Wise Money: Six Investments That Are Low-Risk and Have High Return

When the stock market is on shaky footing it’s usually a good time to look into non-traditional investments. While most people think of investments as stocks and bonds, an investment is really anything you put money into in hopes of making more money later. There are many types of investments that you can put your money into the key is to do your research before investing.

Property Investments

While the property market has left some a little nervous, real estate is still one of the most stable investments. Buying properties, improving them, and then selling them has long been a way of making money. Since properties usually don’t depreciate except when there are problems with the housing market itself this can be an extremely safe investment. Commercial property is even more lucrative and has launched many fortunes.

Dividend- Bearing Stocks

A safe but traditional investment is in dividend-bearing stocks aka. income stocks. If you invest money in safe dividend bearing stocks you can get a significant return. There are many dividend-bearing stocks that have performed well over long periods of time. Many investors overlook these stocks because they aren’t sexy new high flying stocks but the dividends show a different story. The key is to find stocks that have consistently raised their dividends year after year. You are not looking for stocks paying the highest yield, rather ones paying consistently year after year. Some, such as Verizon(VZ_) and AT&T(T_), are yielding well over 4%.

Lending Notes

Lending notes are a great way to diversify your portfolio and get a high return. With a lending club, you buy small notes in large loans that people have taken out. These borrowers pay back the loan over time, and you get your principal back plus interest. Depending on how much you want to risk, you can average returns from 8% to 14% annually, which is a great deal more than a lot of traditional investment vehicles. See What is Peer-to-Peer Lending?

Tax-Deferred Plans

Tax-deferred retirement plans, such as 401k plans, are a great way to grow your investments because they allow you to invest money before it’s taxed, and over the years, this type of growth can be very significant. In general you should put as much money into your tax-deferred retirement plans as you can, up to the contribution caps, so that you can take advantage of this growth. See Tax Deferred Retirement

Annuities

You can always buy annuities. With an annuity during the accumulation phase you can get either a guaranteed or variable growth on your investment. As it enters the distribution phase you have a varitety of choices on how to have the proceeds distributed but the primary benefit is that it has provisions that will allow you to receive distributions for life. An annuity has other advantages including tax savings and guaranteed rates of return no mater what the stock market does.

See: The Truth About Annuities

Auctions

Auctions are a unique way to make some money if you know a lot about the items being auctioned. By going to auctions in areas with a lot of culture, such as Nashville auctions, you can find some great deals and turn around and sell them for a profit or hold them for further appreciation. The key of course is to only buy things you understand well.

There are many creative investments but often it is difficult to find investments that are both low-risk and high return, (usually it is either one or the other) but no investment carries absolutely no risk with it. With all investment portfolios the most important part is diversification. As long as you have a diversified portfolio with many different types of investments you will be able to continuously profit no matter what happens to any specific investment.

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