Investing your money sounds like something only the super-rich do and impossibly complicated or far-reaching for us working folk.
But is that true?
Luckily for us, it’s actually never been easier to start investing, and you don’t need to be mega-wealthy in order to do so. Even investing $1,000 can make a huge difference in your life!
With that in mind, it can still be confusing where to begin with investing and what to invest in exactly. You want to be sure you won’t lose money by jumping right into the deep end with an investment!
In this article, we’ll discuss the best investments to boost your overall portfolio and become a successful investor.
Why Invest Anyways?
Ok so right off the bat, you may be wondering why you should even invest in the first place. Sure, you’ve heard that it’s a good idea to invest, but why do investors join the investment bandwagon?
Investing can provide you with another source of income, fund retirement (or an early retirement!), or even get out of a financial jam.
Above all, investing grows your wealth — helping you meet your financial goals and increase your purchasing power over time.
Many of these options are income-producing assets– meaning by putting your money in, you can make much more money over time!
When you invest money, you’ll want to balance potential gains with the risk involved. Investors have to know if their investment will yield good returns before investing wholeheartedly.
There are many ways to invest — from very safe choices such as mutual funds and money market accounts to medium-risk options such as corporate bonds, and even high-risk picks such as stock index funds.
You earn money, and you need to make sure to use it in the best way possible. If you put it somewhere like a savings account, you will only get a very small amount of interest from this.
The key is to make sure that you aren’t constantly exchanging your time for money. Putting it somewhere where it will grow with compound interest is a sensible option.
After all, the goal is to work less, right?
Assessing Your Risk Tolerance
Before you invest, you need to make sure that you think about your risk tolerance for your investments.
That doesn’t mean how much of a daredevil you are, but just about how much you want to expose your investments to risk.
When investing for the long-term, it’s really important that you don’t panic and try to take your money out when there is a downturn in the market.
After all, you’re in it for the long haul and can ride out any bad times. We consider this for real estate investing, art investments, and more.
Think about how much money you’d be willing to lose with an investment, how much time you plan to be in the stock market, and your personal preference for risk tolerance.
Low-Risk Investments
A low-risk investment is one that guarantees a certain rate of return and has very little chance of losing all its original value.
Low-risk investments tend to be in cash, government bonds, or other stable assets with guaranteed returns. Examples of low-risk investments include CDs, money market accounts, savings accounts, treasury bonds
High-Risk Investments
A high-risk investment is one that carries with it a greater potential for loss. Typically higher-risk investments include individual stocks, startups, and some real estate.
15 Best Investments to Accelerate Your Wealth
1) High-Yield Savings Accounts (HYSA)
HYSAs are one of the best short-term investments that you can make to earn more money on your savings.
Online savings and cash management accounts provide higher rates of return than you’ll get in a bank savings or checking account.
Cash management accounts offer more flexibility and similar — or in some cases, higher — interest rates. Savings accounts are best for short-term savings or money you need to access only occasionally.
With fewer overhead costs, online banks tend to offer higher rates than those at physical branches. See our roundup of the best high-yield savings accounts to find one that fits your needs.
Risk Level
Putting your money in an HYSA is very low risk. It’s essentially just a savings account that has a decent interest rate, which is useful for growing your money.
Best Users
A high-yield savings account is best for those who want to put their money somewhere safe for the short term.
The reason why we recommend an HYSA for the short term is because of the interest rate. Although a high-yield savings account offers much more interest than regular savings, it’s still going to be a small amount of interest when compared to other kinds of investments.
Where to Get Started
We recommend opening an account with a company like CIT Bank or Chime, which have some great rates at the moment for their high-yield savings accounts. But be sure to do your research to look around and see if there are any better ones out there, as it tends to change.
Read our Chime Review to see how their credit builder account or high-yield savings account will help you build better credit or earn more APY!
2) Money Market Funds
Money market mutual funds are an investment product that should not be confused with bank deposit accounts.
They are pools of CDs, short-term bonds, and other low-risk investments grouped together to diversify risk.
The goal of a money market fund is to provide investors with ongoing income while protecting their principal investment. Unlike money market accounts, money market funds are not FDIC insured.
Instead, they’re regulated by the Securities and Exchange Commission (SEC).
