10 Investment Ideas Other Than Stocks

A businessman thinking about investment ideas other than stocks

Once you have secured yourself through insurance and have put aside a substantial amount of savings, then it is high time to look for ways to grow your money.

Investment in stocks through mutual funds and government bonds is always a good idea. However, it is important that people diversify their funds and resources.

The stock market is a very promising source of fortune but the stock market is very volatile and it can be precarious. It would be nice to have a part of your money invested in other places. So after you have learned how to invest in stocks, you should learn other investment ideas that would make your hard-earned and carefully-saved money grow.

Below are a few options other than the stock market.

1. Rental Properties

Money required: As low as $500, $1,000, or $10,000

A lucrative alternative to the stock market is real estate investment. Compared to the stock market, real estate is less volatile. The prices of real estate in Singapore do not fluctuate that much. In fact, they keep on rising. Investors do not worry about investing long-term as short-term fluctuations are unlikely to happen. Hence, real estate is really a good investment to put your money in.

Investing in real estate is a very good source of passive income. Investors keep on earning returns from rent. Rent has never been this expensive. As a place to live or space to conduct business is a necessity, Singaporean residents and businesses will always continue to find a way to pay up the rent.

There are three various ways to invest in real estate.

The first one is buying the property directly. As real estate will unlikely depreciate but more likely to appreciate value, buying property now is very good alternative where returns are guaranteed.

The second way is through real estate limited partnership (RELP). RELP is composed of investors, usually up to 30 members, who pool their money together for the purpose of purchasing, leasing, and developing real estate. There is a general partner that assumes full responsibility and there are limited partners whose liability is only limited to the amount of money they contributed. This offers relatively high expected returns but with comparably high risks.

Lastly, real estate investment may be in the form of a real estate investment trust (REIT). You invest in real properties managed by your chosen REIT. REITs use investors’ money to purchase, manage, and operate properties. In a sense, investors become part owners of the properties bought, managed, and operated.

Such properties earn in the form of rental income. Part of that earning is paid in dividends to investors.

2. Farmland

Money required: $10,000

Farmland is probably the biggest opportunity you have probably never heard of. There is an increasing demand for high-quality food but the supply of lands continues to decrease due to development efforts brought by globalization. Hence, farmland is seen to become more essential over time.

Investments in smart agriculture technologies that boost crop produces are expected to generate profits. Investments in farmland have become more profitable than they have ever been before especially that the government of Singapore is taking a more active role in promoting agricultural technology (AgriTech) innovations.

In fact, AgriTech all over the world has skyrocketed by 49% in 2018. Such indicates a growing interest in farmland globally.

You may invest in farmland through AgriFood B2B eMarketplace.

3. Precious Metals

Precious metals like gold are distinguishable from other asset classes like the stock market, real estate, bond, and equities in terms of the economic forces that determine their prices. Gold is usually bought during the extreme financial crisis or at times when high inflation is expected because it acts as a diversifier that mitigates losses during market stress.

Investments in gold are highly encouraged because this precious metal is highly liquid yet very scarce. It may give you more competitive returns than what other financial assets can give you.

Investments in gold come in many forms. You may opt to buy physical gold (bars and coins). The more common way nowadays is through Internet Investment Gold (IIG) where investors get to buy physical golds online and get them stored in professional vaults.

You may choose to purchase gold-backed exchange-traded funds (ETFs). GLD is a gold ETF.

4. Cryptocurrency

Cryptocurrency is an internet-based medium of exchange that is distributed across a large number of computers. No central authority runs it. Its decentralized nature keeps cryptocurrency from government control and interference.

Cryptocurrencies are very portable, inflation resistant, transparent, and divisible yet many are still afraid to venture into them.

The most popular and most valuable blockchain-cryptocurrency is Bitcoin. However, there are many other alternate cryptocurrencies that offer various specifications that may be adequate to your liking or preference.

5. Business Ownership

Globalization has made businesses a good alternative to the stock market when it comes to investments. Invest in a promising business venture like a restaurant, technological school, by putting your money in either private equity or venture capital. However, to be able to do that, you have to be accredited investors.

6. Cash and Cash Equivalents

This alternative to stocks is an investment on a short-term basis. The maturity period is usually pegged at 90 days. 

It includes bank accounts and marketable securities and should be easily convertible to cash. Thus, equity and stocks are not considered cash and cash equivalents. 

In other words, cash and cash equivalents are the companies’ cash on hand. Those that can be invested as cash and cash equivalents include cash, foreign currency, and cash equivalent. 

This kind of purchase is a low-risk venture partly because there is little risk that its value will change, unlike stocks and equities. If you are interested in short-term ways to invest then this is worth considering.

7. Peer-to-peer Loans

Peer-to-peer loans or peer-to-peer lending is a new and straightforward market stocks alternative. It is straightforward because its meaning is already indicated in its name. Basically, you will lend money to your peers and charge them with interest rates as agreed upon.

Money required: $1,000

This alternative investment is one of the most viable investment options you have. It is comparable to lending a friend some cash with the expectation of getting paid the whole amount with interest rate. Peer-to-peer lending involves some P2P platforms like Prosper and Lending Club where all you have to do is to invest a particular amount, say $1,000.

All lending transactions can be facilitated through these platforms. Returns are more likely to transpire than losses because there will be more than one borrower of your investment. One defaulting borrower would not automatically put your investment to waste because only a portion of your money was borrowed.

Remember, however, that this investment option is a high-risk, high-return way to invest. Make sure that you do not rely on this solely for your retirement money.

But when you have some extra cash, then peer lending is an opportunity to diversify your investments. Sign up for peer lending in a trusted online platform and be critical on who you lend your money to. You will surely earn from the interest rates when you manage your investment well.

8. Collectibles – Alternatives to Penny Stocks

Investing in collectibles is a long term investment because a lot of items increase in value through time. Antique artworks, furniture, and jewelry tend to shoot up in value through time. 

Its value also increases if it has a significance in history and culture. This way of investment is very interesting especially if you have a knack for certain hobbies. 

For example, a lot of sports enthusiasts are also into sports card collection. They take the time and effort to acquire certain cards that are rare and limited. 

For collectors and hobbyists, it is satisfying to acquire coveted items. Secondary to this is the potential of turning these collectibles into cash. 

The rookie sports card of LeBron James, for example, fetched a staggering $1.8 million. If you are into this hobby, keep your collection in mint conditions because you would never know the potential value of that investment in the market in the near future.

9. Fine Wine & Fine Art

Similar to the collectibles, fine wine and fine art are also long-term investments. As you might already know, these two items earn more value the older they get. What is good about fine art, say a painting, is that you may buy it from a random artist at a small price, like $200. And then a decade later, that random artist grew world-famous. 

Suddenly, your $200 investment started to gain thousands of dollars in value in just a decade. This kind of scenario is highly possible when it comes to a fine art. 

So next time you feel guilty for buying that piece of painting for your small art collection in your living room or for buying that bottle of wine you know you won’t open anytime soon, consider the boundless possibilities that can grow out of that purchase.

10. Angel Investing

If you have family or friends who are starting entrepreneurs or have a great start-up idea, be an angel and give them a head start by becoming an angel investor. By becoming one, you are taking ownership of equity to their start-up. You can either provide a one-time investment to help the start-ups hit the ground running or you can also inject funds a couple of times as the young company takes on the most difficult part of starting a business–the initial stages. 

Angel investing, however, is a risky business. Make sure that you are investing the amount of money that you can afford to lose. Since you are investing in start-ups, then the idea is not something tried and tested. 

However, angel investing also requires thorough scrutiny of promising business plans. If you are to be proven correct in your appraisal and the start-up became big, then you will reap the reward of being a believer.

Closing

You yourself can also be an investment. It is always a good idea to learn new skills. You may enroll in several short courses and acquire certain certifications that would make you eligible to take side-hustles. 

Invest in acquiring marketable skills that can give you a chance to be an entrepreneur yourself. Aside from this, you may also start working with a life coach or a financial coach that would dedicate time to looking through your personal growth. 

Lastly, take a more aggressive approach to learn how to invest. Move over googling “how to invest stocks.” Make your research more systematic and scientific by taking investment courses or talking to registered investment consultants.

Top 10 Ways To Earn A 10% Rate Of Return On Investment

how to make 10 percent interest monthly

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.

The 10 Best Vanguard Funds for 2020

best vanguard funds to buy now

For people looking to diversify their assets, investing in Vanguard Funds is a good option. The Vanguard Group, an American registered investment advisor, has provided mutual funds and index funds to millions of investors in the past. It is known to promote low-cost, beginner-friendly investment for individuals with little to no knowledge about the trade.

If you wish to know more about earning additional income through investing in bonds and index funds, this article is right for you. We will help you identify the best Vanguard Funds buy and hold this year. Also, we clarify how each type of index fund.


What Are Vanguard Funds?

Vanguard funds are a type of index funds managed passively through a so-called index-sampling strategy where it tracks a benchmark index. This index is a list of companies grouped based on specific categories like geography (domestic, regional, international) or size (small-cap, mid-cap, large-cap). Vanguard earns money by charging expense ratios which is a fee paid by clients in exchange for the company’s job of managing the index funds for them.

Many investors choose vanguard because they are known to offer one of the lowest expense ratios in the market today. Also, even with a little money you have, you can create an investment. Businessmen like Warren Buffett, who is the CEO of Berkshire Hathaway as well as dozens of other companies, advocates the use of Vanguard funds because it brings investment to the masses. Investment advisors like this company make it easier for lay citizens to dabble in the world of investment.


