Although having more money to play with makes investing simpler and less risky, anyone with a healthy savings account and enough income to set aside a few dollars each month can afford to invest.
I’ve highlighted who each of the investment types here is most suitable for. Let’s go!
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.
Best for: Longer timeframes and higher risks for higher returns.
They don’t tend to achieve the same level of returns as the highest-performing stocks — but they’re far less risky.
Best for: Longer timeframes and lower risk.
Bonds are essentially loans, with the borrowers usually being the government or large companies.
Best for: Shorter timeframes and lower risk.
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.
Best for: Portfolio diversification and stable returns.
If you’re prepared to take on some risk to earn higher returns, then the world of crypto is the way to go.
Best for: High risk and high returns.
I’d recommend doing a mixture of all the above. 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.