Risk Level
There is a bit more risk involved with investing with a money market account, especially when compared to a high-yield savings account.
You are still able to access your money quite quickly, but still want to expose it to some risk. You may wonder why you would want to expose your money when we put it like that, but have you heard of the expression “with risk comes reward”?
Although money market funds are typical investments, you will not get the returns that you would with other investments.
Best Users
If you are looking to put your money somewhere that will expose it to a bit of market risk but is not as risky as other kinds of investments, then a money market fund could be for you.
Where you put your money will depend on what you are trying to achieve with it. Usually, when you are investing, you are looking for the long-term.
With a money market account, these aren’t really for the long-term, due to the lower returns that will get with them.
If you are looking for somewhere to keep your money for the short term, this is where you may want to consider using a money market account.
It may just be somewhere that you want to keep your money for now, for a reason such as just wanting to keep it somewhere or holding off until you put it into other investments.
Where to Get Started
To sign up for a money market fund you will have to sign up to an online broker, or there are lots of other places that you can get them such as a bank or a mutual fund provider.
3) Exchange-Traded Funds (ETFs)
An Exchange-Traded Fund (ETF) is a type of mutual fund that trades on an exchange like stocks. ETFs are offered as shares so they can be purchased for individual investors and give the investor exposure to many different investments, both in one security.
So essentially, an ETF is like a mutual fund in that the investments are all pooled together, with the difference being how the investments are sold.
They have low expenses because of their passive management style, compared to actively managed funds where their fees and expenses are far higher.
ETFs are a great investment because they allow you to diversify your portfolio and reduce risk. This is the case for both long-term investors as well as those who need short-term exposure (i.e., day traders).
Risk Level
ETFs are a higher risk than some of the other investments that we have mentioned, but they should potentially bag you a higher reward.
Plus, ETFs have little correlation with the other stocks in an individual’s portfolio so it reduces risk even further!
Best Users
If you are looking for ways to invest over the longer term, then an ETF could be a good option for you.
As ETF’s tend to have a lower barrier to entry, these could be a good starting point if you don’t have the money to purchase other kinds of funds.
Where to Get Started
You can get ETFs through online brokerages like Acorns, and if you are going down the robo-advisor route, they will likely have portfolio recommendations or automatic investing for you.
4) Mutual Funds
Mutual funds offer investors an inexpensive way to diversify their investments, as you are able to spread your investments across multiple investments.
If you want to get into the stock market, but you don’t want to have a portfolio full of individual stocks, then you could get mutual funds.
Most of the mutual fund providers we review offer no transaction fee mutual funds (which means no commissions).
We checked out Vanguard in particular, and you can check out the best Vanguard funds to find out more about their investment options.
You can invest with some of the mutual funds for as little as $1,000 or less, but if you have many options if you want to invest in a specific area for more or less money down.
Risk Level
Mutual funds are low-risk investments, which is why they are better for long-term investing goals.
Best Users
Mutual funds are best for people who want to invest for the long term, such as for their retirement.
As they are viewed to be a higher risk (as opposed to something like a savings account), it’s best to have them over a longer time period so that you ride out any highs and lows.
Where to Get Started
To get mutual funds, you can check out the companies that have the funds, and also some online brokerages.
Some popular companies include Vanguard, Fidelity, and Charles Schwab – but make sure you do your research into the best ones, as well as the fees.
5) Certificates of Deposits (CDs)
Certificates of Deposits offer fixed interest rates for a defined period of time. CDs are best for the money you know you’ll need on a fixed date in the future.
CDs can be good for retirees who don’t need immediate income and are able to lock up their money for a little bit.
Bank CDs are always loss-proof in an FDIC-backed account unless you take the money out early. See the best CD rates right now based on term length and account minimums.
Risk Level
Certificates of Deposit offer a lower risk level, as they are simply a safe savings account, and as they offer a fixed interest rate, you know what you will be getting.
Best Users
A Certificate of Deposit is good for if you have a goal that isn’t super long term (like retirement in 40 years!), but where you’re willing to lock your money away for a bit.
This could be for a savings goal such as saving for a house or something like a wedding. They have certain amounts of time like 1 year or 3 years, so make sure that you choose the one that’s right for you, as you may have to pay a fee if you take it out earlier than agreed.
