If you are rooting for a safe and successful future, then you must start investing right away. Investing in different ventures is always advisable for a great future. As the COVID-19 pandemic has already shown us the certainty of future and income flow, people must invest. Moreover, investing is always a great deal without or without pandemic. Hence, starting from the year 2021, you must make a new resolution to invest in different ventures. Therefore, in today’s article, we will talk about where to invest money to get good returns.
In the later part of the article, we have also mentioned the top 25 lowcost business ideas with high profit.
Table of Contents
Why should you invest?
Investment always provides a second source of income, funds your retirement, and gets you out of a financial jam. Hence, investing helps you in growing your wealth and meet your financial expenditures and goals as well. Moreover, it also increases your purchasing power. If you have gained a lot of money recently, it is always wise to invest that money. This money will work out for you in the future.
Even though investing brings a lot of money for you, it also has potential risks and gains involved. Markets can turn volatile at any point. Hence, you are open to both gains and losses. Even though the market faces losses sometimes, it can rise at any point in time, bringing you lots of profits.
You have a lot of options to invest in. Some have high risks, while others have medium or low risks. You can invest in safer options such as money market accounts or CDS. You can also invest in medium-risks options such as corporate bonds. Or, you can also invest in higher-risk options such as stocks. Hence, this means you can choose from the options. Also, you can choose what best fits your risk profiles. Moreover, this also means you can create a safer portfolio by combining all the investments you make.
Hence, while you choose which options to invest in, you must check out the risk profiles and calculate your risks and gains.
What should you consider while investing?
The two factors which are very important to consider while allocating your money are time horizon and risk tolerance. The value of each investment option is brought out in volatile periods.
Investors who are nearing retirement or conservative investors may want to allocate their money to a safer option. They will not want their money to go down the drains. Safer options are great for meeting intermediate or short-term goals. So, if a conservative investor invests in C.D.s, then he or she will not lose value. Moreover, the investment will be present when you essentially need them.
Those who are young and are risk-lovers then can go for medium to high-risk options. If they want to test the fire, then they can surely do it. You learn by committing mistakes. If you are a risk-taker and invest in a long-time option, then the stock’s volatility can give you a potentially higher return.
Moreover, if you are looking to grow or doubling your wealth, you can go for less risky investments with moderate returns. Or, you can even go for higher risks investments and root for higher returns. Hence, it is always advisable to read and have full knowledge about where to invest money to get good returns.
Hence, depending on your risk-taking capability and time horizon, you can decide on your investment options. You can also opt for a balanced approach. You can have safe money as of now and head for the opportunity of long-time growth.
Where to Invest Money to Get Good Returns?
Below we have listed the top 9 best investments you make in 2021.
1. High-yielding savings account
You can yield a higher income with higher interest rates and low overheard costs at online savings accounts. Moreover, you can even access the money very quickly. Also, you can transfer the money to your bank or via your ATM as well. A savings account is always a great option for accessing money in the future.
Moreover, the banks that offer such savings accounts are FDIC secured. Hence, you do not have a fear of losing money. The high-yield savings accounts are a safer option, but it gives you less reinvestment because of inflation.
Savings accounts have the same liquidity as your money. You can add and remove your funds whenever you feel like it. But, your bank may limit you to six withdrawals per statement period.
2. C.D.s or Certificates of Deposit
C.D.s or Certificates of deposit are issued by banks and offers more rate of interest than savings accounts.
These are time deposits issued by the federals, and the maturity dates can range from months to weeks to years. As they are time deposits, you will be unable to withdraw money for a specific time period without penalty. When you have a CD, the financial institution pays interest at regular intervals. Once your CD matures, you get the principal plus the accrued interests.
C.D.s are highly safe and have higher payouts. C.D.s are a great option for people who do not need much income and can lock up the money slightly. You can find several C.D.s to choose from. Hence, you can look for C.D.s with higher payouts.
C.D.s, just like a savings account, are safe investments. The only risk that you may face is when the interest rates go down, you may earn less. The opposite risk includes that you cannot take advantage of when the rates go up as you have locked your money in the CD.
C.D.s do not have liquidity due to their maturity period. You can get your money soon in return for a penalty.
3. Government bond funds
Government bonds are ETFs or mutual funds invested in debt securities issued by U.S. agencies or the government itself. These bond funds are great for low-risk investors. The debt instruments include T-notes, T-bills, mortgage=backed securities. Moreover, if you are looking for great cash flow, this is a good investment option. Even beginners can opt for this investment.
