3 Low-Risk Investments you can start with little money down
3 Low-Risk Investments you can start with little money down
What will you do with your first salary? Have a party, buy a car or move out of your parents’ house? That’s what most first time salary earners do when they get paid.
But what if you used your money to make even more money as soon as you start getting paid? While your friends are squandering their cash, you can start building a future where money isn’t a problem in your life.
If you decide to start investing your money, you’ll soon have even more money to party, buy a bigger and better car and move out of your parents’ house into your very own luxury property.
It’s not as impossible as you may think. All it takes is planning, patience and determination.
Three low-risk investments every 20-something must consider
Every investment has risk. Some investments are safer than others. For someone who is new to investing, you want to make safe choices with your money. Once you understand the markets and have built up enough money, then you can take a little more risk.
Till then, here are three low-risk investments you could consider...
- Invest in your first property
Investing in property is not as difficult as you may think. I’m not talking about buying a mansion on the beaches of Clifton in Cape Town just yet. I’m talking about starting out small with a bachelor pad in an area that you really like.
Best of all, if you save up a large enough deposit, the banks will help you with the credit you need to get a bond.
This is a long-term investment, so don’t be in a hurry to sell your first property. When you need to move, you don’t have to sell your property, simply get someone to rent it out and pay off your bond for you.
- Invest in listed shares on the Johannesburg Securities Exchange (JSE)
I’m sure you’ve heard people say investing in shares is like gambling. They usually say this because they don’t really understand the investment markets. So, find out as much as you can about investing by speaking to the financial advisors at your local bank.
You’ll need a broker to help you buy and sell shares on the stock market. Sure, there’s a little risk involved, but let your broker know that you’re looking for safe, long-term investments and they will recommend shares that meet your risk appetite. You can find a broker through your bank or by searching the Internet for broking firms. It’s a good idea to get a referral from someone though because there are some sharks out there.
- Government bonds – The most popular low risk investment
Government bonds are probably the safest investment you can make. You can buy bonds at the Post Office, so it’s an easy investment too. When you buy a government bond, you’re lending your money to the South African Government. After a fixed term, usually a year, the government will pay you back with a little bit of interest on top.
Remember: No investment comes without risk, but if you manage your risk properly, over the long-term you’ll be smiling all the way to the bank.