Traditional Investing Methods

Traditional Investing Methods

You’ve heard about investing and know what it means in our society.  Now, we will go over traditional investing methods that you may have heard about.  Remember, investing involves time, money, and energy.  Let’s take a look!

401K/Retirement Plans

A 401K plan allows you to defer a portion of your paycheck and invest that money into stocks.  The longer you work, the higher your 401k grows.  A benefit of a 401k is that your employer sets this up for you so you don’t have to worry about complicated setups.  Usually, you can choose from 2-6% of your paycheck to be invested.  Your account manager will help you pick the right investments that suit your particular needs.

Bonds

With bonds, the investor (that’s you) purchases debt issued by various companies that promise an annual return on your investment until the debt is repaid.  The value of your investment fluctuates due to inflation. 

Cash

With cash investing, money is invested in short-term, low risk investments like certificate of deposits, high-yield bank accounts, and money market funds.  A common form of cash investing is a savings account that usually yields just 1-2% annual returns at the most.  A benefit is your funds are insured up to $250,000, which means they are backed by the government. 

Real Estate

Many people invest in homes and use them as rental properties.  By purchasing a primary or secondary home, you can either gain funds by collecting rent or borrow against the value of the home. 

Stock Market

The stock market is a very popular option for investing.  People make millions of dollars per year day trading, long-term and short-term trading various stocks from different companies. 

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