Funds invested in the government debt instruments are safe as it has full credit and full faith of the U.S. government. Now, it is not fully government-backed. So, this investment is subjected to interest rate inflation and fluctuations.
So, if inflation rises, then the purchasing power declines. Moreover, if the interest rates rise, then the price of current bonds drop. If the rate declines, then there will be an increase in the existing bonds’ prices. This interest rate risk is even higher during long-terms.
Government bond funds are highly liquid. But the value varies depending upon the interest rate fluctuations.
4. Short-term corporate bond funds
Corporate companies sometimes raise funds for their projects and other activities by issuing bonds to investors. Now, these can be packaged bonds as well. They can be issued by various other corporations as well. Short-term bonds have fewer maturity periods ranging from a year to five years. Hence, they are very less susceptible to interest rate fluctuations.
Corporate bond funds are great for retirees or people looking for easy returns with reduced overall portfolio risk. Moreover, corporate funds are great for easy cash flows.
Corporate bonds are not FDIC insured. Moreover, they are they give higher returns than municipal bonds and government bonds. But, remember, greater returns do come with greater risks. The companies can have defaulted on the bonds due to financial trouble or credit rating being downgraded. Hence, to suffer less loss, you must make sure that you have high-quality corporate fund bonds.
You can sell as well as buy bonds on every business day. Moreover, you can make extra investments or reinvest in income dividends. But, always remember that capital losses are always a possibility.
5. S&P 500 index funds
S&P 500 index funds give you much higher returns than bonds and banking products. Though, S&P 500 index funds are very volatile. These funds comprise many successful and famous companies, including Amazon. Hence, this allows you to own a part of the company.
Moreover, index funds are more resilient as it contains funds from various companies in various fields. The index has considerably returned about 10% annually. You can even buy the funds with very minimal expense ratios.
These index funds are one of the best ways to invest in stocks. They also involve lesser risks. It is made of the top market companies. But it is still more volatile than bonds as it involves stocks. Moreover, it is not even insured by the government. Hence, you can lose money.
The S&P index funds are highly liquid. You can buy or sell them on any day when the market is open.
6. Dividend stock funds
Your stock investments can turn safer when your stocks pay dividends. Dividends are generally a portion of the organization’s profits that are paid out to shareholders. With dividend stock funds, you not gain investment through long-term market appreciation, but also in the short term, you will earn cash.
Buying individual stocks is suggested for advanced and intermediate investors. But, when you buy a group of them and reduce the risk considerably.
Dividend stocks, just like other stocks, include risks. Though, they are much safer than other types of stocks. But you can choose your portfolio carefully. When you choose a company, choose one with a track record of a good dividend increase. Do not just look at the current highest yield. But, always remember a good record does not guarantee that the company’s dividends will not decrease.
You can sell and even buy funds whenever the market is open. If you want your dividend stock funds to perform nicely, you have to invest in the long-term. Hence, for good returns, you must look for reinvesting your dividends.
7. Nasdaq-100 index funds
Nasdaq-100 funds are an excellent option for investors who want exposure to the best and biggest tech companies. The fund is based on Nasdaq’s 100 best companies like Apple and Facebook. Hence, this means the companies are successful and stable. These companies hold a large portion of the index.
These funds offer you immediate diversification. Hence, your portfolio is unexposed to a single company’s failure. The best funds charge considerably less expense ratio. Moreover, it is a very cheap way to own all the giant tech companies in the index.
Nasdaq-100 funds are publicly traded stocks. Hence, they are susceptible to moving down as well. Nasdaq-100 has some of the best and healthiest tech companies. Moreover, they are highly valued as well. Hence, this high valuation means the funds are likely to fall quickly in a downturn. But they can also rise quickly during an economic recovery.
You can easily convert your funds to money whenever the market is open. They are highly convertible.
8. Rental housing
If you can manage your property or properties very well, then rental housing can be a great open for investment. The mortgage rates are low as well. Hence, it is a great time to invest in properties and finance a new home or property. But tenants can likely become defaults due to unemployment uncertainty.
To pursue this investment, you have to find out the right property, then buy it or finance it, then maintain it and deal with the tenants. It is going to be great if you can make smart purchases. If you hold your assets, then pay all the debts and grow your rents as well, then you will be having a significant cash flow when you are retiring. But, it is not going to be easy. You won’t be enjoying selling or buying your assets quickly. Therefore, you have to pull up your socks.
You may overpay your housing. Also, with the tight housing supply and low-interest rates, house prices can run up easily.
