31 Smart Passive Income Ideas That Actually Work _ Ways to get money, Smart passive income, How to g
2. BUY INDEX FUNDS AND ETFS
INITIAL INVESTMENT: 10/10
RISK: 8/10
TIME: 2/10
MONEY GAIN: 7/10
If you have the capital to invest but don’t have the time, knowledge, or energy to get stuck in dividend investing, index funds and ETFs are a much easier alternative. Both index funds and exchange-traded funds (ETFs) track specific returns of a market index.
If you want your money working for you, you are looking for a simple long-term approach, and you don’t want to play with risky investments, this strategy might be for you.
It took us a long time to decide how to invest our money.
I have always been terrified of investing in the stock market as I am the worst gambler in history. Then I discovered index investing and ETFs, and I am converted. Last year my investments made a return of over 20%!
But investing in the market can be a bit of a rollercoaster (thanks to the virus that shall not be named!).
Before investing in index funds and ETFs, I strongly recommend reading this blog: J.L. Collins’ Stock Series.
Books to read before investing:
3. OPEN A HIGH-YIELD ACCOUNT
INITIAL INVESTMENT: 3/10
RISK: 1/10
TIME: 1/10
MONEY GAIN: 2/10
With inflation hitting the highest levels in 40 years, having your money in your checking account means losing cash every day.
If you have money sitting there and still don’t know how to invest it or prefer a no-risk investment strategy, make sure you pick the best possible rate you can get.
And if you want to get high-interest rates, you need to look at an online savings account (which pays as much as 20 times or more than Bank of America!).
CIT Bank savings account, my favorite, has no fee, and you can open it with as little as $100.
And keep an eye out for welcome bonuses!
Many banks will give you between $100 and $500 to move your account. It’s easy money and 100% worth the effort, especially using websites like Bankbonus. With their tool, you can find the best deal in seconds instead of spending hours online looking for the best offer.
n seconds instead of spending hours online looking for the best offer.
4. CERTIFICATES OF DEPOSIT (CD)
INITIAL INVESTMENT: 5/10
RISK: 1/10
TIME: 1/10
MONEY GAIN: 2/10
A certificate of deposit (CD) is similar to a high-yield savings account. Banks will offer you a premium interest rate, BUT you need to leave a lump sum untouched for a certain period of time.
Most financial institutions offer CD terms in multiples of six months. So you can open one for six months, 12 months, 18 months, etc. Usually, the longer you agree to leave your money, the higher the interest rate you can get.
At the end of the fixed term, you will get your money back, plus any interest you have earned during that period.
CDs are great if you have a sum of money you know you won’t need in the short term, but you want to maximize your return without any risk.
When you look for a CD that suits your needs, make sure to check any penalty fees you might have to pay in case you need to withdraw your money before the end of your term.
Some banks, like CIT Bank or Ally Bank, offer no-penalty CDs that allow you to access your money after the first six days of deposit.
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