How Do Vanguard Funds Work?

Vanguard is the world’s largest issuer of mutual funds and is the second-largest issuer of exchange-traded funds (ETFs). Investors who buy from Vanguard are not charged with fees or commissions. Instead, they have to pay for the so-called expense ratios. The expense ratios for mutual funds and ETFs are calculated by computing the operating costs of the fund and divide them by the assets under management (AUM).

For many investors, Vanguard’s low expense ratio is the reason why the company is the best investment advisor there is. To give you an idea, the company’s expense ratios for its mutual funds are around 80% less than what other companies offer. For those who wish to keep their investments for the long term, they could save thousands of dollars in a 5-year or 10-year average.

Aside from saving fees, the ETF and mutual funds sold by Vanguard are often cited as profitable. Anecdotes from individuals who have invested through Vanguard swear by the efficiency and effectiveness of Vanguard as an advisor. People looking to diversify their savings or retirement funds choose to invest in this company.


Top 10 Best Vanguard Funds for 2020

When is the perfect time to save? The answer to this question is always now. Admittedly, there is so much to unravel and understand when it comes to investing. Terms like stocks, mutual funds, government bonds, and many others are a challenge for individuals who do not have prior experience in investing.

Lack of knowledge on stocks, ETFs, and mutual funds should not deter you from starting to build your investment portfolio. In fact, financial advisors recommend individuals to start investing in small-cap to mid-cap funds this year. Do not be content with paying off debts on your credit cards or buying real estate properties. Vanguard funds below are a good starting point in starting your investment journey.

To use Vanguard funds is to choose one or two of the many index funds they offer. As an investor, you can choose which fund you think will give you the biggest return in the long term. In spite of this, it is important to remember that choosing one specific type of ETF is like betting on a particular industry or stock market niche. Hence, it is important to choose an ETF that you think will have a good performance in the long term.


1. Vanguard Dividend Growth Investor (VDIGX)

  • Type: Dividend growth
  • Market value: $40.8 billion
  • Dividend yield: 1.7%
  • Expense ratio: 0.22%

Investors earn some income by being exposed to dividend-focused companies from various industries based in the United States. The fund tracks the performance of high-quality companies that are known to have the ability to grow their dividends in a certain period of time. The risk of VDIGX is that it is fully exposed and dependent on the domestic stock market. A downfall in the domestic stock market could mean a loss to the investors of this fund.

Investment advisors often claim that investing in the Vanguard dividend growth fund is the best choice one can make this year. It is the best actively managed dividend growth funds in the market today. It is more stable than other funds in this list, which means less risk to you as an investor. The minimum investment for this fund is $3,000.


2. Vanguard Dividend Appreciation ETF (VIG)

  • Type: Dividend growth
  • Market value: $51.1 billion
  • Dividend yield: 1.7%
  • Expense ratio: 0.06%

This fund tracks the performance of the NASDAQ US Dividend Achievers Select Index, which is previously known as the Dividend Achievers Select Index. Somehow, it is similar to the approach of VDIGX. The only difference is that this ETF mainly relies on the rules-based system. Human managers play a very little role when it comes to managing it. Choosing between VIDGX and VIG is a matter of choosing between human controllers and a rules-based control system.


3. Vanguard Short-Term Investment-Grade Investor (VFSTX)

  • Type: Short-term bond
  • Market value: $61.5 billion
  • SEC yield: 2.2%
  • Expense ratio: 0 .20%

While the first two funds have more risk, more reward approach, this index fund is particularly notorious for having less risk and less reward. It is a short-term fund that invests in high- to medium-quality, investment-grade bonds with short-term maturities. It invests primarily in corporate bonds, U.S. government bonds, and pooled consumer loans.

This investment is for individuals who have short-term savings goals and who are willing to see only a minimal price movement. The minimum investment for this fund is $3,000. Meanwhile, the fund advisor is Vanguard Fixed Income Group.


4. Vanguard Limited-Term Tax-Exempt Investor (VMLTX)

  • Type: Limited-term municipal bond
  • Market value: $29.5 billion
  • SEC yield: 1.3%
  • Expense ratio: 0 .17%

This one is considered as a low-cost municipal bond fund that wishes to have an income exemption from federal taxes. It has an index of more than 6,000 municipal bonds. Investors of this fund face minimal risk, especially that municipal bonds are less likely to default than corporate bonds. Oftentimes, it is chosen by groups and individuals who belong to higher tax brackets.

The minimum investment for this fund is $3,000. Also, the fund advisor is Vanguard Fixed Income Group. If you wish to save on the expense ratio, you can choose Admiral Shares (VMLUX) instead.


5. Vanguard Health Care Investor (VGHCX)

  • Type: Health sector
  • Market value: $47.5 billion
  • Dividend yield: 1.1%
  • Expense ratio: 0 .34%

This is an actively managed fund that has been in existence for more than two decades now. It is a low-cost index fund that tracks the performance of domestic and international companies belonging to the healthcare industry, which includes medical research facilities, medical supply companies, and pharmaceutical firms. One advantage of this fund is that it has geographical diversity as it invests in companies based in various parts of the globe.

Meanwhile, one downside of this investment is that investing here means investing solely in the health care sector. A good way to balance this out is to invest in other sectors. This fund is best for those who have a diversified portfolio with a long-term horizon. It remains one of the best actively managed funds offered by Vanguard. By the way, the minimum investment here is $3,000.


6. Vanguard Wellington Investor (VWELX)

  • Type: Balanced
  • Market value: $110.7 billion
  • SEC yield: 2.3%
  • Expense ratio: 0 .25%

This one is considered the oldest mutual fund offered by Vanguard. It is an investment to both stocks and bonds in various economic actors. It is particularly known for having a broad diversification and a well-balanced asset class. It has a medium risk and medium reward scheme.

Take note that you can only buy this fund directly from Vanguard. The minimum investment fees or amount here is $3,000. Also, for this mutual fund, Wellington Management Company LLP will serve as your fund advisor.


7. Vanguard Total Stock Market Admiral (VTSAX)

  • Type: Large blend
  • Market value: $874.5 billion
  • Dividend yield: 1.7%
  • Expense ratio: 0 .04%

It is considered the biggest index fund offered by Vanguard. Hence, for some, it is the best vanguard you can buy any day. This fund exposes investors to the entire United States equity market, which includes small-cap, mid-cap, and large-cap stock funds. It is mainly for investors looking for a low-cost investment who are willing to bet on the U.S. stocks market.

This is popular because it is low cost, has a broad diversification, and can be efficient when it comes to tax. It has a relatively high risk and high reward capacity. Also, it has a very low expense ratio. Note that you have the option to buy this as an ETF.


8. Vanguard International Growth (VWIGX)

  • Type: Foreign
  • Market value: $38.8 billion
  • Dividend yield: 1.2%
  • Expense ratio: 0 .45%

While VTSAX focuses on the domestic market, this International Growth Fund focuses on non-American companies with high growth potential. Investors are apprehensive to invest in this fund because it is less stable than the domestic fund. On the other hand, it is a good choice for those wanting to be less dependent on the U.S. economy.

This is an aggressive type of investment. But don’t worry because the 10-year average of the fund has been nothing but positive. This is mainly because of the fact that companies overseas have been growing in the past decade. Its 10-year average return is at 10.38% while its 5-year average is at 16.25%.


9. Vanguard S&P Small-Cap 600 ETF (VIOO)

  • Type: Small-cap stock index
  • Market value: $1.1 billion
  • Dividend yield: 1.4%
  • Expense ratio: 0 .15%

This ETF tracks the performance of stocks belonging in the S P Small-Cap 600 index, which is a list of 600 small companies based in the United States. Notably, the share value of this fund fluctuates abruptly compared to bond funds. Investing here is best for those who have long-term goals and are willing to face high risk and high reward.

It is an aggressive type of investment. People investing here are often individuals who believe in the capability of the US stock market index fund. Investment advisors suggest that investors should purchase this ETF because it will continue to continue growing in the long term. To give you an idea, the top 3 of its largest holdings as of October 2020 are NeoGenomics Inc., Kinsale Capital Group Inc., and Stamps.com Inc.


10. Primecap Odyssey Stock (POSKX)

  • Type: Large blend
  • Market value: $10.8 billion
  • Dividend yield: 1.0%
  • An expense ratio of 0. 66%

For those looking for a Primecap product from Vanguard, POSKX is a good chance for new investors to get one. This fund is managed by various fund managers. Most of the stocks of this fund are invested in the technology and health care industries. Hence, investing in this fund is risky, but on many occasions, the gains are big too.

Investing in this is not as affordable as investing in other actively managed funds of Vanguard. Despite this, some advisors claim that the 10-year average return of this fund is expected to be high.


Bottom Line

Vanguard index funds have been offering affordable and reliable options of investment for the general American population in the past decades. People who wish to diversify their investment portfolio choose to get one or more of the ETFs offered by the company.

It is noteworthy too that aside from investors belonging to a high tax bracket, there are also vanguard index funds sold made for just looking for minimum investment options or those who have bit built an investment portfolio.

Also, take note that the 10 index funds discussed above are only the top best choices of index fund investment in 2020. Needless to say, Vanguard has a long list of other products with the potential to become a high growth index fund.