They are good for people who are looking to earn a bit more than if you put your money into a regular savings account.
Where to Get Started
There are lots of places that you can get a Certificate of Deposit, as even your regular bank should offer them. You can also open them through your brokerage account.
6) Treasury Bonds (Federal)
Federal Treasury bonds are great if you are looking for a safe investment with minimal risk.
These bonds are backed by the federal government so they have very low default rates, and offer protection during periods of volatility in other markets (e.g., stocks).
They are issued by the government and sold by the Treasury Department. They are also known as T-Bonds.
Risk Level
Bonds are typically viewed as low-risk investments, particularly if they are government bonds. You are essentially loaning money to a government, and you can expect the government to pay you back no problem!
Treasury bonds are guaranteed by the government if held to maturity, which should give you some peace of mind.
Best Users
Treasury bonds are great for people who are looking to invest but don’t want much risk. This could be based on your personality or due to your age.
A lot of people choose bonds when they are nearing their retirement age because they don’t have a lot of time left in the stock market to deal with any dips, like with other investment types.
Where to Get Started
You can get these with some online brokers, and also look into money market funds.
7) U.S. Savings Bonds
A U.S Savings Bond is a government bond that is offered to help fund their federal spending and provide you with a guaranteed return.
They are sold at a discounted price, and then mature to their full value over a certain amount of years.
It’s worth mentioning that the U.S. Savings Bond is a zero-coupon bond which means that they will not pay out any interest until they mature, or are cashed in. After 30 years, the bond will no longer be able to generate any interest.
U.S. Savings Bonds are also exempt from both state and local taxes, you’ll be pleased to hear! Federal taxes do still apply, however, but only in the year in which you redeem it, it matures, or after 30 years.
Many people use bonds as a way to save for college for their children, rather than a 529 savings account or an education savings account (ESA).
Risk Level
These are very low risk as they are guaranteed by the government, but the returns that you can get will be much lower.
This type of bond is viewed as being non-marketable, which means that you are unable to transfer it – it is a loan between you and the U.S. government.
Best Users
The types of people that these would be best for are those who are looking for investments that pose little risk, as they are backed by the government. Also if you are looking to do this for the long term as you can’t redeem them for a long time – 12 months minimum.
In order to get these, you will need to be a U.S. citizen or U.S. government employee.
Where to Get Started
These kinds of bonds can only be bought through the TreasuryDirect website, which is run by the government.
You will need to sign up for an account there, provide your Social Security Number, email address, and checking account (or savings).
You can’t buy more than $10,000 worth in a calendar year, but let me tell you, it’s worth it to invest $10,000 wisely!
8) Corporate Bonds
These loans are not backed by the government, making them a riskier option. High-yield bonds are sometimes known as junk bonds and can be riskier.
The higher the likelihood the company will go out of business, the higher the yield.
Bondholders are higher in the pecking order than stockholders, and if the company goes bankrupt, bondholders get their money back before stockholders.
To mitigate interest rate risk, investors can select bonds that mature in the next few years. Longer-term bonds are more sensitive to changes in interest rates.
Risk Level
The risk level on corporate bonds is higher than a government bond, as you will be lending money to businesses and not the government.
Best Users
If you are looking to invest in bonds, but are looking for something a bit riskier than a government bond, as typically the riskier the type of investment, the greater returns that you should be able to get.
Where to Get Started
You can buy any type of bond through an investment broker. Make sure to check the fees associated with it when choosing.
9) Individual Stocks
When you’ve heard about investing before, you have probably heard all about individual stocks, and this is likely what you think investing is all about (spoiler alert: it’s not!).
An individual stock is part of a share of a company. You’ve probably heard of the most popular ones like Amazon, Apple, or Tesla.
Say for example here on The Savvy Couple we decided to offer shares in our company, this would mean that you could own part of our company.
It works the same with other stocks, but they will all be priced differently, with the very popular ones being very high prices, but this can be a way of owning part of a company without having to buy a huge chunk of the company.
Risk Level
Individual stocks are viewed as being riskier, as it’s like putting all of your eggs in one basket. Don’t be put off by this though, as there are other ways to spread your risk in your portfolio (such as using index funds) but you can always hold individual stocks as well.
