1. Mutual Funds
A mutual fund is a type of investment fund operated by a money manager who invests your money for you, and attempts to get good returns.
Mutual funds are typically made up of a combination of stocks and bonds, however, they carry less risk because your money is diversified across many stocks and bonds. You’ll only reap rewards from stock dividends and bond interest, or if you sell when the value of the fund goes up with the market.
The average individual will need more than $3 million to be financially independent in retirement in twenty years and, frankly, mutual funds won’t get you there.
When it comes to value, remember that mutual funds are built and managed by so-called “financial experts” who have a hard time beating the market, especially when you factor in the fees they’re charging you to manage your money in the first place.
Rule #1 Investors expect a minimum annual compounded rate of return of 15% a year or more. If we can get that, we don’t care what the market did because we’re going to retire rich anyway.
BONUS: Peer-to-Peer Lending
Peer-to-Peer (P2P) lending platforms connect individual borrowers with investors willing to lend money for interest. While P2P lending carries some risk, investors can mitigate it by diversifying their loans across multiple borrowers. Many platforms also offer risk assessment tools to help investors make informed decisions. P2P lending can provide competitive returns compared to traditional savings accounts or CDs, making it an option for those seeking a slightly higher yield with a calculated level of risk.