What makes a good investment is not a question that’s easy to give a straight answer to. Sure, the first thing that comes to mind is ROI, due to the fact that a lot of people invest in order to make more money. Aside from this, there’s the reliability of investment. Even though it’s impossible to make a 100 percent reliable investment, some choices are simply more reliable than others. This is often in contrast with the issue of ROI, due to the fact that the most volatile investment choices give the best return. Some investments have a certain investment threshold, which means that without a certain amount of assets in your account, you probably shouldn’t even bother with them.
Then again, there are some investments that are simply too complex or inconvenient for beginners. This brings us to the feature that will serve as the very topic of this post, the beginner-friendliness of investment. For this to work, you need to set your expectations straight (nothing leads to a disappointment more easily than unrealistic expectations). Apart from this, you need to know what are your goals (generating wealth, diversifying portfolio, etc.) in both long- and short-run. Either way, there are several investments that are generally seen as great investments for beginners.
Before you start
Apart from this, there are several more considerations that you need to make. First of all, it’s absurd to even think about investing before you’ve paid off all of your high-interest rate debts. Second, prior to investing you need to set aside an emergency fund. The size of this emergency fund needs to be big enough to cover your expenses for three next months, should the worst come to pass. This formation of an emergency fund is probably the first investment that you need to consider making. The third piece of advice that you need to listen to is the fact that the money you put in some investments may be immobilized for the following several years. Lastly, never invest money that you’re not ready to lose.
1. Buy stocks
The first idea that comes to most people’s minds when it comes to investing is usually buying stocks. To outsiders, this may seem as something complex, yet, it is a task that you can complete in a simple three-step process. First, you open a brokerage account, then, you select your stocks and decide how many shares you should buy. The second part is the most complex one due to the fact that it is here that the successfulness of your investment will be decided. Finally, you get to choose your order type and there you have it. While it goes without saying that asking for a professional support on this topic may be a preferable choice, there are a lot of reliable tutorials online that can give you a basic idea on this should look like.
2. Commodities
A second choice that you should consider is investing in commodities like gold, silver, platinum, palladium or diamonds. The reason why this is a popular idea is due to the fact that it diversifies your portfolio. When people start losing fate in stocks, currencies, governments and organizations, the value of these commodities skyrockets.
It’s only natural that in the moments of uncertainty, people start believing in assets that they can fit in a briefcase, lock in the safe or (traditionally) burry in the backyard. Nowadays, things aren’t necessarily taking this format, due to the fact that in a digital world, you can own commodities that you never put your hands on, yourself. Either way, this doesn’t make them any less reliable.
3. Cryptocurrencies
One of the reasons why cryptocurrencies are such an ideal investment opportunity is due to the fact that they give a potentially insane ROI. Investing in an ICO and then just forgetting about this for a certain period of time can be an investment option that yields millions in the future. Even if this doesn’t take place, unless you decide to invest in one of the major currencies (which naturally give you lower ROI), you can enter this field with a relatively small investment.
In the previous year, cryptocurrencies demonstrated just how quickly they can reach their new peak, which made the world show a much greater interest in them. This also means that, at the moment, there are more learning resources on this topic than ever before. This fact alone would be enough to make this investment at least a bit more beginner friendly.
4. Peer-to-peer lending
If you’ve ever aspired to become an investor (in a traditional sense), peer-to-peer lending may be the best thing for you. Namely, the risk of peer-to-peer lending through a platform is significantly lower than just lending money to startups and small businesses directly. The way in which these platforms often work is also beginner friendly, due to the fact that they often offer a side-to-side section for peer-to-peer borrowing and peer to peer lending. To you as an investor, this can be a great visual insight into the other side of the coin. Naturally, higher-risk investments yield a greater ROI, however, the choice is always yours to make.
5. Real estate
At the very end, you have the option to invest in real estate, which may sound like something familiar but it is an umbrella term and something that’s not to be underestimated. First of all, there are so many different ways to invest in real estate. For instance, you can invest in real estate ETFs, mutual funds, REITs or invest in real estate notes. More traditionally, though, you have an option to invest in home construction, here a property manager to invest for you or even consider going for hard money loans. With all of this in mind, you need to do some in-depth research on this topic prior to investing.
In conclusion
At the end of the day, just because there are some investments that require a lot of research and preparation it doesn’t mean that they’re not beginner-friendly. As long as you have resources to learn from, money to invest and the right mindset, nothing should stand in your way for long. By following this guide, you might just get one step closer to this goal.
