5 Different Investing Options To Make Your Money Work For You 

Investing is not just for the already rich.

Although having more money to play with makes investing simpler and less risky, anyone with a healthy savings account can afford to invest each month. So don’t ask yourself whether you should get involved — instead ask yourself how to participate in the different investing options out there.

Unfortunately, there’s not a simple answer to that question. We all have drastically different financial goals and mindsets; one person’s foolproof plan is someone else’s recipe for disaster. 

What follows are the main factors to consider when starting your investment journey, along with the best approaches for different situations.

Getting Started: What To Consider 

Most people want to jump straight into figuring out the hottest new investment opportunity, thinking that if they select the latest up-and-coming cryptocurrency or stock that they’ll be guaranteed tidy profits.

But this is the wrong approach — before you even think about what you want to invest in, you need to ask yourself these five questions:

  1. What are your financial goals?
  2. What’s your investment timeframe?
  3. How much risk are you prepared to take?
  4. Do you want to select your own investments?
  5. What type of account is right for you?

Above all, before you start spending money on investments, be sure to have a plan for building your emergency fund and paying down any debts you have. 

Financial Goals

While investing your savings instead of leaving them sitting in a checking account will (almost) never be a bad idea, this method will be less effective if you don’t have a clear picture of what you’re heading toward.

Common financial goals include:

These are all longer-term goals that involve some serious saving over multiple years (if not multiple decades).

Some people do save and invest for shorter-term milestones, like a wedding or vacation, but investing is generally only recommended if you’re prepared to lock away your money for five years or more. 

Once you know your “why”, you need to calculate how much you need to meet your goal(s).

For example, if you’re saving for retirement, start by working out how much annual income you’d need to live off. Many people in the financial independence movement recommend following the 4% rule (multiplying your annual income by 25).

Like mortgages and college tuition, other goals are easier to associate with a number — but don’t forget to account for inflation. If college tuition costs $20,000 a year now, expect it to be more expensive in ten years.


Once you know your financial goals, figure out the timeframe you need to be investing over.

If you’re saving for your kids to go to college and the eldest is currently four years old, you’re looking at a time frame of 14 years. Or, if you’re 30 years old and saving for retirement, expect a horizon of roughly 35 years (assuming you want to retire at the “normal” age).


The timeframe you decide on is one of the greatest determinants of how much risk you should take. For example, investing $100 in Bitcoin or Tesla shares is pretty risky if you know you’ll need to use that money in two weeks — maybe the market will just so happen to be experiencing a dip at that point, meaning you’ll lose money.

Take a look at the price chart of any stock, crypto, or currency pair, and you’ll know how volatile prices can be in the short term.

If you know that you won’t need the money for a few decades, you can be reasonably confident that your investments will have a higher value by the time you withdraw.

Naturally, there’s always a chance that a company could go under or lose value — that’s where diversification, research, and some thought about your risk tolerance come in.

If you invest all your money in a single company or asset, there’s far more risk involved than if you spread it across multiple companies or assets (for instance via an ETF).

Then there are the investments that are inherently riskier than others. For example, pouring your money into a brand-new company or a new asset class like cryptocurrencies involves far more risk involved than putting your trust in a “safe pair of hands,” such as Google or Amazon.

Anything with inherent value, like real estate in a desirable area, is also a decent option.

Still, risky investments aren’t necessarily a no-go — you need to become fully aware of the actual risk involved. 

Who Is Going To Choose Your Investments?

The first option is to do your own research and select your investments yourself. Use a trusted website like Vanguard or Fidelity to open your own brokerage accounts and select and invest. 

If you’re new to investing, you might prefer the idea of a finance professional to help select your investments. However, it comes with a management fee which eats into your returns, especially if you’re only investing a modest amount.

Fortunately, there’s a third option: using a robo-advisor. Many platforms and apps have launched special software and applications that guide investors through selecting and managing their portfolios. The sophisticated algorithms bring suggestions that rival actual asset managers.

Some will take users through a quiz with questions about their risk tolerance, and financial goals; others provide tools for automatic investing and rounding up spare change to make investing effortless.

Account Type

Figuring out what you want to invest in is just the first step — you also need to know exactly how you’re going to do it. Or, in other words, which account type you’ll open and on which platform.

In the US, common investment accounts include:

  • 401(k): A tax-efficient retirement plan allowing employees to save part of their paycheck, often involving matched contributions from employers.
  • Traditional IRA: An account that lets you contribute after-tax money and withdraw it tax-free (along with the extra earnings) at retirement age.
  • Roth IRA: An account lets you contribute pre-tax money and pay tax when you withdraw it at retirement age.
  • Brokerage: if you have the ability to invest outside of retirement, then use this account to hold the rest of your investments.

Tax-effective investment accounts and pension plans exist in many other countries, but they’re likely to have different names and involve slightly different rules. For instance, the UK offers individual savings accounts (ISAs), which allow individuals to save up to a set threshold each year and later withdraw the funds they’ve accumulated tax-free.

You might also want to consider accounts for specific savings goals, such as an account for saving for college (known as a 529 account in the US) — these can offer special perks.

Different Investing Options

There’s not a single correct answer here since the right investments for you will depend on your answers to the questions outlined above — each section highlights who is best suited for that investment. 