It includes Vanguard 500 Index Fund Admiral Shares (VFIAX), Vanguard Total International Stock Index Fund Investor Shares (VGTSX), Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX), and Vanguard Total Stock Market Index Fund Investor Shares (VTSMX). These Vanguard index funds can also be a good investment in the next months or years to come.

Understandably, the topic of investing is difficult to understand. If you wish to learn more about Vanguard index funds, the fees associated with it, and the expense ratio tied to these funds, browse more of our articles on Investoralist.

Admittedly, one article will not provide you with all the information you need to fully understand the concepts of investing. Our website is dedicated to helping you not only on the topic of investment but also on other financial topics of retirement funds, mutual funds, real estate, credit cards, credit score, target retirement funds, and many more.

10 Best Ways How to Invest $20,000 Wisely

how to invest 20000 dollar

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.


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.

Fidelity Go Review: Best for Low-cost Choice for Investors

Fidelity Go Review

Robo-advisors are the future of tech-led investment ventures, and the Robo-advisor Fidelity Go has become enormously popular among many US investors from all walks of life. Truthfully, Fidelity’s popularity began with its affordable, virtually zero-commission mutual funds and high-return indexes.

Today, its user-friendly investment platform has become widely popular. Many of them swear by its simplicity and accessibility, thanks to its low to zero minimum balance requirement.

If you’re looking for excellent Robo-advisors, then Fidelity Go might be your best bet. Read more about everything it can offer you in this in-depth Fidelity Go review.


For Clarity: What Type of Account is Fidelity Go?

Fidelity Go is an investment platform/Robo-advisor that acts as your investment manager, strategist, and financial planner. This financial technology will ask you about your investment preferences and then present a great number of investment strategies. It will recommend the best strategy for you using your answers to its questions.

Once you’ve decided, it makes all the effort to buy, sell, and manage your portfolio. You can view its overall investment progress through Fidelity’s dedicated website and application.

Most Robo-advisors use algorithms and complex machine-learning to adapt to certain situations. However, Fidelity has a human team of financial specialists who perform all adjustments and rebalancing fees accordingly. You can be sure it’s not a machine making big decisions for your money.


Why You Should Consider Using Fidelity Go

Any Fidelity investor of mutual funds should have a Fidelity Go account. Truthfully, anyone with an existing Fidelity account will find Fidelity Go an excellent companion investment to improve their existing portfolio regardless of the portfolio.

Fidelity Go is advisable for passive people who trust specialists but love the convenience of using Robo-advisors. Plus, it’s quickly accessible for anyone because of its $0 starting account management fee. As long as your account isn’t earning anything beyond $10,000, you don’t have to pay anything yet.


Shortcomings That Can Put Off Some Investor

Unfortunately, if you are an investor with a high-risk appetite, you’re better off investing and managing your index and stock-based portfolio on your own. Fidelity Go prioritizes Fidelity’s Flex mutual funds in its entire portfolio. While it’s a well-diversified portfolio (as you’ll see in your investment charts), it will comprise Flex mutual fund, decreasing the portfolio’s full earning potential.


Our Advice: Fidelity Go is Excellent for Low-Cost Investment

It takes $0 to start a Fidelity Go account, but you’ll need to pay $10 to start your investment portfolio. Additionally, if you’re new to investing and growing your money, you can entrust its growth to an excellent Robo-advisor. This platform helps you identify your risk appetite and investment behavior, and the adjustment and rebalancing human oversight team take note of your preferences. Lastly, you only start paying fees after your account has earned beyond $10,000 starting from scratch.


Editor’s Rating: 4/5

Fidelity Go isn’t exactly perfect. However, its shortcomings are offset by its user-friendly platform, human-based adjustments and rebalancing, zero starting fee, and a low-risk investment portfolio. It can and will work for most investors who want to see financial growth with adequate guarantees and financial safeguards that their investment is in good hands.


‘Too Long, Didn’t Read’ Summary

Fidelity’s Robo-advisor Fidelity Go takes accessibility and hybrid fund management to the next level. It’s perfect for a first-time investor who has $0 to start an account and $10 to begin investing. Your annual fees only start once the account starts earning beyond $10,000. Plus, you won’t need to worry about complete machine management because a human team works behind the scenes in adjusting and rebalancing your fund to your preferences.


Fidelity Go: A Helpful Snapshot of Everything in Store

Here’s an overview of everything valuable and crucial you should know about Fidelity Go.

Account Minimum $0 to open. $10 upon investing
Account Management Fee No Advisory Fee: Below $10,000 account balance

$3 Monthly Fee: $10,000 – $49,999 account balance

0.35% Commission Fee: S$50,000 and above account balance

Investment Expense Ratios Included in management fee
Account Fees for Annual Transfer, Closing, and Others None
Portfolio Mix Fidelity Flex Mutual Funds

Well-diversified

Lack of international bonds and non-market correlation assets (REITS, commodities, etc.)

Supported Accounts Individual and joint retirement accounts

IRA (Roth, Traditional, Rollover. US Only)

Tax Strategy No tax-loss harvesting available. Uses municipal bonds in tax-brokerage accounts.
Rebalancing Strategy Free. Human oversight monitors and adjusts rebalancing strategies accordingly not automatically
Options for Human Advisors None. Fidelity has an alternative Personalized Planning and Advise platform
Cash Management Account Option Fidelity has a separate cash management account, which they can integrate with Fidelity Go.
Customer Support 24/7. Monday to Friday live chat starting from 8AM-6PM EST


Things We Like About Fidelity Go

1. Competitive Fees

You can see everything about the account and its interface for just zero. You won’t even need to synchronize any account or register your credit card yet. However, once you agree to start your recommended strategy, you’ll need to pay $10, which isn’t a significant amount. Plus, you’ll only pay your $3 annual fees once your account starts reaching $10,000. The 0.35% account management fee only starts when your Fidelity account starts earning beyond $50,000.

2. Quick Start

We’ve mentioned it in the early sections of this review: Fidelity Go is the most feature and user-friendly platform we’ve ever seen. You won’t need to pay anything to start an account. To begin, you’ll need to fill up their quick signup form; then, you’re registered. Once they’ve identified the best investment strategy for you after you answer their interview questions, you can synchronize your deposit account to pay the initial $10. It’s that fast and easy.

3. No Minimum Deposits

Fidelity Go does not require you to make a deposit, which is especially helpful for those who want to look around first. You’ll only pay a single deposit of $10 to jump-start the Robo-advisor’s highly recommended strategy. Without huge minimum deposits, you can explore its investment options without fear of losing anything. Additionally, Fidelity Go starts charging fees only when it makes you profit $10,000 and beyond.

4. Synchronizes With Any of Your Existing Accounts

The investment platform can communicate and interface with virtually any US bank account. Therefore, if you intend to deposit pre-emptively when changing investment strategies or addressing recommended readjustment balances, you can quickly do so. Fidelity Go allows you to make deposits on its online platform and app too.

5. Significantly Low Annual Fees

If your portfolio is earning less than $10,000, Fidelity Go won’t charge you anything. Instead, it will keep executing its investment strategies (with humans making manual adjustment balances behind-the-scenes) and then charge you a small $3 annually once it goes beyond $10,000. Even if you reach the $50,000 threshold, the 0.35% management fees are tolerable considering the high profit you can receive.

6. Fee Transparency

Any time you are confused about your Fidelity charges and fees, their customer service department is fully transparent regarding its calculations. While it might take them some time to produce your information, Fidelity Go’s representatives can give you a clear statement that leaves you with a full understanding of your fee calculations, which is critical for budgeting and investing.

Generally speaking, Fidelity has an excellent customer service department to address all your needs.


Is Fidelity Go a Good Investment?

Fidelity Go is a great investment of your time and money. With $0 to sign up for an account and a small $10 fee to start your investment strategy, you won’t have anything to lose that Fidelity Go and Fidelity Investments did not produce through their account. You can open an account without hassles, and Fidelity offers the best investment possibilities with full integrity and transparency.


Can Beginners Quickly Use Fidelity Go?

Yes, anyone can use Fidelity Go, especially if they’re already familiar with the beginner-friendly Fidelity Investments. Success with Fidelity Go is enormous, especially for an investor who has a low-risk tolerance. Fidelity Go’s mutual funds-oriented financial planning strategies makes it an excellent choice if you need a safe haven to offset your other index and stock-oriented investments.


Areas For Minor Improvements

1. Lack of Tax-Loss Harvesting

All US investment portfolios will earn capital gains tax (CGT) depending on your time horizon. Short-term investment incomes incur up to 37% CGT. On the other hand, long-term investments, which Fidelity Go hugely encourages, have lower CGT at 20%.

Tax-loss harvesting is a fund manager’s automatic rebalancing method, enabling them to sell certain stocks and assets at a loss to cover CGTs. Fidelity Go does not have this automatic rebalancing, which means investors still need to calculate and deduct CGTs to learn their total net profit. With tax-loss harvesting, investors can save time and have clarity about their net profits.

2. Poor Integration with Fidelity Spire

Fidelity Spire can synchronize your bank accounts, just like Fidelity Go. However, you cannot integrate Fidelity Go with Fidelity Spire.

About Fidelity Spire: This app is Fidelity’s young professional-oriented financial planning application, allowing them to monitor their spending activities. Furthermore, it allows them access to limited investment vehicles and uses the same Robo-advisor algorithm as Fidelity Go. It’s free for anyone to use, and its interface is user-friendly and intuitive.

