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When it comes to investing, many people immediately think of stocks, bonds, and mutual funds. But there’s a whole world of investment options beyond these traditional avenues. If you’re ready to explore new ways to grow your wealth, alternative investments may be the solution. These investments can offer diversification and potentially high returns. Whether you’re just starting out or looking to expand your portfolio, here’s a rundown of some alternative investment options that you might want to consider this year.

What Are Alternative Investments?

Alternative investments are anything outside of conventional stocks, bonds, or mutual funds. These can include real estate, peer-to-peer lending, private equity, art, and even cryptocurrency. The beauty of alternative investments lies in their ability to diversify your portfolio and offer different risk-return profiles compared to traditional assets.

Before diving in, it’s crucial to understand where your money is going and how it might perform. While these investments can yield great returns, they also come with their own set of risks.

Best Alternative Investment Ideas

1. Investing in Real Estate and Rentals Real estate has long been a popular investment choice, offering potential for both steady rental income and property appreciation. If you’re willing to take on the responsibilities of a landlord, investing in properties such as single-family homes or multi-unit buildings could be a great way to earn passive income.

That said, being a landlord isn’t always easy. Maintenance, tenants, and the occasional late rent payment can add stress. Hiring a property manager could alleviate some of the headaches, but it comes with additional costs. If you’re up for the challenge, real estate can be a lucrative alternative investment.

2. No-Landlord Real Estate Investing Not interested in dealing with tenants or maintenance? Crowdfunding platforms like Fundrise and RealtyMogul allow you to invest in real estate without the landlord responsibilities. These platforms pool money from multiple investors to buy properties or provide loans. The idea is to earn income through rental payments or interest on loans without the need for physical property management.

Fundrise, in particular, is a standout, as it allows you to start with as little as $500. And you don’t need to be an accredited investor to get started, making real estate investing accessible to a wider audience.

3. Peer-to-Peer Lending Peer-to-peer (P2P) lending platforms like Lending Club let you loan money directly to individuals or small businesses, bypassing the traditional bank model. In return, you earn interest as the borrowers repay their loans. With P2P lending, you can get involved in everything from personal loans to business financing.

Lending Club allows you to start with as little as $1,000 and offers the flexibility to fund multiple loans with smaller amounts, spreading your risk across various borrowers.

4. Investing in Art Art investment is gaining traction, and platforms like Masterworks make it easier than ever to invest in fine art. Masterworks purchases artwork below market value and sells shares in these paintings, allowing you to own a piece of art. If the art appreciates over time and sells for a profit, the investors receive a payout based on their share of ownership.

While art investment can be profitable, it requires a level of expertise. Masterworks handles the details, but it’s important to understand that art can be a long-term hold, with returns varying based on market demand and trends.

5. Music Royalties If you’re a music lover, investing in music royalties could be an interesting option. Through platforms like Royalty Exchange, you can buy the rights to music royalties and earn a share of the income generated when the music is played or used in commercials.

This form of passive income allows you to profit from established songs without needing to be a songwriter. However, investing in music royalties generally requires a higher initial investment and could be riskier for beginners.

6. Cryptocurrency Cryptocurrency, especially Bitcoin, has become a household name in recent years. Despite its volatility, cryptocurrency can be a lucrative alternative investment. The ease of access to digital currency exchanges like Coinbase makes it possible for beginners to start investing in Bitcoin, Ethereum, Litecoin, and other cryptocurrencies.

While cryptocurrencies offer high growth potential, they are extremely volatile and speculative. Be prepared for large price swings and make sure you understand the risks involved before diving in.

7. Gold Gold is often seen as a safe haven during times of economic uncertainty, and it can help diversify your investment portfolio. Whether you buy physical gold in the form of coins or bars, or invest in gold exchange-traded funds (ETFs), gold is a solid option for balancing risk and protecting against inflation.

Gold has maintained its value over time and is considered a relatively stable investment, especially during periods of market downturns.

8. Commodity ETFs Commodity ETFs provide exposure to physical commodities like oil, gas, gold, and agricultural products. With these funds, you can invest in commodities without dealing with the logistics of owning the physical asset. These ETFs offer an easy way to hedge against inflation and diversify your portfolio.

Commodity ETFs trade just like regular stocks, but they are subject to the price fluctuations of the underlying commodities.

9. Starting Your Own Business If you’re entrepreneurial, starting your own business can be an incredibly rewarding alternative investment. Whether it’s a freelance career, a side hustle, or a full-fledged business, investing your time and energy into a venture you control can yield significant returns.

Starting a business comes with risks, but it also offers the potential for high rewards. If you’re passionate about a particular field, turning that passion into a business could be the best investment you ever make.

10. Investing in Someone Else’s Business If you don’t want to run a business yourself but still want to get in on the action, consider equity crowdfunding. Platforms like SeedInvest and Crowdcube allow you to invest in startups by purchasing equity shares. If the business succeeds, you’ll see a return on your investment.

This form of investment can be risky, as startups are more likely to fail, but it also has the potential for substantial rewards if the company grows and succeeds.

Are Alternative Investments Worth It?

Alternative investments can provide diversification and new opportunities for growth, but they come with varying levels of risk. It’s important to consider your investment goals, risk tolerance, and financial situation before diving into any of these options. Diversifying your portfolio with a mix of traditional and alternative investments can help you build wealth and mitigate risks.

Remember, thorough research and due diligence are key to making informed investment decisions. Whether you’re looking for passive income or long-term capital gains, alternative investments offer a world of possibilities beyond the stock market.

Have you tried any alternative investments? Share your experiences in the comments!

If you’re exploring new ways to diversify your portfolio, exchange-traded funds (ETFs) might be just what you’re looking for. These investment tools bundle various assets like stocks, bonds, and commodities, allowing you to gain exposure to multiple markets with a single purchase.

Let’s dive into what ETFs are, how they work, and why they may be the right addition to your investment strategy.

What Are ETFs?

An exchange-traded fund (ETF) is a type of investment fund that holds a collection of assets, such as stocks, bonds, or commodities, and is traded on an exchange just like individual stocks. When you invest in an ETF, you essentially buy into a basket of different securities, which provides instant diversification. Unlike buying individual stocks, an ETF allows you to access multiple assets in one simple transaction.

