Day: November 26, 2020

Without a doubt, all of us want to earn more. But, the question has always been, how?

In this article, you will read 10 of the easiest tips and techniques to earn a 10 percent rate of Return on Investment (ROI). While you might think that this percentage is too little, note that these savings can sum up a large amount of money when accumulated. Find which of these ways works for you and your situation, especially during recession and pandemic.

Top 10 Ways To Earn A 10% Rate of Return on Investment

1. Real Estate Investing

One way to earn a 10 percent ROI is real estate investing. There are multiple mechanisms to do this. You can choose to rent out your property. Just make sure that the rent rate is more than your monthly mortgage or loan payments. If you don’t want this type of real estate endeavor, you can try other methods too.

You can also buy and sell homes to earn an income. A pro tip here is to invest in single-family rental homes. These types of homes sell like pancakes.Experts even claim that these types of houses will continue to grow even during and after the pandemic. With the work-at-home option growing popular, people choose to stay in these comfortable and affordable homes even with a high rent rate or an expensive price tag.

If you want to venture into the market of single-family rental homes, you might want to check out companies like Roofstock. The company is dedicated to this type of rental service. They offer to buy, own, and sell rental homes, so this is the best place for you to find potential clients and customers. They are one of the best in the industry, but you can surely look for other companies in the same field.

If investing in single-family rental homes is not right for you, you can also try to invest in real estate debt. Here, you can invest in the loans made to borrowers. As these borrowers pay back their loans, you get to earn you money as well. The nice thing here is that you do not need to manage the property while being part of the thriving real estate investing industry. You can check out Peerstreet if you want to try this out.

Another option to enter real estate investing is to invest in corporations that give dividends or dividend stocks. It may take time before you profit from these real estate investments, but they are relatively more stable sources of income. They are for a long term investment. You might have to wait for five years for your first dividend, but you can earn per month or per quarter after that. Check out Fundrise or Streitwise if this type of real estate investing works for you best.

2. Paying Off Your Debt

If you have an existing loan, chances are you are losing a lot of money because of the interest rates you are paying back. One easy way to earn a 10 percent Return on Investment is to pay back your loans so you can save money. The longer you are keeping your debt, the higher the interest rate you are paying. By doing so, you are no longer charged with the interest rate each month, thereby making you save a ton of money per month.

Just think of this scenario – your credit card debt charges you around 16 percent per month. The longer time you wait to settle your debt, the more money you have to pay the loan agencies per month. The same goes for your other loans. For example, student loans have big interest rates, so you have to pay them back as soon as you can.

If you cannot avoid taking loans, you have to apply to the best credit institutions or to take the best credit cards available in the market. Only take loans with fair and reasonable terms. If you fail to do so, this could hurt your finances in the future.

3. Long-Term Stock Trading

To invest in stocks for the long term, you have to get in touch with an investing company and let them manage your money. Long term stocks are conservative because the Robo advisors or financial advisors put your money into various businesses. They are the ones to choose an option for you. In doing so, you, as an investor, are not taking too much of a risk.

One downside of this type of stock trading is that it might take months or years before you start earning money. But once your investment has given your due diligence, you can start earning high returns.

If this option fits you and your financial goals, you can contact a trusted bank, a discount broker, or even a smartphone app. A financial advisor or Robo advisors will then choose where to put your money.

4. Short-Term Stock Trading

In long-term stock trading, you make trades for a long period of time, like for several months or often years. In contrast, in short term stock trading, you buy-and-hold trade quickly in days of weeks. This is a riskier type of investing because you are only given a short period of time to make trades. The short term fluctuations in the market can potentially turn you into a financial success overnight or potentially lose your savings.

Honestly, the short term stock trading is not meant for everyone. There is a learning curve if you wish to do this for a living. Remember to read various resources before jumping into this market to come in ready and prepared.