Moreover, housing rental is the least liquid-able investment. You cannot have quick cash when you invest in rental housing. If you sell, then your broker can easily take a 6% commission on the sale.
9. Municipal bond funds
The last investment type is municipal bond funds. These funds invest in a lot of various municipal munis or bonds issued by local or state governments. Your earned interest is free of federal income taxes. These can be likely to be exempted for state and local taxes as well. Hence, these funds are quite attractive to high tax states.
You can buy muni funds individually. You can buy them either through an exchange-traded fund or mutual fund. For additional tax advantages, you can stick to investments with those in your local or state governments. But, you can always consult a financial advisor.
Municipal bond funds are great for beginner investors. If you are a beginner investor, then you do not have to rely on analyzing individual bonds. Municipal bonds offer diversified exposure. These are also great for investors looking for amazing cash flow.
Individual funds have default risk. This means you cannot make further principal payments or incomes. States and cities never go bankrupt. Hence, in such a condition, muni bonds are very safe and are a great option.
Bonds can also be callable. This means you can return the principal and retire the bond even before it matures. This results in a loss of future interest payments. A bond fund, thus, allows you to prepayment risks and spread-out potential default as well. This is done by owning a large number of bonds. Hence, cocooning the blow of negative surprises from a minimal part of the portfolio.
On every business day, you can buy or sell your fund shares. Moreover, you can reinvest income dividends, or you can even make additional investments.
Best Ways to Invest Money
When you invest money for small returns, you ensure that you have an almost fail-safe and easy investment. So, if you put your money on U.S. treasury bonds, then you can be rest assured to get 2-3% returns annually.
The only problem lies in the factor that 2-3% is just not enough for people to achieve their retirement goals. Hence, to achieve your retirement goals, you need to invest for higher returns. So, the best way to do this is to invest in the stock market and buy many companies on sale.
An excellent company will be one that overcomes all challenges and give higher returns to its shareholders over the years. If you can find such companies, then you can get up to 15% returns annually. By this, you can surely fulfil your retirement goals.
How to invest successfully?
To get higher returns, you must make sure that you are investing rightfully. Hence, you need to follow the 4Ms. Management, Meaning, Moat, and Margin of Safety. Let’s dig in deeper into the 4Ms.
Management
The most crucial factor while you are analyzing a company’s investment potential is its management. Companies rely entirely on the people who are running them. Hence, you have to find companies that are managed by determined, honest, and talented executives.
Moreover, before you invest in a company, make sure you familiarize yourself with all the management processes. Also, you have to make sure that you trust the company to move forward.
Meaning
When you are investing in a company, it must have a personal meaning to you. This is important because, first, companies with meaning will be more understandable to you. Secondly, you will be able to analyze the company’s future in a better way.
Therefore, when you invest in a company with meaning, you can research the company and keep yourself up-to-date with all the happenings.
Moat
When the company you have chosen has a moat, it is hard for other companies and organizations to come and carve away a part or portion of the company’s market share.
Margin of Safety
The Margin of Safety is the last but essential 4Ms. This is a measure of how an “on-sale” company’s stock price is comparable to the true value. There is a clear difference between value and price. Therefore, a company’s stock prices can vary widely even without its value changes.
Hence, these were the ways you can invest money with good returns. Make sure you follow them and have the right portfolio.
Low-Cost Business Ideas with High Profit
Now, we will talk about the top 25 low-cost business ideas with high profit. You can try any of them out and earn a significant profit margin.
1. Affiliate Marketing
Affiliate marketing is slowly gaining popularity among people who want to earn a lot of money. The affiliate marketers earn a small portion of each sale that they send to a brand. So, you do not need anything to get started with. It will take some time for you to build an audience that will help you earn. But, once you have an audience, nothing can stop you from earning profits.
2. Virtual Assistant Service
As a virtual assistant, you will help companies with literally everything from social media posts to inbox management. So, to get started, all you need is a P.C. and an internet connection. Also, you can earn more if you have great and specific skills.
3. Online Influencer Service
Influencers partner with various brands and share their opinions and thoughts on the brand with their audience. So, if you have a good number of followers on your social media handles and blogs, then you can start with an online influencer service. This can surely earn you some extra money. This is undoubtedly one of the best low-cost business ideas with high profit.
4. Social Media Marketing
In social media marketing, your schedule and make various social media content for other companies. You may handle their Twitter or Facebook accounts and create and schedule posts for the brand.
