What Is The Best Investment Opportunity In 2023?

There is no shortage of investment opportunities. The real question is, which opportunities are worth it, and which opportunities are not? We will examine some of the most common investment opportunities available today.

High Interest Savings Accounts

If you have extra money laying around and need to earn a return on it, you can earn a guaranteed return through a high interest savings account. High interest savings accounts at FDIC insured banks are insured for the first $250,000. Despite the name, high interest savings accounts may pay high interest but their actual rates of return compared to other investments are quite low. That being said, high interest savings accounts are extremely low risk.

Since the first 250K is guaranteed by the government, you can leave your extra money in a high interest savings account and slowly earn some return on your investment. From some perspectives, using a high interest savings account will actually earn you less than the inflation amount. Even though you are gaining money, the value of that money is decreasing over time and inflation is greater than the amount of money you are gaining. However, inflation is going to happen whether or not you put your money in an interest savings account. It’s better to get some interest and to get none. To make sure the bank you have chosen is actually FDIC insured and guaranteed by the government, you can look it up at the FDIC BankFind Website.

Taking Care Of Debt Before Investing

If you have debt and are paying a lot of interest every month, then you want to pay off your debt first before you start investing so you will not keep losing money to interest. The money you pay in interest is money that you are guaranteed to lose, and if you can get rid of the interest as quickly as possible then you’ll save a ton of money. Of course, this just depends on the type of debt you have as well as the interest rate of your debt. If you have student loans and your interest rate is zero because the interest rates have been temporary frozen, then you may be better off earning some interest on your money that rather than just paying your student loans while they are still at a 0% interest rate. But if you have credit card debt at 17% APR and are currently incurring interest, then you should pay that off first before you invest.

Investing In Certificates Of Deposit

Certificates of deposits are investments that are guaranteed by the government. You can earn a guaranteed return but while you have your money tied up you will not be able to access it unless you pay high early penalty fees which negate the whole purpose of investing. You can set the amount of time you are willing to put your money in the CD, for example six months, one year, five years, or other time periods.

Certificates of deposit are likely to have a higher rate of return than high interest savings accounts. However, once you make a CD, you will not be able to access your funds unless you pay a penalty or wait until the certificate has matured. If you do not need to access your funds, then you may be better off doing a CD instead of putting your money in the high interest savings account. You may be able to actually access your funds early but you will have to pay some type of penalty so that will defeat the purpose of investing.

Investing In The Stock Market

It’s easier than ever to get into the stock market today. Prior to the invention of the internet, people needed to place phone calls or physically go to the stock exchange in person. Now you can do it all in your pajamas at home. Just because it’s easier to get into the stock market, that does not necessarily mean it’s easier to make money though. There’s a lot of risk involved in buying individual stocks.

To mitigate risk, people like to invest in index funds. An index fund is a fund which is comprised of many different stocks. For example, some people may invest in a fund that is made up of the 500 companies in the S&P 500. One company may go bankrupt but another company may double in size. Overall, the value of the S&P 500 has trended to increase over long time periods. You might want to look into this type of investment option.

Investing In Cryptocurrency

Cryptocurrency is extremely new in the finance market. Due to the potential, many people are interested in investing in it. However, the industry is also not that well regulated yet as it is still new. The CEO of the former crypto exchange FTX, Sam Bankman-Fried, is under investigation and potentially facing a very long sentence in prison. People who have invested with him they have lost all their money. Moral of the story is be careful when investing in cryptocurrency.

Investing In Real Estate

Real estate is a special type of investment. You can do it by yourself and try to flip houses, you can do it through a REIT or real estate investment trust, or you can just buy your own house and hope that it goes up in value while you live in it. You may want to pay off a mortgage instead of rent and pay someone else’s mortgage. There are however benefits to renting instead of paying off a mortgage. We won’t get to in depth with real estate in this article, but you must keep in mind that is a very illiquid investment. Once you buy a house, it is very hard to convert that into cash unless you sell it or potentially get a home equity loan. Other types of investments like stocks and cryptocurrency can be converted into cash much easier.

Best Option For You

There are many factors to consider the best option for your investment strategy. The amount of capital you have, your risk tolerance, the timeframe you plan on investing and other factors will determine the best choice for you. Some people like to diversify, and not put all their eggs in one basket, while others may be focused on a single investment.

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