How to Invest

The worst thing you can do is leave your cash under your mattress, not only can a burglar run away with it, but it can lose it’s value over time due to inflation.

Imagine you were working in the 1940’s. At the time with 5 cents you could buy a bottle of Coke. One day during payday you decide to save 5 cents under your mattress. Time passes and it became the year 2015. You decide it’s finally time to spend your 5 cents. You go to the store to find out you can no longer afford a bottle of Coke, your saved nickel lost its orginal value! That’s why saving cash is not a good thing, and why it’s a good idea to invest it.

There are many ways you can invest your money, some riskier than others. The riskier the more money you can make, but at the same time you can lose a lot of money too so it’s a doubled edged sword. One way is to diversify your investments, meaning spread it out in different things. Think about the saying never place all your eggs in the same basket.

Here is a non-exhaustive list:

• High-Yield Online Savings account
• CD’s (Certificate of Deposits) - basically you save a set amount for a certain amount of time and the banks pay you
• Real Estate - your home, rentals, flipping homes
• REITs (Real Estate Investment Trust) - in stocks/ETFs that deal with Real Estate
• Bonds - when you let the goverment or company borrow money and they pay you interest. You can buy through brokerages and even on Treasury Direct.
• Stocks - owning a share (piece) of a company. The safest type of stocks are called blue chips.
  • Dividends - getting paid to own a stock
• Options - contracts to buy/sell stocks. Almost like insurance. In a way it’s like betting if a stock will go down or up. This is more of an advanced strategy.
  • Calls/Puts
• Mutual Funds - basically a pool/bundle of stocks and bonds
  • Index Funds - based on a category of stocks i.e. S&P 500
    • Exchange-Traded Funds (ETF’s) - can be traded like stocks
• Retirement Plans - 401K, Roth, etc. all interest earned is tax free!
• Buy Gold or Silver - you can either buy physical “bullions” (bars, coins, round) from places like APMEX or JM Bullion, or invest in stocks that deal with gold and/or silver.
• Make loans / Peer-to-Peer Lending - you can make loans to stranger on platforms such as Lending Club, or to family and friends with a written contract
• Crowdfunded Real Estate Portfolio - on platforms like Fundrise or RealtyMogul.
• Commodities - oil, etc

Risk varies, but you can search around for more information on each.