What is the best way to invest money besides real estate?

Question

I work at the GSU Rec Center and I do not make that much but I have been pondering lately and want to find ways to use the money I have now to make more money.

Answer 1

I am actually not of the opinion that real estate is the best way. I am probably in the minority there, but taxes and insurance and maintenance are not to my liking not to mention il-liquidity and exhorbantant commissions. Of course if you are talking about a place to live, that changes the equation somewhat.

If you do not have much to invest and are looking at a time horizon of 10 years, consider a good mutual fund or index fund. Better yet several. Most no-load mutual funds do have a $2500 minimum. Some load mutual funds allow you to begin with $250. Over a 10 year time span if history repeats itself you should be able to expect about 10 to 13% annual return over that time frame. Index funds offer the advantage of being tax advantaged because they do not churn their holdings and they have low expense ratios. You buy them like you buy stocks or you can also buy a few from mutual fund companies.

Answer 2

You're very wise to want to use the money you have to make more. Except for the very few that are pro athletes, movie stars, CEOs, etc. and have huge salaries, I think the best way to get ahead is to invest and let your money work for you in addition to you working for yourself.

As for HOW to invest, if you're investing for the long-term, my preference is the stock market. Over long periods of time, stocks have historically returned more than any other asset class (including real estate). When starting out, what I'd do is open a mutual fund account at a company like Vanguard, Fidelity, American Century, etc. and invest in an "index fund" that tracks a major stock market index. For example, the S&P 500 for large company stocks, the S&P Mid-Cap 400 for medium-size company stocks, or the Russell 2000 for smaller company stocks. Smaller company stocks bounce up and down more, but over long periods of time, tend to grow a little faster.

Once you've done that, keep investing as much as you can AND DON'T PANIC AND TAKE THE MONEY OUT WHEN THE MARKET DROPS. After every crash, the market has always come back. If you sell when it's down, you miss out on the usually big gains that come when it recovers.

Answer 3

Many people have the false impression that real estate is both a 1] no lose investment and 2] the best investment. Real estate values are diving right now.

The facts show that over reasonable periods of time, equities (stocks) in general have far superior rates of return than real estate.

Between 2000 and 2006, real estate values soared and had huge returns. Currently, real estate is a horrible investment. The capacity is at a peak and interest rates are rising. Also, the speculators have stopped investing in real estate.

There are many classes of stocks. Large cap stocks have taken a back seat to small and mid-cap stocks over the last six years. Also, international stocks have outperformed US domestic stocks.

A good reference is to check the following Morningstar website to see the trends in how different classes of stocks are performing. You can sort these by different time periods by clicking the period range. The link is below:

Answer 4

Dave W is right to the point that over the long term, you would make more money from his advice than real estate. In fact I think real estate has hit a major peak. The reason is people want to sell their homes for more than they bought it and to get those returns from the the long term stock market investments real estate could only be afforded to the very rich since the average wages aren't even keeping up with the weak inflation let alone gaining against it. The pool of money for the poor and middle class is going into stocks and bonds, especially since you can buy partial shares of a stock. That pool will continue to grow until something bad happens, but you can bail immediately unlike you can with real estate.

Answer 5

Don't make investments cash you do not possess. Get a task and get monetary savings till you will have adequate to speculate. You can not also be due to the fact coming into truly property until you are skilled within the inventory marketplace and feature tons of cash, and may not be utterly devistated through a essential loss.

Answer 6

1 The stock market
2 Start a business
3 Invent a product and take it to market
4 Buy notes
5 Talk to a venture capital firm to become angel investor
6 $500 worth of making money type books to improve your knowledge in this area

Jeff
http://www.best-stock-trading-systems.com/trading_stocks_online.html

Answer 7

best thing we are in right now - check out Dave Ramsey. He gives straight talk on saving and investing. No BS.