accounts and term deposits, are not insured by governmental entities, so that there is a risk that the issuer does not pay the interest promised in the event of a bankruptcy.
Invest in Bonds is a good alternative for those who would like to receive the periodic payment of interest and that, due to its low risk tolerance, they would also like to know in advance how much is what you are going to receive and which is the term that is going to be invested their money.
Real estate
investing in real estate is to buy physical properties such as homes, apartments, commercial premises, offices, land, etc., for the purpose of selling them later at a higher price when they had at the time of purchase (and thus obtain a gain), and/or rent (and thus obtain an income).
Advantages of real estate:
they offer a high potential for profitability (investing in real estate can be quite profitable, but usually in the medium or long-term)
are an investment, in general, safe (the value of the real estate hardly decreases and, on the other hand, tends to increase with time).
are an investment relatively simple (just a few technical skills are required to start investing in them and then to manage them, at least in comparison with other investment instruments such as shares).
Disadvantages of real estate:
you need to have a good capital to start investing in them.
You need to have knowledge of the market that allow one to choose the property, suitable, and then make sure that this increase its value or can be rented quickly.
have a low degree of liquidity (it is not easy to convert a property in cash, as it takes time to find a buyer for the same).
Investing in real estate is one of the best investment alternatives that already exist which allows one to have an asset that hardly loses its value and that, in spite of the falls that may have, in the long term (approximately five, ten, twenty or thirty years) it is very likely that is worth considerably more than what it is now.
Mutual Funds
Mutual funds are funds that are shaped by the contributions of money of natural and/or legal persons, which are collected, managed and invested in other financial instruments in order to make them grow, for funds.
Mutual funds
investing in mutual funds involves buying shares of these funds in order to sell it later at a higher price when they had at the time of purchase, and thus obtain a profit.
Advantages of Mutual Funds:
they are a low-risk investment (investment of money in a mutual fund are carried out by professional investors and so diversified). You
don't need a lot of capital to start investing in them (most mutual funds allow one can start to invest in them with just 100 dollars).
are an investment simple (not required greater financial knowledge to start investing in them).
You can immediately invest in them (it is only a matter of approaching company funds or to any bank that offers this product, ask about the types of mutual funds that offer, and request the opening of one.) If you
have a high degree Of liquidity (money invested in a mutual fund can easily be converted into cash, as one can have this at any time).
Disadvantages of mutual funds:
offer little potential for profitability in comparison with other investment instruments such as stocks and real estate.
It has little control over them (the investment of money in a mutual fund are carried out by the managing company of the fund).
it is necessary to pay commissions to the managing company of the fund.
Mutual funds are the ideal choice for those who would like to obtain a return on their money than they could get with traditional investment instruments such as savings accounts and term deposits, but do not have the knowledge you need to invest in other more complex instruments such as shares, or that are not willing to take the risk that these imply.
Term Deposits
term deposits accounts are managed by banks and other financial institutions that offer the payment of certain interests to those who put and keep their money in these for a specified period of time. Long
-term deposits to
invest in term deposits involves placing money in these accounts in order to collect the interest that offers once the agreed deadline.
Advantages of term deposits:
are a safe investment (before investing in a term deposit one knows what the interest you are going to receive and what is the deadline within which the money is going to be invested). You
don't need a lot of capital to start investing in them.
They are an investment simple (it is only a matter of approach to a bank or a financial institution that offers this product, ask about the types of fixed-term deposits that offer, and request the opening
Disadvantages of exchange:
carry a high risk (the foreign exchange market is a highly speculative and volatile market, where any event economic, political or social can significantly affect the value of a currency from one moment to another).
You need to have technical knowledge that will enable one to invest properly.
Invest in foreign exchange is an alternative where you can earn a lot of money in a short period of time (mainly due to the possibility of leverage), but it also presents a high-risk, especially if you do not have the knowledge and the proper preparation.
Gold
Investing in gold is to buy gold, either directly (for example, through bullion or gold coins) or indirect (for example, through certificates of deposit of gold or specialized investment funds in gold), in order to sell it later at a higher price than it had at the time of purchase, and thus obtain a profit.
invest in gold
gold Advantages:
offers a good potential for profitability (invest in gold is profitable, but, in general, in the long term).
It is a secure investment (the value of gold hardly decreases due mainly to the fact that it is not regulated by governments, but it is determined by the supply and demand; and, On the contrary, it tends to increase with time because each time there is a greater demand and lower supply).
it is a simple investment (financial knowledge are needed to start investing in it).
presents a good degree of liquidity (the gold can easily be converted into cash, which can be sold at any time).
Disadvantages of Gold:
its value is unstable in the short term.
does not provide any type of income.
In the case of buy physical gold, requires care and maintenance, and runs the risk that it may be stolen; and, in the case of leave in custody in a bank, it is necessary to pay a high cost for it.
Invest In Gold is considered an investment haven that investors often perform in times of crisis in order to prevent the value of your money to decline; but it also tends to be regarded as a profitable investment in the long term because in the long run its value tends to increase due to the fact that there are more and more investors and less gold reserves.
Works of art and collectibles
invest in works of art and collectibles is to buy paintings or sculptures of renowned artists, as well as jewelry, stamps, coins, old books, among other objects, in order to expect to increase their value as a result of the passage of time, and sell them at a higher price when they had at the time of purchase.
Works of art Advantages of works of art and collectibles:
offer good potential for profitability (invest in works of art or collectibles, in some cases, it may be quite profitable in the long term).
are an investment simple (it is only a matter of buying the work of art or collectable object and save it At home or leave it in the custody of a bank).
owning them gives one a feeling of satisfaction and enjoyment, especially if you are a collector, or likes the type of work of art or collectable purchased.
Disadvantages of the works of art and collectibles:
do not provide any income (unless they are given in any art gallery or a museum).
require enough care and maintenance (any cracks or deterioration could decrease part or the total of its value). There is
a risk that they can be stolen or destroyed in a fire or other disaster, and, in the event of acquiring insurance, this tends to have a fairly high cost.
we run the risk of being scammed (that you sell a piece forged or, even worse, stolen).
have a low degree of liquidity (works of art and collectibles are not easy to convert into cash, as It is not easy to find a buyer for these).
The investment in works of art and collectibles is a great alternative for collectors or for those who like a work of art or collectible in particular; but also for those who want to diversify your investment portfolio or simply want to give a touch of distinction.
Business
Invest in business is to create a business from scratch, buying a business that is already in operation, or finance the business from a third party, for the purpose of securing a profit or sell it at a higher price than it had at the time of purchase (in the case of creating a business or buy one), or get a percentage of the profits (in the case of financing the business of a third party.)
Acquire a transfer
of the business benefits:
Offer a high potential for profitability (invest in business can be very profitable, always and when you choose the business indicated and this is administered efficiently).
In the case of creating a business or buy one, you have full control of the investment (the utilities and the increase in the value of the business depend on one).
If you have good results, give one the satisfaction of having been responsible for the good performance of your investment.
Disadvantages of the business:
carry a high risk, especially if you do not have the appropriate knowledge and skills.
Generally, you need to have a good capital to start investing in them, especially in the case of the purchase of a business.
You need to have knowledge and skills, both to invest in them how to manage them.
have a low degree of liquidity (money invested in a business is difficult to convert into cash because, among other reasons, it is not easy to quickly find a buyer for a business).
Invest in businesses is the ideal choice for those who like the subject of business and have full control of your investment (in the case of creating a business or buy one), or that they like the subject of business but don't have the time or the political will necessary to administer one (in the case of financing the business to a third party).