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The Best Investment Portfolio for 2016 and Beyond

The Best Investment Portfolio for 2016 and Beyond

Simply put, there is a lot to know and a lot to learn about investing. There are dozens of different kinds of investment vehicles and countless options among those for investing your money. Before you start putting your hard-earned money away, it’s best that you understand the basics of where it’s going and your best options for investing in 2016.

The Principles of Investing

Before looking at specific types of investments, let’s review some of the basics of investing. The very, very simple summary is that you give away some money, wait, and receive more money back after a certain time.

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It’s also helpful to understand what investing is not. For one, it’s not a way to make money overnight (in most cases). It’s not something to put all of your eggs in–all investments involve a degree of risk. And it’s not something worth putting money into if you have high-interest debt obligations to pay off because the chances are you’ll just end up accumulating more debt than returns on your investments.

That said, if you’re able, the sooner you invest, the better. It’s a snowball effect: The sooner that you put your money into something that will make you money, the sooner you make that money, which you can put back into investing. Rinse and repeat. The best time to invest was yesterday, and the second-best time to invest is now.

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Finally, you’ll want a diverse portfolio. That is, it’s best if your investments are split among different vehicles. If you’re all set to invest, make sure you have the following investments in your portfolio this year.

Mutual Funds

If you’re just starting out, mutual funds are the best way to grow your money. While it will take some time to see a return on this investment, they’re low-risk and almost a guaranteed profit. A mutual fund works by pooling together money from multiple investors who share a common goal and investing the money accordingly. Here are the best mutual funds you can invest in in 2016:

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  • Vanguard 500 Index Fund: Based on the S&P 500, this fund has had its slight ups and downs. But taking a longer-term look at the fund shows its almost doubled in value over the past five years, and it looks to continue to grow. It’s basically a guaranteed profit.
  • Vanguard Health Care: This fund is split among different health sectors such as biotech and healthcare technology. While Vanguard labels this fund as high risk and high reward, an aging Baby Boomer population is going to put these services in high demand.

Stocks

A stock is a portion of a company that you buy into, and as the company does well, demand for the stock rises, meaning your stock increases in value. The best stock investments you can make are in companies you expect to continue to do well. But, if you want to make a greater profit (with a higher degree of risk), you’d do better to choose companies that you expect to grow in the future. Here are your best stock investments for 2016:

  • Apple (AAPL): Of course, the best time to buy Apple was years ago. But don’t be fooled: this is still a good stock. The past year has seen the stock fall, meaning that it’s cheaper than it has been in two years. With a broadening ecosystem and a new headquarters, there’s no doubt that Apple’s stock will rise again.
  • Tesla (TSLA): The electric car company basically has the rapidly-growing industry cornered and is set to release its first consumer electric car next year. It’s a disruptor on the ground floor, just like Apple (AAPL) was, and it’s just announced its iPhone.

Commodities

Commodities are fairly easier to understand, as their value comes from physical objects. Better yet, they’re always in demand. Unlike a stock, you never have to worry about a commodity going out of business or making bad press. Here are three of the best commodity investments you can make:

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  • Alternative energies: If you’re interested in short-term investments, you might look instead at investing in crude oil. But taking a long-term view of energy shows that green and renewable energies like solar, nuclear, and natural gases are the way of the future. Their demand will increase this decade, and surely in the decades following.
  • Lithium: This precious metal isn’t as popular as gold, silver, or copper, but it’s due for a huge surge in demand, as it’s one of the main materials used in batteries. With a car industry that will see a greater reliance on batteries in the future, lithium will be coming out on top.

Real Estate

In simple terms, your investment comes in the form of buying a property, such as a house, an apartment, or a condo. While you’re responsible for paying the mortgage on this property, as well as for its upkeep and repairs, you can make money by renting out the property, or by “flipping” it by making renovations and selling it for more than you paid.

Your safest investment would be to buy a property that’s in an area of high-demand. With that in mind, consider these options for 2016:

  • College apartments and houses: There’s always an influx of students every year, and with tuition rising, across the board, more students will be looking for cheaper off-campus rentals than living in a dorm.
  • Real estate in trending cities: Homes in cities such as Detroit, which is on the verge of economic recovery, and Austin, which constantly ranks as an increasingly popular city for millennials, will no doubt be in higher demand in the coming future.

These are just a few of your investment options, but you would certainly do worse putting your money elsewhere. Look at these investments as opportunities to learn more about how investments work, and soon enough, you’ll be on to more complex (and hopefully higher earning) investments.

Featured photo credit: http://www.lifehack.org/ via lifehack.org

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Last Updated on April 3, 2019

How to Nix Your Credit Card Debt in Less Than 3 Years

How to Nix Your Credit Card Debt in Less Than 3 Years

Debt is never a fun thing to be in. But, there are many actions that you can take that will help you rid yourself of the burden of debt once and for all.

By coming up with a set plan, eliminating your debt can feel much easier than constantly thinking about it.

