Was 2018 a bad year for generating extra income? Were the returns on your investments simply not worth the effort?
Or are you one of the approximately 40% of young Americans who don’t have anything invested at all?
It’s not easy judging which investments are the best kinds to make. Risk, after all, can be a scary thing to face.
But it doesn’t have to be if you make the best investments possible for your risk tolerance. Here are 5 investments you should consider for 2019 and beyond.
Peer to Peer Lending Opportunities
Alternative investment opportunities can be some of the best investments to make, and it looks like peer to peer lending will still be one of the strongest to consider in 2019.
Rather than a bank lending to individuals, investors like yourself provide the money that users then borrow. You take on the risk, with the borrowers paying higher interest rates.
The risk means a higher rate of return than you might find from a savings account, with average returns for a major peer to peer lending firm, Lending Club, estimated to be between 5% and 9%, depending on the risk.
Real Estate Investment
If you’ve got the money to spare, why not consider investing in real estate? It’s a tried and tested method to invest your extra cash and see it grow as the real estate market grows.
You don’t have to buy a property either. If you’re looking to invest in property more widely than just one property, Real Estate Investment Trusts (REITs) offer you the chance to do that.
They’re funds that spread their real estate wealth across various properties that the trust owns. When you invest, you own a tiny part of all their properties. Because the property they own varies, the risk to you financially is reduced.
Tax Efficient Savings and Investment Accounts
Do you have a high income? Rather than paying more in tax, you could invest your money smartly and gain a better return on it by taking advantage of tax-efficient savings and investment accounts.
Just imagine them as different pots to hold your money. Roth IRAs, for instance, are designed for retirement savings. Other accounts like a health savings account or HSA allow you to save and invest your money to pay for healthcare.
You’re going to pay for healthcare or retirement anyway. They may not be the most exciting investment opportunities (based on the risk vs reward), but you can generate more money with low risk and without paying extra to the IRS.
Stocks and Bonds in Emerging Markets
Fancying a little bit more risk? Transfer any skills you have in traditional stock investments and apply them to new, emerging markets.
Unlike the relative stability of the US or other western stock markets, emerging markets like the Chinese or South American markets are more like the wild west. Speculation is high, prices are cheap, and growth can be enormous.
While the prices can skyrocket to make you a quick profit, you should be aware that they can also fall back down – hard.
Of course, if you’re looking for a more stable investment in the stock market, look at investing closer to home through options trading. These top options trading books can teach you everything you need to know.
Invest In Yourself
The best investment for 2019 may well be finding opportunities to build your monthly income.
That might mean investing in yourself financially by building an emergency fund or paying off any debt you hold. It might mean investing in your career, by building new skills or applying for better opportunities elsewhere.
If a new job can do that, it’s a worthwhile investment to make, but you might find the time to build up a side hustle instead. If you’re stuck for ideas, here are 7 modern side hustles you could try.
Choose the Best Investments for Your Risk Threshold
The best investments aren’t necessarily the ones that generate the best profit. They’re the ones that offer you the best return for your tolerance of risk.
These investments give you a chance out of the starting block if you’re wise enough to do your research. Consider alternative opportunities in things like peer to peer lending, or through investments in emerging markets.
If that doesn’t float your financial boat, traditional investments, through real estate and tax efficient saving platforms, can still offer great returns.
Liked these tips? Then don’t be afraid to check out some of our other financial articles for ideas on how to secure your financial future.