by Brian McKay
It will always be true that the higher the risk with investments, the more money you will make if they are successful. However, people tend to get more cautious with investments as they get older, and then they are seeking low-risk investments that have good returns.
Real estate is always a fairly safe bet as long as investments are handled properly. You can buy property at a low price, improve it and sell it on or you can rent it out for the monthly rental income. There is also the option of commercial real estate investing, where the returns can be higher over a longer period. Explore the options and choose the one that you feel most comfortable with.
Peer-to-peer-lending is like all investments in the respect that you need to take care that you are lending to the right people, just as if you were dealing on the stock market you would have to take care to buy the right shares.
There are platforms that specialize in helping people with this type of investment, and using one of these lowers the risk of a loan not being repaid greatly. The borrowers tend to need money short term, often to help get a business off the ground. When they are properly screened and you choose only the best loans, the returns can be a decent amount and the risk very low.
Certificates Of Deposit (CD)
With a CD you deposit an amount for a fixed period of time, in exchange for a guaranteed return no matter what happens to interest rates or inflation within the agreed period.
If you buy your CD from an FDIC insured financial institution, the government guarantees you will at the very least get your original investment back, with the financial institution paying you interest on top. The amount you earn will depend on the length of the CD, and it is advisable to opt for 1 or 2 years to achieve a higher amount of interest.
Money Market Funds
A money market fund is best explained by saying it is a mutual fund created for people who do not want to take a risk with the principal amount of their investment. They are not foolproof by any means, but they do have a good track record of achieving reasonable gains. This enables the fund to pay you your money back with some profit on top.
There are lots of other low-risk investments that have not been mentioned here. You could put your cash into a high-interest account with a bank, or invest in government bonds. Then there are Municipal Bonds, US Savings Bonds, Cash Value Life Insurance and many others.
None of them will promise you huge returns, as they legally have to be realistic about the amount you can expect to make. You would not expect to lose any of your original investment though, and you may feel it is worthwhile accepting a lower return for that peace of mind.
If you are unsure what to do with any money you have to invest, you should seek the help of professionals who will be able to advise you the best thing to do.