5. Starting Your Own Business

If you have a trust issue and would not allow other people or organizations to manage your money, you can always start your own business. Once you build a successful business endeavor, you can ensure your continuous 10 percent earning per month.

To get started in your own business, you have to begin looking at the market familiar. If you are a fan of a fashion, technology, or food trend, make your business revolve around things you know and love.

One of the best tips when starting your first business is to use your personal capital. This is to minimize the risk of being in debt. You do not need to start big here. You can start small, grow your business, and then acquire investors once you are confident about your business plan.

If you plan on investing in a small enterprise, you should get familiar with Facebook, Twitter, Instagram, or other social media marketing tools. These are affordable and easy-to-use tools proven to attract the money market. With limited funds, you might have to do much of the work in the first few months of your business.

6. Art and Other Collectibles

Do you know that your collection hobby can be turned into a profitable business as well? Art and other collectibles can diversify your investments. Make money by buying popular collectible items, keeping them in good condition, and then selling them to the right customers. Navigate Facebook, Twitter, and Instagram to know what items are hot among collectors.

Some of the common collectibles in the market today are books, toys, legos, paintings, and many more. Popular media items, ones released by corporations like Disney, Warner Brothers, Mattel, etc. are also safe bets when it comes to earning your 10 percent ROI. And of course, try to stick on the market that you are already familiar with. If you are into Harry Potter, for example, start your collectible items within this realm.

7. Create a Product

If the stock market or real estate investing does not appeal to you, you can always try to make products that could entice people. One of the useful tips in creating a product is to get an education about the industry before designing or developing a product.

You do not just produce something and sell it to others. Instead, you have to gather the necessary information from your potential clients to ensure that you create a marketable and profitable item.

When creating a product, do not limit yourself to the fashion or food industries. For one, digital products are popular among younger consumers today. You can create a blog, vlog, website, or other online products and earn 10 percent of ROI monthly.

8. Junk Bonds

Given the economic crisis we are currently facing, investing in junk bonds can be the best investment option you can do today. Junk bonds refer to bonds rated below investment grade by the top rating agencies in the country. Most investors would not choose to invest in junk bonds because they carry a higher risk of default than other bonds. But, take note that junk bonds have the potential of significant price increases when the company’s financial situation improves.

Remember that investing in junk bonds is like betting to a given business. This means that before investing, you have to gather all the relevant information to bet on the business that is likely to be a success in the next months or years. If you have to invest in the right junk bonds, the return can be big for you.

9. Peer-To-Peer Lending

Peer-to-peer lending, otherwise known as P2P lending, is a mechanism where lenders are matched to borrowers. You have to use a third party business like Lending Club or Prosper.

In Lending Club, for example, you can earn a rate of return on investment of over 10% per year. For more conservative investments, the ROI is at 6 percent, while for more risky investments, you can even earn a return on investment of 20 percent or more per year.

10. Master Limited Partnerships

There are basically two paths to take under the master limited partnerships. First is the so-called limited partnership is where you provide capital for the business and eventually receive income distributions. Here, you become an investor because of the money you gave to the business as their capital.

On the other hand, there is the so-called general partnership. Here, you help manage the business. Eventually, you get a return on your investment in the form of a compensation basis monthly.

Note that Master Limited Partnerships is similar to trading stocks. They can be risky and are not for every investor. If you wish to proceed, you might want to consult a financial advisor before committing as an investor.

Which One is Right for You?

If you have some funds in your savings accounts, your money is sleeping because of the extremely low-interest rate it earns from the bank. In some cases, inflation could even decrease the value of your funds. If you truly want to improve your personal finance and grow your funds, you have to start building your investment account. As an investor, begin with the industry familiar to you.

Before investing, you have to be certain how much money from your savings account you are willing to use in investing. Also, create a target on when you want to start earning your ROI. All these factors are essential in choosing which type of investment you are willing to make.

While not necessary, it will not hurt you to know the basics concepts in finances and investing, including inflation rate, interest payments, money market fund, credit score, government bonds, and many more.