Best for: Longer timeframes, higher risk for higher returns.

When you buy a stock, you essentially become a shareholder (or owner) of that business — so whenever the company increases in value, your investment will also rise in price.

You only have to look at how much some of the most successful stocks have grown over the last few decades to see how profitable this can be. For instance, if you’d invested in a Google stock back in July 2016, its value would have jumped from $719.85 to $2585.72 — an increase of around 259.2%.

That’s a whole lot better than stowing it away in your savings account and even better than investing in the S&P 500 (which achieved a return of around 100% over the same period).

Yet, although stocks can be a path to mouthwatering returns, they can also end in tears. If you purchase shares in a company that happens to go under, you’ll lose your entire investment. Even if a firm doesn’t go out of business entirely, it could lose a lot of its value, even over the long term — industry trends, technology, and customer opinion can suddenly render a profitable business less than desirable.

This isn’t likely with a business as dominant as Google, but there’s no way of knowing for sure what’s going to happen tomorrow.


Best for: Longer timeframes and lower risk.

If you like the sound of the returns and liquidity that stocks can bring but not the high risk, you can opt for a fund instead. Funds let you invest in a mix of different company stocks, therefore offering increased diversification.

While they don’t usually achieve the same level of returns as the highest-performing stocks — they are far less risky. 

The best way to invest here, especially if you don't have an interest in watching the market or reading too much about it, is to get your money into these index funds. Set a regular investment schedule and then forget about it. Let the market do its thing, don't react to changes and over time your returns will be equivocal. 

There will be some high-performers and some low-performers (or non-performers) in any fund, but on average, you’ll get good investment returns. 

The main types of funds available to investors are:

  • Mutual funds: Contain a selection of bonds, stocks, and other assets (e.g., real estate or commodities) picked by asset managers and pooled together with other investors’ money. Traded at the end of the day.
  • Index funds: Contain an index, like the S&P 500 or the FTSE 100, and are traded throughout the day (just like stocks).
  • ETFs: Contain an index but can be traded throughout the day, just like individual stocks.

The differences between these are subtle but worth noting.


Best for: Shorter timeframes and lower risk.

An article about the best investments wouldn’t be complete without giving an honorable mention to a top short-term investment option: bonds.

Bonds are essentially loans, with the borrowers usually being the government or large companies. Because of who you’re lending to, the risk associated with bonds is low, yet this also means that the returns are lower than other types of assets.

The exact returns you can expect depend on the type of bonds you opt for and who the borrowers are — some bonds are unable even to beat inflation, while others can earn up to 5%.

Bonds are often used in funds to hedge against risk since they’re less affected by the stock market swings.

However, if you want to invest over a larger time period, it’s generally agreed that the benefits of investing in bonds are minimal. If you know you’re not going to access your funds within the next few years, the cons of low returns will outweigh the benefits of increased security.

Real Estate

Best for: Portfolio diversification

Properties have inherent value — people will always need somewhere to live — so their prices will generally increase over time. However, real estate doesn’t always match the returns seen in assets like stocks, and if you choose the wrong property, you could fail to achieve much of a return at all. 

Money invested in real estate is less liquid than anything in the stock market. It carries some serious risk — you might have issues with tenants or face expensive maintenance operations, for instance.

Despite these risks, and the large cash flow that real estate requires upfront, they can be an excellent investment option. 

The gains can beat the stock market if you choose the right area. If you purchase a property and then rent it out to others, it can also be a great way to generate income and make your money work for you — you can use your investment to finance even more investments by using rent payments toward the future down payment.


Best for: High risk and high returns (maybe).

Last but least, we have cryptocurrencies. It’s no secret that the crypto market is somewhat wild, and you need a clear strategy for the price swings. Just look at how much the value of Bitcoin has fluctuated in the last year alone!

Be prepared to do some serious research before you start investing in this one. Following the crowd could lead you to buy into a bubble at the wrong time, whereas buying niche coins at random could involve you in a scam (the crypto world is unregulated for the most part).

How To Decide

As you should realize by now, choosing the best investment vehicle(s) for you is a personal decision. For example, some people are happy to accept significant risk by investing in specific stocks or cryptocurrencies. In contrast, others would prefer to sleep at night knowing their money is (relatively) safely locked away in index funds or property.

How much you invest depends on your budget. Many of the options listed here have no minimum requirement for getting started. 

The best investment mix is to do a little of each. It’s good personal finance practice to have a good amount of liquid cash at hand, and it’s safest to invest the rest of your funds across a range of assets or investment types. 

Related Posts From The Wealth of Geeks Network:

12 Money Management Tips For When You Start Your First Job

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This post was produced on The Female Professional and syndicated by Wealth of Geeks.

Featured image credit: Unsplash

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Sanjana is a physician anesthesiologist, avid traveler, and entrepreneur. She founded The Female Professional in order to give women a voice, a community, and provide resources to help them overcome hurdles and achieve success.

With her experiences as a physician, as a CEO of a startup, and as a writer, she understands the struggles and frustrations that women face. She also understands what it takes to move past those things and come out on top.

Through this platform, Sanjana aims to empower women to be their best, authentic, selves, achieve work/life balance, and live life to the fullest.