Where to Invest Your Hard Earned Money?

You’ve worked hard and finally you see that you’ve managed to save a considerable sum of money. What the term considerable means here exactly, depends on a person, obviously.

Be it $100, $1000, $10,000, or something remarkably higher than that. Whatever the number is for you, after you’ve spent time to save it, it’s time to start thinking how to grow your savings. Obviously, there are a number of things you can do.

Keeping your money in your savings account, it’s always possible. But, depending on the exact number we’re talking about, the inflation is usually times higher than the interest you can earn on your savings account.

For years we’ve all been told that the safest investments are gold and real estate. Whether it’s true or not is already another story. But historically they can be the most stable investments. But even they can sometimes be very volatile. So in that sense they can be good long term investments, but short term they might lose you money, should you need to use your savings again in a year.

Another option is stocks. There are a lot of stocks that might earn you a lot of money, but when compared to real estate and gold, the volatility can be way higher.

And usually you really should know what you are doing. The safest bet here is most likely investing in index funds. While your potential maximum earnings can be times lower than with individual stocks, index funds are times more stable and safer as well.

So what is an index fund? Index fund is a type of mutual fund “with a portfolio constructed to match or track the components of a market index.” You can learn more about index funds here.