Most investors often want to get high returns at the earliest without any risk to the principal amount invested. With this aim in mind they go on searching for suitable options which allows them to double the amount invested within a few years without any risk to the amount already invested. In fact there is no method of investment which is free from risks and high in returns. As the returns increases the risk on investment also increases.
There are two channels of investment. They are financial assets and non-financial assets. Investing money in bank accounts or in stock exchange or in mutual funds are examples of financial assets. Investing money in gold or in real estate is the example of non-financial investment.
Residential housing: Majority of Americans consider investing in residential housing as the best overall investment. Residential housing, they know is capable of keeping pace with inflation. In addition, it is estimated to save an average return of 4 % annually towards rent of the house paid by the owner for other houses where he is living now. Therefore Americans consider owning a house as the first priority when they are able to earn some money and invest it for future welfare.
Rental properties: Another important investment option for Americans is buying properties that can be easily rented out. Residential housing is particularly the most suitable and accepted investment option by Americans as most of them are able to calculate and understand the rental values of houses and apartments. But unless you have a strong personality, it is better not to invest money in this field. Because, it is natural that a land lord has to be strict and strong as he will have to evict the defaulting tenants at some point of the renting process. The important attraction of this type of investment is that once the property is rented out the rent given by the tenant will be almost enough to repay the monthly instalments toward the mortgage of the property.
Mutual funds: Mutual funds are so planned that the investors are naturally attracted to it. In this system pooling of large number of investments from a lot of people are invested in stocks. This is an easy and well proven method of spreading the risks. Mutual funds are considered as good investments due to the following properties shown by it.
- Most of them comprise of small incremental investments
- Professional investment management is available to mutual fund investors
- They allow great flexibility as it is possible to shift funds among a variety of asset investments
Insurance products: The insurance products like whole life insurance and annuities have been considered as viable products for people who are interested in long term investments.
Company retirement plans: Most of the retirement plans provided by the companies are exactly similar to the ones that might have been selected by you if you were given an option. The added advantage of this type of retirement plans is that the funds of such schemes are having tax rebates. Similarly many companies offer suitable funds based on the amount one is willing to invest.
Government backed sureties: Americans believe that absolute security is assured to government sponsored sureties. Though the returns may not be that high compared to other types of investments, one can be sure that they are the most secured investment.
A person who buys treasury securities is actually lending money to Government of
America. As per it, the Government promises to pay back the amount known as the face value on completion of certain period of time or when the security matures. You can either buy treasury sureties directly by participating in the auction conducted by the treasury or as gift through several other ways.
US savings bonds are considered as one of the safest types of investments in the US as they are endorsed by the government itself. By visiting the website of the department of treasury one can understand more details about savings bonds. Details like what is to be done if the bond is lost or how to cash them etc can be understood by logging on to the official website of the US treasury department. By using savings bond calculator one will be able to understand the present value of the bond you are having at present and what will be its value on a future date.