ETFs are designed to track the performance of a particular index, sector, or asset class. The value of an ETF generally mirrors the value of the index it tracks, so if the index goes up, the ETF increases in value, and vice versa.

For example, if you invest in a bond ETF, you gain exposure to a variety of bond types, including corporate, municipal, or government bonds, all within one fund. Similarly, commodity ETFs allow you to invest in products like gold, oil, or agricultural goods.

One key thing to remember is that owning shares of an ETF doesn’t mean you own the individual assets within the fund. Instead, you receive your share of any profits and dividends as the value of the ETF fluctuates.

ETFs vs. Mutual Funds

While both ETFs and mutual funds offer diversification by pooling different securities, they differ in how they are traded and priced.

• Mutual Funds: Mutual funds are priced at the end of the trading day based on the net asset value (NAV). The NAV is calculated by adding up the total value of the assets in the fund, subtracting any liabilities, and dividing by the number of shares. Mutual funds are only bought and sold once the market closes.
• ETFs: ETFs, on the other hand, are traded throughout the day just like individual stocks. Their price fluctuates in real-time based on market demand, giving investors more flexibility and transparency in their transactions. This constant trading makes ETFs a better option for those interested in active trading.

Benefits of ETFs

• Diversification: With an ETF, you gain exposure to a wide range of assets, sectors, or regions without having to pick individual stocks or bonds.
• Low Costs: ETFs generally have lower expense ratios compared to mutual funds, meaning you can keep more of your returns.
• Flexibility: You can buy and sell ETFs at any time during market hours, offering you more control over your investments.
• Tax Efficiency: ETFs tend to be more tax-efficient because you can manage when to sell and avoid triggering capital gains taxes, unlike mutual funds, which may distribute capital gains to investors.
• Transparency: ETFs provide real-time pricing, which makes it easy to see how much your investment is worth at any moment.
• Automatic Reinvestment: Most ETFs automatically reinvest dividends, allowing you to compound your earnings over time.

Who Should Consider ETFs?

ETFs are great for investors who want to diversify their portfolio but don’t want to spend time selecting individual securities. If you prefer a hands-off approach to investing, ETFs allow you to passively invest in broad markets or sectors.

ETFs are also ideal if you like the idea of active trading. Unlike mutual funds, which only trade at the end of the day, ETFs can be bought and sold whenever the market is open. They’re perfect for investors looking to take advantage of daily market movements.

If you’re tax-conscious, ETFs are also a good choice. Their structure allows you to have more control over when you sell and how you manage your capital gains.

Where to Buy ETFs

To purchase ETFs, you’ll need an online brokerage account. Most brokers offer a wide selection of ETFs, so your choice will depend on the types of investments you’re looking for. You can find ETFs that track specific sectors, regions, or investment strategies. Once you make your selection, simply buy through your broker and track your investment by following the ticker symbol.

Bottom Line

ETFs are a fantastic option if you’re looking for a cost-effective, easy way to diversify your investments. With their low fees, transparency, and tax efficiency, they offer a simple way to invest in various markets without the need for constant monitoring or purchasing multiple securities.

Although all investments carry some risk, ETFs can help mitigate risk through diversification. They’re an excellent option for both beginners and seasoned investors looking to streamline their portfolio.

Would you consider adding ETFs to your portfolio? Let us know your thoughts in the comments!

Saving for your child’s education can feel overwhelming, especially with the rising costs of tuition and the burden of student loan debt. But there’s a simple, effective way to begin preparing now. The 529 savings plan, particularly through platforms like CollegeBacker, offers a tax-advantaged way to save for educational expenses.

In this review, we’ll walk you through what CollegeBacker is, how it works, and why it might be the perfect solution for your college savings needs.

What Is CollegeBacker?

CollegeBacker is an online platform designed to make starting and managing a 529 college savings plan simple and accessible. It operates under the guidance of Principly, Inc., a registered investment adviser with the U.S. Securities and Exchange Commission (SEC). CollegeBacker is essentially a robo-advisor for college savings, automating contributions and investment management to ensure your money grows over time.

Launched in 2016, CollegeBacker was created to help parents save for their children’s education without the usual hassle and complexity of traditional investment plans. The platform aims to provide families with a user-friendly way to avoid the burden of student loans and give children the gift of a debt-free education.

How Does CollegeBacker Work?

Setting up an account with CollegeBacker is quick and easy, allowing you to get started within minutes. The platform provides low-cost investment options that grow your contributions tax-free, meaning your savings compound without being taxed along the way.

Here’s how you can use CollegeBacker:

• Start a 529 Plan: CollegeBacker helps you set up your 529 plan and allows you to automate contributions. You can also share a unique link with family and friends, enabling them to contribute to your child’s education.
• Choose Your Investment Options: The platform suggests low-cost investment options that automatically adjust based on your child’s age. It starts with more aggressive investments and gradually becomes more conservative as your child approaches college age.
• Withdraw Tax-Free: You can withdraw your funds tax-free when used for qualified educational expenses, including tuition for primary, secondary, and higher education institutions.

Why Choose CollegeBacker?

User-Friendly Interface: CollegeBacker makes it easy to set up and manage your 529 plan. With minimal effort, you can automate your contributions and let the platform handle the rest. There’s no need to worry about balancing investments or understanding complicated financial jargon.

Flexible Fund Use: Unlike many other savings plans, CollegeBacker allows you to use funds for both primary and secondary education, as well as college expenses. There’s no age limit, so your child can use the savings later in life if they decide to pursue higher education as an adult.

Simple and Transparent Fees: CollegeBacker doesn’t charge mandatory account management fees, making it an affordable option. However, you can choose to tip the platform a fair amount, with 1% of your tip going to help low-income families.

Crowdfunding for College: One of CollegeBacker’s standout features is the ability to invite friends and family to contribute to your savings plan. This crowdsourced approach is a great way to get your support network involved in your child’s education.

How Much Does CollegeBacker Cost?

Opening an account with CollegeBacker is completely free. There are no required account fees, but users are encouraged to tip the platform, which helps support low-income families’ educational needs. The only fees that apply are related to the investments you select, though CollegeBacker specifically chooses low-cost options to ensure your money is spent efficiently.

How to Get Started with CollegeBacker

Starting with CollegeBacker is simple. Head to their website, create a free account, and begin setting up automatic contributions. You can also select investment options and invite others to contribute to your account using a unique link.

