When it comes to investing your money, you have many options. Although most people typically think of stocks and bonds, there are at least 10 different ways and places to invest your money. If you choose to spread out your investments, you will ensure the safety of your money.
The U.S. Stock Exchange is one of the most widely used forms of investment. With it, you purchase stocks in a specific company, hoping the value of the stock increases with time as the company makes profits. Purchasing a stock buys you a piece of the company; with it, you may be given voting rights for important decisions at the company. You purchase stocks through brokerage firms, such as Etrade.com
When purchasing stock, why stay within the country's borders? An entire world out there is full of different stock exchanges. This allows you to purchase foreign company stocks (such as places out of the United Kingdom, Europe and Japan) without tying your money to how well the U.S. economy is doing. Many brokerages where you would purchase American stocks (such as Etrade.com and Scottrade.com) will allow you to purchase the foreign stocks as well.
A bond is a long-term investment; it is a contractual obligation between you and the government, stating that you are giving money to the government to use for a certain period of time and they will uphold the bond, returning an agreed amount of money to you at the maturation date. Often, you purchase a bond with a high fixed interest rate. However, you will not be allowed to cash in the bond money for several years. For example, you may spend $20 on a bond, which will increase to $25, but you can not cash it until three years down the road. You can purchase a bond through your local bank or from online trading companies.
Currency trading allows you to purchase foreign currencies in hope the value will increase. This is a common investment when you believe one currency will increase in value while your country's currency will decrease in value. This usually is not a long-term investment though. You can purchase foreign currency through companies such as EZforex.com and PurchaseForeignCurrency.net.
You have probably seen commercials for companies wanting you to send them your used gold, then you'll receive a nice cash payment in the mail. This is a form of investment (on their end). Most precious metal, such as gold, silver and platinum, keeps its value and occasionally increases. The value of these metals rarely decreases in value.
Standard Savings Account
A standard bank account, although not a great investment, will pay you a small interest rate on the money you keep in your savings account. Depending on the bank, this is usually around a quarter of a percent. This means for every $100 in your savings account you'll receive 25 cents in interest every month.
Another kind of bank account is an IMMA, or Insured Money Management Account. This account is similar to a standard bank account, but it gives you a greater interest rate. Depending on the bank and how much money you have saved, you can earn around 1 percent.
A CD, or cash deposit, is certified by the federal government. You receive a set interest rate for a set period of time (from a few months to several years). You purchase them through banks and stock broker accounts.
A mutual fund is essentially purchasing many stocks at the same time. A mutual fund company buys several stocks and offers them as a mutual fund to investors. Every time you purchase a mutual fund share, you receive a small investment in all the companies within the fund. This spreads out your investment.
If you want, you can also invest money into a local business. For individuals looking to start a business, you can loan them money with terms to receive a specific amount of interest back on the loan once the business is launched and profitable. However, if the business fails, you may never receive your money back.