Financial independence and securing a comfortable future is something that more and more people are starting to do for themselves, instead of trusting the banks or government to do it for them. After the most recent recession, many saw their savings evaporate, their retirement funds suffer , and their hopes for a lifestyle upgrade completely disappear.
Though it was a hard time for many, it motivated a growing portion of the population to educate themselves more regarding investing as they take a hands-on approach to their finances.
For those looking to start investing some savings starting in 2017, here are some popular choices available and the basic pros and cons of each.
Real Estate
Many of us have a bad taste in our mouths when it comes to real estate, however if you can still get a mortgage, many places are rebounding quickly in value. Obviously there are differences according to location, geography, and more, however the average house prices in the US have gone up 7.2% in the last year. Whether this helps you decide whether to rent or to buy, or if this inspires you to buy a house to rent out, it's a good time to be investing in property. The trouble is that you never know what kind of disaster could strike, but if you invest in good insurance and believe that the market has truly fixed itself, it could be an easy and safe investment.
Bonds
A good option for conservative investors, bonds are usually quite stable investments. You receive regular payments in the form of interest rate on a sum which you lent to either a company or a government entity. Similar to stocks, they still do go up and down in value, and you can sell them as you wish, however not as quickly or easily as stocks. This means a less volatile market to deal with. Another bonus is that if one of the companies you have loaned to goes under, you are the first in line for compensation once the assets are liquidated and ready to hand out.
Commodities
A basic good which can be sold, like iron, gold, wheat, etc, is known as a commodity, and many people invest their money in commodities. Though this market can be extremely volatile, it has negative if negligible correlation with stocks, and benefits from inflation. This can be appealing to those who have had bad experiences with one or the other. However, if you are expecting regular income generation, this is not for you as there are no regular payouts. If you don't mind the risk, there are many success stories of commodities going up steadily as the need for it arises and supply is limited.
Equities/Stocks
There are plenty of reasons for which “stocks” is the first thing that pops into your head when you think of investments. It's a very popular option for many investors, mostly because of the highest historical returns, the fact that you receive dividends, they are liquid and easy to acquire and sell, and can be as diverse as you would like. Unfortunately, they are quite risky as they can be volatile in the short term, there are “losers” in this game, and there is a lot of knowledge and experience that goes into analyzing the stock market.
If 2017 is going to be the year when you are going to start investing, we recommend that you at least consult investment recommendations for 2017 . This could be a valuable insight and starting point for your investment experience. Remember that you should be the one to decide on where your money should go, and being comfortable with your investment decisions should be a priority when choosing them.