They are viewed as being riskier because you are relying on that individual company to perform well. If it doesn’t perform well, this will impact your investment negatively.
You can try and make things less risky for yourself by choosing an individual stock very carefully (doing a lot of research), but it’s impossible to predict the future, no matter how well a company has performed in the past.
Best Users
If you are looking to take a bit more risk, then you could get some individual stocks. A lot of people get individual stocks to make investing a bit more fun, but it’s worth mentioning that this is a kind of gambling if you go into it with that mindset.
It will be best if you already have a well-balanced portfolio that you can add these into, as you don’t want all of your investments to be held up in individual stocks.
You will also ideally want to have a bit of knowledge about how to pick a stock (although none are guaranteed).
Where to Get Started
Plenty of online brokers offer individual stocks – although not all of them do, so make sure you check before signing up!
We recommend Robinhood for those who are new to stocks, but there are great robo-advisor programs like Betterment that are also great for navigating new investments.
10) Dividend Stocks
Dividend stocks can provide the fixed income of bonds as well as the growth of individual stocks. Dividends are regular cash payments companies pay to shareholders and are often associated with stable, profitable companies.
Young investors may do well to look into dividend growers, which are companies with a track record of consecutively increasing their dividends. Older investors looking for more stability or fixed income could consider stocks that pay consistent dividends.
The easiest way to buy dividend stocks is through an online broker.
Risk Level
This is probably medium risk, as you will still be owning a part of a company and your returns will be dependent on how well that company is performing, but you can get dividend stocks associated with well-performing companies.
Best Users
If you are looking to get into investing, dividend stocks are a good option for you.
No matter what age or whereabouts in your financial journey you are, the dividends are worth a piece of portfolio space.
There are certain kinds of dividend stocks that you can get based on how old you are – you may prefer dividend growers if you are just starting out on your journey.
Dividend stocks are also very popular with people who want to get a bit of an income coming in from their investments, as you will get a regular payment through.
Where to Get Started
You can get dividend stocks on many different online brokers, similar to the other investments listed in this article.
11) Municipal Bonds
A municipal bond is a debt instrument (can be bought/sold between 2 parties) that is given by a municipality to help to finance their expenditures.
A simple way of thinking about it is that it’s essentially a loan to local governments. These loans are used to fund things like infrastructure e.g. bridges or roads and other public entities like libraries or public parks.
There are a couple of different types of these bonds:
- General obligation bond
- Revenue bond
Risk Level
Bonds are always generally viewed as a low-risk investment, but it’s always worth comparing the different kinds of bonds as they pose different levels of risk.
Municipal bonds are at lower risk than corporate bonds, but revenue bonds can be quite volatile, as they are affected by things like economic downturns.
Best Users
These kinds of bonds are good for people who don’t want to have very risky investments. They are appealing to high-income earners because they can be tax-free.
Like with the other kinds of bonds that we have mentioned in this article, municipal bonds are good for investors who want to invest over a longer period.
Where to Get Started
You can buy municipal bonds from online brokers, banks, and a few other places.
12) Annuities
Have you heard about Annuities before? Annuities are contracts that are distributed with the funds being invested to pay out later on.
If you have heard about annuities before then it has probably been in relation to retirement, as that’s typically what they are used for.
You will start off with funding it either by doing a lump sum payment or payments that you do at certain points.
When you reach the annualization phase, it will begin paying out to you for a fixed period, or for the rest of your life.
Some examples of annuities like this are Social Security and defined-benefit pensions.
Risk Level
Annuities are low risk because the purpose of them is to make sure that you do not outlive the money.
Best Users
The whole point of annuities is to help people have a steady income stream that will last them the rest of their life, which is why it is perfect for the older generation.
It is illiquid, and if you withdraw it you will have to pay penalties, which is why it’s better for people who want to leave it and not take the money out early.
There are also immediate annuities that you can get, that can be purchased at any time, regardless of your age. This is usually chosen by people who have received a large amount of money and want to keep it for the future.
Where to Get Started
You can get annuities from brokerage firms, large banks, mutual fund companies, IFAs, and more.
13) Real Estate
Traditional real estate investing involves buying a property and selling it later for a profit.
