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Nearly everyone these days is interested in the prospect of investing, whether that means contributing to retirement accounts like a 401K or Roth IRA, purchasing a home in order to build equity, or signing up for an E-Trade account so that you can follow the market and put your money into some solid, long-term investments. But while you can certainly plan for a hazy and far-away future, you might also be interested in putting some coinage in your coffers a bit quicker – like today! And you may be wondering just what kind of investments could make your money get you work for you a lot faster. Of course, you probably realize that this type of reward also tends to come with a fair amount of risk. But if you’d like to do a little research and make an informed decision about where to invest your money for a quicker return, here are a few options to consider.
There are two things to think about when it comes to short-term investments: the likelihood of return and the potential yield (how much money you’ll get back). For example, you could put money into a savings account with almost no risk (since many banks are federally insured against loss up to a certain amount per customer) and you’ll see yearly interest, but it will likely be less than 1%. However, there are many more options that can deliver a larger percentage of return over time with varying levels of risk (of loss) associated with them.
The next level is certificates of deposit (CDs), which can be purchased through your bank or with the aid of a financial planner. They come with a shelf life of 6 months to 5 years and the average return is about 1-3% during that time. The risk for losing your money here is very low, but as you can see, the rate of earning is fairly low, as well. Then there are short-term bond options. These tend to be lower-risk than stocks for the simple reason that you are buying debt (which means you’re more likely to get something back even if a company goes belly up). You will generally hold such bonds for 1 to 5 years and you could see a return of about 3-5% per year. You might also see losses, though, so be prepared.
Finally, there are plenty of riskier options that have the potential to yield major returns (or losses, unfortunately). Stock speculation of any type is considered high-risk, but on average you could earn as much as 10-12% in a year investing in this area. You could also lose everything within minutes. Some people also invest in products (buying goods at a low price and turning around and selling them through their own retail/online store), businesses (self-directed Roth IRAs let you use your retirement funds to partner in a business), or housing (flipping houses or real estate investment groups), all of which have the potential to offer major payoffs in no time flat (you could practically track some of them on onlineclock.net). However, they can also quickly eat up your nest egg. So think long and hard about your investment strategy before you dump everything into the hottest stock of the day.
Author bio: This is a guest article by Evan Fischer