I have always loved the idea of investing. I give you money, you use that money to make more money, then pay me back more than what I gave you; that’s investing right? Well obviously it can get a bit more complicated with stocks, options, 401k’s, bank cd’s, Roth IRA’s, futures, you name it, there are hundreds, if not thousands of investments types out there. The big question that’s on everyone’s mind is which is best?
Before I get into investing types I like, I have to tell you that I really do enjoy investing. It’s more of a hobby for me and anyone who is close to me has probably been roped into some sort of conversation about an investment that I really like. Luckily, I don’t think I’ve ruined any relationships yet over these recommendations. That being said, let’s get into the nitty-gritty. Here are the few investments that I love and a bit about each one.
Lending Club is AWESOME! I’ve been a member since 2008. While looking for decent returns in a depressed market I stumbled on them. Basically it’s a place for good/great credit score borrowers to borrow money from normal everyday people. Loans are originated by Lending Club then put in a marketplace for investors to fund them.
For example a $5,000 loan for someone to pay down credit card debt could potentially be financed by 200 investors at $25 per investor. ($25 is the smallest increment Lending Club will let you invest) What’s also cool is you don’t need any money to start an account. I started with $25 and automatically put in an extra $25 per month.
I have averaged a total of 10% return on this investment. It’s consistent and pays you monthly on the interest which you can then reinvest.
I also love the idea that Lending club it essentially taking the banks out of the equation, and giving you the real returns you should get with your money. I plan to use Lending Club when I retire as a way to generate consistent returns regardless of the market. Lending club does charge a 1% fee for managing the loans but it’s subtracted from the return.
Also, if you are planning on immediately depositing $2,500 or more, ask me for a referral down in the comments and you’ll get a $100 bonus.
The Stock Market
I have found that when I speak with friends and family about trading stocks, people’s eyes glaze over and I can tell that I am more excited about the subject than they are. That said, I intend to elaborate more on my trading strategies in another post. The main thing about trading stocks is obviously to buy low and sell high. This is something that is much harder to learn than you think though.
Lots of emotion can get in the way of trading stock. Sometimes it’s a roller coaster ride and you’d better have a plan and stick to it no matter what; otherwise you will consistently lose money.
I lost a good bit of money over the years because I didn’t have a plan, then I started achieving avg market returns. This year I achieved higher than avg market returns. I hesitate to say my return publicly only because I don’t want to be thought of as a braggart. But I do want everyone to know what is possible in the stock market versus “normal” investing.
So far this year I have averaged over 45% return. (Even after this most recent downturn in stocks) I have executed 52 trades so far this year, some of which I lost money but mostly I gained. The investing I do in the stock market is with money in my 401k. My employer allows me to have a link to a brokerage account so I can do the investing myself.
To sum up my strategy, I use what’s called a conditional trade to buy stock in stable companies when their stock falls by a certain amount during the course of a trading day. This way I buy stocks at discounted prices and typically am able to sell the stock within a short amount of time for a small profit. I want to stress that I do make sure the companies I invest in are good long-term investments for when I have to ride a trade out longer than I would have hoped.
This form of investing is not for everybody, but is a great tool for those interested in learning and taking a more hands on approach.
Chances are that at some point in all of our lives we will have to invest money especially for retirement. What are some cool investing ideas you have? Please share them with us in the comments section below.