As New Year’s resolutions are fresh on your mind, there’s no better time than now to initiate and strengthen wealth-building strategies. To inspire you, I’ve created an inventory of the best investments for 2020.
This article is about where you’ll direct your money and time this year so that ten and twenty years from now, you’ll be glad you made the investments. It’s not about making a fast buck. If you would like to accelerate your wealth trajectory by creating multiple income streams from targeted investments, this text may be a good place to start.
Before we get into the list, here are a couple of things to stay in mind.
Slow and steady wins the race. That’s the philosophy that I follow, albeit some folks could be willing to require more risk for greater reward.
Immediate results are elusive, but long-term desired outcomes are probable with this mindset.
Investments are available in many forms. Sometimes directed toward a selected goal is probably one among the simplest investments you’ll make. Think hard about where you spent your free time last year. Did it contribute to your long-term goals?
Finally, always perform due diligence when embarking on new investments. Simply because a blogger writes about it, or someone on TV says it, doesn’t mean it’s right for you.
The 7 Best Investments in 2020 for Long-Term Growth
Based on my 10+ years of experience investing, factoring in my successes and many mistakes and failures, I’ve put together this list of best investments for 2020.
Most of those will look familiar because I haven’t spent the last six years blogging about the worst investments! This list hasn’t changed much since last year either, because a long-term investment strategy must stay track to realize results.
In addition to the standard suspects, consider making significant time investments in personal growth to feed your curiosities, educate yourself, and strive to craft your best life. Those investments pay the simplest dividends.
It would be best if you bought stocks in 2020. I say it because investing in stocks should be habitual. Regularly invest small amounts within the stock exchange. It’s easier now that nearly all online brokers eliminated commissions. I’m not saying if you purchase stocks on January 1st, your investment will be worth more on December 31st. But if you would like to make lasting wealth, investing within the world’s largest and best companies has been a successful strategy over the last century.
The stock exchange was up quite 25% in 2019, which may scare you if your investment horizon is one year. But I advocate for brooding about investing in 10 to 20-year increments. The cash you invest in 2020 is going to be worth more in 2030 and 2040.
Utilize your employer-sponsored 401(k) or other tax-advantaged accounts to automatically dollar cost average in broad-based index funds if you’re just getting started. If your plan doesn’t have low-cost funds, managed stock mutual funds are OK, but keep an eye fixed on fees.
You can also start to create passive income through dividend growth investing. Please do thorough research on a person stock you purchase. Specialize in companies with long dividend-paying track records and moderate debt exposure.
I like to recommend the commission-free online broker M1 Finance for beginner to intermediate investors for IRAs and taxable investing. The minimum investment to urge started is $100.
Even though I’m primarily a mutual fund and dividend stock investor, I think that land may be a more lucrative investment over the long-term if used as a rental property. That’s because you get capital appreciation, income, and significant tax advantages from the land. Also, there are several ways to finance land deals: all cash, mortgage financing, private financing, home equity loans, etc., supplying you with plenty of flexibility.
Money is formed by finding good deals. My recently sold investment property didn’t return much within the 12 years I owned it because I overpaid. So, there’s a due diligence component if you would like to be a successful investor.
Young beginners should consider house hacking, which may be a good way to urge started. Mid-career to older investors can purchase and rent a single-family home, multi-family units, or check out turnkey rental opportunities. Now that I sold my lousy rental, I’m beginning to check out investment properties again.
If the thought of a multi-thousand-dollar deposit or being a landlord is off-putting, consider land crowdfunding platforms like Fundrise, where you’ll own high-quality land for as little as $500.
Accredited investors trying to find more substantial equity and debt deals and better returns should check out crowdfunding sites such as:
#3: Invest in Low-Cost Side Business
Starting a side business has been one of the foremost rewarding endeavors of my life. Not only do I work on something I enjoy, it earns supplemental income to assist support our single-income family. The dollar cost of starting my business was not up to $100 within the first year. The important cost was the quantity of the time I spent on my business, which was tons.
Though I like blogging as a hobby and business, it isn’t right for a few people. With the web’s maturity and every one the platforms from which you’ll earn money (think Etsy, eBay, Upwork, Fiverr, Amazon, etc.), the free information tells you ways to form money online. The opportunities are endless.
