Ways to Invest Money for the Future

The key to letting your wealth grow, is to invest the surplus cash you have at hand from your business or your job income into profitable businesses which generate good revenue (by buying stocks and bonds), investing it in commodities like metals (gold, silver) or into financial instruments like certificates of deposit and retirement schemes that offer good returns. If every penny that you earn is made to work for you in the best possible way, by putting it into good investment options, you are going to have a steady income stream in the future, to take care of your family and fulfill your personal ambitions. The trick is to develop a sound logical framework to choose the best investment options and let logic dictate your decisions, rather than emotions. In this Buzzle article, I acquaint you with some of the best ways to invest money for the future, which includes short term, as well as long term investments.

Best Ways to Invest Money for the Future

There are a range of investment options, ranging from the high risk options with high gains, to low risk options with moderate to low gains. With surplus cash at hand, you may wonder what options can you invest in, to secure your future. Here are the best investment which cover the whole range of risk spectrum.

Invest in Stocks
A stock or share is a quantum of ownership in any public listed company. Buying stocks in companies with growth potential is one of the best ways of investing for the future. You can trade stocks through a qualified broker on stock markets like the New York Stock Exchange (NYSE). The key to make money through stocks is to buy cheap and sell dear. Stock prices keep rising and falling according to the performance of the company and investor sentiment.

The trick is to know when to buy and when to sell a stock, while remembering the fact that all bullish markets must crash some day. Study the basics of stock investing and know what you are getting into, before going ahead. A recommended reading option is 'Intelligent Investor' by Benjamin Graham. You can reap substantial benefits by investing in the stock market to secure your future.

Invest in Bond Market
A bond is a type of debt security issued by businesses, with limited maturity periods. Bonds are bought and sold like stocks, but they don't provide ownership of a company or equity. They are loans you extend to a business, which promises to pay back your principal value with a fixed return. The key to make profits through bonds is the same as stocks. Buy cheap and sell dear. On end of maturity period, the bond holder gets the principal value back, along with dividends. Smart investment in the bond market can yield rich dividends.

Mutual Funds
Another option is investing in mutual funds, which pool in the investor's money. The combined money kitty is used to invest in stocks, bonds and other securities. Investors are paid back returns after management fees are deducted. If you are not interested in managing securities investments on your own, investing in mutual funds makes sense. The risk involved, is almost same as that of investing in stocks and bonds. Research the track record of the mutual fund, before investment.

Government Securities
Some of the most low risk and moderate yield investment options are government securities like treasury bonds, treasury bills and treasury notes. These debt securities are the best long term investment options as they are backed by the US government. You may also opt for Treasury Inflation-Protected Securities (TIPS), which are bonds that provide returns, adjusted for inflation. Investment in government treasury bonds is one of the best low risk investment options.

Real Estate Investments
With the property prices down, there is a lot of opportunity to invest in real estate. You can invest your surplus cash in buying property, which can earn you money through leasing and rent. It can generate good long term returns. These are long term investments which need to be carefully made, only after a thorough research of the future trends in the price of the property.

Gold & Silver
When in doubt, invest in gold and silver! That is the golden rule of investing as the prices of these metals are always on the rise. Buying and stocking gold is one of the best ways of investing for the future. That is because of the guarantee that it will fetch good returns in the future.

IRAs & 401 (k) Plans
One of the best and low risk options for the future are individual retirement accounts (IRAs) and 401 (k) plans that lets you save your money tax free, for retirement. There are limits set by the IRA, on how much you can contribute to these savings accounts, but they guarantee you with good returns in the retirement years.

Certificates of Deposit
Investing in a time deposit with a bank is one of the best short term investment plans. One such option is a certificate of deposit (CD). How do CDs work? You keep your money with the bank for a fixed period of time ranging from 6 months to more than 5 years. After the conclusion of this period, you are then paid back your principal along with the interest accrued. They are some of the best low risk options to opt in to.

These were some of the best long and short term investment options varying in the degree of risk involved. As most expert financial advisers will advise, the best way of minimizing your financial risk is to spread your money over the whole range of investment options. Let your investment portfolio be like a pyramid, with a large share of money invested in secure low risk options and increasingly lower amounts invested in high risk options. That way, you can keep the overall risk to a minimum. Wish you all the best for the future!