The following is a guest post by Rachel Devitt, a content specialist at Duuo .
Financial security–we all want it. And in difficult times such as these, it feels almost impossible.
Record unemployment and the prospect of many businesses never opening their doors again has got a lot of people wondering how they’re not just going to pay their bills next month, but live comfortably into old age.
For a long time, many people have pictured themselves striking it big on the right investment at the right time. Finding that tech company just before they crack into the market with a killer product. The problem is, that’s an one in a million chance.
Safe and secure investments are a much safer bet, and today we’ll explain why they’re the key to financial security.
Why Investing Works
It feels like an obvious question, but when you actually think about it, it’s easy to find yourself asking exactly why investments work.
For many people in 2021, the key to financial freedom is passive income. Employment can be insecure, so it’s hard to rely fully on just your job for your financial needs. In part, this is why many people have turned to side hustles such as dropshipping in recent years.
Safe and secure investments allow you to build an additional income to complement your day job. You might be saving for a rainy day or building towards a business of your own. Whatever your goal, it doesn’t matter, investments allow you to think ‘long-term. ’
Investing doesn’t just help you prepare for retirement, but stay ahead of key monetary developments, such as outperforming inflation .
It’s about preparing for the future, and there’s no better way to do that than by becoming more financially secure.
How to Secure Your Investments
Now that we understand why investments work and how important they are, let’s take a look at how you can begin to secure your investments and assets.
Start Early, Start Slow
It makes sense, right? The earlier you start, the more money you make.
While that’s not always the case, starting your road to financial security through investment early is a good way to offset any future mistakes. Nobody gets it right 100% of the time. There will be points you make a bad decision or decide to splurge unnecessarily. Starting early ensures that these missteps don’t leave you in ruin.
Start slow and build up to financial security. Allow yourself to learn as you grow and make small steps in safer bets.
Protect Your Assets
Good financial investments require a certain level of constant monitoring.
Passive income doesn’t come from sitting back and checking in once a year. You need to have a keen eye on where your money is going and how it’s performing, especially if it’s tied up in assets.
Property is a particularly good example of this. If you’re in the rental sector you can’t afford to let your asset diminish over time as tenants move in and out. Whether it’s property management and upkeep or insurance, you need systems in place to ensure your asset improves in price, rather than diminishes. Thankfully, innovative flexible insurance options have created options that encourage not just property owners but tenants to protect their homes and assets, even if they’re only there temporarily.
These innovative services make potentially volatile, yet very popular, services and products such as Airbnb a safer investment for first-timers. Look into what systems are in place to protect your assets and continue to monitor them.
Diversify Your Portfolio
We’ve all heard about the risks of putting all our eggs in one basket. While you might want to pump all your money into a safe bet, it makes sense to diversify your portfolio and develop multiple ways of saving for old age.
By banking on one investment taking off you run the risk of not just losing everything in the worst-case scenario, but limiting your return on investment. Asset allocation is an important part of financial management. Don’t be afraid to move money around if something isn’t working.
Consider three important factors:
- How much you’re willing to lose (and when you’re willing to pull out)
- Your age (and how long you have to aggressively invest before you want to reap the rewards)
- How you want to see your assets grow (particularly important if you’re putting everything into businesses)
Learn about Saving for Retirement
Perhaps most importantly, take the time to learn about how these investments can be enhanced in the long run.
As we touched upon, early or secure retirement is the goal for many people looking to achieve financial freedom. Understanding how your social security plan can be improved or invested in early to maximize savings is a key part of that. Don’t think of investment as solely gambling on a risky bet taking off. Think about how what you’re owed later in life can be pushed to its maximum potential.
The Safest and Securest Investments to Make
So , what are the best investments to make on the road to financial protection? While you can never be sure what concept, product or service is going to take off, there are some bets that have been shown to be safe for a number of decades now.
Property has been a safe investment for many years.
The increasingly popular rental market has made real estate a brilliant source of passive income for many prospective investors with the initial capital to become a landlord. In fact , rental properties are considered one the safest investments American investors can make in 2021, largely due to the all-time low mortgage rates COVID has afforded buyers.
Most importantly of all though: Prices will continue to go up.
Sure, some people are afraid of the bubble popping. However , house prices are some of the most protected assets in the world’s economy. The COVID-19 pandemic is a shining example of the Western government’s commitment to keeping house prices rising post-2008, crisis or no crisis.
The GameStop fiasco might have shined a negative light on the solidity of the stock market. But according to experts, stocks remain a brilliant investment opportunity if you’re willing to take risks and do your research.
There are plenty of safe bets out there, while an eye on future tech can leave you ahead of the curve and able to invest right at the sweet spot.
Biotech is expected to be a huge investment opportunity within the next year (especially if you follow Nasdaq), although you should do your own research to ensure you’re not one of many caught up in a media-galvanized rush to buy.
A Side Business
While betting on stocks can provide a thrill, many Americans would prefer to bet on themselves in 2021.
Rather than relying on their ability to get a promotion, they see financial freedom in the world of side hustles and out-of-office enterprises.
From ecommerce to tutoring, there are loads of quick and relatively easy ways to make money with an online business. It might not always be the safest investment. But if you’ve got the capital and commitment, a side hustle can be a great way of saving up and building your own empire.
Remember for a side hustle to really succeed, you need an idea of:
- Digital marketing practices
- Website design
- An active target audience
- Upscaling potential
Whether you’re bilingual or even love selling through eBay, there’s a side hustle investment opportunity for you.
Safe and secure investments might not be as exciting as taking dangers on the next Apple, yet they’re more likely to get you to a reasonable level of financial freedom.
Ask yourself, what do I want to achieve from my investments? Your answer should guide your investment decisions more than past success stories or the promise of being ahead of the curve.