That’s not possible for everyone, but luckily there are some new options that we can try out to get into real estate investing without having a large amount of capital to do so.
The best way to invest in real estate is through real estate investment trusts or real estate crowdfunding. Real estate crowdfunding platforms are also popular in recent years.
Investors should know the risks, but consider if you’re willing to take more risks to chase higher returns.
Some REITs can be purchased on the public stock market through an online stockbroker, while some are only available in private markets. And some crowdfunding platforms open to accredited investors only, while others don’t put restrictions on who can invest.
Risk Level
Investing in REITs is riskier than a normal investment, but it also means you could gain higher returns. It is dependent on so many different factors.
Best Users
Ideally, investing in real estate investment trusts or crowdfunding won’t be the first thing that you do when you are getting started with investing.
If you are looking to get into real estate investment trusts or crowdfunding, then this could be something that you do once you have already set up your investment portfolio.
Real estate investment trusts or crowdfunding is great if you are looking to diversify your portfolio a bit, or if you are looking for an investment that is a bit riskier.
Real estate investment trusts or crowdfunding are not going to be for you if you are going to need to take your money out quickly, as they are illiquid – you won’t be able to access them for periods of time as they will be tied up in the real estate.
They can be a good option if you are happy with leaving your investment to grow over the agreed period of time (check all of the terms when you are signing up).
Where to Get Started
There are real estate crowdfunding websites out there, such as FarmTogether, but they might have specific criteria to join, such as earning a certain level of income in order to be able to sign up to the platform.
You can also use Roofstock to find single-family homes, which you can rent out for passive income or flip to try and increase your profits.
You can access some through an online broker, but it’s best to check through all of your options.
14) Cryptocurrencies
A cryptocurrency is a digital currency that uses cryptography to keep it secure. Cryptocurrency has become extremely popular, especially with the younger generation.
Not every investment platform has crypto assets as options, so you’ll want to find and compare the ones that do to add the best to your portfolio.
The most commonly known cryptocurrencies include things like Bitcoin or Ethereum.
Risk Level
Cryptocurrency is known as being very high risk- so investors can make money or lose money quickly at any given time.
The reason for this is because it’s very volatile and as it’s a new currency.
We aren’t able to look at the historic highs and lows (or returns) as we are with other types of investments, so we can’t estimate how you should invest money in order to make money.
Not only that, but we have people like Elon Musk who go on Twitter all the time and talk about various cryptocurrencies, and every time he does, it either drops or goes up – is this the kind of investment that you want to make?
This is something that you will have to bear in mind, it may make new headway in the next few years as people flock to it.
Best Users
Crypto is good for people who already have a decent investment portfolio and are looking to bring in some diversification, and are willing to take a bit of a punt on a new digital currency.
Unfortunately, this kind of investment usually attracts younger, inexperienced investors who don’t know what they’re doing. If you are brand new to investing and have been hearing about crypto, we’d highly suggest that you do a lot of research into it and don’t think of it as a get-rich-quick scheme – as you’ll be quickly losing your money!
Where to Get Started
Cryptocurrency isn’t available everywhere to buy, but you could check out platforms such as Robinhood or Coinbase as some examples. Make sure you do your research though!
Robinhood offers free stock when you open an account, which is basically free money for your investments, but you want to know more about using the app before picking your one and only for cryptocurrency.
There are other ways to make money on Robinhood too, so there’s plenty of potential for good investments!
Before you start investing in cryptocurrency, we highly recommend that you read up on how it all works, so that you don’t get carried away with what you see people talking about on social media, and can make some sensible investment decisions.
15) Invest In Small Businesses
Do you want to make a bigger difference in your community?
Start with supporting local businesses!
But you can do even more than that- you can invest in the great restaurants, the trendy bars, or even at your favorite bakery.
Risk Level
Investing in small businesses is considered high risk- within their first year, 20% of small businesses fail. After 5 years, as many as 50% of small businesses may shut their doors.
Minimum investments start at just $100, and even though small businesses are high-risk, you could potentially make 1.5X or more your money back.
Best Users
Investing in small businesses is best for those who don’t mind the high risk/high reward option. It adds diversity to any portfolio, of course, as well as gives people all the good feels from supporting an aspiring entrepreneur.