3. Focused Only On No-Commission Mutual Funds

Fidelity became widely famous because of its zero-commission Fidelity Flex funds, which attracted significant investors’ waves to use their services. However, mutual funds are a mixed bag that prioritizes risk-offsetting. Doing so limits all possible higher-stakes investments you can find in an exclusive index fund or ETF-oriented fund. However, anybody looking for stability will find it by investing in Fidelity Go.

Alternatively, the company offers an excellent index fund and high-risk appetite products, allowing you to use Fidelity Go as an excellent offset.

4. Limited Account Variety

Fidelity Go’s ultimate goal is to have you start making investments. To attract passive investors and present viable long-term investment strategies, it’s a cost-effective and low-risk proposition. However, it’s a “one-trick pony” because it’s the only purpose and objective Fidelity Go has.

We look forward to seeing some account variations, but we believe Fidelity has other high-risk tolerance products.


How Much Does Fidelity Go Cost?

Here’s Fidelity Go against other products with the same features, benefits, and service.

Fidelity Go Betterment Marcus
Account Minimum $0 to Open. $10 For Investing $0 for Betterment Digital, S$100,000 $0 to Open
Fees 0.35% 0.25% n/a
Account Fees for Transfer Etc. None None n/a


Where Fidelity Go Truly Shines: Low-Cost Investment Management

Virtually every highly-interested investor is in a position of need with minimal cash available for investment. With zero account minimum to start using its services and just $10 to begin your investment journey, this investment platform is the most accessible for young professionals. Additionally, beginning investors and passive investors looking for safe havens that can offset their aggressive portfolios can use this to their advantage too.

Additionally, partnering low-cost investment management with low-risk mutual fund-oriented portfolios is a good thing for the wider beginner investment population. The passive investment style requiring no manual asset allocation will suit most traders who aren’t keen on paying attention to tickers and graphs for hours after work.


Is Fidelity Go Perfect For You?

No investment platform is perfect, and Fidelity Go has many personalities compatible with the majority of beginning investors. Additionally, if you’re someone looking for an investment with nearly-guaranteed investment outcomes in the next few decades, Fidelity Go is certainly your best bet. Truthfully, low-cost investment partnered with low-risk portfolios sound better than an insurance policy offering the same portfolio but with strict claim conditions.


Fidelity Go: Not Perfect But Effective and Affordable

Fidelity’s mutual funds-oriented Go platform isn’t perfect. It has a single goal: to get beginner investors and provide them with virtually-guaranteed results. Furthermore, it’s passive, but a human team of financial advisors is at the helm of all of its financial planning. It’s an excellent and effective product for investors with a low-risk appetite and has ample amounts to invest.

To find more review content about the best financial technologies, products, and services, Investoralist has a dedicated review section for all your needs. Our blog can give you ideas on your first investment journey too!

The World’s Top 10 Investment Banks 2020

top 10 investments banks

If you think of banks, you tend to think of financial institutions where you get to store your money which you eventually withdraw at a given time. But, there is another type of bank that not only stores your money but also grows it. These are the so-called investment banks.

Compared to commercial banks, investment banks could provide small and growing businesses as well as individuals with high net worth to invest and help raise money to a company while also taking a stake in the company. Though complex, dealing with investment banks can be financially rewarding.

To know more about investment banking, read about the top 10 investment banks in the world. We chose them based on various criteria, including revenue number, global reach, employee headcount, income, etc. Note that not all investment banks are made equal. If you wish to deal with one in the future, you should research more on which of these institutions fit your profile as an investor.

Goldman Sachs Investment Bank

  1. Best All in All: Goldman Sachs

One of the Top 10 is Goldman Sachs which is an investment bank based in New York City. It is an American international company that also offers financial services to its clients. Aside from investment management, Goldman Sachs offers services in asset management, securities, securities underwriting, and prime brokerage.

With about 150 years of experience as a financial institution, Goldman Sachs is one if not the largest investment bank in the world. In 2019, the company earned a revenue of US$36.546 billion while its total assets were recorded at US$992 billion. In terms of awards, Goldman Sachs was ranked by Fortune as the 62nd largest US corporation with total revenue.

JP Morgan Chase Investment Bank

  1. Best from a Big Institution: JP Morgan Chase

JP Morgan Chase is an American investment bank based in New York. It is considered a global leader in the investment banking industry as it has one of the largest client bases in the entire world. Today, the company has around 200,000 clients ranging from governments, corporations, educational institutions, banks, and individual investors. They have a global reach expanding to around 100 countries.

In 2019, the company reached a revenue of around US$115.6 billion. Meanwhile, they had a net income of around US$36.43 billion. With around 200 years of history, JP Morgan has received awards from groups advocating for women, people with disability, veterans, and many more. Without a doubt, the company is one of the largest investment banks in the world.

Barclays Investment Bank

  1. Best in Europe: Barclays

Barclays is a British multinational investment bank with more than 325 years of history in banking. It operates in more than 40 countries and has around 80,000 employees tasked to provide service to the clients. While Barclays does not have a global reach as wide as the first two investment banks, it is considered as the best in Europe. Its headquarter is in London, England.

In 2019, the company had a revenue of around US$28 billion. Because of its excellent service in its electronic trading platform, the company won the Electronic Platform of the Year award from the GlobalCapilta Americas Derivatives Awards 2019. Today, the company continues to grow its reach not only in Europe but also in Northern America and Asia.

Bank of America Investment

  1. Best for Innovation: Bank of America Corporation

The Bank of America Corporation is best known for bringing innovation to the field of investment banking. It is an American multinational investment bank based in North Carolina but has central hubs and offices in New York City, London, Hongkong, Dallas, and Toronto. This bank has brought innovation by merging and partnering with other top financial institutions, including Countrywide Financial and Merrill Lynch, to name a few.

The company earned revenue in 2019 amounting to US$91.24 billion. The company was awarded as Top Global Bank on Fortune’s “Change the World” list in 2020. Its quality service in other parts of the globe has also received recognitions. In particular, it was awarded by Euromoney the Best Transaction Services Bank in Latin and North America this year.

Morgan Stanley Investment

  1. Best for Markets: Morgan Stanley

Also included in the top 10 of the global investment bank is Morgan Stanley. It is known for its effective and successful contribution to the growth and development of the capital markets as well as its effective and efficient wealth management. It is an American multinational investment bank that also offers financial services. Its headquarter is located in Manhattan, New York City. Currently, Morgan Stanley is found in more than 42 countries in the globe employing more than 600,000 individuals from various nationalities. It offers services, including investment management to different types of clientele, including governments, business institutions, and individuals.

Morgan Stanley gained revenue of US$41.4 billion for 2019. In the same year, it was awarded the title of World’s best bank for markets by Euromoney. According to the award-giving body, Morgan Stanley has shown resilience in spite of problems in the market. It was able to provide growth in the investment of its clients or customers.

Deutsche Bank Investment

  1. Best for the Asia Pacific: Deutsche Bank

Another prime investment bank is Deutsche Bank which is a German multinational investment bank based in Frankfurt, Germany. It has offices found all over the globe including in Europe, the Americas, and in Asia. In 2019, Deutsche Bank has earned US$26.3 billion. Its great work in the Asian market has won the company Top 1 in Best Investment Bank for Financial in the Asia Pacific from the business intelligence firm Coalition.

With around 150 years of history, Deutsche Bank has proven its strength in traditional fields of investment banking including financing, advisory services, fixed income, and currencies. Aside from doing well in Asia, Deutsche Bank is one of the top 4 investment banks in Europe. This indicates its capability to satisfy its clients from all parts of the world.

Citi Group Banking

  1. Best for Inclusive Investment Banking: Citigroup

Probably known for being the largest credit card issuer in the world, Citigroup is also one of the most reliable financial institutions in the field of investment banking. It is an American multinational investment bank based in New York City. In 2019, it had revenue of US$73.29 billion with as many as 204,000 employees as of June 2020. It provides strategic and financing products and advisory services to corporations, governments, and private businesses to more the 160 countries.

Citigroup is best known for being a haven for customers from all walks of life. It is friendly to even to young, women, racial minorities, and many more. It has been recognized as one of the Most Community-Minded Companies in America since 2012. With such an accomplishment, no wonder new clients continue to choose this company for their investment banking needs.

Credit Suisse Banking

  1. Best for Modern Investment Banking: Credit Suisse

Credit Suisse is a global investment bank founded and based in Switzerland. It is particularly popular for its strict bank-client confidentiality and banking secrecy. For clients who do value their privacy, choosing Credit Suisse is the best choice. It has proven excellent services in wealth management and capital markets especially in South East Asian countries as proven by the recent accolades it has received.

The company earned US$24.63 in 2019. Meanwhile, in 2020, Credit Suisse received the award of being the Investment Bank of the Year from The Banker besting all investment banks in the world in 19 different product areas. The Banker said that the decision was because “Credit Suisse ticks all the boxes of what a modern investment bank should be focused on.” This investment bank was able to make sustainable banking for its clients.

UBS Group AG Investment Bank

  1. Best for Secured Investment banking: UBS Group AG

Like most Swiss global investment banking companies, UBS Group AG puts secrecy and confidentiality its priority. It had a revenue of US$30.21 billion. The company is best known to provide access to capital markets for corporate and institutional clients. Aside from providing investment banking and investment management services, it also provides global wealth management.