Even if you’re not the parent, you can start a 529 plan for a child if you’re at least 18 years old and a U.S. resident or resident alien. CollegeBacker’s flexibility makes it easy for anyone to contribute to a child’s education.

Pros and Cons of CollegeBacker

What We Like:

• Easy to Use: Setting up an account and getting started with your 529 plan is simple, even if you have no experience with investing.
• Crowdfunding Option: You can share your account link with friends and family to get contributions, which makes saving for college a community effort.
• Low-Cost Investment Options: CollegeBacker offers affordable investment options, minimizing fees while maximizing your savings.
• Tax-Free Growth: Enjoy the benefit of tax-free growth and withdrawals when used for educational expenses.
• No Mandatory Fees: While you can tip the platform, there’s no mandatory fee for managing your account.
• Support: CollegeBacker offers easy-to-reach customer support, and users can also access educational resources like the CollegeBacker Learning Center.

What Could Be Better:

• No Mobile App: While CollegeBacker’s website is user-friendly, the lack of a mobile app means you can’t easily manage your account on the go.
• Limited Fund Selection: Your investment options are limited to those provided by CollegeBacker, which might not offer as many choices as some state-sponsored 529 plans.
• No State Tax Deductions: Some state plans provide tax deductions for contributions, which you’ll miss out on if you use CollegeBacker.
• No Tax or Financial Advice: While CollegeBacker helps with setting up and managing your savings plan, for more complex financial planning, you may need to seek advice elsewhere.

Who Should Consider CollegeBacker?

CollegeBacker is ideal for parents who want a simple and efficient way to save for their children’s education. It’s perfect for those who may be new to investing, or those who prefer a hands-off approach. The platform’s ability to involve family and friends in the savings process is a unique feature, making it a great option for anyone looking to make saving for college a community effort.

The Bottom Line

While CollegeBacker may not be the only way to save for college, it certainly stands out for its ease of use and accessibility. Whether you’re new to investing or simply looking for a simpler, more modern approach to saving for your child’s future, CollegeBacker is worth considering. With no mandatory fees, low-cost investment options, and the ability to involve others in your savings, it offers a unique and straightforward way to plan for higher education expenses.

Investing in real estate can seem daunting, especially for those new to the field. However, platforms like Roofstock are making it easier for both beginners and seasoned investors to tap into the single-family rental (SFR) market. If you’re looking to get started with real estate but don’t have the time or expertise to manage properties yourself, Roofstock may offer a great solution. This review explores how Roofstock works, its pros and cons, and who should consider investing with this platform.

What Is Roofstock?

Launched in 2016, Roofstock is an online platform that allows investors to buy and sell single-family rental properties across the U.S. Roofstock has quickly become a leading marketplace for real estate investors, with over $2 billion in completed transactions. The platform simplifies the process of purchasing rental homes by providing tools that help you research, analyze, and close deals. Roofstock also supports the sale of investment portfolios and property shares, making it a versatile choice for various types of real estate investors.

Roofstock is particularly appealing to those who want to invest in rental properties without the hassle of managing tenants. By partnering with licensed property management companies, Roofstock ensures that your properties are maintained and tenants are handled on your behalf.

How Does Roofstock Work?

Roofstock operates as a fully online platform, meaning you can manage your entire investment journey—from purchase to sale—without leaving the site. Here’s how it works:

• Buying a Property: Roofstock lets you search for properties in your preferred market. You can filter properties by various factors such as price, rent, appreciation potential, and more. Once you find the right property, you can make an offer, pay an earnest money deposit, and complete the closing process. You can either purchase the property outright or finance it through Roofstock’s lending partners. Once the transaction is complete, Roofstock will connect you with a property manager to handle daily operations.
• Selling a Property: If you own a property and want to sell it, Roofstock offers a streamlined process to list and sell your home. You can submit your property details, and Roofstock will generate a free valuation report to help you set a competitive price. After listing your property, Roofstock will assist you in managing offers, handling paperwork, and closing the sale. There is a 3% fee on the sale price or $2,500, whichever is higher.
• Building a Property Portfolio: For those looking to diversify their investments, Roofstock also allows you to purchase a portfolio of properties. You can buy multiple properties that are already generating rental income, spreading your risk across various locations and markets. Roofstock also offers a partner service, BrightForge, which helps you with the portfolio procurement process.
• Buying Property Shares: Roofstock offers an opportunity to buy shares of fully-managed properties through Roofstock One. This option is available to accredited investors and allows you to generate passive income without the responsibility of property management.

How to Get Started with Roofstock

Getting started with Roofstock is easy. Simply create a free profile on the platform, and a short quiz will help determine your investment goals. To begin purchasing properties, you’ll need a minimum budget of $20,000. For those interested in buying a portfolio or property shares, additional requirements may apply.

Benefits of Using Roofstock

• Free Registration: You can explore the platform and its tools for free, making it easy to get started without committing any money upfront.
• Simplicity: Roofstock simplifies real estate investing by handling much of the legwork, including property research, transaction management, and property management.
• Flexibility: Roofstock gives you various ways to invest, whether you want to buy a property outright, purchase shares, or build a diversified portfolio. The platform also supports 1031 exchanges and self-directed IRAs, offering additional flexibility.
• Time-Saving: Roofstock does most of the work for you, from gathering information to communicating with various parties involved in your transactions. This saves you time and effort as you grow your investment portfolio.
• Investor Education: Roofstock offers a one-time fee for lifetime access to Roofstock Academy, where you can access real estate investing courses and connect with other investors.
• Property Certification: Roofstock certifies properties through a rigorous process to ensure they meet its standards, providing you with confidence in the properties you buy.

Roofstock Drawbacks

• Long-Term Investment: Real estate is not a liquid asset, meaning it can take time to see returns. If you’re seeking short-term investments, Roofstock may not be the right choice for you.
• Market Limitations: Roofstock only operates in certain markets. While it covers over 70 markets, if you’re looking for properties in a specific area not listed, you might have to wait for Roofstock to expand.
• Initial Capital Requirement: Roofstock requires a minimum investment of $20,000, which may be higher than other platforms like Fundrise that offer lower minimums.

Who Should Consider Roofstock?

