4 Types of Investments You Can Take Part In As Beginner

One of the greatest things about the United States is its bustling economy. No other country on the planet affords its citizens more or better opportunities to prosper.

However, a common mistake is thinking if you start saving your money now and are smart about your spending, you can eventually save your way to financial prosperity. Saving is great, but it’s not the key to wealth. Ask anybody wearing a new Patek Philippe timepiece how much they saved up for it. All of the wealthiest people in the country are either entrepreneurs or investors. If you’re thinking about investing but are unsure about your options, continue reading to learn about some great investment opportunities for newbies.

Stocks

Stocks are—in a sense—pieces of companies that are traded on the market. When you buy stock in a company, you’re really purchasing equity in the company in hopes that the company performs well and the value of your shares increases.

The stock market is so important that when politicians talk about the strength of the United States economy, they’re usually talking about the stock market. Even though the stock market isn’t the economy, they’re often spoken of synonymously.

The stock market can be intimidating for first-time investors, but Wealth Rocket is a website that’s worth checking out if you’re interested in learning how to invest in the stock market. The website’s goal is to make you more financially literate, and it’s a great place to learn not only about investing but also budgeting, banking, and insurance.

Certificates of Deposit

Certificates of deposit, also called CDs, are another great investment option. One of the best things about CDs is that they’re a low-risk investment.

You’ve probably gotten a loan from a bank before, whether it was for a home, car, or personal expense. However, have you ever thought of what it would be like to loan money to the bank?

The easiest way to explain CDs is that they’re loans from individuals to financial institutions. When you open a CD, it reaches maturity after the time period agreed upon by you and the institution. Once the CD matures, the bank will pay you the principal with interest. However, if you cash in your CD before it matures, there are harsh financial penalties, especially if interest rates are high.

Bonds

Bonds are a type of loan that individuals make to a company or government. When you buy a bond on the secondary market, just like with a CD, you have to let it mature to reap its full value. Also, like with CDs, interest rates for bonds depend on the length of the loan. The longer the bonds are for, then the higher the interest rates will be. Just let the time tick by on your used Patek Philippe timepiece, and let that interest pile up!

Alternative Investments

The previous three types of investments mentioned were all financial tools. However, those are not the only way to invest. Many people who are collectors or entrepreneurs like to put their money into alternative investments.

Alternative investments are usually physical assets like real estate, artwork, or even precious jewelry. You’d be surprised what a Patek Philippe in excellent condition could net you in a few years.

Not all investment gurus see the value in alternative assets, but they’re good for diversification purposes. Items like precious gems and vintage watches may be for special-interest collectors, but their value is subjective. That means there’s no telling what price you could fetch for them in a sale. Truly interested buyers may be willing to pay well above the market value for collector’s items they desire. What may be nothing more than a collection of used Cartier, Rolex, and Patek timepieces to one person is another person’s treasure trove.

If you want to become a serious investor, then the best way to increase your IQ when it comes to finances is to study how money works and make it work for you. You may take some losses early on, but so did Warren Buffet and Michael Bloomberg.