5. Digital Marketing
You can offer a myriad of digital marketing solutions to companies. All you need is expertise in digital marketing, a laptop, and an internet connection.
6. Business Consulting
If you are smart and have business expertise, you can offer your insights and services to other businesses and brands as a consultant. Business consulting is a great way to earn money as well.
7. Recruiting
With the market growing every day, companies need candidates for various jobs. So, you can help the companies to get hold of the right candidate. You can easily do this online. Businesses often pay a premium for finding the right and high-level candidates.
8. Ebook Sales
You can easily publish ebooks reasonably inexpensive on Amazon and platforms likely. Then, when you bring the money from the sales, all goes to your profit account.
9. Blogging
You can simply start a blog by purchasing and hosting a domain. Finally, you build an audience and earn money and profit by offering sponsored content to affiliate links, sidebar ads, and brands.
10. Podcasting
It has kind of a similar business model. You have to do it in an audio format. Moreover, you have to buy specific audio equipment. Overall, it should not cost much to you.
11. YouTube Video Creation
YouTube lets video creators earn a part of the ad revenue that their content brings in. So, all you need is time, great content, and video equipment to earn followers and some profit.
12. Membership Website Development
If you start a blog but do not want to provide free content to the audience in blog form, you can simply start a membership site. So, your audience has to pay a monthly subscription fee to access your content.
13. Copywriting
If you are a writer, then you can try out this business idea. You can work with brands on a contract basis. You can offer your copywriting services to product pages, websites, and others.
14. Resume Service
If you have great creative and writing skills, you can write a resume for people looking for jobs. These people will be glad to pay you for creating an impressive resume. The resume you create will help job seekers to crack jobs.
15. Online Course Sales
If you have expertise in a certain field, then you can take a course and sell it to learners at a flat fee. Learners can take it forward at their own pace. So, if you are an expert in Psychology, you can create an online course and then sell it.
16. Digital Product Sales
You can create any one of the plenty of digital products and then sell them online. You can create design printable or workbooks and then sell them online. Making them does not need a ton of money.
17. App Development
Every brand or product needs its apps. Hence, app development is on-demand now. App creators and designers get highly paid for creating a fully-functional app. So, if you can create apps, you can create your app and then sell it. Or, you can even offer your services to various companies.
18. I.T. Support
If you are tech-savvy, then you can offer your I.T. support to customers. You can offer your support and services online or over the phone. Therefore, you do not have to pay for a location or an office.
19. Real Estate Brokering
If you start a real estate broker, then you can earn with every sale you make. Moreover, you can also bring in extra agents and earn even more profits. Real estate brokers do earn a lot of profits. Hence, you can consider this as a good business idea.
20. Bookkeeping
If you are great at finance, then you start bookkeeping for various companies. So, all you need is a computer and bookkeeping software to manage the books of your clients. Hence, all you need is wisdom and finance knowledge.
21. Translating
A lot of people need translating services in present times. So, if you know many languages, you can provide your translating services to various governmental organizations, authors, or businesses.
22. Stock Photo Sales
Photographers sell their photos to stock sites to earn some fair passive income. Therefore, if you are a talented photographer and have a bundle of photos in your store, you can sell your photos on stock sites. So, all you need is your camera, a laptop, and an internet connection.
23. Event Photography and Planning
As a photographer, you can even offer your services as an event or a wedding photographer. People pay a premium of having beautiful and unique pictures clicked of them at events. You can even offer pre-wedding, and wedding shoots for couples. Hence, making their relationship even more memorable.
Apart from photography, people also need creative and talented people to arrange and manage their events. They want their halls properly decorated, food tasty, and lights perfectly. You can offer your services as an event planner and help people perfectly organize their events. Starting from catering to decorating, you can provide all the benefits. Moreover, you can also employ other people as well as this is not a one-man’s army.
24. Meal Planning
If you are a registered dietician, then you can plan meals for other people. People nowadays are very health conscious. Hence, it is essential and very profitable to offer meal planning services to people. People pay a lot to have a planned, balanced diet.
25. Personal Training
If you are a gym-freak, then you can offer your services as a personal trainer as well. Along with diet, people also love to do physical exercise. Hence, you can be someone’s trainer and offer fitness services to them. Personal trainers do get very well paid.
Summing Up!
So, this is how you can invest smartly and also in great business ideas. Investment is a great opportunity for you to save for your future goals and also retirement plans. We have already answered where to invest money to get good returns. I hope we have been able to answer the query. You may also get into business and earn a lot with our low-cost business ideas with high profit.
