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Where to grow your money

Knowing where to put your money has always been a sensitive topic. These turbulent times cause a lot of uncertainties to the point that most people would rather cave in to their comfort zones than make a risk in investing their money in a shoestring budget. Investing has always been about learning to make risks to gain bigger profits. Most often than not, investments that are high risk, have high returns while investments that are low risk, have low returns. On the other hand, some investments guarantee returns, others do not.

Investing is not for the faint-hearted. If you have the stomach for it, then proceed with the next steps. One of the first few things that you need to do is to determine your financial and personal goals. Is it a long-term or a short-term goal? When exactly do you need the money? Do you want a high return or a low return? How much risk are you willing to take? Once you are clear with your financial and personal objectives, the next step is to determine the type of investment you should take.

commodities and investments

Where to Invest
There are different types of investments that you can make to grow your money and to hopefully achieve your projected return. It is important that you know the pros and cons of each type before you plunge in. Here are the most common types of investments:

Stocks are also known as shares and cant be compared to forex market, because owning a stock allows you to share ownership of a company or allows you to own some part of the company. The more stocks you own, the more ownership you have. Investors who own stocks of a certain company gain profits through dividends. Dividends are basically the profits of the company that are divided among stock owners. So the more stocks you have, the more dividends you will receive if the company is profiting.

There are two types of stocks, the common stock and the preferred stock. Common stocks have higher risks and higher returns than preferred stocks. Common stocks provide the highest returns, but in cases of company bankruptcy or loss, common stock owners are the last one to receive money. The creditors, bondholders, and preferred shareholders will be the first ones to receive money when the company folds; on the other hand, the common stock shareholders come last. Preferred stocks do not have the same investment returns and rights as common stocks. Preferred stocks receive a fixed, guaranteed dividend all the time. If you are not so much of a risk taker, you can invest in preferred stocks.

Bonds are issued out by the government and corporations to those who would like to lend their money for a profit. Bonds, also known as securities, are said to be risk-free investments making them a low return investment in general.

Mutual Funds
When you invest in mutual funds, you allow commercial entities or other people to invest your money for you in various stock options. These commercial entities are normally financial experts and they basically collect money from various investors and individuals so that they could invest the money and gain profit from it. The returns that you will receive are shared on the basis of your individual contribution in the total sum. Mutual funds are known to be less risky compared with stock markets simply because you are sure your money is being invested by professionals or experts.

Investing on a shoestring budget

Investing is a term that can be quite perplexing. For some people, uttering the word can be a little paralyzing because it is such a complex word and that you get bogged down by series of jargons. There are so many words that get attached to it like stocks, bonds, forex trading, mutual funds, venture capital, and the list goes on. Investing generally means “to allot a certain amount of money on something and gain something from it in the future”. You invest money to attain a certain financial goal so that you can buy or pay for certain things like a car, a house, your son’s college tuition fee, etc. Investments can be long-term (e.g. buy a house in 10 years) or short-term (e.g. buy a car in 2 years).

Building Your Budget
The most common misconception is that you need to have big money before you can start investing. If you think that you can’t afford to invest, think again. The truth is you can start investing just by saving your pennies. Start with the simplest form of investing, saving. You can start by getting a piggy bank where you can put your loose change at the end of the day. At the end of the month, take the pennies saved from your piggy bank and use them to open a bank account. Next step is to find a bank that can offer you a good fixed annual return rate. Once you have a bank account, you can easily build the budget to do more complex forms on investments in the future.

Safe Investments

If you have long-term financial goals, you can start investing in safer financial management instruments like treasury bonds. You can start by looking for an investment firm or bank that offers low opening balance, low minimum, and low purchases. In this way, you won’t get discouraged early on in your quest to invest a fortune. Most of the time, the high opening balance is a great deterrent to most people.

Another safe investment is mutual fund. Mutual funds are good investments if you are on a budget. This type of investment can make the most out of your investment dollars since your funds get invested in many companies. Your money gets professionally managed as well.

Buying stocks online
Once you have saved enough money for it, try investing in stocks. Start off by opening an account with an online broker that offers low commission rate. There are a lot of cheap online brokers. Buying and selling stocks online can be a real time-saver as well.


When you already have a couple of stocks and bonds in your account, you will notice that some of them are already paying dividends. Even though these dividends may not be that big since you only own few shares, make an effort to reinvest them. Set up your investment account in such a way that the dividends will be automatically invested into the stocks that created them. Over time, you will see how much they’ve grown. You can also enroll in a direct stock purchase plan which allows you to buy fractional shares of stock for you.

There are so many ways to invest on a shoestring budget. You don’t have always to start big. Just take it one step at a time.