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10 Investments You Should Know

10 Investments You Should Know

    It’s impossible to miss the fact that stocks, real estate and bonds all make for decent investments (at least most of the time). But there are so many different investment options, most of which get minimal marketing. If you want to take a look at a wider variety of options, you should be able to at least tell an American Depository Receipt apart from a Convertible Security. There are about twenty investments that any investor should at least be familiar with and the ten listed below are the first half of that list.

    1. American Depository Receipt (ADR)

    ADRs are traded on U.S. stock markets just like regular stocks, but they actually represent shares in foreign corporations. An ADR is issued by a U.S.-based bank or brokerage, which buys a large number of shares from a company based outside the U.S. Those shares are bundled into groups and then resold; they are usually labeled with a ratio representing how many shares a particular ADR represents. The sponsoring bank collects detailed financial information about any company whose shares it resells. ADRs are a relatively simple way to invest in foreign companies and avoid the administrative and duty costs of international transactions. Other countries besides the U.S. have depository receipt opportunities available.

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    2. Annuity

    Annuities provide set payments at regular intervals to their owners. You can typically purchase an annuity through an insurance company, and you’ll have several options. An annuity can either be immediate or deferred: with a deferred annuity, you will not begin receiving payments for a certain period of time. Deferred annuities are often contracted for life — they’re set up so that as long as you live, the insurance company will send you a check at a regular interval. Annuities are also either fixed (the payments are set) or variable (there is a guaranteed minimum payment, as well as payments based on the performance of an annuity investment portfolio.

    3. Closed-End Investment Fund

    A closed-end fund issues shares that are traded just like stocks but are actually closer to mutual funds in the way the are managed. Closed-end funds hold portfolios of securities — usually securities that meet very specific criteria (i.e. come from particular industries). These fund are actively managed and may hold a few investments in stocks or bonds in order to diversify, but because of their focus on particular sectors, closed-end fund issues are not considered diverse. Some closed-end funds offer dividends.

    4. Collectibles

    Collectibles can be pretty much any physical asset with a value that increases over time. While most people consider fine art, stamps and similar purchases to be collectibles, there is no strict definition that includes or excludes a particular asset. The greatest drawback to collectibles is the fact that collectibles offer no income, unlike many other investments. However, a collectible’s appreciating value often outpaces inflation.

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    5. Common Stock

    Common stock is what most of us think of when we hear the word stock: a share of ownership in a particular company. It entitles you to a portion of the company’s profits as well as voting rights. The majority of stocks traded today are common stocks. While the benefits associated with owning stock can be great, it is a relatively risky investment. If a company that you own stock in goes bankrupt, as a common shareholder, you won’t receive money until the creditors, bondholders and preferred shareholders have all been paid off.

    6. Convertible Security

    Convertible securities are either preferred stock convertibles or convertible bonds. While you would purchase a convertible bond just as you would purchase a normal bond, you would have the opportunity to convert it into common stock in the company that issued it. Depending on the terms of the convertible bond, also known as the indenture, the bond could convert into a significant number of shares. Convertible bonds do provide a small amount of income, but the real value is that the bond can be converted into common stock.

    7. Corporate Bond

    Corporations issue bonds in order to raise money: when you buy a corporate bond, you’re essentially loaning a corporation money for the length of the bond. Not only will the corporation repay you the full face value of the bond (and your loan) but it will also pay you a coupon — a predetermined interest rate paid out every six months. Corporate bonds are more lucrative than government bonds, but they are also riskier.

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    8. Futures Contract

    A futures contract is a commitment to either deliver or receive a specific quantity of a commodity during a specific month at a specific price. Most futures contract are closed out before the expected delivery date and while they can be very risky, futures contracts can also provide for a simple way to manage price risks. They can provide impressive profits, due to their higher risk factors.

    9. Life Insurance

    While life insurance may not seem like an investment on the surface, it provides a return on your monthly payments. No matter how long you may have been paying for a life insurance polity, its value is set. It’s a relatively low-risk investment because insurance is heavily regulated by the government.

    10. The Money Market

    Through the money market, you can buy fixed-income securities, primarily short-term securities that last less than a year. Unless you are able to deal in the very high denominations that most money market securities are sold in, you will likely have to purchase these securities through a money market mutual fund or bank account. Returns on money market investments are highly dependent on the current interest rate and are considered low risk.

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    Check back on Thursday for the other ten investments that you should know.

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    Last Updated on October 14, 2020

    How to Become an Early Riser and Stay Energetic

    How to Become an Early Riser and Stay Energetic

    When you become an early riser, you’ll experience a lot of benefits, including feeling more energized and having more time to do what you want.

    If you’d like to join the ranks of those waking up with the sun, there are some things you should know before you run off to set your alarm.

    What exactly do you need to do to learn how to become an early riser?

    Here are 5 tips I’ve discovered to be most helpful in making the transition from erratic sleeper or night owl to early morning wizard.