You do not need to invest a large sum of money. You have to be certain that you are investing in a field with a high rate of return or a growth rate. Make the right decisions by getting insights, suggestions, or education from groups and individuals who are experts in investing. There are more tools online than ever that could make you start earning that 10 percent ROI of interest monthly.

Conclusion

As seen above, there are more ways than ever to start earning that ROI of interest monthly. If you are afraid to start investing, financial websites, consulting firms, and business organizations can be found on the Internet. These groups and individuals are willing to help you and guide you in investing your finds to rightful businesses or endeavors.

One of the most reliable financial websites today is Investoralist. We have tons of reading materials, tips, and guides for you. We can help you understand seemingly complex concepts like compound interest, day trading, real estate investing, mutual funds, money market funds, and more. Just send us your queries and concerns, and we will provide you the necessary information you need.

It’s not really common for one to inherit or save $20k, as that is a relatively huge amount of money. Credit cards sometimes hinder us from saving! But if you have that amount of cash in your hands, then good for you!

Now, what you would want to do with that amount of money is not to let it sit around. Because of inflation, you might end up losing money rather than making more of it! This is why the idea of investment comes into the financial picture.

This article’s content will help you with 10 of the best ways to keep your money rolling.

1. Invest With a Robo-advisor

One of the best ways to invest 20k is to do it with a Robo advisor. Doing so will keep you invested in the stock market using broad and various approaches. There are many resources and content online should you know more about what Robo advisors do and how they could help you with stocks, ETFs, personal loans, and credit card budgeting. However, let me give you an idea about what Robo advisors are. For one, they know money cards best.

A Robo advisor, in general, is like a financial advisor. Still, instead of them being a person, your finances are analyzed by a series of computer algorithms that are programmed to adjust, maintain, diversify, and pick out your investment as time passes by.

Just like what a financial advisor would do, all these algorithms are based on the context of your finances, credit card debt, car insurance, emergency fund, your risk level of choice (also known as your risk tolerance), and the duration of your investment plan. Also, you can opt for some regular, taxable investment account. You can set up your own IRA funds ETFs by yourself.

2. Max Out Your Retirement Accounts

If people around you say that it is too early (or sometimes late) for you to plan for retirement, then don’t believe them. With an investment of 20k, you may have the financial buffer you need to increase or max out your 401 k and even your individual retirement account.

Take note of these three strategies:

• Always remember that you put into an investment for each dollar and know that your employer at work will match a portion of that amount. While we all know that plan terms may differ. But a 50% to 100% match on your contributions as an employee (those which range from 3% to 6%) is something that isn’t rare.
  
  That’s why the tip is for you to be able to contribute an ample amount to earn that full match. You won’t need to worry because if you end up short on your utility bills or credit card bills, for instance, your $20 000 is there to cover for you. Just be sure to read their privacy policy as well.


• Another strategy is to open an account with the IRA and make sure to maximize that out. Choose between a Roth IRA to collect tax breaks in retirement should you opt to start financial withdrawals. You can also choose a traditional IRA (different from a Roth IRA) for tax deductions made upfront.


• Lastly, even if you think that it makes sense to raise your best personal 401 k contributions, know that you may also have other goals for investment. This year, to max out both your 401 k and your IRA or Roth IRA, you would need to use a benchmark of $25k if you are aged 50 or below. Also, take note that the annual contribution limit is $19.5k for 401 k and $6 000 k for your IRAs. This is one of the best credit deals ever.

3. Invest With a Broker

Now, if you are those types who wouldn’t patronize Robo advisors’ use because you would want the best credit or to invest on your own instead, that is also a fine choice.

Personal finance brokers, especially with a good investment portfolio, can help you do that–even with mutual funds or retirement funds—people before used to pay high fees to brokers who would trade on their behalf.

Thanks to algorithms, technology, and artificial intelligence, these are now becoming things of the past. All you have to do is to create a brokerage account.

