Investing helps ensure that you have sufficient funds for downturns in the economy or your career. There are plenty of investment opportunities out there, involving different levels of risks and corresponding returns. The following are some popular investments that can lead you to a secure financial future.
Dividend Paying Stocks
Established corporations and companies pay out stock dividends regularly. These are companies with a long history of success. Investors earn more profits from them compared to safe investments like Treasury securities and certificates of deposit.
Investing in stocks requires technical information about stock behavior and history, as well as market forces. However, long-term stock investments are very profitable with minimal management.
Peer-to-Peer or P2P Lending
Peer-to-Peer (P2P) lending has grown in popularity since its inception in 2005. Several P2P investments pay high interest rates than any stock market investments. This method requires the investor to choose which loan to finance. The risks are high, but so are the potential returns.
Individual Retirement Account
A precious metal Individual Retirement Account (IRA) allows people to invest in precious metals like gold, silver and platinum for their retirement fund. It is like investment plans for gold or silver bullions. Investing in precious metals is a hedge against a downturn in the economy.
Municipal bonds are debt securities issued and guaranteed by the state, country or municipal government. The main advantage of investing in bonds is that any interest you earn here is free of tax. They pay 2% higher interest compared to U.S. Treasury bonds.
This is a kind of investment contract instituted between a party and the insurance company. These are available in various forms, with each one guaranteeing returns at a given rate. They can either come in fixed or variable plans. The insurance company pays out annuities after the investment has matured.
Treasury Inflation Protected Security
Treasury Inflation Protected Security (TIPS) is a form of Treasury debt guaranteed by the government. This is different from ordinary Treasury security as they pay interest and added principal to help compensate for the inflation.
TIPS can come as little as $100 and can be completed in terms of 5, 10 or 30 years. The inflation adjustment is made each year and is computed based on the consumer price index prevailing at a given time.
The percentage change is often added to the principal, instead of being paid out and treated like interest payouts. As soon as TIPS mature, the investor is paid the higher value depending on the consumer price index.
Treasury Notes and Bonds
If you want a sound investment, you can try bonds and notes guaranteed by the U.S. Treasury. These Treasury bonds are long-term securities and pay guaranteed interest earnings. The treasury bonds guaranteed by the government treasury and bear the terms of up to 30 years and may bear interest rates over 2.5%.
Of all investment maturities and types, U.S. Treasury Notes and Bonds can be directly purchased via the U.S. Treasury web portal known as “Treasury Direct.”.