Have you ever had money to invest, yet, face so many choices? Do you stick it in a savings account for safekeeping? Do you invest in the stock market and take a risk? Are there other options?
Although it isn’t apparent when you start investing, trust me! risk is scary, but the reward is enticing. So, how do you decide where to invest your money?
We’ve devised this guide below to help you get started.
Bonds are the most conservative investment you can choose, next to a savings or money market account. When you invest in a bond, you invest in a company’s debt. In other words, you loan them money. The company (sometimes it’s the government) issues the bond, which is a contract to pay you back in a certain number of years.
You earn interest in exchange for loaning the company or government entity the money. You know the exact amount you’ll receive if you keep the bond through maturity. If you sell it sooner, you’ll receive less. Bond should be a long-term investment so you can see them through maturity, receiving the full amount of interest.
Most corporate and government bonds are risk-free but have lower returns than other investment options.