Investments have the potential to expand your income sources, fund your retirement, or get you out of the financial gridlock. As you look into 2021 through to the future, smart investment ideas should be guided by the two universal investment philosophies. First, an investment strategy should be broad-based. Secondly, you ought to stick to a solid investment plan. Ensure to justify your investments with a rational market-driven plan as opposed to the random emotion-driven decision. Having this in mind, here are four smart ways to invest your money:
1. Consider High-Yield Deposit Accounts
A high-yielding online bank account affords you interest on cash balance held. Like the common bank accounts, a high-yield account allows you to access your deposits as you wish. Nonetheless, it is advantageous as overhead costs are minimal while interests in your deposits are at a comparably higher rate. It pays 20 to 25 times the average speed by a standard savings account.
You can easily access the cash by transferring it into your mobile wallet, primary bank account, or ATM. This account is ideal for risk-averse savers looking forward to accessing their deposits in the short term. Deposits are insured by the Federal Deposit Insurance Corporation (FDIC) hence lessening the risks of losing your deposits.
2. Join a Statutory Interest
A statutory trust is defined as an incorporated association formed by the governing instrument under which the property is managed, held, invested, reinvested, administered, controlled, or operated for a profit by a trustee or trustees as specified by the governing instrument. It could also mean executing all these mandates for a business or professional activities for a profit through trustees or trustees.
A good example is the Delaware statutory trust (DST). Through DST, you can hold title to a real estate investment. You can enter into this trust through purchasing fractional interests, which the internal Revenue Service (IRS) regards as a direct interest in real estate. By purchasing DST security as an accredited investor, you become a passive owner of the real estate property while enjoying tax benefits provided by the DST.
DST offers you the chance to diversify into various investments with a minimum of $100 000. Through structured property ownership, you can own a fractional interest in the ownership of larger, quality, and well-managed commercial properties. Alongside other investors. You will then get back a certain percentage from incomes generated by the property, tax advantages, and property appreciation.
You can purchase DST securities from a DST investment firm like Kay Properties & Investment LLC, which allows you to access at least 25 sponsors who act as trustees of DST.
3. Invest in Government Bonds
A government bond is an exchange-traded fund (ETF) that allows you to buy securities traded by the government and its agencies. The investor gets back interests on the amount expended upon the expiry of the specified bond period.
It is essentially like loaning the government. You will have to choose debt instruments from the government such as T-bills, T-bonds, T-notes, or mortgage-backed securities issued by government enterprises like Freddie Mac. Government bonds are beneficial as they come with low risks. This is because they enjoy the backing of the full faith of the U.S. federal bank.
4. Consider Looking at S&P 500 Index Fund Benchmarks
The Standard & Poor or S&P 500 index fund, though volatile, has proven the better way to get higher returns compared to classic banking bonds or products. S&P 500 index is a concept of market capitalization through weighted indices of at least the 500 largest and publicly traded companies in the U.S. Companies featured included global giants like Amazon and Berkshire, to mention just a few.
S&P 500 index funds are exchange-traded funds or mutual funds that track the index. They provide you with an opportunity to diversify your portfolio by investing in stocks of the best-performing companies. The fund is considered resilient as it covers companies from several industries. Over the years, the fund has enjoyed a steady annual return of about 9.8%.
Investing smartly is the best way to guarantee a livable future. It would be best to, alongside, consider using policies of diversification, adaptability, and a rational investment plan, which have proved practically fruitful over the decades.