Online brokers now exist, and they only cost a fraction credit of the cost of your regular, traditional brokers. They know credit cards best. They know insurance best. They handle your accounts best.

These online platforms, using a brokerage account, can help you get educated not only with the stock market, the stock exchange, and how its dynamics are but also on investments — namely– how to build your investment options and your other credit investment products.

They can also help plan you with the best online car insurance, emergency fund, life insurance, checking accounts, or even mutual funds.

Some online brokers offer stock trades for free, with additional educational resources that explain how investing works. Others may charge fees, but you get additional options, such as a real-time monitoring system on how the stock market performs.

4. Do a 401(k) Swap

You may already get this idea: if you are not jobless and have 20 000 dollars at hand, which you can use two invest, even for your retirement, it is also the best way to do a credit 401 k swap effectively.

You can easily invest 20k with this method. This is a good advantage to tax-loss harvesting and investing more in life insurance as you age.

Since this type of money comes from your payroll or your work bonus, you can increase your contribution amount, usually up to 75 percent of your paycheck, until you have contributed $20 000 using that money you have on hand — just so that you can replace the income that you have lost.

How Does This Work, Though?

For example, a way to invest here is to imagine that you are a person who makes $40 000 per annum and that you are currently contributing 5% into your 401 k (life insurance) right now.

This amount will be about $2 000 per year, assuming that no employer match is included. Given this context, let’s continue to think that you have come into $20 000 that you’d like to invest.

What’s going to happen is that you could keep that $ 20 000 in some high yield savings accounts and then increase your 401 k contribution, which will make you feel that you are not living off of any less. That’s one way to take advantage of a high yield savings account as well.

Now consider this: instead of paying a five percent contribution, raise them to 50%! After a year, you did not just invest 20 000 bucks, but you have just reduced your taxable income by 50%. From the government’s perspective, you just paid fewer taxes because you earned only half of what you received per annum.

5. Put the Money in a High Yielding Savings Account

In relation to point number 4 above, we would still recommend that you, as an investor, put off 50% of your money in a high yield savings account because going above it might not return greater investment returns.

However, if you are certain that you will need the money shortly, you should feel okay about going above fifty percent; but we advise you to think twice.

There are high-yielding savings accounts that will give you a 1 percent yield per annum (or sometimes higher). This is good for a savings account. But if you want a higher reward for your investment, one way to invest is to invest in stocks, although you will need to have a higher risk tolerance for this.

Another way to start investing is to do this with your money through the best Robo advisor in the utmost conservative way possible. For instance, if you save for a house, you choose to take your money out of your high-yield savings account and put it onto that best Robo advisor.

6. Try Out Peer-to-peer Lending

Peer lending is a method of loaning money to others who need it. It is a great way to invest. You can lend to someone who needs investors for their business idea, their student loans, for instance, or some would want to pay the debt on their credit cards or bank account. In other words, it just seems like you’re providing personal loans to other people. Some people would do this best online.

Now, the benefits you can get from peer lending is that your investments can give higher returns as compared to having to invest in stocks. When you invest your money here, however, the risks are so much higher.

Because according to experience, people would not usually pay back the personal loans on time, or in some cases, you might not make money because, as you start lending to them, they might not pay the personal loan back at all.

Before you engage in peer lending, be sure to heed to investment advice first (such as Robo advisors), and make sure that you have the personal capital to lend. Remember: based on data, the more risk you are taking, the more yields you receive.

Read more: Is It a Good Idea to Take Out a Loan to Invest?

7. Start Your Own Business – 100% Recommended!

Pre-discussion notes: The recommended percentage allocation of investing 20 000 bucks for this is 100%; however, take note that this involves a high level of risk.

Starting a business can be stressful sometimes, but always know that this is a very lucrative line of work and that most times, it is also very fun. All you have to do is to be certain about your plans and what you are doing.

