People invest with the intention of making their money grow which is why if the opposite of what is expected happens, the result can be a tad catastrophic — loads of stress, emotional havoc, and possible health issues (caused by said stress and emotional havoc). Is there a way to keep your money safe and still grow your wealth? This is a question many people ask.
We all know that investments come with risks. As American entrepreneur, Robert Arnott said, “In investing, what is comfortable is rarely profitable.” For instance, you can always put your money in the bank. You know you won’t lose anything. Your money’s safe! But, you also won’t be gaining a lot from it — aside from the meager interest of course. Or, you could invest it in stocks where there is a risk of you losing some money, but also a possibility of gaining a lot depending on how the stock market moves.
How Do You Grow Your Money, Keep It Safe, and Avoid Stress?
These two things may help you build your wealth with less stress.
Option 1: Don’t Risk Money You Can’t Afford to Lose.
If you put in money that you can’t afford to lose, it’ll cause insurmountable stress. You’ll be constantly worried whether your investments are doing well or not. It’s recommended to split your savings into two (not necessarily equal) portions. Set some money for your savings account, and dedicate a percentage for your investments.
Option 2: Diversify, Diversify, Diversity
Don’t put all your eggs in one basket. In fact, you know it already. That’s why you have ATM accounts from BPI, Metrobank, BDO and five other banks, right?
Well, that’s one way to diversify, but that’s oxymoron and it only leads to stress.
There’s a better way and that is put your money in other investment vehicles. Diversify your investments so if one “fails”, you wouldn’t get too stressed out since you’ll still have other income sources.
Here are a few investment options you can take.
Invest In Stocks
Although this type of investment can be stressful, when properly managed, it may yield high returns. Investing in stocks require a great deal of studying, but when done right, your money could rise exponentially. Still, it’s recommended to invest in stocks based on your risk tolerance so you don’t feel uneasy with the market’s volatility.
Invest in Mutual Fund
Considered less risky than buying individual stocks, a mutual fund is a professionally managed investment program. It works like a company — complete with managers, investment advisors, and board of directors. They collect money from investors (you) and invest them in stocks, bonds, and other investment markets. If you’re not an expert in securities, then one of the best options is to invest your money in a mutual fund as it is managed by a group of experts so you get the advantage of professional stock picking and portfolio management.
You can also put your money in bonds — a type of debt security where the issuer (company or entity) raises funds by borrowing money from lenders (bondholders or investors). Although it may not make as much money compared to a stock market trade, bonds offer a guaranteed specific payment, a known coupon rate or interest rate, and a determined maturity date.
Invest Variable Universal Life Insurance
Another investment option that’s popular among millennials is the Variable Universal Life Insurance (VUL). Compared to the traditional life insurance, VUL combines the death benefits with a savings component and health insurance coverage through riders. VUL is considered a less stressful investment option since you don’t have to manage the investments yourself — it’s done by a team of professionals (just like the Mutual Fund). As with most investment options, however, VUL doesn’t always guarantee returns as your fund value may rise or fall depending on the investment market.
I’m not really a big fan of VUL Insurance, but that’s another story and I might write another article about it. But for now, it’s best to look at it as an alternative investment tool.