HSBC Holdings plc Banking

  1. Best for Sustainable Finance: HSBC Holdings plc

HSBC Holdings plc is a British multinational company offering services on investment banking, wealth management, and many more. It is considered as the 6th largest bank in the world as of 2020. In 2020, it had a revenue of US$56.1 billion. Also in the same year, this investment banking company was awarded by the Euromoney Awards for Excellence for sustainable finance as well as the Banker Investment Banking Awards with Investment Bank of the Year for Sustainability.

Closing

It is true that looking for a trusted investment banking company can be daunting and exhausting. We have to make sure that we choose the best investment bank that provides services deserving of our hard-earned money.

To begin your search, you can start with these top ten investment banking corporations. They have provided outstanding services to thousands of customers in the past decades.

Be sure to research more about deciding which of these investment banking companies is right for you. Note that customers have different demands. Make sure that your bank of choice can accommodate your needs and wants.

Stock Market for Kids: Simple Financial Lessons for Your Children

kid drawing stock market graph

As early as possible, you can teach kids about the stock market. However, we won’t advise using technical terms you’ll find in online blogs and news websites. Plus, children understand concepts better through play than a lecture. This post will talk to you in-depth about explaining stock markets for kids, we’ll give you some ideas for enriching activities that drive home each point completely.

You own a stock, you own a small share of a company. Getting into a bond binds you into financing a company for a fixed period. All of these are securities that hold great value for investors. Explaining these to kids with terms and objects they’re familiar with makes it easier to understand the stock market.

By going through everything here, you’ll have no problems getting your kids to understand everything about Singapore’s stock market.


The Stock Market: It’s a Marketplace That Sells Different Things

Take your children to the local marketplace. Introduce them to a few shopkeepers, and allow them to explain their daily activities (they’ll likely love doing it for kids). Introduce the idea that a marketplace sells many different things and that a stock market is just the same.

A refresher for adults: A stock market works the same way as traditional goods markets. Legal tender, such as the Singaporean dollar, can purchase goods from both goods and stock markets.

•Buy and Sell Stuff, With a Few Risks

It’s correct for your children to think that both goods and stock markets have the same buying and selling concept. However, it’s critical to tell them that goods markets have fixed, regulated prices. Differentiate the stock market by explaining the products have no fixed values. Instead, they’re allowed to change their prices on a daily and hourly basis.

Explain that children can get more or less chocolate on a daily, hourly, and monthly basis when they buy chocolates from this particular market instead of the goods market

A refresher for adults: The retail goods market has fixed and government-regulated prices because they are necessities. The stock market allows regulated price value changes to accommodate the real-time changes in supply and demand.

•Activity-Based Example

Demonstrate the difference between goods markets and stock markets. Have you or another child play a shopkeeper and another a buyer. Allow them to buy one chocolate from the shopkeeper.

Next, demonstrate the stock market’s dynamic prices. Pose as the shopkeeper, and allow your kids to buy chocolates from you at one dollar during a fixed period. Then, tell your kids to buy from you again after one minute, then increase or decrease the chocolate price.


Stock: Chocolate With Dynamic Values

Tell your children that stocks are similar to retail market chocolates but can change their prices or chocolate content at regular periods. You can use the analogy that retail market chocolate is plain chocolate. Alternatively, stock market chocolate can grow bigger or smaller at any time.

•Saving and Investing

Your children are likely fascinated by the idea of self-growing chocolate. Entertain their astonishment by telling them the self-growing chocolate does not need water or nourishment. Instead, they just need to understand the public’s perception of the chocolate they’re holding.

Explain that if more people buy the same chocolate bar, everyone’s chocolate will increase in size and shape simultaneously. However, if the chocolate runs out, the content or prices will become unstable and inconsistent. While everyone eats theirs, Saving chocolates increases its content or price too — and your kids can sell them when everyone’s chocolate runs out.

However, everyone will become sad if chocolate does run out, even if it is beneficial to your kids to increase when they save it. Therefore, highlight to children that they can give their chocolate bars to chocolate makers to grow more bars, illustrating the concept of investment.

A refresher for adults: Saving stocks retains its immediate value. As the stock’s supply decreases and demand increases, they gain value too. Alternatively, if the stock is in short supply, it’s a one-time, big-profit product for sellers, which they can’t repeat again. Stabilizing prices involve the equilibrium of buying and selling a particular stock.

•Activity-Based Example

Take two jars. Write the benefits of both savings and investment jars in one sentence.
Savings: Chocolate you can eat at any time
Investment: Chocolate that your kids can give to chocolate makers to make more chocolate.


The Stock Exchange: A Regulated Chocolate Marketplace

Explain to your children that the government regulates both retail goods and stock market prices. However, this particular chocolate market has a special regulation that allows prices to change every minute, hour, and day. Name this particular market as the stock exchange.

•Stock Exchange Responsibilities

Explain to your children that the stock exchange is a particular chocolate marketplace that makes it easy to buy and sell chocolate in different sizes or prices. One significant difference between retail and stock exchange chocolates is you can only buy the latter in bulk.

Tell your children the stock exchange makes sure all chocolate your kids’ purchase has the right prices or amounts, and everything is in paper before they proceed to pay and accept the seller’s chocolates.

•Supply and Demand

Earlier, we mentioned to your children that savings can increase in value if supply decreases. Additionally, the chocolate maker’s failure to make more stock will increase their savings value. However, doing so will create instability, an undesirable outcome for any investment venture.

This example demonstrates the law of supply and demand. Chocolate companies must make sure it has enough supply and demand to stabilize the prices. Additionally, explain to your kids that the government urges the chocolate companies to produce enough to meet the demand without devaluing the supply.

A refresher for adults: Stock market prices change due to evolving supply and demand hourly. The economic law states that an item devalues with more supply than demand. Conversely, it increases its value with more demand than supply. Feasible market conditions favor a stabilized and sustainable supply and demand in stock exchanges.

•Activity-Based Example

Present your children with four chocolate bars and some money. Give yourself and each of them one chocolate. Then, ask one of your children the amount they will pay for the last chocolate. Next, ask your other child if they’re willing to increase the price to get it. If one of them reaches their maximum spending amount, he or she gets the last piece. 


Price Determination: Estimated Chocolate Prices The Next Day, Week, and Month

Stock market prices change every hour, making many people pay attention to profits that minute movements can make. Truthfully, it can be too technical even for the average adult to grasp precision stock market pricing. However, by understanding several principles, you can easily explain these concepts to your children.

•Is It Always One Dollar to One Chocolate?

In most examples we’ve listed here, we’ve stressed that it’s often one dollar for one chocolate bar. While it illustrates basic stock market concepts, it does not show some principles of stock pricing. We only explained it to your children that stock prices can change regularly.

You can explain to your children that chocolate makers have different speeds in making chocolate, affecting prices positively or negatively. Makers who have more buyers than others will have higher market value than the rest, allowing them to sell their chocolates at a higher price (or demand higher chocolate content from buyers).

If they can grasp this concept, explain to your children about supply and demand additional chocolate pricing factor.

A refresher for adults: This example talks about revenue growth. It’s the periodic business reports many people and investors read, allowing them to see the trends in the companies’ performances and the industry it belongs in.

•Paid Out Every Four Months

Your children will ask if they’ll receive their chocolate as soon as they purchase it in bulk. Tell your children that chocolate makers take about four months to make new chocolate for everyone.

A refresher for adults: All companies pay their dividends every four months.

•Can You Trust The Chocolate Seller All The Time?

Children easily trust adults who have more knowledge than they do. However, introduce the idea that some chocolate makers might be using inferior ingredients, making their chocolate unhealthy. Additionally, explain that some chocolate makers might have poor-tasting chocolate that no one wants to buy.

In doing so, your children will understand their responsibility to inspect and gauge the chocolate maker’s performance before giving them money or chocolate to make more chocolate.

A refresher for adults: The investigation of a company or investment fund’s credibility is critical to ensure they will provide your dividends and back up their estimates.


Making Investments in The Chocolate Market

Your kids have enough money to buy some chocolate in bulk. They know how they can receive their chocolate and calculate its estimated value increases or decreases. However, tell them they can’t just approach the chocolate company owner. They’ll need to go through a process involving a professional chocolate salesman called stockbrokers.

•Stockbrokers: Chocolate is Mysterious, But Someone Knows Everything About It!

This middleman receives recognition from renowned chocolate makers, allowing them to compile your order and other investors who want to receive more chocolate.

A refresher for adults: A stockbroker is a financial professional responsible for the buying and selling of stocks from traders to companies. Usually, these professional people charge money with a small percentage when you use their services. Additionally, stockbrokers brief new financial traders about money investments, stocks, and first-time use of their software trading facilities.

•Should You Buy Other Brands?

Earlier, we’ve told your kids about chocolate makers making harmful products and some people losing money (or chocolate) because they invested in a poorly-performing company. Tell your child that even those who make the best chocolate can make bad batches.

You can anticipate your child to ask you steps to avoid this. You can tell them that aside from chocolate makers, they can work with candy and toymakers too. Some candy and toymakers accept chocolate to make new candy and toys. Alternatively, your children can ask these companies to convert the candy and toys they’ll receive into chocolate or money.

Once again, remind them that making investments with a company that offers different products or services gives them a safety net for their money (or chocolates). If the candy or chocolate makers fail to make a good batch, their spending on toymakers will give them significant profits and act as a safety net for any situation.

