Best Conservative Ways To Invest Money

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Ask two people why they invest and you'll likely get two different answers, yet everyone's reasons stem from one idea; to end with more than you started. This usually occurs over some period of time. Below are common reasons people invest.

Contents

Reasons to Invest
Create a Plan
Types of Investments
- Stocks
- Best Stock Brokers
- Government and corporate bonds
- Real estate
- Peer to-peer lending
- Savings accounts and certificates of deposit (CDs)
- Education and self-development
Final Thoughts on Investing Young

Reasons to Invest

Retirement: Adds to your ability to quit work and live off the gains later in life.
Life events: Puts enough money together to pay for a wedding or starting a family.
Personal development: Save for college and higher education.
Housing: Bank enough money for a down payment.
Wealth creation: Make money to increase your net worth.
Provide for others: Invest to generate funds for charity.
Avoid inflation: Use low-yield savings accounts to offset inflation.

Create a Plan

People often give Treasury bonds as gifts for newborns for college. Such a conservative investment guarantees the money and gain will be there when needed, but this strategy may not be right for someone trying to make enough to quit his job.

Your reason for investing creates the framework for an investment plan and considers the following:

Goals

Goals should be as specific as possible.
They answer how much and by when .

Risk profile

An individual's personality and goals define how much risk to accept.
With a longer time horizon, you can take more risk now that will average out over time.
Create a portfolio geared towards lower volatility if the thought of waking up one morning with your portfolio down 5% makes you uneasy,

Income vs expenses

Financial plans look at inflows (income) and outflows (expenses).
Expenses include ongoing items like food, housing and loan payments
What remains after paying all your expenses can be used for investing.

Types of Investments

After you've created an investment plan, select your options. Investments fall on a scale that balances risk and return. Riskier stocks should provide bigger gains than safer ones. Stocks should provide better returns than bonds. The type of investments you choose balances these forces.

Stocks

Partial ownership of a company.
You share in the profits and losses along the way.
Different stocks have different levels of risk.
When companies go bankrupt, stockholders usually get nothing.
Stocks can be easily bought and sold.

Best Stock Brokers

Government and corporate bonds

Guarantee of payment from a company or government.
Failure to pay a bond results in default.
Bondholders can force the issuer to sell assets to pay them back for their investment.

Real estate

Ownership of residential or commercial land or buildings , i ncluding primary residences.
Very illiquid market that can take weeks to months to buy or sell.
Risk varies depending on the location and market cycle.

Best For

Low Cost Real Estate Investing

Get started securely through Diversyfund's website

Best For

Low Cost Real Estate Investing

1 Minute Review

DiversyFund isn't your average crowdfunding platform. You'll find that the company puts a twist on the traditional everyday crowdfunding platform, beyond anything you can find online with a simple Google search. You only have to look under DiversyFund's skin one layer to surmise that DiversyFund is a conscientious developer and sponsor and helps hedge risk through improved vetting.

DiversyFund offers a multifamily real estate investment trust, the DiversyFund Growth REIT, and its main goals are to increase cash flow and resale value. It'll automatically give you access to multi-million dollar real estate assets.

Best For

Those looking for an alternative investment beyond stocks and bonds
Individuals who aren't sure they want to be landlords in the traditional sense
Investors who aren't accredited

Pros

Only need to pony up $500 to get started
Open to investors all over the world
No expensive broker fees

Cons

You'll only be able to access "blind pool" investments, which means that you can't opt out of specific properties
There's only one real investment option, the DiversyFund Growth REIT

Best For

Accredited Investors

Get started securely through CrowdStreet's website

Best For

Accredited Investors

1 Minute Review

Crowdstreet is an online real estate investment platform that lets investors choose from a wide range of real estate investment offerings to crowdfund. Crowdstreet investors are free to buy into managed funds, individual buildings or even build a bespoke investment portfolio that includes both kinds of deals.

CrowdStreet's platform has a diverse range of property types, ranging from multifamily to office, industrial, self-storage and others.

Best For

Accredited investors
Long-term investors
Investors looking to diversify from stocks

Pros

User-friendly interface
Diverse investment offerings
Great investor resources
Proven performance history
Many offerings eligible for inclusion in self-directed IRA

Cons

Accredited investors only
Most offerings require a $25,000 minimum investment

Groundfloor

Best For

Non-accredited Investors

get started securely through Groundfloor's website

Best For

Non-accredited Investors

1 Minute Review

Groundfloor is open to non-accredited investors and private individuals looking for active real estate alternative investment. Groundfloor has great volume with more than 10 investments.

Individuals with small portfolios will also like the low $10 minimum and 0 investor fees. However, most of the loans are given to house flippers, and there is a risk of borrowers defaulting on their loans.

Best For

Non-accredited investors: It is a good option for non-accredited investors who want to invest in an individual capacity.
Private investors with small portfolios: Groundfloor charges a relatively small premium of $10, which private investors with small portfolios find attractive.
Active-investors: Groundfloor is also ideal for investors who want to actively maintain and control their real estate portfolio.

Pros

Charges the lowest minimums in the industry
0 investor fees
Open to non-accredited investors

Cons

Offers no bankruptcy protection
High rate of an uncured default
Many loans are for judicial-only states

Mainvest

Best For

Investing in small businesses

Get Started securely through Mainvest's website

Best For

Investing in small businesses

1 Minute Review

Mainvest allows people to invest in local small business with a minimum investment of only $100.

Best For

Small Account Real Estate Investing

Get started securely through stREITwise's website

Best For

Small Account Real Estate Investing

1 Minute Review

Streitwise is a unique online real estate investing platform that was designed to give investors, both big and small, an equal opportunity to invest in real estate. At its core, Streitwise is a real estate investment trust, but it's one of the few online real estate investing platforms that is available to non-accredited investors.

Best For

Investors looking to diversify
Investors with less than $200k in annual income
Passive traders

Pros

Consistent quarterly dividends
Low, transparent fees
Low investment minimum
Convenient and easy to use

Peer to-peer lending

Lending to individuals or businesses
May not come with the same rights to force asset sales as bondholders
Used by individuals to start businesses or lower high-interest payments
Risk and return is evaluated on an individual deal basis.

Savings accounts and certificates of deposit (CDs)

Money given to banks or financial institutions provides a small but guaranteed interest rate.
Conservative investment that people use for emergency funds
Easy-to-access and very liquid
CDs may have a penalty for closing them early.
Both may require a minimum balance.

Education and self-development

Use savings to pay for school and training.
You take classes and develop skills with the expectation that it will lead to better jobs in the future.

Learn more about stocks. Check out Benzinga's article How to Buy Stocks for Beginners.

Final Thoughts on Investing Young

Reducing your expenses is one of the best ways to invest. People often forget to look at the way they live as an opportunity to make money. Spending $300 to add insulation into your home could provide a better return than the stock market. Paying off your credit card that charges 20% interest will get you a better return than most stocks.

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Methodology

For brokerage reviews, Benzinga created a weighted scale based on the following criteria: usability, services offered, customer service, education, research, mobile app, account minimums and fees. We aim to provide the most up-to-date, impactful and trustworthy reviews. For an in-depth look at our process, read the full methodology process.

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Disclaimer: These stocks are not stock picks and are not recommendations to buy or sell a stock. Rather, these ideas should be viewed as potential opportunities for elevated levels of volatility and trader interest and thus increased liquidity. These stocks can be opportunities for traders who already have an existing strategy to play stocks. Benzinga does not recommend trading or investing in low-priced stocks if you haven't had at least a couple of years of experience in the stock market. For a full statement of our disclaimers, please click here .