10 Things to Invest Your Money in

For a comfortable financial future, good investments are the way to go.

In 2022, let investing be part of your financial goals. What you invest in plays a huge role in your success, let this year be a year where you attain your financial independence by making the right financial decisions.

As the year starts, we would like to advise you on the best things you can invest your money in, things that will have great returns if done right. The secret is in making the appropriate investment decisions that align with your goals.

1. Stocks

You will never go wrong with investing in stocks. Do thorough research and buy stocks on the Johannesburg Stock Exchange (JSE). There are several platforms you may use to make your purchases, with EasyEquities being a reputable one. It is advisable to invest in stable companies that have a good track record and show continuous growth. With all the risks that can be incurred in investing it can be extremely hard to decide on the best stock to invest in so to get started, you may do a comparison of which companies did well in 2021 and which ones are best to invest in this year.

Avoid investing in one company because if anything goes wrong with that one company you might lose all your money with no returns so, rather spread your money amongst various companies, so you always have something to fall back on if one fails.

2. Cryptocurrency

Bitcoin is one of the best things you can invest in, it is the top cryptocurrency that allows you to buy, sell, and exchange directly and not through the bank. The interesting part about Bitcoin is that you can treat it like a stock, which you can buy and hold as an investment in a way that you can now even do so in special retirement accounts. Whichever way you choose to buy and hold your Bitcoin, be aware of the risk of price swings.

3. Real Estate

Real estate investment involves buying property and selling it later for profit or owning property for rental purposes wherein you generate a fixed income.

Property can be a good investment if you make smart purchases, and it is a great route for long-term investors who want to manage their properties and generate regular cash flow. You will have to purchase the right property (finance it or buy it outright) and maintain it properly to attract tenants.

You will have a powerful cash flow if you hold on to your assets over time, pay off your debts whilst growing your rents.

If you are willing to grow your portfolio beyond publicly traded company stocks or mutual funds, you may invest in Real Estate Investment Trusts - REITS, as it enables one to invest in commercial real estate property without actually buying and managing those properties themselves.

4. Money Market Fund

Money Market Fund is an investment product that is part of the FSCA classification of Collective Investment Scheme which is regulated by the Collective Investment Schemes Control Act.

You may succeed in money market fund if you only want to invest for a year, need a high level of stability, and require higher returns than bank deposits. How it works is your money gets invested in selected money market instruments that are issued by the government, corporate, and banks. Investment is selected based on analysis of interest rates, inflation, and Reserve Bank policy and they are typically held until they mature.

5. High-yield Savings Account

Savings accounts are best for short-term savings or money you can easily access when you have emergencies. For long-term investment, you may want to make use of cash management and online savings accounts as they provide higher return rates than traditional bank savings accounts.

6. Mutual Funds

With Mutual Fund investments, a company uses the money that investors put in and invest in securities such as stocks, bonds, and short-term debt. As an investor, you will buy shares in mutual funds and each share represents your ownership in the fund and the income it generates. You may want to read about the top performing unit trusts in South Africa.

7. Small Businesses

Investing in small businesses is a smart idea that could make you money whilst fixing the country in bringing real economic growth. Considering how small businesses fail, yes, it is a high-risk but, it wouldn’t hurt to give it a try. You can finance a business that is of interest to you and that you see growth in. It will be up to you as an investor if you invest in a small business for a financial return by a set date or require an equity stake in that business.

8. Exchange-traded Funds (ETFs)

Exchange-traded funds are similar to mutual funds, the only difference is in liquidity, costs involved, and the management styles. ETFs include a collection of securities like stocks, bonds, and/or commodities that are traded on an exchange through a JSE broker.

9. Dividend Stock

Investing in dividend stock is great for beginners as it favours them more. Dividend stock provides fixed income on bonds and the growth of individual stocks and stock funds. Dividends are regular payments that companies pay shareholders and are mostly associated with stable and profitable companies. Investing in dividend stock is great as it comes with a stable income. The simplest way to purchase dividend stock is through an online broker.

10. Certificate of Deposit (CD)

Certificate of Deposit is a product offered by banks and credit unions. It is an insured savings account that has a fixed interest rate for a defined period of time. CD could be a good option if you would like to invest your money and leave it untouched for about three to five years while it gains interest. You may check with your bank to see if they offer a better CD, if not, you can shop around.

In conclusion, it is all up to you to make wise financial decisions, there are a wide range of investment options, from safe lower-return assets to riskier, higher-return ones. You will need to understand the advantages and disadvantages of each investment and how they fit into your ultimate financial goal. It may seem daunting at first but once you start and understand where you put your money in, you are a step closer to building your wealth.

You may also want to read on: Top 10 Investment Companies in South Africa