A refresher for adults: Diversification is one of the wisest advice to use for anyone investing in the stock market. Investing in just one market will lead to huge losses if the market underperforms during a period. With diversified assets, investors can have returns that allow them to take advantage of low-priced opportunities from companies with high revenue growth.

•Activity-Based Example

An alternative to chocolates, candies, and toys are games and apps that focus explicitly on diversifying assets. Here are some of them.

Monopoly: A child-oriented board game about ownership. It illustrates commerce by allowing kids to buy properties, earn a profit, manage businesses, and more. It even has fake money for detailed immersion.

Wall Street Survivor: An in-depth (and slightly technical) program and app available on all platforms give you a practice amount of $100,000. Additionally, you can invest in actually-existing businesses and use updated valuation on trends, stock values, prices, bulk requirements, and more.


It’s Easy to Teach Your Kids With These Simple Examples

stock market concept

You can teach your kids about the stock market if you allow them to perceive it as simple as values they see in chocolates, toys, candies, and other objects they have a full understanding of. Truthfully, if you or other adults feel confused about some stock market concepts, allow someone to explain it to you using ideas, concepts, and paradigms familiar to you.

Learning to invest and have exceptional financial management practices doesn’t have to be when you’re earning money. Children with this concept can start early on savings and investment, and this tutorial can help immensely.

Mutual Funds Definition Advantages and Disadvantages

Advantages of Mutual funds

Mutual funds are suitable for those looking to dip their toes in the world of investing. While financial know-how is always a good thing to have when undertaking such ventures, mutual funds ultimately leverage on the expertise of people in the industry, making it accessible to budding and experienced investors.

What are Mutual Funds?

Mutual funds, essentially an entity that acquires ownership in different fund companies. Instead of purchasing stocks individually, you would have a broad portfolio making for a simpler transaction.

This is achieved through pooling resources together into some type of investment vehicle, where investors mutually contribute, or where they purchase a variety of different stocks or bonds or a combination of both and grow it over a period of time.

Types of mutual funds

There are 2 types of Mutual funds: index funds and actively managed funds

Index funds make keeping track of investments easier, as they replicate the portfolio of a particular market index. Investing in index funds gives you the simple goal of buying all the companies in an index. This means that an S&P 500 fund buys all the companies in the S&P 500 index.

Opposite to index funds, active funds are comparatively more of a gamble. They seek to purchase less companies in hopes that these stocks perform better than others in the index, and it is this performance that investors measure the active funds’ failure or success.

Active funds are highly dependent on an active manager’s skill in picking winning stocks; ergo, usually charge higher fees as compensation.

While a valid approach, this might be too fickle a venture for beginning investors, as active fund managers cannot consistently add value through stock picking and market timing. It’s important to consider whether the efforts of the active manager is worth the higher expense ratio and annual.

Mutual Funds: Advantages and Disadvantages

Mutual fund investors may benefit from the convenience, risk reduction, fair pricing, dividend reinvestment, and advanced portfolio management. The less-than-ideal side of the coin includes tax inefficiency, poor trade execution, and the increased likelihood of management abuses.

Advantages of Mutual Funds

  • Diversification

For safe and consistent returns in mutual funds, it is generally a better idea to spread out your investments into multiple funds, as singular, active funds can still be susceptible to market volatility no matter how good the performance record.

Diversifying your money among various funds with different risk profiles will keep your money secure even for a long-term investment. This also has the added benefit of cushioning the effects of market fluctuations due to having your assets allocated among diverse funds, ultimately reducing the risk associated with your return on investment.

Spreading your investments overstocks with different securities and risk profiles helps mitigate loss, as this protects other stocks within the fund when one underperforms.

Simply put, mutual funds are a horse race where there can be more than one winner, and hedging your bets on multiple racers exposes you to less risk.

  • Expert management

Convenience is the main advantage of mutual funds, an efficient way to earn in the stock market without the trouble of navigating it yourself and managing your money.

This is especially true for those without much time and experience in stocks. Your investments will be handled by skilled fund managers, trained in preventing loss and yielding profits through strategic trading, while considering macroeconomic factors, your risk appetite, ideal time horizon, and financial objective, among others, allowing you a less worrisome investment venture.

  • Liquidity

Mutual funds are considered the most flexible form of investment. You can withdraw or redeem all or part of your investment(s) at your convenience. Your money is always accessible to you. Moreover, the method of accessing is standardized, making it swift and prompt.

  • Reinvestment of income

You can purchase additional shares by using dividends and other interest income sources as they become declared in the mutual fund, which can help grow your investment.

  • Range of investment options

Within mutual funds, there are different types in which you can partake: growth funds, income funds, money market funds, balanced funds, index funds, asset allocation portfolios, target-date funds. A diverse portfolio exposes you to these different investments, opens more options and opportunities.

  • Convenience & affordability

Another advantage of mutual funds is that it makes investing accessible to those with a minimal budget. Some mutual funds let investors buy-in with no minimum at all, you can begin your mutual fund investment even with as low as $5.

Disadvantages of Mutual Funds

  • No control over your portfolio

By entrusting your mutual funds to your fund managers, you lack control over portfolio customization. Fund managers are in charge of the decision making when it comes to purchases and sales.

While fund managers honor your investment philosophies, moments of conflict when it comes to strategies are inevitable and is something to consider.

  • Locked in clause

These require investors to hold their money for a specific period, the duration varies on the type of mutual fund you have acquired. Investors are not allowed to buy or sell units until the end of this period.

  • High fees and charges

Another disadvantage when you avail of professional management is the management fees. Management of funds is paid for via expense ratio, which is the percentage that serves as compensation for the fund manager’s time and skills.

Since actively managed funds are more diverse, managers are engaged in purchases and sales more, which increases the expense ratio, as each transaction requires payment. Mutual funds usually charge 1-3% commission per year which eats up your profits in the long term.

  • Over-diversification

When rebalancing stocks and bonds, a diverse portfolio can help stabilize your original asset allocation. However, it takes more time than you should ideally spend.

To acquire a diversified portfolio, you would need to acquire multiple different stocks with different asset classes and risk levels, not to mention the transaction fee you would have to pay for every purchase.

  • Tax inefficiency; high capital gains

Among the disadvantages of mutual funds are tax inefficiency and high capital gains. You are still responsible for the entire year’s taxable gains, no matter when you purchased within the year. These are referred to as embedded gains.

The downsides are you pay taxes and other fees, even after technically having a loss, and it may negatively affect an investor who may not desire to pay the fees required of additional taxes despite not expecting it or an investor who is at the top of the tax bracket where these gains are taxed at higher rates.

  • Poor trade execution

The buying or selling of mutual funds take place at the close of the market regardless of when you entered the order for the transaction. Many advocates of ETFs, however, will point out that you can trade with ETFs throughout the day.

While it’s possibly true that your order can be fulfilled earlier in ETFs than in mutual funds, the time difference is considerably small, and the consistency of singular time for transactions itself can be appealing.

  • Liquidity costs

One disadvantage of mutual funds is that it is not often easy to liquidate a portfolio, and it can be dependent on market liquidity for security.

Are Mutual Funds Right for You?

Determining a road map for any journey requires you to be aware of both the starting and endpoints. This is the same with mutual funds. You must first analyze your situation, specifying your needs and goals, and from here, consider your own risk appetite appropriate to your situation.

For example, if you are investing in mutual funds for your retirement account while your retirement is many years away, it might be ideal to look into considerably riskier, but more rewarding ventures due to the extensive timeframe.

In this case, an aggressive, low-expense fund might be for you, and because you aren’t liable for capital gains on investments in qualified retirement accounts, investing in mutual funds with high turnover that distribute capital gains every year is something to consider.

In the purpose of purchasing real estate within a shorter time frame, a fund that doesn’t often distribute capital gains and isn’t as aggressive will be the better choice.

Closing

Mutual funds are the perfect fit for people without the time nor experience to involve themselves in the management of an investment portfolio and do not mind paying annual fees for professionals who make it their responsibility.

Mutual funds are also ideal for people who simply cannot afford the level of diversification that most funds offer. If you are one of the people who desire low expense ratios without the need for professional management, index funds may also be another ideal option.

A Complete Guide to Large Investments | How to Invest $500k Wisely

How to invest 500 000 dollars

If you are a person who has $500 000 in your savings accounts and earns little interest (or sometimes, none at all), well, you are not technically on the “bad side” of the earning spectrum. But did you know that you can do so much more with just earning little interest? If you are one of these privileged people who has these amounts of money, it may be a bit overwhelming, as you might feel pressured to manage the finances and make it roll around. This article will help you figure yourself out!

However, know that having these amounts of money is a good opportunity for you to diversify your personal finance portfolio. Given this, we would highly suggest that you split up your 500 k dollars into investment options –which we will be talking about in this article.


How to Invest $500k Wisely?

500,000 bucks is a huge amount of cash that should be placed into diversified investments. While this article gives you a wide array of options to invest that money properly, we also believe that you should be working this out with a personal finance advisor.


1) Guaranteed Investments

The first and safest option for diversification is to have a set of guaranteed income investments. If you would like to invest everything (let’s say the whole 500- k chunk of the pie), then getting sure income returns for your money can be very interesting to think about.

