The Best Ways To Invest Your €5000

WHAT TYPE OF INVESTMENT IS GOOD FOR YOU?

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The finance world is generally considered quite intimidating and complex by most people, especially a layman.

However, once you get the hang of it and enter it, you will notice that it is quite easy and a fun world. The world of investments is one such part of the financial universe, which is inherently simple, once you understand its major concepts as well as its associated lingo.

Different types of investment choices

There are different types of investment options, which you would know if you are familiar with the investing world.

Among them, the main ones are Bank Accounts (in the form of Fixed Deposits and Savings Accounts), Bonds, Stocks, and Mutual Funds. These are the very common or mainstream investment options, which many people know.

However, there are other investment options too that are not very popular, but you should definitely consider them.

These types of investments are known as alternative investments, which include peer to peer lending, Binary Options, Futures, Forex, Gold, Real Estate, etc.

Among all these alternative investments, this article will focus on four investments, which are Savings Accounts, Peer to Peer Lending, Binary Options, and Forex.

You already know about savings accounts, so I don’t have to tell you about them. So, let me tell you what the other investment options mean. First, let us talk about Forex, which is also called FX in short. Forex refers to the foreign exchange market and trading in this market is one of the most preferred investment options.

Binary Options means trading in a combination of different assets, such as a specific company. In this, you have to predict what will be the value of the asset in future, whether it will increase or decrease.

The fourth option is Peer to Peer Lending in which consumers have to lend their investment money to others in exchange for which they earn interest plus the principal amount.

Among these, Forex and Binary Options are somewhat riskier as compared to other investment options. However, if you play smart and know what works in this type of trade, you can actually earn a lot more than other available investment offers.

Diversification of your investment portfolio

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Saving accounts can take a lot of time for you to accumulate a decent amount of money for your future. However, because of the reliability and security of banks and saving accounts, many people prefer this option over other investment choices.

They are ready to earn a small rate of interest rather than risking their whole investment money. But, there are also a few people who would rather risk their principal savings just to get higher interest rates and get more future value.

However, there is a way through which you can invest safely as well as get higher interest rates. You want to know how? Then read on.

This method is called investment diversification. If you are not familiar with this term, then let me tell you that investment diversification refers to investing your money in different types of investments.

This means that the investor manages his portfolio by holding different investments that have low associations with each other.

Through investment diversification, the volatility, as well as the risk of investment, reduces. This is a smart risk management technique that combines a wide array of different investment options in order to potentially diminish your investment risk.

Let me explain this through an example. For instance, John has $5,000 to spare, which he wants to invest.

Rather than putting all the $5,000 in his savings account, he can choose to diversify his investment profile. So, he puts $2,000 in his bank account and invests the remaining $3,000 in other investment options, such as Peer to Peer Lending, Binary Options, Forex, etc. Thus, he invests $1,000 in peer to peer lending, $1,000 in Binary Options, and $1000 in Forex.

This way he can be sure that $2,000 of his savings is safe in his bank account as a solid bank investment. And, if he loses the $1,000 in his Forex investment (in the worst scenario), he will not suffer a huge blow as he would have if he had invested all his savings in Forex.

Besides the reduction of risk, he will earn more as compared to his investment in only a savings account, as Peer to Peer Lending and Binary Options will offer him a much higher interest as compared to what he receives on his savings account from the bank.

This shows you how diversification of your management portfolio can help to reduce your risk as well as give more returns on your investments. Even the most successful investors advise you to diversify your investments, as diversification is king. It will not only reduce unwanted risk from your investments, but will also contribute towards a winning portfolio.

The four main investment options to diversify your investment portfolio

Since investment diversification will require you to invest in more than one investment area, we have brought forward a combination of four main investment options through which you can diversify your investment portfolio and earn higher returns with low risk. These four main investment areas are Savings Accounts, Peer to Peer Lending, Binary Options, and Forex.

Among these, Forex and Binary Options are high reward and high-risk securities that require some specialized knowledge and are more speculative than plain old bonds and stocks. You may even come across some fraudulent companies that make false promises. However, you can avoid this problem by directly contacting the Forex or Binary Options Company and then seeking its permission to work with those platforms. Nevertheless, both Forex and Binary Options reward you with big profits.

In order to help you out with the four main investment options, we have studied them in detail and jotted them down, so that potential investors can know everything about them. Investment professionals and experts also agree that before you invest in these alternative investment areas, you must know them fully, with their advantages, disadvantages, risks involved, profits, etc. and then only you must choose to invest in them.

The four main investment options

Savings Account

  • Minimum amount of activity

    Varies from bank to bank. It can be as low as $25 or as high as $2,500.

  • Average yield

    Varies from bank to bank. Can be as low as 0.01% per annum or can be as high as 17% per annum.

  • Learning time management

    Atleast one monetary activity in six months.

  • Level of risk

    Low risk

P2P lending

  • Minimum amount of activity

    £10
    .

  • Average yield

    Depends on the market trends, generally 4.5%.
    .

  • Learning time management

    Requires monthly time management.

  • Level of risk

    Depends on the investor

Binary Options

  • Minimum amount of activity

    250€
    .

  • Average yield

    Depends on the market trends, generally high returns with 70%.
    .

  • Learning time management

    Managed almost daily
    .

