Investing For Beginners: Four Smart Ways to Invest Your Money

There are countless ways to invest money that can give you a greater return, some of which may be surprising for first time investors. However, the risks of each method varies, and some methods are riskier than others.
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You may think that you have to be rich in order to begin investing funds, but the truth is that with as little as 50 dollars you can begin putting money into investments that will get you a return. Not all investors place their money in the stock market. There are countless ways to invest money that can give you a greater return, some of which may be surprising for first time investors. However, the risks of each method varies, and some methods are riskier than others. They each have their varying benefits, timelines, and interest rates, and your preferences and investment decisions will depend on your assets, knowledge, and the amount of cash you can afford to put in.

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It's important not to put all of your savings into your investments. Set a sufficient amount aside for emergencies and future plans that may require your saved up funds. Most investments take time to make you money, especially the ones that aren't as risky, so make sure you can afford to lose access to that money for the duration of your investment. If you don't have money that you can afford to set aside untouched for at least a few months, it's best to wait until you have the savings to invest your money properly. Many investments can take years to return a substantial profit, but the patience is well worth it.

You may have doubts if you are a first time investor, however, there are several smart ways to invest aside from putting your money in the stock market that are safer and equally effective in making you money. Here are four of the safest and most profitable ways to invest for beginners:

1. Real Estate

While real estate takes a lot more than 25 dollars to invest, it is a good market that can make you big profits depending on how you choose to go about it. You can make money by renting out your property to tenants or businesses, through capital appreciation, or through buying and selling (aka flipping properties). Real estate is a safer investment because it is a physical asset that is and will always be in demand. As long as people need homes, and businesses need buildings to produce goods and host customers and products, real estate investments will be profitable. You can purchase property on your own, or go in with a partner with whatever funds you have available. You can also invest in a Real Estate Investment Trust if you don't want to deal with buying property yourself.

2. Gold

Gold may seem like an outdated investment that is no longer necessary or valuable in today's economy. However, gold is another physical asset that holds real value and therefore remains a smart investment when handled correctly. Gold isn't just found in jewelry - it can be purchased as coins or bullion bars and kept safe either at home or in a bank vault. One of the greatest benefits of investing in gold is that it preserves wealth. While dollars may be affected by inflation, the value of gold cannot be reduced by such economic developments. What's more, experts agree that gold will become a "larger part of global commerce in the years ahead." Some experts believe that gold can go up as high as 10,000 dollars an ounce during the next economic meltdown, making it a truly worthy investment for the future.

3. Peer-to-peer lending

This is another relatively safe investment method, and it can be utilized with significantly less funds. With peer-to-peer lending, you lend money to other people or "peers" through peer-to-peer companies such as Prosper, Lending Club, and Peerform. The borrowers then proceed to pay back the loans with various interest rates. The benefit of peer-to-peer lending is minimized risk through spreading out investments over many borrowers. Rather than placing all of your funds into one borrower who may not pay back the loan, the money is spread out over many to compensate for any of those who fail to make their payments. To get started with this type of investment, simply visit one of the many peer-to-peer lending company websites.

4. Bonds

Investing in bonds is another smart way to go for first time investors; however, there are some details that need to be noted before any bonds are bought. Bonds are debt investments in which the investor loans money to a government or corporate entity at variable or fixed interest rates for an established period of time. The price of the bond equals the amount of money lent to the entity, and investors receive interest in exchange for loaning the money. Bond interest rates can either be fixed, floating, or payable at maturity. Safer investments offer lower returns while the higher risk investments typically offer higher returns. The rule is, the higher the interest, the higher the risk, so take care when choosing which bonds to invest in and pay attention to the bond's coupon (interest rate).

These are just four of the ways that you can begin investing outside of the stock market. Real estate requires more money for investing than gold. Bonds can be purchased at a range of prices, and the amount invested in peer-to-peer lending is entirely at your discretion. You may also choose to make your decisions based on the investment opportunities present during the various economic conditions. It is important that you have a basic sense of your preferred method before you begin. Stick to the lower risk investments if you are feeling unsure.

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