3 Investment Ideas to Supplement Your Income
While 55% of Americans own a stock, the majority of investment money belongs to the top 10%.
There are two ways to look at this stat. Either the majority of investments belong to the rich because they have more money, or those investments helped put them in the top 10%.
Regardless, everyone needs to have an investment plan, as it’s one of the best ways to develop long-term wealth. Even if you don’t have much money to start, here are three investment ideas to help you supplement your income.
Certificates of Deposit (CDs)
One of the best investment ideas for beginners is to build wealth through CDs. The premise of a CD is that the bank borrows money from you, then lends it out to other people. They pay you a small percentage of the interest they receive from the loans, and after your CD matures, you get the money.
At first, you won’t make much, but by reinvesting your dividends, you can build wealth slowly. If you start young and add to these CDs, you could have a decent income when you retire.
Start Small With the Stock Market
If you’re looking for faster small investment ideas with the potential for higher returns, buying fractional shares in the stock market is the way to go.
While any investment in the stock market carries risk, for the most part, you can expect between a 5-10% yearly return on your investment.
You can use apps such as Robinhood to invest in fractional shares, meaning that instead of spending $260 to buy one share of Microsoft, you can spend $26 to buy 1/10 of a stock. Over time, you can put more money into it and grow your investment.
When buying stocks, diversify. Many experts believe in having 70% of your portfolio consist of EFTs, which are large collections of managed stocks in certain sectors. The other 30% can go into company stocks. You should also resist the temptation to invest in trendy stocks, such as GameStop, as they tend to rise quickly and fall faster. Most investors lose money on “meme stocks.”
If you have a decent credit score and know how to do some DIY repairs, you can find bargain houses, fix them up, and rent them out for a healthy income.
If you can find a house for $30,000 in a decent neighborhood that needs repairs, you can fix it up, rent it out for $1,000 a month, and then in two and a half years, that money is pure profit minus advertising a vacancy and repairs. You can then use the equity from that home to buy another rental, and before long you’ll have a portfolio of homes supplementing your income.
You should find out more info about investment properties before trying this strategy.
Use These Investment Ideas To Supplement Your Income Today!
These investment ideas for 2021 are best used as a long-term strategy, so it’s best to start as soon as possible. Whether you decide to invest in stocks, CDs, or rental properties, the key is to do research and have a consistent approach.
If you’re looking for more financial advice to supplement your income, plan for retirement, or get some extra income to save for a vacation, bookmark our blog and check out some more of our posts today!