• New Real Estate Investors: Roofstock is a great starting point for individuals looking to invest in rental properties without the need to manage tenants. The platform provides ample support and guidance throughout the process.
• Accredited Investors: Roofstock allows accredited investors to purchase shares of properties, making it a viable option for those seeking passive income without the responsibility of managing physical properties.
• Investors Seeking Diversification: If you want to diversify your portfolio beyond stocks and bonds, Roofstock offers the opportunity to invest in real estate through property shares, portfolios, or direct ownership.
• Busy Professionals: If you want to invest in real estate but don’t have time to manage properties, Roofstock’s property management partners take care of everything for you.

Who Should Avoid Roofstock?

• Those Without an Emergency Fund: Real estate investing involves risk, and it’s important to have an emergency fund in place before committing large amounts of money.
• Investors Seeking Quick Returns: Real estate investing typically requires patience. If you’re looking for short-term cash flow, you may want to explore other options.
• Individuals Not Contributing to Retirement Plans: Before diving into real estate, it’s best to make sure you’re contributing to tax-advantaged retirement accounts like a 401(k) or IRA, especially if your employer offers matching contributions.

Conclusion: Is Roofstock Right for You?

Roofstock is an innovative platform that makes real estate investing more accessible, especially for those who prefer a hands-off approach. It offers a wide variety of investment options, from buying properties outright to purchasing shares of rental homes. If you’re looking to invest in real estate but don’t want the hassle of managing properties or dealing with tenants, Roofstock could be a great option to explore. Just be sure to consider your investment goals and financial situation before diving in.

Saving for retirement is an essential part of financial planning, but navigating the different retirement account options can be confusing. With so many rules, contribution limits, and account types to consider, it’s easy to feel overwhelmed. However, understanding Individual Retirement Accounts (IRAs) can simplify the process. These tax-advantaged accounts allow you to save for retirement with either tax-free growth or tax-deferred growth. In this article, we will explain the contribution limits for both traditional and Roth IRAs, outline who qualifies for each, and clarify some common questions about these retirement accounts.

What is an IRA?

An IRA, or Individual Retirement Account, is a type of investment account specifically designed for retirement savings. The two main types of IRAs are traditional and Roth, each with its own tax advantages. Contributions to a traditional IRA may be tax-deductible in the year you make them, and the funds grow tax-deferred. Roth IRA contributions, on the other hand, are made with after-tax dollars but provide tax-free withdrawals in retirement.

2025 IRA Contribution Limits at a Glance

• Under age 50: You can contribute up to $6,500 to your IRA for the 2025 tax year.
• Age 50 or older: You can contribute up to $7,500 due to the “catch-up” provision, allowing individuals over 50 to save more as they approach retirement.
• Deadline: Contributions for the 2025 tax year must be made by the tax filing deadline, usually April 15 of the following year.

Traditional IRA Contribution Limits

The contribution limit for a traditional IRA is the same as for Roth IRAs: $6,500 for those under 50 and $7,500 for those 50 and older. These contributions are typically tax-deductible, which can reduce your taxable income for the year. However, the amount you can deduct may depend on your income and whether you or your spouse are covered by a retirement plan at work.

For the year 2025, if you or your spouse are covered by a workplace retirement plan, your deduction limit may be phased out based on your modified adjusted gross income (MAGI). If neither of you is covered by a workplace plan, the full contribution is deductible, regardless of income.

As of 2020, the IRS removed the age limit for contributing to a traditional IRA, so you can contribute at any age as long as you have taxable income.

Roth IRA Contribution Limits

Unlike traditional IRAs, Roth IRA contributions are made with after-tax dollars, meaning you don’t get an immediate tax break. However, the biggest advantage of a Roth IRA is that your withdrawals in retirement are tax-free, provided you meet certain conditions.

The contribution limits for Roth IRAs also mirror those of traditional IRAs: $6,500 for those under 50 and $7,500 for those 50 and older. However, Roth IRAs come with income limits that may reduce or eliminate your ability to contribute.

Here are the income limits for Roth IRA contributions in 2025:

• Married Filing Jointly: If your MAGI is less than $198,000, you can contribute the full amount. If your MAGI is between $198,000 and $208,000, your contribution limit is reduced. If your MAGI is over $208,000, you cannot contribute.
• Single Filers: If your MAGI is less than $133,000, you can contribute the full amount. If your MAGI is between $133,000 and $148,000, your contribution limit is reduced. If your MAGI exceeds $148,000, you are ineligible to contribute.

How to Calculate Reduced Roth IRA Contributions

If your income falls within the phase-out range, you can calculate your reduced contribution by following these steps:

1. Subtract your MAGI from the upper limit of the phase-out range for your filing status.
2. Divide the result by the phase-out range amount (i.e., $10,000 for married couples or $15,000 for others).
3. Multiply the result by your maximum contribution limit ($6,500 or $7,500, depending on your age).
4. Subtract the result from your maximum contribution limit.

For example, if you’re a married couple with a MAGI of $202,000, your contribution limit will be reduced. After subtracting $198,000 from $202,000, you’ll have $4,000. Divide that by $10,000 to get 0.4. Multiply that by the $7,500 maximum contribution for individuals over 50, which equals $3,000. Subtract that from $7,500 to get your reduced contribution limit of $4,500.

Exclusions and Restrictions

There are a few important exclusions when contributing to an IRA:

• Taxable Income Requirement: You can only contribute to an IRA if you have taxable income. This includes wages, salaries, tips, and self-employment income.
• Contribution Limits Based on Income: You can’t contribute more than your earned income for the year. For example, if you earned $5,000, your contribution limit would be $5,000, not the standard $6,500 or $7,500.
• Non-Working Spouse: A non-working spouse can contribute to an IRA through a spousal IRA, but only if the working spouse has enough taxable income to cover both contributions. The total combined contributions cannot exceed the total taxable income.

Final Thoughts on IRA Contributions

IRAs are a fantastic way to build wealth for retirement, offering both tax advantages and the potential for long-term growth. Whether you choose a traditional IRA for tax deductions or a Roth IRA for tax-free withdrawals, these accounts provide a flexible way to save. Be mindful of the contribution limits and income restrictions, and make sure you contribute as much as possible to take full advantage of the tax benefits. Remember, saving for retirement is a marathon, not a sprint, so start as early as possible to make the most of compound growth.