    1. Choose to Get up Before You Go to Sleep

    You’re not very good at making decisions when you’ve just woken up. You were in the middle of a dream in which [insert celebrity crush of choice here] is serving you breakfast in bed, only to be rudely awakened by the harsh tones of your alarm clock.

    You’re frustrated, confused, and surprised. This is not the time to be making decisions about whether or not you should stay in bed! And yet, most of us leave the first decision of our day to be made in a blur of partial wakefulness.

    No more!

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    If you want to learn how to be an early riser, try making your decision to rise at a specific time before you go to sleep the night before. This frees you from making the decision in the morning when you’ve just woken up. Instead of making a decision, you only have to follow through on your decision from the night before.

    Easier said than done? Of course. But only for the first few times. Eventually, your need for raw willpower to get out of bed will diminish, and you’ll be the proud parent of a new habit!

    Steve Pavlina suggests you practice getting out of bed during the day[1] to get a few of the “practice sessions” out of the way without the early morning fog in your head.

    2. Have a Plan for Your Extra Time

    Let’s say you’ve actually made it out of bed 2 hours before you normally would. Now what? What are you going to do with all this time you’ve discovered in your day?

    If you don’t have something planned to do with your extra time, you risk falling for the temptation of a “morning nap” that wipes out all the work you put into getting up.

    To become an early riser, plan a great morning routine.

      Before you fall asleep, make a quick note of what you’d like to get done during your extra hours the following day. You could read a book, clean the garage, or write up that work report you’ve been putting off. Make a plan for when you wake up earlier, and you’ll do more than protect yourself from backsliding into bed.

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      You’ll get things done, and those results will fuel your desire to build rising early into a habit!

      3. Make Rising Early a Social Activity

      Your internet or social media buddies just don’t have enough pull to make your new habit stick in the long term. The same cannot be said for the people you spend time with as part of your early morning routine.

      Sure, you could choose to read blogs for two hours every morning, but wouldn’t it be great to join an early breakfast club, running group, or play chess in the park at 5am?

      The more people you get involved in making your new habit a daily part of your life, the easier it’ll be to succeed.

      Consider finding an accountability partner who is also interested in becoming an early riser. Perhaps it’s a neighbor who you plan to go for a run with at 6 am. Or it could be your husband or wife, and you decide to get up earlier to spend more time together before the kids wake up.

      Learn more about finding the perfect accountability partner in this article.

      4. Don’t Use an Alarm That Makes You Angry

      If we’re all wired differently, why do we all insist on torturing ourselves with the same sort of alarm each morning?

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      I spent years trying to wake up before my alarm went off so I wouldn’t have to hear it. I got pretty good, too. Then, I started using a cellphone as my alarm clock and quickly realized that different ring tones irritated me less but worked just as well to wake me up. I now use the ringtone alarm as a back-up for my bedside lamp, which I’ve plugged in to a timer.

      When the bright light doesn’t work, the cellphone picks up the slack, and I wake up on time. The lesson learned? Experiment a bit and see what works best for you as you try to become an early riser.

      Light, sound, smells, temperature, or even some contraption that dumps water on you might be more pleasant than your old alarm clock. Give something new a try!

      One final thing you can do is put your alarm at least several feet from your bed. If it’s within arm’s reach, you’ll be tempted to hit the snooze button. However, if you have to get out of bed to turn it off, you’ll be more likely to resist going back to sleep.

      5. Get Your Blood Flowing Right After Waking

      If you don’t have a neighbor you can pick fights with at 5 am, you’ll have to settle with a more mundane exercise. It doesn’t take much to get your blood flowing and chase the sleep from your head.

      Just pick something you don’t mind doing and go through the motions until your heart rate is up. Jumping rope, push-ups, crunches, or a few minutes of yoga are typically enough to do the trick. Here are 10 Simple Morning Exercises That Will Make You Feel Great All Day. (Just don’t do anything your doctor hasn’t approved.)

      If you’re going to go for a full-on morning workout, remember to give your body at least 15 minutes to get moving before you start[2]. Have a glass of water, stretch a bit, and then get into your workout.

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      If you live in a beautiful part of the world like me, you might want to use a bit of your early morning to go for a walk and enjoy the beauty of the world around you.

      If you have a coffee shop open within walking distance, dragging yourself out of bed for a cup of coffee to savor on your walk home as the world wakes around you is a wonderful experience. Try it, and you’ll enjoy becoming an early riser!

      Final Thoughts

      Creating a new habit is always a challenge, especially if that habit is forcing you out of the comfort of your bed before the sun is even up. However, early risers enjoy increased productivity, higher levels of concentration, and even healthier eating habits[3]!

      Those are all great reasons to give it a try and get up a few minutes earlier. Try getting to bed a bit earlier and learn how to become an early riser with the above tips and conquer your days.

      More on How to Become an Early Riser

      Featured photo credit: Nomadic Julien via unsplash.com

      Reference

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