Where does this start, you might ask? It starts with a solid and clear business plan. Without this, starting such a business might just put your investment goals and funds into waste, and might only live for a short term.

Sometimes, you can look for business partners or financial advisors to help you analyze the risk. Compared to other methods on how to invest, you will need to have personal capital and time, and a lot of energy to keep your best personal business going. Some businessmen would say that sometimes they would even work for more hours than a regular employee.

Just get started! The fund’s payoff can be great, and these investments may be good in part for the long term as long as there’s a money market for your products. If you are equipped with the right information and do things the right way, you could end up profiting from your products–with or without business partners on your side!

8. Pay for an Education

You might remember your parents telling you when you were younger that the only thing that other people can never take away from you is nothing but education. Well, a lot of people have testified to the validity of that quote, and the principles behind it stay true –even up to this day. If Robo advisors could talk, they might even suggest the same thing!

Even if you invest in stocks, you can lose all your money in the stock market. You can go bankrupt on your bank account. You could even stumble into debt on your credit cards or even on your checking accounts. But if you have a strong foundation in education, that foundation will never go away.

If you do not have a bachelor’s degree, be an investor in your education, and consider getting yourself through college. Access to this may be hard as you might fall into student loans. If you do already have a college degree, consider getting a higher form of education. For some schools, student loan services are usually available even for graduate degrees.

If you have the college fund to access higher education, consider this one of the best ways to invest in your future. Know that when you invest 20k into this, it might not cover all your fees, but this will surely be a good investment portfolio.

9. Be an Investor in Your Education Today!

Invest in an employer-sponsored retirement account. Once again, one great way to invest your 20 000 bucks is in your retirement account. You can get ample tax advantages when you invest 20k into accounts such as 401(k), the traditional IRA, or Roth IRA.

The first investment for many people is the 401(k) plan, co-sponsored by your employer. This can help you get started with your investments since the transactions are automatic.

One thing to consider about investing in 401(k) plans is the high management fees. With this, your investments might grow more slowly than the other types. This gets worse if the set of options you would otherwise choose and invest 20k on is not offered.

10. Invest in Real Estate Investment Trusts

REITs (also known as real estate investment trusts) serve as an alternative real estate directly when it comes to real estate investing. Some would offer the most attractive services, products, and other information regarding money market accounts and stock trading.

REITs have been very popular in forms of real estate investments since the 1960s. Think of REIT as somewhat to a huge lending club of real estate assets whose location is freely traded on the stock market.

Similar to real estate, REITs can invest in more options and locations. Also, as additional information, know that real estate is categorized into the following:

• Retail
• Residential
• Lodging and Resorts
• Specialty
• Industrial and Office
• Health Care; and lastly,
• Self Storage

To invest money in REITs can be done easily by any investor (and sometimes guided by best online financial advisors), regardless of their credit score, because of the availability of mutual funds and ETFs. If you are a beginner, you can think of getting index funds based on REIT as a start. You can also check out a crowdfunding website or sites online that offer such services–including ETFs.

Personal finance success stories in real estate prove that it is an excellent avenue for long-term stocks investment. Know that purchasing property accounts best more of a sizable monetary investment (sometimes higher than 20 000 bucks).

However, always remember that you can start investing in REIT, as this is a strategic alternative in owning real estate. This is because REITs provide good gains from expense ratio as you get passive income, a growing nest egg, and a diverse investment portfolio. Imagine how you will continue to earn from stocks or ETFs–even up to your retirement accounts!

Conclusion

Invest your $20k into good use by planting them into the right avenues. Some advisors are available best online, as compared to the traditional financial advisors. You can trust them to Robo advisors who know insurance best or credit cards best. They can handle your accounts best as well! Aside from these, they can educate you with stocks!

Aside from those, other ways to invest can be chosen as well. From education to stocks, to real estate, to ally invest, always remember that you will benefit in the long run as long as you invest your money carefully and properly.