If you’re looking for ways to grow your money while keeping risk to a minimum, you’re not alone. Many investors seek low-risk options that provide reliable returns without exposing them to too much volatility. Whether you’re nearing retirement or simply prefer a more cautious approach to investing, there are several smart ways to invest without risking your financial security. In this article, we’ll explore some of the best low-risk investments for 2025 that offer good returns with minimal risk.

What Are Low-Risk Investments?

Low-risk investments are those that are less likely to lose value, typically offering steady returns over time. They are ideal for those looking to preserve capital while still earning a modest return. These investments are generally less volatile than stocks, making them a good choice for conservative investors or those who need their funds to remain stable.

While no investment is completely risk-free, low-risk options can provide peace of mind and help build a balanced portfolio. Let’s dive into the best options available for you to consider this year.

1. High-Yield Savings Accounts

One of the safest and simplest ways to earn interest on your money is through high-yield savings accounts. These accounts typically offer higher interest rates than traditional savings accounts, and your funds are insured by the FDIC, making them a secure choice. While the returns may not be huge, they’re perfect for short-term goals or emergency savings.

For instance, CIT Bank’s Savings Builder account offers an impressive 1.00% APY with no monthly service fees, making it one of the best options for those looking for a reliable and low-risk place to park their money.

2. Money Market Accounts

Money market accounts are another solid choice for low-risk investments. They often offer better interest rates than regular savings accounts and are FDIC insured. With a money market account, you can access your funds when needed, making it a flexible option for your emergency fund.

Keep in mind that while money market accounts are low-risk, they typically require higher minimum balances than regular savings accounts, so make sure to shop around for the best rates.

3. Fully Secured Bonds

Fully secured bonds are an attractive low-risk investment option. These bonds are backed by collateral, which reduces the risk of loss. Worthy Bonds, for example, offer a 5% fixed interest rate and are used to fund small businesses. The bonds are secured by the businesses’ assets, which provides an added layer of protection for your investment. With a low minimum investment of just $10 per bond, they offer an accessible way to earn steady returns.

4. Certificates of Deposit (CDs)

Certificates of deposit (CDs) are a popular low-risk investment for those looking to grow their savings at a guaranteed rate. With a fixed interest rate for a specific term, CDs are FDIC-insured, ensuring the safety of your principal up to $250,000. They typically offer higher returns than traditional savings accounts, but your money is tied up for the duration of the term, which could range from a few months to several years.

The longer the term, the higher the interest rate, so consider using a CD ladder strategy to give you access to your money at different intervals without sacrificing potential returns.

5. Exchange-Traded Funds (ETFs) – Medium Risk

While not entirely low-risk, ETFs can be a relatively safe investment option when chosen wisely. ETFs provide instant diversification by holding a variety of assets, such as stocks or bonds. By spreading your investment across different sectors, you can lower the overall risk. ETFs are also more liquid than mutual funds, and they generally have lower fees. However, as with any investment, there’s still some risk involved.

6. U.S. Treasury Securities

U.S. Treasury securities, including T-bills and Treasury notes, are some of the safest investments available. These government-backed securities are considered almost risk-free because they are backed by the full faith and credit of the U.S. government. Treasury Inflation-Protected Securities (TIPS) are particularly valuable for protecting your principal from inflation, as their value is adjusted based on inflation rates.

7. Municipal Bonds

Municipal bonds, issued by state or local governments, are another safe investment option. They are usually low-risk, and the interest income is often exempt from federal and state taxes. Although the return may be modest, municipal bonds can be a great way to preserve your capital while generating tax-free income.

8. Money Market Funds

Money market funds are investment products that focus on short-term debt securities, like Treasury bills and commercial paper. They’re designed to maintain a stable value, usually $1 per share, and provide income through dividends. While not FDIC insured, money market funds are regulated by the SEC and offer a low-risk alternative to other investment vehicles.

9. Pay Off Your Mortgage Early

If you own a home, paying off your mortgage early can be one of the best low-risk investments you can make. By paying down your mortgage faster, you save on interest and eliminate a significant debt. This gives you financial freedom and peace of mind. Additionally, the money you would have spent on mortgage payments can be redirected to other investments once the mortgage is paid off.

10. Credit Card Rewards

Credit card rewards might not seem like an investment, but they can provide significant value with minimal risk. Many credit cards offer sign-up bonuses, cash back, and rewards points. If used responsibly, credit cards can be a way to earn rewards on everyday purchases without any added risk. Just make sure to pay off your balance in full each month to avoid high interest charges.

11. Bank Bonuses

Some banks offer generous bonuses for opening new accounts, often in the range of $100 to $500. These bonuses are a great way to earn free money with minimal effort. Typically, you’ll need to meet certain requirements, like setting up direct deposit or maintaining a minimum balance. The best part is that these accounts are insured by the FDIC, so your money is safe.

12. Peer-to-Peer Lending

Peer-to-peer (P2P) lending allows you to lend money directly to individuals or businesses through online platforms. While this can be a lucrative investment, it’s important to understand the risks involved. However, platforms like LendingClub and Prosper allow you to diversify your loans, reducing the risk of any one loan defaulting.

13. Dividend-Paying Stocks – Medium Risk

Dividend-paying stocks offer both regular income through dividends and potential capital appreciation. While they carry more risk than bonds or savings accounts, they can be a good option for those looking for stable returns. Reinvesting your dividends can help you grow your portfolio over time while providing ongoing income.

14. Annuities

Annuities are insurance products that provide guaranteed income, often for the rest of your life. Fixed annuities provide a set return, making them a stable investment option for those seeking predictability. While the returns may not be as high as other investments, the certainty they provide can be valuable, especially for retirees.

15. Preferred Stocks – Medium Risk

Preferred stocks offer higher dividends than common stocks and are less volatile. They provide a good balance between risk and reward, offering steady income while retaining some growth potential. However, they are still subject to market fluctuations, so they’re best suited for those with a medium risk tolerance.

16. Stable Value Funds

Stable value funds are low-risk investments often available in retirement plans like 401(k)s. These funds are designed to preserve capital while providing moderate returns. They hold short- to medium-term government and corporate bonds and are typically insured, making them a safe and stable investment option.

Final Thoughts

When it comes to investing, it’s important to find the right balance between risk and reward. While high-risk investments can yield higher returns, low-risk investments provide stability and peace of mind. Whether you’re building an emergency fund, saving for a big purchase, or just looking for safe ways to grow your wealth, the options listed above offer low-risk solutions with decent returns. Be sure to assess your financial goals and risk tolerance before making any investment decisions, and always consider diversifying your portfolio to minimize risk.