  • Level of risk

    High risk

Forex

  • Minimum amount of activity

    250€
    .

  • Average yield

    Depends on the market trends.
    .
    .

  • Learning time management

    Managed almost daily
    .

  • Level of risk

    High risk


Savings Account

Savings Accounts are the first banking product that people use to save their money. They are generally offered by banks.

Advantages

  • Works for both short-term as well as long-term investment
  • Low investment risk
  • Comes with a guarantee that your investment will remain safe, without any losses
  • High liquidity
  • Fixed interest rate

Disadvantages

  • Low rate of interest
  • Minimum deposit required

You can invest your money in savings accounts that offer high interest rates. These are the best savings accounts for you.

Peer to Peer Lending

Peer to Peer lending is a form of investment, where you offer your investment money to different consumers who want a loan and for this, an interest rate is charged on the principal amount. The amount you offer to invest is split into chunks of smaller amounts and then lent to different borrowers. Every borrower pays back the capital with interest on your loans. You can either withdraw these repayments or recycle them into new loans.

Advantages

  • Works for both short-term as well as long-term investment
  • You can withdraw your payment anytime
  • You get high rate of interest
  • A small amount required to start the lending process
  • High liquidity

Disadvantages

  • Some level of risk involved
  • The interest you get depends on the market trends, thus no fixed interest rate
  • No guarantee of profits, as borrowers can fail to pay back your loan
  • Not safe as compared to savings accounts

There are many peer to peer lending websites on the internet, which work as tools and connect investors to qualified consumers who want loans and enable the investors to become a bank. Among these websites, the best one is Zopa, as it makes the whole peer to peer lending process easy and quick. You just have to open your account, choose your lending option between Zopa Access, Zopa Classic, and Zopa Plus and leave the rest to Zopa.

Binary Options

Binary options are a combination of different trading assets. In this, you make predictions whether the value of a particular company or any other underlying asset will increase or decrease. Unlike standard investment vehicles like bonds and stocks, you do not purchase a part of a firm in binary options trading. And as a result, you only end up with two possible outcomes in binary options trading, which is you either end up out of the money or in the money.

Advantages

  • Fast returns, as quick as 60 seconds
  • High returns
  • Works for both short-term as well as long-term investment
  • No minimum amount of deposit required

Disadvantages

  • High risk of loss, as if you predict wrongly, you will lose all your investment
  • Daily time management required
  • Market regulation
  • No fixed returns, as everything depends on your prediction

24option.com is one of the best platforms for binary options trading, as it consists of different assets, including stocks, indices, currency pairs (Forex), and commodities. It offers a user-friendly environment and immediate execution along with real-time results, so that every trader can take part in it.

The Binary options market has strict regulations and 24Options is one of the first companies who got the regulator account

If you would like to try them – leave your details at this link and ask for the special RevenueMe offer – 24Options.com

Forex

Forex or FX in short stands for foreign exchange market. Trading in foreign exchange currency is also one of the alternative forms of investing your money.

Advantages

  • Easy to understand as opposed to the stock market
  • Flexible, as no minimum amount of deposit required and no market regulation is there
  • 24*7 market operation
  • Different trading options with hundreds of currency pairs and options of spot trade and future agreement
  • High liquidity
  • Low transaction costs
  • No minimum amount required to invest your money

Disadvantages

  • High level of risk
  • No fixed returns, as returns depend on the value of currencies, that can change frequently
  • Lack of transparency
  • Complex price determination process
  • High volatility

Indulge in Forex trading through Xtrade, which is one of the best Forex trading platforms.

Also in the Forex market – in the last year there has been many regulations changes – Xtrade is one of the first companies who got the regulatory approval

Like in the binary options, I believe that Xtrade have the best solution in the market for beginners, sign up on their site and ask for the special offer for RevenueMe readers – Xtrade.com

The Bottom Line

If you are looking to sock away your savings and want to invest them, then these four main investment options are the best. These are some out of the box investment areas, which you ignored most of the time, but works great when used smartly. You can diversify your investment portfolio in these four investment areas and minimize your investment risk as well as increase your returns.

Plus, with the best innovative online platforms for each of these investment alternatives, you do not have to search which is the best place for investing your money, as we have already provided you with the best investment places.

So, what do you think is right for you?

Savings Account

  • Minimum amount of activity

    Varies from bank to bank. It can be as low as $25 or as high as $2,500.

  • Average yield

    Varies from bank to bank. Can be as low as 0.01% per annum or can be as high as 17% per annum.

  • Learning time management

    Atleast one monetary activity in six months.

  • Level of risk

    Low risk

P2P lending

  • Minimum amount of activity

    £10
    .

  • Average yield

    Depends on the market trends, generally 4.5%.
    .

  • Learning time management

    Requires monthly time management.

  • Level of risk

    Depends on the investor

Binary Options

  • Minimum amount of activity

    250€
    .

  • Average yield

    Depends on the market trends, generally high returns with 70%.
    .

  • Learning time management

    Managed almost daily
    .

  • Level of risk

    High risk

Forex

  • Minimum amount of activity

    250€
    .

  • Average yield

    Depends on the market trends.
    .
    .

  • Learning time management

    Managed almost daily
    .

  • Level of risk

    High risk

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