Easing Into The Investment World


2438005410_6100c23246_mPerhaps you have friends who talk about how much money they have made investing.  Maybe they have given you tips as to the next hot, money making investment, but you haven’t taken the plunge yet.

If you’re ready to start making your money work for you, there are many different ways you could invest.  Of course, some investments are safer than others, and some are more profitable than others.

Before you begin investing, it’s important to know a few things.  What is your risk tolerance?  What do you need the money for?  How long do you have to invest?

Investing for your retirement, for instance, should be safer than investing your fun money.  Let’s say you have $10,000 you just want to have fun and experiment with.  There are a few ways you may be able to make a good return on that investment, though these are a bit riskier than other types of investments.

Foreign Currency

You may have heard others talking about forex trading.  That is investing in the foreign currency markets.  If you don’t know anything about this type of investing, you don’t have to leap into it blindly.  You can join an online brokerage and set up a demo account.  This lets you practice your strategy and gain confidence and skill.  After you’ve learned more about the market and feel comfortable investing your money, you can set up a forex trading account and start trading.  Chances are, once you trade for real, you’ll learn even more.

Peer-to-Peer Lending

Another investment option for your fun money is peer-to-peer lending.  Both Prosper and Lending Club offer peer-to-peer lending.  You invest a small amount, say $25, to fund a portion of a larger loan for a borrower.  You get to decide which loans to fund based in part on information about the borrower and the borrower’s credit history.

There are plenty of financial bloggers who invest in peer-to-peer lending and write about their criteria when choosing loans as well as their average rate of return.  Some bloggers can hit a rate of return as high as 12%.

If you have fun money that you would like to invest, these are just a few of the investments that may be seen as riskier by others.  However, if you can afford to lose the money, you can afford to take chances, and the return on your investment might be more substantial than if you went with a safer investment.

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