Looking for a simple, low-risk investment option to grow your savings? Worthy Bonds may be exactly what you’re looking for. With a fixed 5.73% annual percentage yield (APY) and a low entry point of just $10 per bond, it’s an easy and accessible way to earn guaranteed returns. Here’s an in-depth look at Worthy Bonds and how they can benefit you.

What Are Worthy Bonds?

Worthy Bonds are investments that provide a fixed return of 5.73% APY. For just $10 per bond, you can invest in small business loans through Worthy. Your funds help finance these loans, and you earn interest as the businesses repay them. Worthy’s bonds come with no fees or penalties, and you can cash out at any time. They’re a great way to earn higher returns compared to a typical savings account, without a huge risk.

How Do Worthy Bonds Work?

When you purchase Worthy Bonds, you’re lending money to small businesses that need capital to grow. These businesses repay the loan with interest, and your earnings come from the interest accrued on those loans. It’s a simple and straightforward process. Worthy uses your funds to make loans and returns the interest you earn, all while keeping the bond process transparent and secure.

Key Features of Worthy Bonds

1. Fixed 5.73% APY – Earn a competitive interest rate on your investment.
2. Low Minimum Investment – Start investing with as little as $10 per bond.
3. No Fees – There are no transaction fees, penalties, or hidden costs.
4. Secure Investment – Your bonds are secured by the assets of the businesses they fund, minimizing risk.
5. Liquid Investment – You can withdraw your money at any time without paying a penalty.
6. Automatic Reinvestment – You can choose to automatically reinvest your interest, allowing your investment to grow effortlessly.

Security and Regulation

Worthy Bonds are SEC-registered, meaning they are officially recognized by the U.S. Securities and Exchange Commission. Although they are not FDIC-insured (since they are not bank products), the bonds are secured by the assets of the companies they fund. Additionally, Worthy uses standard internet security protocols to protect your data and prevent unauthorized access.

Benefits of Worthy Bonds

• Good Return on Investment: With a 5.73% APY, Worthy Bonds offer a solid return that’s higher than most traditional savings accounts.
• No Fees: Worthy’s fee-free structure ensures you get all of the returns without any surprise charges.
• Flexibility: You can withdraw your money at any time without paying penalties, providing liquidity if you need it.
• Diversification: Worthy Bonds can be a great way to diversify your portfolio by adding a fixed-income asset to balance your investments.

Where Worthy Falls Short

• Investment Limits: While there’s no maximum for accredited investors, non-accredited individuals are limited to investing no more than 10% of their annual income or net worth.
• Risk: While the loans are secured by the businesses’ assets, like all investments, there is still risk involved, and economic downturns can affect the ability of businesses to repay their loans.

Who Should Consider Worthy Bonds?

• Hands-off Investors: If you prefer a simple investment strategy without actively managing your portfolio, Worthy Bonds are perfect. The platform allows you to invest automatically by rounding up your everyday purchases and reinvesting interest earnings.
• Beginners: With a low minimum investment of $10, Worthy Bonds are a great entry point for new investors. The simplicity and accessibility make it easy to get started.
• Investors Seeking Diversification: If you already have stocks or real estate investments, adding bonds like Worthy Bonds can help diversify your portfolio and reduce overall risk.

Who Should Avoid Worthy Bonds?

• Short-Term Investors: While Worthy Bonds allow you to withdraw your money anytime, the bonds have a 36-month term. If you need a more liquid investment, consider alternatives like high-yield savings accounts or certificates of deposit (CDs).
• People Without Emergency Savings: Before investing, make sure you have an emergency fund set aside. It’s always smart to have access to cash for unexpected expenses.

How to Open a Worthy Account

Getting started with Worthy is easy. Here’s how to open an account:

1. Visit the Worthy website and click “Get Started.”
2. Create an account by entering your email, password, and personal details.
3. Connect your bank account for easy funding.
4. Start investing with just $10 per bond.

Once you’ve linked your bank account, you’re ready to invest and start earning interest on your funds.

Final Thoughts on Worthy Bonds

Worthy Bonds offer an accessible, low-risk way to earn a fixed return on your money. With a solid 5.73% APY, no fees, and the ability to withdraw your money at any time, it’s a great option for those looking for a hands-off investment. Whether you’re new to investing or looking to diversify your portfolio, Worthy Bonds provide a straightforward and secure way to grow your savings.

Are you saving up for something big in the near future? Whether it’s an emergency fund, a car purchase, a down payment on a house, or a vacation, you might be looking for ways to grow your savings without taking on too much risk. Thankfully, there are plenty of short-term investment options that can help you do just that.

While traditional savings accounts often offer low returns, there are several other short-term investments that provide higher growth opportunities with relatively low risk. Let’s explore some of the best short-term investment options to help you grow your money even if you don’t have decades to wait.

What Are Short-Term Investments?

Short-term investments are designed to be held for a relatively short period, typically less than five years. The goal is to earn a return on your money while keeping the risk low since you’ll need access to the funds sooner rather than later. While riskier options like stocks are better suited for long-term horizons, short-term investments allow you to grow your money without putting it at unnecessary risk.

Here are some of the top short-term investments that strike the right balance between growth and safety:

1. Online Savings Accounts

Looking for a low-risk, highly liquid option? High-yield online savings accounts are a great choice. They often offer better interest rates than traditional bank savings accounts and are typically FDIC-insured, making them a secure place to park your money.

For instance, CIT Bank’s Savings Builder account offers an interest rate of 1.00% APY, which is a solid return for an account that gives you easy access to your money. While you won’t earn a fortune, your money will grow at a reasonable rate compared to a standard savings account.

2. Money Market Accounts

Money market accounts are another great way to earn higher interest rates than traditional savings accounts. They are typically offered by banks or credit unions and can also come with check-writing and debit card access.

While these accounts often require a minimum deposit and can charge fees if your balance falls below a certain level, they are insured by the FDIC (or NCUA if from a credit union), making them low-risk.

3. Certificates of Deposit (CDs)

If you’re looking for a safe, low-risk investment, a certificate of deposit (CD) might be the way to go. With a CD, you commit to locking your money away for a set period, typically ranging from a few months to five years, in exchange for a fixed interest rate. The longer the term, the higher the interest rate usually is.

