You can start building wealth at any income level and any age. It is done through the systematic investment of your surplus funds. So, investment planning involves setting your investment goals and your available funds to achieve them. It is based on your timeline, risk tolerance, and available income. You can seek the assistance of experts in the investment field, such as Joseph Stone Capital, to realize your goals by investing your available funds in various avenues like real estate, equities, bonds, and lending loans.
To achieve your wealth-building goals, you need to invest your funds wisely in equities, bonds, and property. However, investing in equities is risky and depends on your risk appetite. Young investors can go long on equities. Others can invest in property, bonds, high-yield bank accounts, index funds, money market funds, mutual funds, government securities, etc. for moderate returns over some time. However, investing in equities with guidance from financial experts gives you handsome returns.
Importance of investment
Many people may ask why investment planning is necessary. Investing your surplus funds in the right avenues gives you another source of income. It helps you come out of a financial jam or fund your retirement. It grows your wealth and improves your purchasing power over time. You need to keep some money aside to meet emergency needs.
Stock index funds are high-risk picks, whereas corporate bonds involve medium risk. If you are searching for the safest ways to grow your money for retirement, you can invest your funds in government securities, government-backed bonds, and high-yield bank accounts.
Bank CDs
Banks usually issue CDs, or short-term certificates of deposit, which can offer higher interest rates compared to savings accounts. The interest offered on regular savings accounts is very low, but you can withdraw money for your immediate needs. So, you can invest in CDs for better returns and safety. After the maturity of the CDs, you can withdraw and reinvest that money. You will also receive interest from the banks on CDs at regular intervals.
Corporate bonds for short-term investment
Usually, corporations raise funds through the issue of bonds. You can consider investing in short-term corporate bonds that have a tenure of up to five years. They are less susceptible to fluctuations in interest rates compared to long-term or intermediate bonds. You can find the best short-term corporate bonds for investment with the help of investment experts at Joseph Stone Capital. Corporate bonds are the best option for retirees and those looking to reduce risk in their portfolios. However, you should consider high-quality corporate bonds for your investment.
Investing in value stock funds
If you are ready to take a risk, you can invest in value stock funds for decent returns over the long term. You should aim for good returns over five years. However, these are not backed by the government. You can find value stock funds through mutual funds or ETFs.
Index funds for investment
An index fund in the US comprises several successful companies around the world. If you are yearning for higher returns compared to traditional banking products, you can consider investing in an S&P 500 index fund. You need to stay invested for three to five years for handsome returns.