Paul Haarman: A Few Investment Considerations for Extra Income

About 78% of Americans would admit that they make just enough money that helps them cover their monthly expenses. If you want to change your situation, start looking into investing opportunities. While it is not an easy undertaking, you can first educate yourself about different options. For example, you must be aware of stocks. But for new investors, starting with a highly volatile market can be risky and, sometimes, heartbreaking too. So, it is better to pick low-risk investments. They might not promise extraordinary returns; however, you can rely on them to offer decent growth even during tough times. Here are some examples.

Real estate

Real estate

The property market can be one of the safest investments, albeit local conditions tend to have a larger impact on its behavior. But you can expect decent returns whether you buy a commercial or rental estate, says Paul Haarman. It is because you don’t have to deal with the ups and downs like stocks. However, it is essential to know that long-term gains can be as low as about 3.8%. Plus, it involves upfront buying costs, maintenance charges, and taxes. For these reasons, some people choose real estate investment trusts (REITs). These are less expensive assets with high liquidity. But you cannot dodge the risk part of it.

Certificates of Deposit (CDs)

Do you want to make money with a savings accounts? If you don’t immediately need cash, you can put some amount in this for a specific period.  You can open this deposit account with banks, online lending institutions, and credit unions. You will earn interest on this, which would be higher if you lock your money for the long-term. Nevertheless, there can be penalties for immature withdrawals, including an interest fee for a few months. 

US Treasury Bonds

Bank

Another safest investment for a new investor can be government bonds. Investors hold them in high regard because the US government has always paid its debts successfully. These can be low yield, though. But certain Treasury bonds come with inflation protection, which makes them a valuable addition. You can buy them either from the US Treasury or online brokerage platforms. Just be aware that secondary markets can charge extra while US Treasuries don’t levy any fees. In this context, exchange-traded funds (ETFs) and mutual funds are also tax-efficient and low-cost solutions. You can even try these.

Gold

You can witness price volatility with gold also. But it can retain its value for an extended period. Besides, it offers inflation protection. However, you cannot expect this every year. After all, gold is a monetary asset in the end. 

Series I Savings Bonds

Investment

If you wish to do away with inflation risks without losing your interest income, you can rely on these government bonds. Paul Haarman says they don’t post negative yields, unlike Treasury Inflation-Protected Security (TIPS).

The investment options are endless, but the real trick is to find out the most suitable bet. For unseasoned investors, these things can be overwhelming. Hence, it will be better to consult certified financial advisors from your city and invest your money carefully. Make sure you don’t lose your peace of mind by diversifying funds into a high-risk portfolio while trying to bolster your finances.

Paul Haarman: A Few Investment Considerations for Extra Income 1

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