The main downside to CDs is that your money is tied up for the duration of the term, and withdrawing funds early often comes with penalties. However, for short-term goals, a CD can be a good choice, offering guaranteed returns.

4. Worthy Bonds

Worthy Bonds allow you to invest in bonds that fund loans to U.S. small businesses. With a $10 minimum investment, you can purchase bonds that pay a fixed 5% interest rate, with a term of 36 months. The best part is that you can cash out early with no penalties, offering flexibility along with solid returns.

5. U.S. Treasury Securities

U.S. Treasury bills (T-bills) and notes (T-notes) are government-backed investments with very low risk. T-bills are short-term investments with maturities ranging from 4 weeks to 52 weeks. T-notes have maturities of 2, 3, 5, 7, or 10 years.

T-bills are purchased at a discount, and when they mature, you receive the full face value, earning the difference as profit. T-notes, on the other hand, offer fixed interest rates and make semiannual payments. These are low-risk investments with relatively low returns but can be a safe bet for short-term growth.

6. Treasury Inflation-Protected Securities (TIPS)

TIPS are government bonds that are adjusted for inflation, which means they provide protection against inflation while earning you interest. The principal value increases with inflation, and you earn interest on that adjusted value. While TIPS are typically long-term investments, they can also be suitable for short-term goals if you want a hedge against inflation.

7. Short-Term Municipal Bonds

Municipal bonds are issued by state or local governments and are considered relatively safe. While they typically offer lower returns than corporate bonds, the interest on municipal bonds is often exempt from federal taxes, and in some cases, state taxes as well.

For those in higher tax brackets, municipal bonds can be an attractive option to maximize returns while keeping risk low.

8. Short-Term Corporate Bonds

Corporate bonds are another type of bond that can offer higher yields than government or municipal bonds. They are backed by corporations, making them riskier but also more lucrative. Short-term corporate bonds, with maturities of 1 to 5 years, offer a balance between risk and return, making them suitable for short-term investors.

9. Peer-to-Peer Lending

Peer-to-peer (P2P) lending platforms allow you to lend money to individuals or businesses in exchange for interest payments. While P2P lending offers the potential for higher returns, it also comes with higher risk, as borrowers may default on their loans.

Platforms like Lending Club and Prosper let you choose which loans to invest in, and you can start with as little as $25 per loan. If you diversify your investments across multiple loans, you can minimize risk while earning attractive interest rates.

10. Credit Card Rewards Offers

Although not technically an investment, taking advantage of credit card rewards can be a smart way to earn money from everyday spending. Some credit cards offer substantial sign-up bonuses or cash-back rewards that can be redeemed for travel or other benefits.

Just make sure you can pay off your balance in full each month to avoid high-interest charges that would negate the value of the rewards.

11. Paying Off High-Interest Debt

One of the best investments you can make is paying off high-interest debt, such as credit card balances. If you have a $5,000 balance on a credit card with a 20% APR, paying it off can save you hundreds of dollars in interest annually—more than you’d likely earn from most short-term investments.

Final Thoughts

While short-term investments won’t make you rich overnight, they offer a safe way to grow your money with minimal risk. Depending on your goals, you can choose from various options like high-yield savings accounts, Treasury securities, or even peer-to-peer lending.

The key is to choose investments that align with your risk tolerance and financial timeline. Start early, diversify, and stay consistent with your investments to build a solid foundation for your financial future.

If you’re thinking about investing but feel overwhelmed by the process, you’re not alone. Many beginners struggle with where to start, what to invest in, and how to avoid common pitfalls. The good news is that investing doesn’t have to be complex or intimidating. With a few simple steps, anyone can start building wealth and securing their financial future.

In this beginner’s guide, we’ll walk you through the basics of investing, why it’s essential for long-term financial success, and how you can get started with as little as $500. We’ll also discuss various investment strategies, options to consider, and tips to help you make smart decisions along the way.

Why Should You Start Investing?

Investing is one of the most effective ways to grow your wealth over time. Whether you’re saving for retirement, a down payment on a house, or just looking to build financial security, investing allows you to put your money to work for you. The key is to start early, remain consistent, and let the power of compounding interest work its magic.

As you invest, you’re essentially creating multiple streams of income, allowing your money to earn money. Unlike saving in a traditional savings account, where your money sits idly, investments can generate returns and provide long-term growth.

Understanding Compound Interest

One of the most powerful concepts in investing is compound interest. In simple terms, compound interest means earning interest on both your initial investment (the principal) and the interest that accumulates over time. This creates a snowball effect, where your money grows faster as time goes on.

For example, if you invest $100 a month starting at age 20 and earn a 7% annual return, by the time you’re 60, you’ll have invested $48,000. But thanks to compound interest, your investment will be worth over $264,000 by the time you reach retirement age. The earlier you start, the more you benefit from this compounding effect.

Protecting Your Investments and Minimizing Loss

Investing comes with risks, and it’s essential to understand how to minimize them. One of the most effective strategies is the “buy and hold” approach, where you invest for the long term and ride out market fluctuations. This strategy helps you avoid panic selling during short-term downturns and increases the likelihood that your investments will grow over time.

Additionally, understanding your risk tolerance and matching your investments to your financial goals is crucial. If you’re comfortable with higher risk and have a long time horizon, you might opt for more volatile investments. On the other hand, if you’re closer to retirement or prefer stability, you’ll want to focus on lower-risk investments.

Diversification and Asset Allocation

To reduce risk, it’s important to diversify your investments. The idea is to spread your money across different types of assets—stocks, bonds, real estate, and more—so you’re not putting all your eggs in one basket. Diversification helps protect your portfolio from the potential loss of a single investment.

Asset allocation refers to how you distribute your investments among different asset classes. A well-balanced portfolio might include a mix of stocks, bonds, and other assets based on your financial goals, risk tolerance, and time horizon. The right asset allocation will help you achieve your objectives while minimizing risk.

