Navigating the world of investments can feel like traversing a complex maze, especially for beginners venturing into the financial landscape for the first time. Finding the right avenue to grow your wealth requires careful consideration, a touch of courage, and a solid understanding of potential risks and rewards. This article provides a curated list of the top 10 best money making investment ideas for beginners in 2019, focusing on accessible options that can help you build a strong financial foundation. Remember that the year 2019 has passed, but these fundamental investment principles and options generally remain relevant, though specific returns and market conditions have undoubtedly changed.
Understanding Investment Risk and Reward
Before diving into specific investment ideas, it’s crucial to understand the relationship between risk and reward. Generally, higher potential returns come with higher risks. Conversely, lower-risk investments typically offer more modest returns. Your risk tolerance, financial goals, and investment timeline should all be considered when making investment decisions.
Top 10 Investment Ideas (Keeping 2019 in Mind)
- High-Yield Savings Accounts: A safe and liquid option for beginners. While returns were generally low, some online banks offered competitive interest rates compared to traditional savings accounts.
- Certificates of Deposit (CDs): Offer a fixed interest rate for a specific term. CDs were a relatively low-risk way to grow savings, but accessing the funds before maturity could incur penalties.
- Money Market Accounts: Similar to savings accounts but often with higher interest rates and check-writing privileges. They provided a good balance of liquidity and return.
- Bond Mutual Funds: Invest in a portfolio of bonds, offering diversification and professional management. However, remember that bond prices can fluctuate with interest rate changes.
- Index Funds: Track a specific market index, such as the S&P 500; They offer broad market exposure at a low cost. Index funds were a popular choice for long-term investors.
- Exchange-Traded Funds (ETFs): Similar to index funds but traded on stock exchanges. They offer flexibility and diversification.
- Dividend Stocks: Stocks of companies that pay regular dividends to shareholders. Dividend stocks provide income and potential capital appreciation.
- Real Estate Investment Trusts (REITs): Companies that own and operate income-producing real estate. REITs offer exposure to the real estate market without directly owning property.
- Peer-to-Peer Lending: Lending money to individuals or businesses through online platforms. P2P lending offered the potential for higher returns but also came with higher risks of default.
- Robo-Advisors: Automated investment platforms that build and manage portfolios based on your risk tolerance and financial goals. They provide affordable and convenient investment management.
Diversification is Key
A fundamental principle of investing is diversification. Spreading your investments across different asset classes can help reduce risk. Don’t put all your eggs in one basket. Consider a mix of stocks, bonds, and other investments to create a well-balanced portfolio. Robo-advisors often automate this process for you.
Understanding Fees and Expenses
Be aware of the fees and expenses associated with different investments. High fees can eat into your returns. Look for low-cost options, such as index funds and ETFs, and compare fees among different providers. Read the fine print and understand what you’re paying for.
The Importance of Due Diligence
Before investing in anything, do your research. Understand the risks and potential rewards. Don’t rely solely on advice from friends or family. Consult with a financial advisor if needed. Educate yourself about the top 10 best money making investment ideas for beginners in 2019 and beyond, and make informed decisions based on your own financial situation.
As you embark on your investment journey, remember that patience and discipline are essential. Don’t get discouraged by market fluctuations. Stay focused on your long-term goals and stick to your investment plan. Continuous learning and adapting to changing market conditions are crucial for success in the world of investments.
