Hola bellas! If you like money as much as Cardi B, you’re going have to figure out how to make smart money moves! Good news is that it’s possible to side hustle intelligently by investing, which means putting money in an account in hopes that it will be worth more in the future. For example, this would be like buying a limited edition designer purse, with the idea that it’s going to be worth more than you paid for in the future.
Here are some basic investment options where you can place your money to potentially gain more than you invested. There are investments that are high, medium, and low risk. If you’re just getting started, I would recommend that you start with the low risk options.
- High-yield savings accounts- practically zero risk, up to $250,000
- It’s a bank account that earns you a higher interest rate than a normal savings account. A normal savings account offers about 0.01% interest, while a high yield savings account can give you a 2% interest rate. When you’re looking to open an account, make sure to look for one that has a low or zero monthly maintenance fee. Also make sure to look for a bank that has FDIC insurance. FDIC insurance protects your money up to $250,000.
- Money Market Account- practically zero risk, up to $250,000
- It is a type of savings account that also gives you a higher interest rate than a normal savings account, but oftentimes requires a larger minimum deposit. Also, just like with other savings accounts, you’re only able to make six withdrawals or transfers a month.
- Certificate of Deposit (CD)- practically zero risk, up to $250,000
- It is a federally insured savings account that earns you a fixed interest rate, as long as you keep your money in there for the specified term. The term is usually anywhere from three months to five years. Usually, the longer the term, the higher the interest rate you’ll receive. It is also important to note that if you need to withdraw your money before the term, you will be charged a penalty fee
- Mutual Funds– Low to high risk
- An investment that gives you the opportunity to pool your money with other investors to purchase a variety of stocks, bonds, and other securities. I also believe index funds, which are a type of mutual fund, are a one of the best options for those who are new to investing. They are a diversified investment that is low cost and lower risk than other mutual funds.
- Exchange Traded Funds (ETF)– Low to high risk
- They are a pool of stocks, bonds, or a combination that can be bought and sold through a broker. Just like mutual funds, they’re diversified but the added benefit is that they can be traded just like stocks (bought and sold multiple times per day).
- Stocks- High Risk
- According to the U.S. Securities and Exchange Commission, “Stocks are a type of security that gives stockholders a share of ownership in a company.” Stocks are a risky investment and have the potential for high returns, but they’re usually not recommended for those that are new to investing, because they’re not a diversified investing option and you can lose a lot of money very quickly.
You ready to start investing? You can get started with even just $100. There are many great online brokers that offer buying and selling of different investments. Before you open an investment account just make sure to pay off your debts first, because when you have credit card debts, you’re paying a lot of money in interest each month, if you’re not paying off your balance each month. So when you’re ready, get to it! Don’t delay making your money grow!