Or start an area side business. Don’t go and lease a storefront. Start small and figure it out as you go. I waxed skis and snowboards in my college dormitory for extra cashback within the day.
Start with something that you are hooked into (sports, art, travel, computers, nerdy hobbies, etc.) and research how people with an equivalent interest earn money. Consider starting a business around your hobbies. Be creative. Try. Fail. Then try again. Spend longer and fewer money on your ideas.
#4: Alternative Investments
Technology has enabled a replacement breed of investment platforms beyond traditional stocks and bonds. Peer to see lending and land crowdfunding were the primary to drive this renaissance. But other asset classes are quickly following with similar models.
Some of these platforms could seem experimental, as they’re still somewhat new. But I think that ten years from now, crowdfunded investing is going to be commonplace. Getting into today may offer you a start on the masses.
Several of those new platforms are worth exploring. a number of the foremost intriguing include:
- Farmland and Agriculture
- Blue-Chip art
- Small Business Lending
- Diversified Alternatives
- Small Business Startups
#5: Career Development
In 2012, once I was broke and unemployed, I signed up for a junior college course in Java programming. I felt my computer skills were weak and that I needed a stronger resume. A week later, I found employment and quit the course. Had I continued to pursue my Java education, I might have had more career opportunities.
If your skills are lagging, teach yourself something new. Assuming you have already got a career, the likelihood is that you’ll increase your earning potential faster within the same field rather than starting a replacement career.
Take a course, read a book, or find a free resource to enhance your skills to become more marketable in your career space. The cash investment is minimal — the longer you set into developing your skills, the upper the payout. Just invest in yourself in 2020!
#6: P2P Lending
Lending your money is a choice for getting an honest return. Again, this is often one that won’t only be hospitable to the truly wealthy. But now P2P lending platforms have made this feature accessible to the masses.
With a P2P lending platform, you’ll typically decide whom you’ll lend to, with varying information available supported the platform. Then you’ll lend your money and obtain your investment back because the loan is paid back. Higher-risk loans can offer you an excellent return if they’re paid back, but you’ll also make fairly safe loans to individuals with excellent credit and proposals.
You can practice P2P lending through platforms like Lending Club and Prosper. These platforms aren’t available to investors in every state. And if you reside during a state where they’re available, you’ll need to meet minimum qualifications supported your annual salary and net worth.
These requirements aren’t as high as those for a few land investing, but you’ll get to make certain you meet them before you invest.
#7: Paying Off Debt
Finally, the most crucial investment to make is paying off all of your debts! Don’t forget that your assets and your liabilities decide your wealth. So, invest all you would like, but don’t forget how your debts could also be dragging you down.
If you’ve got high-interest MasterCard debt, it’s crucial to make an idea to squash those balances this year — or a minimum of as soon as you’ll.
Unfortunately, this isn’t always an easy feat. Many of us get caught during a downward spiral of debt because it’s more convenient to form minimum payments and worry about the balance later.
This problem is exacerbated further by the very fact that the typical MasterCard APR is over 17%. Albeit your balances are relatively small, that’s plenty of interest you’re paying.
The good news is, paying off debt may be a smart thanks to getting a guaranteed return on your money regardless of what the stock exchange is doing. If you pay off a MasterCard with an APR of 17%, you’ve effectively secured a 17% return on your investment.
Plus, there are additional benefits that accompany paying down debt. Paying off debt can reduce your utilization and improve your credit score as a result – a far better credit score can help your secure loans with the simplest rates and terms, which may prevent money subsequent time you’re taking out a loan for a home or a car.
Strategies for long-term investors shouldn’t change much year to year. Please don’t attempt to time the right investment on January 1st and sell it for enormous profits on December 31st. Focus on the 10-year milestone where you’re more likely to hit your investment objectives than a one-year time-frame.
Use the New Year to reevaluate your broader investment and retirement plans and make tweaks. Make significant investments in yourself through education or starting a business. Invest some time and energy rather than upfront cash.
As always, attempt to reach your tax-advantaged accounts first. Then direct excess monthly income into income-producing assets to create passive income and convey security to your financial life. The New Year may be a time for resolutions and new habits. Reset both your yearly and long-term goals, then ensure your actions drive you toward those goals.