Types of Investments to Consider

There are various ways to invest your money, each with its pros and cons. Here’s a quick overview of some popular investment options for beginners:

1. Employer-Sponsored Retirement Accounts (401(k), IRA)
   These accounts are an excellent place to start investing, especially if your employer offers a match. Contributions are often tax-deferred, and you can automate your contributions to make the process easier. For many people, contributing to a retirement account should be a priority.
2. Individual Retirement Accounts (IRAs)
   IRAs are another solid retirement investment option, offering both tax-deductible (Traditional IRA) and tax-free growth (Roth IRA) benefits. They are easy to set up and provide flexibility in how you invest.
3. Real Estate Investment Trusts (REITs)
   If you’re interested in real estate but don’t want the hassle of buying property, REITs allow you to invest in real estate without owning physical properties. REITs pool money from investors to buy and manage income-generating real estate, providing a way to earn passive income.
4. Peer-to-Peer Lending (P2P Lending)
   P2P lending allows you to lend money to individuals or small businesses in exchange for interest. It’s a more unconventional option but can offer higher returns if done correctly. Just be aware that there is a risk of default.
5. Bank Products (High-Yield Savings Accounts, CDs)
   While these options tend to offer lower returns, they are safe and liquid, making them ideal for short-term savings. Look for high-yield savings accounts or certificates of deposit (CDs) with better interest rates.
6. Physical Real Estate
   If you’re ready to take on more responsibility, buying rental properties can provide steady income and long-term value appreciation. However, it’s important to consider the costs and time commitment involved in property ownership.
7. Educational Savings Accounts (529 Plans)
   If you have children and want to save for their education, a 529 plan allows you to invest money tax-free for qualified educational expenses. This is a great way to prepare for future costs while gaining tax advantages.
8. Start a Business
   Investing in your own business can yield high returns, both financially and personally. While it requires more effort than other investments, owning a business provides the potential for significant growth and flexibility.
9. Individual Securities (Stocks, Bonds)
   Investing in individual stocks and bonds is more hands-on and carries more risk, but it also offers the opportunity for higher returns. Many beginners start by investing in index funds or ETFs, which provide exposure to multiple securities with less risk.

Final Thoughts

Starting to invest might seem overwhelming, but it doesn’t have to be. The key is to start small, be consistent, and gradually build your portfolio over time. Remember, the earlier you begin, the more you can take advantage of compound interest and the longer your money has to grow.

Whether you’re contributing to a retirement account, investing in real estate, or trying out stocks, make sure you understand your risk tolerance and time horizon. Diversify your investments to minimize risk and align them with your long-term goals.

Investing is an essential tool for financial success. With a little knowledge and discipline, you can start building wealth and working towards a secure financial future.

M1 Finance is a platform designed to simplify investing, borrowing, and spending, offering a user-friendly way to manage all your financial activities. This review will highlight the platform’s key features, benefits, and any drawbacks so you can determine whether M1 Finance fits your needs.

What Is M1 Finance?

M1 Finance is an all-in-one financial platform that provides automated investing, a checking account, and borrowing options. It offers a hands-off approach to building a custom investment portfolio without dealing with high fees or complex trading processes. With M1, you can choose to invest in individual stocks or exchange-traded funds (ETFs), and you don’t have to worry about paying trading fees. In addition to investing, M1 Finance provides a checking account with debit card access and the ability to borrow against your investments.

How M1 Finance Works

M1 Finance allows you to create a customized portfolio using a unique “pie” system. You select your desired stocks or ETFs, and M1 divides them into slices of a pie, which makes the management of your portfolio straightforward and intuitive. You can choose how much of each investment you want and then automate contributions. If you prefer, you can opt for one of M1’s ready-made pies, which offers a hands-off approach for those who don’t want to customize their investments.

The platform also offers fractional shares, meaning you can buy smaller portions of a stock that would normally be out of reach. This makes investing accessible for users with smaller budgets.

Once set up, M1 Finance automatically handles your investments, including rebalancing your portfolio if it drifts from your original allocation. You can also make manual contributions and trades if you prefer more control over your actions.

Fees and Costs

M1 Finance does not charge trading fees or commissions. The only fees you may encounter are for regulatory purposes when selling a stock, which are minimal compared to traditional trading fees. There is also an option to subscribe to M1 Plus, which costs $125 annually and provides added perks such as a second trading window, reduced borrowing interest rates, and a rewards debit card.

M1 makes money through its borrowing platform, where users can access loans at competitive interest rates. The interest rate varies, but it’s typically lower for M1 Plus subscribers. The free platform also generates revenue from a small fee on borrowed funds.

Key Features of M1 Finance

• Automated Investing: M1 Finance’s key strength lies in its automated investing approach. You can set up your portfolio and contributions, then let the platform do the rest, ensuring that your investments are regularly funded and rebalanced without you needing to actively manage them.
• Fractional Shares: M1 Finance allows you to purchase fractional shares, enabling you to invest in high-value stocks even with a small budget.
• Borrowing Options: Once you have $5,000 in a taxable account, you can borrow against your portfolio at competitive rates. You can access up to 35% of your portfolio value, and M1 Plus subscribers enjoy lower borrowing rates.
• Checking Account: M1 Finance offers a free FDIC-insured checking account that comes with a debit card and access to ATM reimbursements. M1 Plus users enjoy additional benefits, such as earning cash back on purchases and a higher annual percentage yield (APY) on account balances.

Who Should Use M1 Finance?

M1 Finance is ideal for investors who prefer a more passive approach to managing their investments. If you want to customize your portfolio without dealing with frequent trades, this platform makes it easy to automate your investing. Additionally, it’s a great choice for anyone looking to avoid trading fees and those who want to earn rewards with a checking account.

For those who don’t have the capital to buy full shares of stocks or ETFs, M1’s fractional share system makes investing more accessible, even with smaller amounts of money.

Who Should Avoid M1 Finance?

M1 Finance might not be the best option for active traders who enjoy choosing their stocks and making trades on their terms. If you prefer direct control over your trades and want to set specific parameters, you may find that a traditional brokerage is a better fit.

Additionally, M1 Finance is currently only available to U.S. residents, so it’s not an option for international users.

Final Thoughts

M1 Finance offers an easy-to-use, fee-free platform for investing, borrowing, and banking. With its automated investing process and the ability to invest in fractional shares, it’s a great option for those looking for a hands-off, low-cost approach to building wealth. The added features like the checking account and borrowing options make it a versatile financial tool.

However, if you’re an active trader or prefer complete control over your investments, M1 might not meet your needs. For those who prefer a more automated, simplified approach to managing their finances, M1 Finance could be the right fit.