This post will provide some tips on how you can do this to help you nix your credit card debt in less than 3 years.

Hint: there are ways that are easier than you think.

1. Consider Consolidating Multiple Credit Cards If Possible

This may not be applicable to you, but if you have multiple cards – it is something to consider. Keeping up with multiple bills is time consuming.

It will depend on the balance you have on each. Consolidate ones you can but do not do it to the point that you get too close to the maximum limit. Also, it is ideal to pick the card with the lower interest rate.

Consider if there are any fees or alternatively, rewards, with transferring a balance to another card. Watch out for fees. Note that some cards offer rewards for transferring a balance to them. This is extra cash that can help go towards paying off your debt.

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Having one or two cards can make nixing your debt much simpler than keeping up with the balance of a bunch of cards. Keeping track of paying the minimum towards a bunch of cards is time consuming. Spend the time to consolidate instead to make the overall process simpler going forward.

My tip: Have one main credit card. Have a second one that you use for necessities – such as groceries or gas – that offers rewards for those purchases (a lot of cards do) and set the second one on auto-pay. You should be able to pay off a smaller amount on auto-pay if it is a necessity. If you think you cannot, then you may need to cut down a lot on expenses.

Why do I suggest doing this? Having one thing set to auto-pay is one less thing to think about. One less thing to waste time on. Same idea with consolidating to one main card. Tracking down too many is a hassle.

2. Try to Pay the Full Balance You Spent Each Month at the Very Least

You need to pay off the amount you are spending each month when that bill comes in. This is the amount you spent THAT month.

Do not let the debt keep accruing while you work on paying any unpaid debt that has accrued. It will become a never-ending battle. Try as best as you can to be current on paying for each month’s expenses when that month’s bill comes out.

If this is a strain, consider why. You may need to cut expenses. Or you may need to consider other cards. Or look at where this money is going.

3. Pay Extra When You Can – Every Small Amount Counts

This cannot be emphasized enough. If you are looking at a lot of credit card debt, it can look daunting, but each extra amount that you can put towards the debt will really add up – no matter how small it is.

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It does not just reduce the principal amount that you have left to pay off, but it reduces the amount that is collecting interest. You will always save money with that reduced interest.

4. Create a Plan on How to Pay Extra

Back to the main point, having this plan is giving you one less thing to think about.

This plan should be a plan that works for you. If it does not work for you, your spending habits, and your views on debt, then it will not be an effective plan.

For instance, if a set plan of an extra $50 (or another amount that you know you can afford) works for you, then do that. Set that aside every month and pay that extra amount. Treat it like a bill. Choose an amount that works for you and pay it like clockwork as though it was a bill you had to pay each month.

Little amounts will not nix it entirely, but they will help tackle it and having a set plan can make it less of a chore. Creating a new plan of how much to put towards it each month is an unnecessary added stress.

5. Cut out Costs for Services You Do Not Use

If you are signed up for subscriptions that you do not use because of some free trial or for some other reason, cut it out. Your overall financial position will look better.

In turn, that will make cutting your credit card debt easier. Look at your statements to find these expenses. If you do not use them, you may forget you are paying some unnecessary amount each month. Cutting it out can really add up in savings that you can put towards other needed expenses.

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6. Get Aggressive About It

Consider these points:

Depending on the interest and the level of debt, you may need to give up a few indulgences. For example, instead of ordering delivery or going out to eat, cook at home. Everything adds up.

Other things may be more of a sacrifice. It may be a trip you wanted to go on, or a daily latte habit you’ve picked up. In these instances, consider how important it is to you and if it’s worth the sacrifice. And if it is a costly expense, think whether you can wait to indulge.

Cutting an extravagant expense can really help make a dent in your overall debt. Try not to add to debt when you are trying to pay it off. It will be a never-ending battle. Make it less of a battle with these tips and it will feel easier.

Bottom line: Do what you can to make this process easier for you. Implement steps that do this. It takes time now, but will help overall. Also, keep track of your spending and paying down of your debts. Which is the next point.

7. Reevaluate Your Progress at Set Intervals

Doing a regular check-in can help you see your efforts pay off or maybe indicate that you need to give this a bit more effort. If you check every 3-6 months, it will not feel so much like a chore or feel so daunting.

By doing this, you will be able to better understand your progress and perhaps readjust your plan. Bonus: if you see it pay off, it will feel great to do this check-in. You will get there.

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Finally (and most importantly)…

8. Keep Trying

Do not get discouraged. Pushing it off will make it worse. Just keep trying.

Once your debt becomes lower, each monthly payment will reduce the balance more. Why? You are paying less towards interest. It will be a snowball effect eventually and it will become much easier to manage. Just get to that point. And know once you do, it will feel easier and motivating.

Start Knocking out Your Debt Today

The best way to eliminate debt is to get started right away. Begin by implementing the above steps and watch your debt just melt away. Try out some of the above strategies and see what works best for you. Soon you’ll be on your way to a debt free life.

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