BUSINESS & FINANCE FAMILY LIFE

Different Investment Options That Generate Income – An Article

Extra income never hurts and there are plenty of creative options for generating it. Not everyone has the time or energy for a second job, which is what makes different investment options that generate income very appealing. Invest wisely and reap the benefits.

Stocks

For most of us, the first word we think of when we think of investing is stocks. The stock market is exciting but can also be intimidating.

To generate income through the stock market, a broker is necessary to help you buy shares in dividend stocks. Choose the right broker who can answer the many questions regarding the stock market.

Stocks can be risky, as the market is unpredictable. Still, if you have the extra money to throw at it without causing financial devastation should your stock investments fail, it’s worth considering.

Real Estate

Tried and true, real estate investing comes in many forms and is considered a safer bet than the stock market.

Residential rental properties are the most obvious of all real estate investing. They are a great way to start for new investors because properties are familiar to most everyone. In general, investors understand real estate because they live in it and have possibly bought and sold it themselves.

House flipping and rental properties are the two most common forms of residential real estate investment. Beyond buying residential properties, there is also commercial investment.

REITs (real estate investment trusts) sometimes allow investors to invest as little as $1000 along with a group of investors who are investing in commercial properties and other large developments.

And of course, if financially able, commercial real estate investment can be done by an individual without the use of an REIT.

Savings Account

It may take a little research but finding a high yielding savings account is a safe way to earn interest on your money while saving and enjoying the added income from interest earnings.

Look for savings accounts that are FDIC-insured to protect your savings.

CD’s 

CD’s (certificate of deposits) are low risk and are purchased through a bank.

When purchased as a CD ladder, an investor buys multiple CD’s at different rates to increase their yield. For example, a one-year CD earning 2.5% and a five-year earning 3.5%.

Return with CD’s is not high, but at the same time, it’s very low risk.

The different investment options that generate income all have their place and should be used according to the amount of risk that can be safely taken by the investor.