You’ll first need to have a high-interest savings account. Also, it is best to have an emergency fund as well. This means you’ll have to allocate a portion of this to savings accounts or a retirement account. The amount of your savings should have a monetary value of at least six months of your household’s expenses. This will eventually serve as your financial buffer for six months should unforeseen, and unfortunate circumstances arise.


2) Invest in Stocks

All you have to do for this is to get information from online resources and determine which companies you think can grow big in the future market. Once you have identified your company or companies, purchase their stocks in the market. Be sure to buy individual stocks for each. This will be a great way of investing your $500k.

Doing this can be done in partnership with a financial advisor or a stockbroker, but you can usually get better gains and equities with your stock using online platforms.


3) Robo-investing

Consider yourself getting involved in the stock market. If you are not certain which stocks to pick, then subscribing to Robo-investments can give you the jumpstart you will ever need to get started.

Usually, investing with Robo advisors will make you go through a process that identifies your risk tolerance, assess your funds, annual income, dividend income, and other contributors. Afterward, the Robo-investors will engage in the stocks by investing that best credit for you. They can allocate your budget for individual stocks. Many people usually would prefer this method. For the sake of stock, you might want to try this out, too.

Algorithms programmed in Robo-investors will give you the advantage to lessen your liabilities with taxes and will make sure that you will get the highest yields with the least fees possible.

Lastly, Robo-investments are convenient as you are investing without having to get your hands on it. All you have to do is to trust that your money is being managed properly by the platform.


4) Certificates of Deposit

Certificates of deposit (also known as CDs) are not reported to yield positive things like a justifiable interest rate—CDs workaround by putting your funds into a deposit for the short term and guaranteed return rates.

When the great recession hit the market and the Americans in the US, CDs’ returns dropped to one percent. However, interest rates have risen and gave better deals. This made CDs a more attractive investment for those looking at a guaranteed return of investment for their 500 000 bucks.


5) Exchange Traded Funds

Engaging with Exchange Traded Funds (or ETFs) is also a strategic method to diversify your stocks and investments in the market. One way to invest is that you will only get to make a single trade across a wide array of different stocks.

ETFs are very much similar to mutual funds wherein you purchase a relatively huge number of stocks that comprise one huge fund all at once. ETFs will mean that it is a single stock share that you buy from the stock market. In other words, you are purchasing portions of the fund from the exchange instead of going through a bigger fund group like what you do with mutual funds.


6) Peer-to-peer Lending

Peer lending is essentially lending and investing money on people (or business ideas) whom you think can give you a high return in the long run. Therefore, peer lending excludes you from the stock market, as you invest using your personal finance inventories and cash flow.

Peer lending usually gives you a higher return than other traditional investments, but the risk investments for this might be high. Everyone knows that some borrowers might give a delayed payment or might pay you nothing at all!

This is why it is important to question who or what business you will be putting your risk in. Remember to ideate your share price, and you may want to also balance it off by investing in people with a set, stabilized financial income, and a good financial portfolio. Otherwise, without that data or information, you might run into a problem that could put your financial items at risk as time will age.

Look into their business portfolio, the product they give advertiser disclosure on, and make sure that payouts and payment terms are all explicit. Link this information with a financial site if needed to make sure you give them the best credit possible, which will, in turn, give high-interest gain for your part of the pie.


7) Invest in Annuities

Previous and historical experiences would stigmatize annuities as a way of investing your $500k, or even for retirement. This is because a lot of salespeople have used the complexities of this product to their self-interests. However, there are scenarios where annuities can be that strategic option for a person who has 500 000 to invest. For those huge amounts of funds, that may be the right decision.

While a wide array of choices are available when it comes to annuities, it is important to take note that you will provide a lump sum of funds to insurance companies, which, in return, will give you a high guaranteed yield of that money. The moment you start to draw funds from that annuity is the moment you will get a fixed income as you move forward. Just be sure to consult with the right financial advisor for these ventures.


8) Invest in Gold

It could be a challenge for an investor to invest a half-million in physical gold, especially when one is already familiar with trading stock and bonds on platforms found online. So, when it comes to gold, you would be transacting with everyone outside traditional brokers, and sometimes you will need insurance and storage funds on the investment.

Suppose your main concern is about inflation, for instance, or other emergency index funds. In that case, putting some risk into the gold investment industry may be one of the ways to invest your half to a million dollars in fixed-income investments.

Always know that using this method would need some reflection on your risk tolerance and how you would want to jump off from that nest egg of yours. Either way, this approach will still be a good investment, especially if you do not want to get involved in the stock industry. But again, as we all know, you would still want to diversify your seeds as an investor.


9) Invest in Real Estate

If I were a person to get a hold of $500 000, I would place a portion of the pie to real estate. Data this 2020 show that the market shows a healthy demand in real estate investment trusts and the real estate industry as a whole. With the right information on risk tolerance, you will know that investing in such an industry can give you a high yield in the long term.


10) Invest in Government Federal Reserve Equities

The FRS’s main goal (also known as the Federal Reserve System) is that they would want to promote the aims of stable prices and maximum employment.


How to Manage Your Investments?


1) Keep it Lowkey

Everyone knows that if someone suddenly gets access to a huge amount of money, there is a tendency that new friends would be attracted to them in a way that they never had before. Sometimes even those whom you have already broken ties with could suddenly return to you to rekindle and amend some relationship. This is a very sad yet very realistic example of how money can bring humans down to their worst.

Given this premise, you can manage your investments easier when you keep them lowkey, especially if this is newly-found wealth. Otherwise, you will most likely fall into two scenarios:

Scenario A: You will either meet the requests of your acquaintances, friends of a family — until most your wealth is gone; or

Scenario B: You will keep tons of people on the margins (usually your lost ties and distant family) and alienate them because they think your wealth should be shared with them.

Don’t worry, you can avoid these stresses if you keep everything on the lowkey–at least until you have stabilized or have managed everything out.


2) Pay Off Existing Debts

Debt will always hinder you from your financial goals. Some debts even go to the very bad end of the spectrum, and you must get rid of them by paying them off immediately. Otherwise, your investment efforts will go to waste. Now, if you want higher returns:

  • Pay your loans from your family and your friends. This is not just because we would want us to be responsible not just with their finances but also because of their manifestations on family and friend relationships. As you invest, now is your chance to pay them off–so you can also secure and protect your social relationships in and outside the home.
  • Pay all your debts on your credit cards. This includes that home equity line of credit for your US home. These equity lines are huge credit cards that are secured by your home. No further discussion is needed.
  • Pay all your debts on your student loans. These are also huge, unsecured debt, and you have to consider paying these immediately–even if they have low-interest rates.
  • Pay all your existing car loans. Pay your pending US car loans if your pending loans are not three years of age yet. (or if you aren’t within 2 remaining years of paying the loan off). This will give you a great leeway of margins for your emergency fund in the long run–should you need it.
  • Pay your mortgage. Signing up for a mortgage as an investment makes sense since this is a very long term asset and may take you huge amounts of amortizations per year. It is more strategic to pay off your mortgage immediately. However, if it is an “interest only,” “sub-prime,” “balloon,” or an “ARM” type of mortgage, pay them off, then don’t patronize it. When it comes to mortgages, make sure to be certain and fully-informed.

3) Give Back to Charities

Do not let money own you; prove to yourself that you have full control of your money, not the other route around. One way you can prove this to yourself is to give back to some extent, and at the earliest possible time.

You do not need to be religious to give back to charities. All you have to do is be kind and generous, especially when you have more than enough. Greed will make us want so much money that it could turn us into selfish people who only want to receive and receive.

But if you would want to practice managing your investments, try doing it the other turn around–give.


4) Plan Your Monthly Expenses Ahead

Prepare for your large windfall. Try to predict the worst possible scenarios life might hit you with, then plan to secure resilient money savings ahead. Planning will give you time to handle your newly-acquired fortune more properly. It will give you ample time to make better decisions about it–such as your retirement, how content you would want to become, your life status on health, the right company you want to be with, or how you would want to live your life.

To assess and plan your financial expenses, ask yourself, do you want to have your retirement solution right now? Given that, do you have other income sources that can help make your retirement possible, or will your USD500 000 be sufficient enough for you? Is this something we would want to have high returns for?

You can also ponder if you would want to stay in your company or if you would want to shift to other careers? Are you satisfied with the current money you are getting for your pay? Subsequently, would you want to have some fixed income or something more fluid?

Extend those questions into where you would want to live in the US, what kind of home would you want to have, would you want to start your own company and risk your money there? What index funds would you want to invest in, and what rates of return would you like to have? What dreams do you want to be made fulfilled but couldn’t because of limited money and just a fixed income?


5) Emphasize Safety of Principal Investment

Just like what has been mentioned earlier, going through a windfall might be a game-changer when it comes to aspects of trying to live a life for yourself. What else contributes to that game-changing experience is how you invest that money when such windfalls arrive. Therefore, the key is to make sure that you have full control over your strategy.

The moment you have secured the safety of your principal money, the better emphasized your fixed-income assets will be. Some of the things you might want to consider are:

  • To secure an ample amount of emergency funds. And to secure an ample amount, we are talking about around 24 months worth of financial content and living expenses, so when your windfalls will come, you will be financially resilient–sometimes even up to retirement.
  • To engage in peer lending. Emphasizing your principal investment can diversify your portfolio in various ways. Be an investor in peer lending so that you could secure your money (but with relatively high risks. Create the best personal loans and schemes for your friends. Just make sure to question and be intuitive, and the only risk is the right company.

