An investment portfolio is a collection of financial assets that you hope will make you money over time. That’s easy enough to understand, but how do you get started and begin making money? There are three easy steps you can take to start your investment portfolio and put yourself on the road to success.
Invest In Rental Properties
There are two easy ways to go about adding rental properties to your portfolio.
You can invest in a REIT.
- REIT stands for real estate investment trust.
- REITs are companies that own, operate, or finance real estate that draws an income.
- When you give money to a REIT, they invest it in their rental properties, like apartment complexes for example.
- The REIT then pays you a portion of their income every quarter.
- This is a way to invest in rental properties without the stress of becoming a landlord or managing a property.
You can buy and operate a rental property.
- You can get a rental loan or vacation rental loan depending on what type of property you’d like to buy.
- Once you have the loan, you can use it to purchase your property. You’ll then make loan payments until the full amount is paid off.
- With careful planning, the property will end up paying for itself.
- You’ll have to decide whether you want to be involved in the daily operations of your rental or if you want to get a property manager.
- Because you’ll be the property owner, you’ll have certain legal obligations and risks you wouldn’t have with a REIT.
Do some research and decide which option will work best for you in the long term.
Invest In Companies And Stocks That Are Expected To Grow
Looking for companies or stocks that are part of a new trend or that are gaining popularity is one of the best investment strategies.
- Finding these opportunities early will allow you to buy-in before the price skyrockets.
- These kinds of investments can be resold for a huge gain in profit.
- Popular options might include tech startups, medical supply companies, or brands that are gaining public approval quickly.
- You usually won’t have an active role in the companies you’re investing in, so you can skip the stress of decision-making.
- These kinds of investments can be good for the long-term or may require a quick turnaround.
You’ll have to do some serious research or get someone to do it for you, before choosing companies or stocks. Growth can be predicted, but it can’t be guaranteed.
Invest In Bonds And CDs
Bonds and Certificates of Deposits (CDs) are a lower-risk investment option.
- They work in a similar way to a savings account, only there’s a penalty if you withdraw money before your agreement is up.
- You’ll put a certain amount of money into your CD or Bond and agree to leave it there for a set amount of time.
- The money will gain a small amount of interest while it’s there.
- When the agreed-upon amount of time is up, you’re free to withdraw your money and the interest.
- So what’s the catch? You’ll usually have to agree to a large upfront deposit of money, and if you withdraw it early, you’ll face fees.
Bonds and CDs are a great option if you have a large amount of money to put into them, or if you can find an online bank willing to give you a high-reward interest rate.
If you’re ready to start your investment portfolio, now is the time to follow these three easy steps and be on your way to success.