Even though investing your money is a great way to have your money make some dough for you. However, the risk of losing your hard-earned money prevents people from learning about investments.
Many people do not realize there are plenty of options to make the safest investments with low to no risks involved.
Continue reading this guide to know about the best investment you can make in 2022.
1. High Yield Savings Account
A high-yield savings account may not exactly be an investment, but definitely, a safe way to increase your savings. Most banks offer a good return on your savings account. You could open one for an emergency fund and be assured that the bank will add a certain percentage through interest while you also attempt to build upon it from your end.
Investing some money in a savings account is the best investment if your only priority is to keep your money safe. Furthermore, savings accounts are insured by the government, so in case of the bank fails, you will not lose your money if the bank fails. Instead, you will get compensated for up to $250,000.
Now, you might wonder what you have to do if you have more than that amount in saving. We recommend setting up another account, so you don’t lose the amount that exceeds the coverage limit.
2. Gold
Gold has been considered the best investment for a long time now. However, you must note that the value of gold has quite an unpredictable swing at times. Still, there is little risk involved because even though the value fluctuates, there comes a time when it’s multiple times higher than what it was when you invested.
Hence, you will surely get a good return if you are patient enough not to pull out at the wrong time. Moreover, it is an excellent way to invest safely and protect your money from inflation.
3. US Treasury Bonds
US Treasury Bonds are the ultimate secure investment. You can buy bonds for free directly through the US Treasury. Additionally, you have the option to buy through the secondary market, but the seller might add a fee.
These bonds mature in 30 years, and you can buy or sell them through mutual funds as well. It is essential to note that keeping your bonds until they mature gives you a good return. However, selling them before they mature might lead to losing some of your principal amount.
That said, Treasury Bonds do not give an exceptionally high return compared to other options for safest investments.
4. Series I Saving Bonds
Inflation is at an all-time high. In order to seek some protection and invest safely, consider the series I saving bonds. These savings bonds are also backed by the government, making them one of the safest investments.
The initial interest rate for this year, from May 2022 to October 2022, is 9.62%.
In addition to this, the semi-annual inflation rate is variable on these bonds since it is tied to fluctuation in inflation.
Hence, the risk involved here is that the inflation rate will fall if inflation goes down. Furthermore, holding on to your bond for at least five years is crucial. Otherwise, you will be charged three months’ interest.
5. Real Estate
Investment in real estate is known to produce significant returns. However, it also depends on the region’s real estate industry conditions. Putting up your property for rent will provide you with consistent income you can use for savings. Even if you do not choose to do that, your property will still hold value.
Of course, there is some risk involved because the value can fluctuate. That said, you can invest safely in real estate because it cannot be considered a high-risk investment.
You must note that buying real estate comes with additional costs, such as fixing and repairs, insurance, etc. Moreover, you must maintain the property in order to ensure its value does not deflate.
It might be a secure investment, but it definitely requires some effort and extra money to ensure a good return.
6. Corporate Bonds
Corporate bonds can provide high yields because they have better interest rates. With that said, corporate bonds have some risk involved of different varieties from high to very low. It depends on which company you choose for your corporate bonds.
In terms of this factor, it might not be one of the safest investments. However, if you make the right decisions, you can end up with a good return on your investment.
The risk involved in this investment is related to fluctuating interest rates. Furthermore, the company could fail to deliver the payments as promised.
It is best to do thorough research before buying the bonds and only invest in reputable and large-profitable companies.
7. Preferred Stocks
Preferred stocks are a combination of stocks and bonds. They offer a higher return than bonds but also provide a regular cash payout similar to bonds.
If you wish to invest safely in preferred stocks, you must know that companies have the authority to suspend payments in certain situations. However, they pay off pending dues when payments resume. Moreover, companies that issue preferred stocks are liable to pay dividends on the preferred stocks before they do pay their stockholders.
It is essential to research well before investing any amount to ensure your money will be safe and that you are making a secure investment.
Preferred stocks are considered a better investment than regular stocks because they involve lesser risk.
The Final Takeaway
As you can see from the information shared, even the safest investments involve some risk. All you can do is make an informed decision to ensure you invest safely. This knowledge can be beneficial when you invest your hard-earned money.
Investing may sound scary, and it is natural to assume you will lose all your money. That said, learning about it will help you explore the world of investments.
The return you get will help you gain financial stability and become confident in making more investments wisely.