6) Keep the Investment Risk to a Minimum

To manage your stock and financial resources properly, it is important to know that if you put these at high risk investing in the market, a ton of the hard work you have gone through might be jeopardized. This is why you would want to become not just fully aware of the things you are investing in but also on and act on it–by adding measured and well-calculated risk strategies.

A typical financial advisor would say that with 500 000 USD, you are considered a huge investor, and you should think and act like one, especially on income, index funds, and returns from the market. You should be able to diversify your portfolio and to make your money rolling–amidst inflation. That is what the stock market is for, at least in the life long run-up to retirement. Do not, however, overdo it, and learn to be content.

Ensure that you still have your stock allocation on close monitoring and do not exceed 50% of your total capital. This will provide you the growth and diversity you need, minus the high risks.

To further create calculated and measured risks, consider subscribing to ETFs or even mutual funds. Robo advisors are also available online, just if you need help on reviews on your a part of your credit cards or your investment vehicles in the market. They can also calculate returns and items on the stock–given available financial data.


7) Invest in Yourself

Self-care does not just apply to your mental and physical well-being, but it also manifests in your relationship with your finances. This is the time to spend on a few things you have wanted to have for the longest time.

Do not go all-grand and get carried away in this part of the process, though. Just spend on a little, and to those that are urgently necessary (just like your 401 k). In light of higher returns, focus on investing, and be content.


Conclusion

We hope you have had an informative read as we have talked about steps to make sure your large items for investment are manageable and accounted for. Always remember, with the right passion, data, and attitude for things, getting to the financial goal you’ve always dreamt about will always be one step closer to reality. Read more about Investoralist personal finance articles and be knowledgeable on the current economic situation about finances!

A Quick Guide to Schwab S&P 500 Index Fund

Schwab S&P500 Index Fund What You Need To Know

For those who have no idea, the Schwab S&P500 Index is one of the benchmarks that is most observed when it comes to U.S. stocks. This index has around 80% coverage of the country’s equity market on investable market capitalization. The fund’s expense ratio is the characteristic that differentiates the return of the fund and the index itself.

Let’s dig deeper into this article and find out about a quick guide on investment, particularly the S&P500 Index Fund.

What is Charles Schwab?

The Charles Schwab Corporation is a company that succeeded in making a remarkable place in the arena of investment. Having started in 1971, the company was able to launch its retail brokerage branches and has now established about 350 brokerages around the United States, and has been offering more than 50 funds to entrepreneurs, and has been ranked as the top three largest mutual company in terms of assets measured under management.

Charles Schwab offers empowerment for those who would want to invest individually, as they have this belief that it would want to help benefit its investors through numerous types of available investment services and product development.

It is essential to know that they have a global account that gives access to the world’s top stock markets right at the tip of your fingertips. Their global account has an architecture for accessibility especially for those who are not tech-savvy providing low-cost futures contracts. You wouldn’t have to have an account minimum for this, nor a trade minimum.

This means that you can trade stocks on your own terms, and during your own time to top world markets across the world, including, but not limited to European countries, Australia, Canada, and some Asian markets.

What is Schwab S&P500 Index Fund?

The S P500 index fund SWPPX is the index investment that seeks to track the “Standard and Poor’s” performance of the index which is also being widely observed for stocks in the United States.

This fund essentially falls under Morningstar’s large blend and mixed category and is known as the large-cap stock holding. Its largest holdings consider themselves those as large as Apple’s Microsoft Corp, JP Morgan Chase & Co. Amazon Com Inc., among other software companies.

How Can I Buy an Schwab S&P500 Index Fund?

You wouldn’t have to worry much if you are eager to invest in S&P 500 stocks, but without the patience to properly look through the financial information of 500 individual companies.

This is because an S&P 500 index can help you get the exposure you need to such stocks, wherein it ensures that the investment seeks to track typically the actual percentage of your investment return without having to analyze much.

This index is one that observes, and keeps track of not just the most powerful, but also the largest companies across the U.S. These stocks are curated by the S&P Index Committee, which chooses companies based on criteria including a large-cap, expense ratio 0 02, financial liquidity, and even sector asset allocation.

It is helpful to know that the Vanguard 500 index fund introduced individual investors to the country’s first mutual fund. This was formulated to somehow mirror the S&P 500 Index.

Today, however, almost all brokerages, as well as fund companies, now offer some sort of S&P 500 fund with return ration and the percentage is considerably higher. All these can be accessed through discount brokers, full-service brokers, or even financial advisors across the nation.

Things to Consider Before Buying Schwab S&P500 Index Fund

1) Investment Strategy

Based on the information of the fund, the investment’s goal is to be able to observe and track the return of the S&P 500 index as well as other factors such as tracking error tools and benchmark index. It is important to consider that this return usually gives the same value factor to a given stock just the same as the index.

Now, you may know that the return fund and expense ratio would usually place the investment in derivatives, the contracts in the future and that it would lend the securities to put the gap in performance down to a minimum, especially to that that exists between any index funds, ETFs and the corresponding index associated with it.

2) Rankings

Based on a variety of data, news outlets in the United States have evaluated 1,265 large blend mutual funds, and have come up with a top-rated list of ETFs and return funds for those who would want to invest in the long term.

3) Role in Portfolio

It has to be noted that the fund exists as a large-cap core holding when it comes to financial portfolio including information on the return, inception date, standard deviation, tracking error, and return.

4) Management

Another thing to consider is management. It would help you to know that the fund, since 2012 had been managed by a person named Agnes Hong. It was then managed by Juwono, Ferrian, from 2013, and 2015 onwards by David Rios. All these three are known as professional and expert mutual fund managers who supervise and manage a couple of other funds for Schwab.

5) Performance

Another thing to consider is the performance of the fund as a whole. Just over the past year, the fund has returned 15.14%! And over the previous 3 years, it returned 12.25%. Similarly, throughout the previous 5 years, it returned 14.09% and when it comes to looking at data for a decade, the fund has returned a staggering performance of 13.66%.

6) Fees

In this section, it is important to know that the fees, as well as the expenses of the mutual fund, are known as charges that could be accosted by the investors who have gotten a hold of mutual funds or ETFs.It is common knowledge to know that if one generally invests at least in a mutual fund like S P 500 index fund, it will obviously involve costs and content measurement expenses.

This will include costs on shareholder transactions, distribution, and marketing expenses, as well as investment advisory feeds. You should know that the costs mentioned above are usually passed along to investors in multiple ways imaginable. To further get down to detail, know that initial sales fees are those costs that are generally being used to pay brokers through a commission.

On the other hand, deferred sales fees are what you call those weight to a given cost when investors would want to have their investment return from inception date, and redeem their shares, from the inception date.

Furthermore, there are other fees that are being charged annually to those fund holders. In this category, there are administrative, management, and redemption fees.

Administrative fees are those costs that are considered to be a part of the fund’s data overhead expenses so that they could operate. In other words, these are the costs being used by the business so that they could efficiently run the fund.

Administrative fees include rental fees, for instance, or even office supplies, and even utilities. Now, because expenses are being paid from fund assets, investors usually pay for these fees indirectly, rather than direct payments through separate line items.

Management fees on another hand, are the costs that are the actual percentage is considerably being used to pay for the manager or the firm that handles your S & P 500 index funds. They use this to make the decisions necessary when it comes to which securities should be purchased for instance, or even the strategic return date or time the firm or the managers should buy or sell.

These costs usually defer between firms but are typically the actual return percentage of the assets under management. Some firms would waive a category of this fee, usually around 2-3 years. Waiving this would not just help firms accumulate assets, but also lower the expense ratio down to a minimum.

Lastly, Redemption fees are experience costs that come in the form of penalties so that investors will get discouraged to transact with short-term market timing. These are fees being charged to the investors if they sell the funds before the expiration date of the funds’ holding period. Usually holding periods last between 30 days to a year and may take a longer period of time.

7) Volatility Measurements

Another thing to consider is device volatility measurements and tracking error tools, which are the tools that mirror the risk or those that are giving the same weight of uncertainty in the market capitalization return value of the security.

8) Fund Performance

Fund performance is something that you should really consider because investments are serious business. it is important for investors and funds to track the total return of their investments. In this context, it has been mentioned earlier that the large-cap SCHWAB funds have been performing throughout the previous decade, and even though the past three and five years.

Schwab S&P 500 Index Fund: Hypothetical Growth of $10,000

With trading stocks typically the actual amount, or with low and minimum investment requirements on a variety of funds, SCHWAB usually becomes a very good deal to those who are investing in the long run, or to those who are looking for a new brokerage that they can call home.

While Schwab does not have as many funds when compared to other stock as the index category, ample information would tell you that you can make a successful deal that the broker already offers ample choices for one to meet the needs of most entrepreneurs and investors that are also mindful of the market cap.

Now whether you would go for large or small caps to index the fund, Schwab funds would usually provide cost-efficient solutions that are ready for you to choose from. All you have to do is to access this information online.

Conclusion

This index fund is something that can really help you with your investments and net assets. The fund generally invests in long-term solutions. The Schwab seeks to track the investments being done in the market and will help you give your total return of funds whenever you need them. You must consider a set of things though, such as your fees, net expense ratio, and rankings, before choosing the right company for you. At the end of the day, everything will be a great experience, especially for large blend investors like you.