Some investors are given options for: equity, meaning ownership and continued profits for their investment, or debt, where they simply lend money to get the business going.
Where to Get Started
We have found Mainvest is a great platform to use to start investing in small businesses!
How to Choose the Best Investment For Yourself?
Your Goals & Timeline
Everyone is different, and it’s important to remember that personal finance is just that – personal.
With that in mind, try not to worry about what anyone else is doing – especially when looking at what people are talking about on social media.
When you start investing, you need to be smart and do your research, not just jump on whatever other people you know are doing. You can ask more hands-on investors for some advice, but take things as a grain of salt.
There are certain kinds of investments that gain a lot of popularity on social media like TikTok, but does that mean that they are the best kinds of investment for you? Probably not.
One of the key parts of investing is making sure that you don’t have all of your eggs in one basket – which means diversifying your portfolio.
A lot of people tend to think that investing is just about investing in an individual stock, but that’s not the case at all.
As you will have seen from this article, there are so many different types of investments and investment accounts out there for you to choose from.
When you are thinking about what you want to invest in, make sure you think about your goals and when you want to do them by – this is important for choosing your investments.
Are your goals short-term or long-term? Are you close to retirement age or are you just starting out? These are all things that you will need to bear in mind.
Your Current Finances
Look at where you are currently and if there are any areas that you need to work on. Do you need to start a retirement account and save more for the future?
Maybe you dabbled and only have one stock right now, and want room to grow.
You can create a budget to get a good overall view of where you’re at, and you could put everything in one place to help you, such as by using a platform like Personal Capital.
Once you know how much money you have left in your budget after the necessities are handled, you can start investing.
Don’t be afraid to start small and invest in just a stock or two- but to get higher yields, you may be interested in some other investment options.
DIY Investing – Investing Platforms
When you are new to investing, another thing that you can tend to assume is that you have to pay someone to invest for you. But that’s not true!
There are lots of companies out there where you can do DIY investing, and there are also robo-advisors out there that will help invest for you based on certain criteria that you choose.
Some of our favorites include:
FarmTogether
FarmTogether is a real estate investment platform that gives you the opportunity to invest in U.S. farmland, which is great if you’re looking to diversify your portfolio.
You’re likely to have good returns since agriculture investing has done so well, and you’re able to combine your money with other investors- which is more feasible than buying a farm outright!
However this platform isn’t great for all newbie investors, as you need to be an SEC Accredited Investor, have over $1 million dollars in net worth, plus more criteria to get in on the action.
On top of the requirements to become an investor, the minimum amount you’d need to invest is $15,000- for those just starting in investing this may seem difficult.
But FarmTogether is a fantastic opportunity for those who are more experienced in investing or for those looking for better long-term investments. They offer low fees and hold a very unique asset class that could yield good returns time and again.
Betterment
Betterment is an online investment platform that uses robo-advisors to do the busy work for you.
If you are looking for a robo-advisor to take care of your investments, Betterment is known as being the best and is a good option if you are new to investing.
Robo-advisors are automated tools that will align your portfolio with your investment goals, earning you more money with less work on your part!
It’s really helpful that the robo-advisors will re-allocate funds in your account, it’s one less thing on your plate when you start investing.
M1 Finance
M1 Finance is an online brokerage platform that helps you build your portfolio (which they call a ‘pie’).
They have no commissions and they will help you to customize your pie (portfolio) with your personal goals.
They even have prepared portfolios based on your investment goals to help you start investing, which makes it easier to enter the investing world with not much research or work on your part.
Fundrise
Fundrise is a crowdfunding investment platform for investing in real estate, with the intention of helping people investing in real estate – and not just the super-wealthy of course!
Fundrise has two kinds of investments that you can invest money in:
- eREITs (electronic real estate investment trusts)
- eFunds (electronic real estate funds)
You will buy shares of either one of these by buying one of the portfolios that are available on Fundrise.
Our Takeaways
Even if you are new to investing, it has never been easier to get started. There is a low barrier to entry and there are DIY platforms for you to take matters into your own hands!
There are so many different investment options out there, and we recommend diversifying your portfolio as much as you can in order to get the most returns.
Write out your goals and how much time you have, to decide on the types of investments that you want to go for, to achieve all of your financial dreams.
