Investments are the wave of the future as more people are jumping on ship in hopes of obtaining a comfortable future. COVID-19 has devastated the economy and now many are worried about retirements or how they will afford major purchases such as college. Investments can provide an additional source of income and act as a safety net for financial hardship. Now that you’re enticed, you may be wondering where to begin? There are many different types of investment options to suit the needs of a wide spectrum of individuals. We’ve broken down 10 investment ideas for 2021 that may help you gain income.
- Rental Housing
Mortgages are hitting an all time low, which makes purchasing a house an appealing option. Rental housing is a great investment option for long-term investors who would like a steady stream of cash flow. However, the risk associated with rental housing is that it will take time to sell if you need cash instantly. Furthermore, rental housing could incur some serious expenses with maintenance or if it takes awhile to find a tenant.
- Bitcoin
Bitcoin is all the rage in the investment world, and for good reason. In early 2021, the value peaked at $64,000 per coin. Though it currently sits around $40,000, it is expected that the value will continue to rise. The risk associated with Bitcoin is that it is not a regulated currency and countries could implement bans (such as they did in China). Furthermore, Bitcoin’s value is volatile, meaning it constantly fluctuates, so one must be comfortable with those drastic shifts.
This form of investment is the safest as it simply requires that you place money into a savings account with a higher interest rate. The downside of this method is that you may risk losing purchasing power over time if inflation increases and your fixed rates are too low. Some banks also have a limit as to how many times you can withdraw in a calendar year.
- Forex trading
Forex trading in sum, is the trading of currencies to earn a profit. Many have found Forex to be a lucrative investment option, but it does take quite a bit of research to predict how currency values will shift. Ideally, you want to buy a currency while the value is low, and sell when the value increases.
- Buy and Sell stocks
Stocks are the original investment opportunity that dates back to the late 1700s. Though the stock market has been around for hundreds of years, how to trade stock can be cumbersome with the technical jargon. Still, there are many options and strategies that can make this a lucrative investment option.
- Dividend stock fund
Similarly to buying and selling stocks, one can hold onto a stock whose company pays out quarterly dividends to the shareholders. When some companies have a surplus of capital at the end of their quarters, they distribute it amongst shareholders. The key with this method is researching which companies are likely going to have progressively increasing dividend stock funds as years go on. As with the others listed, there is risk. The economy may impact the company’s functioning or the company may start to decompensate.
- Government bond funds
Yet another popular option that dates back to the American Revolution. In this form of investment, people purchase a bond at a set value, and that value is expected to mature after a set period of time (typically 10 years). After those ten years, the bond will accrue interest. This is a long-term investment option that takes decades for profit to incur, but it’s a nice safety net if you need cash quickly. However, cashing in the bonds prematurely means you will lose some of the capital you invested.
- Certificates of Deposit
Similar to bonds, a certificate of deposit, or CD is an iteration of a high-interest savings
account that has a maturity date. The maturity date can vary from several weeks to several years, but there is a penalty associated with withdrawing prematurely. These are more appealing than the high-interest savings accounts listed previously because they have a higher interest rate.
- Fixed Annuities
Simply put, this is life insurance or retirement. You pay a certain amount to the account over a course of years, then after a certain life event, the company pays out a certain level of income. If you choose this option, beware, the contracts can be complicated, and you want to ensure it is fair.
- Commodities
Commodities are raw materials that people can invest in, which is another potentially lucrative option. Though, commodities are arguably the most volatile of the investment opportunities given the constant fluctuations. To succeed at this investment opportunity, you will need to research the commodity you have interest in and learn to predict changes based on political and economic shifts across the world.
