Don’t Just Make an Investment — Make an Investment That Yields a Return (With These Hot Money Tips!)

investment-growthThe stock market can seem heady and full of promise. Or it can seem like a pit of despair where money goes to disappear. At least that’s now investing is often portrayed in pop culture—which does investment a disservice, because the stock market is far from the only option.

While investing is not a get-rich-quick scheme as movies, the media, and unscrupulous pyramid schemers would lead you to believe, it is a way of working smarter instead of working harder, by making your money work for you.

Here are some ideas on how to make investments that yield returns and follow Warren Buffet’s first rule of investing: “Never lose money.”

“Safe” Bets

These options are almost guaranteed to yield a return on your investment. If you choose a savings account, certificate of deposit (CDs) or bond, your investment will carry almost no risk. You will, at the very minimum, get the money you put in back, and usually with a percent increase. However, the lower the risk, generally, the smaller the return. Savings accounts and CDs are at an all-time interest low, with interest rates hovering around 1% for high-yield accounts. That’s well below inflation, which is usually in the range of 3%. A good investment should at least beat inflation.

Bonds fair slightly better than savings accounts and CDs by providing at least a return of 2% annually, and are by far-and-away the most popular investments. The extremely wealthy, insurance companies, pension funds, and foreign governments, like Japan and China prefer bonds. However, if you buy a bond, know that your money will be tied up for at least 10 years.

Taking a Risk

Mutual funds are a safer option that venturing out into the stock market, as they include a variety of stocks, bonds, equities and other securities. The diversity helps temper the risk by mixing relatively secure, but low-yield bonds with high-yield, but risky stocks. If interest rates go up in 2014, as some are predicting, money market mutual funds would be good place to start investing.

Out on a Limb

Unless you work in the stock market (and even then), stocks can provide the greatest drain on the bank account. However, the inverse is true—stocks can make you rich seemingly overnight. Even if stocks don’t make you filthy rich, they are your best shot at outpacing inflation. The average large stock has returned close to 10 percent a year since the end of World War II.

Trading on the stock market is a gamble, unless you do your due diligence and research and understand how the market works. Remember that when you buy a share of stock, you’re basically buying a part of the company—so make sure the companies you invest in in 2014 are businesses with major growth potential. Stocks can be excellent investments, but as part of a long-term strategy instead of a get-rich-quick fix.

Real estate investments are considered very risky because the market can fluctuate wildly from year to year. In the current soft housing market, flipping a house for quick profit may not be feasible, with the exception of certain metropolitan areas where the demand never diminishes—like Manhattan, parts of Los Angeles, and San Francisco.

Other Investment Tips

Diversify, diversify, diversify. Investments vary with the economy and the market, and carry different return rates and risk levels. By ensuring your portfolio includes multiple types of securities in a range of industries, you reduce your risk of losing it all, while improving the overall yield.

Start small. There’s no need to go “all in” in the very beginning. Test the waters by choosing investments that have performed well in recent years, and “safe bet” investments. Buy in small increments if necessary.

Do your research before investing. This cannot be said enough! Enlist the help of a financial advisor before leaping into the investment fray by yourself. That’s the smartest recourse for maximizing yields while minimizing risk.

No matter how risky it may seem, it may be more risky to not make an investment as part of a long-term strategy as people live longer and cost-of-living continues to increase. Find an advisor, learn more about investing, and make your money work for you and your future.


Do you think you will give some of these investing tips a shot? What do you hope to get out of your investment? Share with us in the comment box below!

All investments carry some level of risk, and may not be suitable for all investors. Before deciding on any investment, you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. Seek advice from an independent financial advisor if you have any questions or doubts.

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