Top 4 investment options for 2021

Investment in shares and equity mutual funds are not the only way to make the most of your accumulated savings. As a matter of financial prudence you should start looking at different investment ideas and asset classes to take care of your money. It’s never smart to let your money lie dormant in a bank account, gaining little interest and losing its purchasing power from persistently high inflation. So, here are four different investments that are worth learning about in 2021:

Real Estate

Regardless of what year we’re in, investment in real estate will always be worth learning about. This market is perfect for long-term investments as it offers unique benefits that favour risk-averse and patient investors. In reality, it is extremely hard for someone to lose money from a real estate investment. This is because you can generate income in one of the two ways: renting the property or outright selling it. Renting helps you earn a steady stream of money over the years, which can then help you invest in more properties to build a proper portfolio. Selling can help you get a huge chunk of cash and make a profit on your purchase. 

Also Read: Wealth creation: Forget stocks; invest in a house instead

Rental income typically grows at an annualised rate of 8-10 percent every year or higher depending upon your geography.

In either case, the key to successful real estate investments is to learn the property market. Understand the right time to buy and what can influence property prices. Learn about how you can improve your property value or increase rental prices. An educated property investor will know exactly where to look for the best properties, while an uneducated one is more likely to buy something that doesn’t work out. 

Also Read: Is it the right time to buy a house? Here’s all you need to know

Cryptocurrency

Yes, the crypto market is definitely worth paying attention to in 2021 and beyond. 

Though much more volatile, crypto currencies such as Bitcoin have been one of the best performing assets in the last five years. History dictates that it will go through down periods, steady periods, but also huge positive periods where prices go through the roof. Some people have a negative opinion of this investment, but that’s largely because they don’t understand it. 

Truthfully, it’s easy to see why this is the case. There are so many different questions to ask relating to cryptocurrency. What is cryptocurrency? What is blockchain? How do you trade crypto? What are liquidity pools? Is there a crypto tax? The questions keep on coming, so you need to do your research to understand everything about this market. If you can get to grips with it, you’ll soon learn how to identify the best and most profitable investments. 

Gold

It may seem like an old-fashioned investment, but there’s a reason gold continues to be an asset people purchase. The simple fact is that gold tends to increase in value over time, and it isn’t influenced by the same economic factors as things like the stock prices, bonds, currency markets or even real estate. This makes gold a perfect hedge against the price volatility in financial or paper assets that dominate most savings and investment portfolios nowadays.   

Still, there are questions you need to ask and answer before you start this investment. For starters, how do you invest in gold? What are the different ways you can invest? What’s the key investment strategy?

Also Read: Why it’s time to invest in gold right now

So many things need to be considered if you want to truly understand the market and learn more about this investment.

This tends to be one of those investments people make when they’re looking ahead to a future target or goal. For example, you put money in gold now with a view to selling it when you retire. Over the decades, the price appreciation in yellow metal would be more than enough to cover inflation and yield a significant profit. 

Certificates of Deposit

A certificate of deposit or CD is a very popular investment that functions like a savings account on steroids. Banks issue them and they give you a much higher interest rate than you’d get from a traditional savings account. The difference is that they have a set time on them that dictates when you can withdraw the money without getting a penalty. You get paid interest on your CD at set intervals by whoever issued it, and you can earn a large amount depending on the time period. 

Also Read: 7 golden rules to save and invest for your child’s education

Already, you have lots of different questions rolling around in your mind. Predominantly, where can you get a CD, and who offers the best CD rates? A bit of research will help you find the answers to these questions, along with the answers to many other questions that will help you make the right investment.

Understandably, you’re looking at some of these ideas and scratching your head. You may have left this page and done a bit of quick research into each investment, and some of them seem super confusing. Don’t worry, that’s the point of giving you different ideas. If cryptocurrency or real estate seems too complex or confusing, gold and CDs might be easier. It’s all about finding investments that you understand!

Also Read: How safe is your money in the bank and what can you do about it?

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