How To Make a Rewarding, Profitable Investment

How To Make a Rewarding, Profitable Investment

Investing money can seem like a professional activity, only practiced by those with a high amount of savings to gamble and with a degree in Economics. While knowledge and experience do play some part in investing into stocks and bonds, making an investment can be relatively simple, and even $1,000 can go a long way when properly invested. But how is one to tell which investments are smart and profitable and which are risky and costly? Consider these easy strategies to invest your savings for future profit with minimal risk and effort.

Invest More in 401k

You may be thinking to yourself, “What does 401k and retirement have to do with prudent investing?” but putting more funds into your 401k is actually a smart investment for those looking to start investing safely and simply. While it may not yield a high profit as a high-risk high-reward option might, a 401k provides the money necessary to live comfortably in retirement without fear of financial troubles or having to resort to a reverse mortgage. At just $20 a week in addition to your current allocation, you will be adding roughly $1,000 per year. For more on 401k savings tips and other savings options, refer to a site like DepositAccounts.com.

Plus, investing in a 401k has other benefits in addition to padding your retirement funds. For instance, pre-tax income is calculated without considering the money placed into a 401k, meaning those who invest more will save more on their taxes. Additionally, many employers offer to match 401k contributions, making investment even more advantageous.

Invest in Your Home

While many may not consider home improvements an investment per say, remodeling and renovating your home can actually amount to a profitable investment in your home’s value, raising your equity and potential profit should you decide to sell. Particularly, on a budget of $1,000, investors can opt to make more strategic improvements, such as bathroom remodeling or door replacement, that can add a considerable value to a home at a surprisingly low cost.

Though this may not be the most traditional sense of an investment, which conjures an image of stock market prices rising and falling on a graph, home improvements can pay off in a big way when selling a home, raising a property’s value by many times the cost of the improvements.

Pay Down Your Debt

Another unconventional investment, paying off your debt brings many substantial benefits and ultimately saves a bundle. Whether it is credit card debt, student loan debt, car loan debt, or home mortgage debt, borrowers who pay off their balance early can save an unbelievable amount of money on interest, due to its compounding nature.

While $1,000 may not be enough to pay off most debts, paying down a debt has a similar effect, lowering one’s overall interest costs notably. For those with a sizeable amount of debt, one option may be to invest that $1,000 into a debt consolidation service, which can help borrowers to better manage their debt under a lower interest rate.

Buy a Safe, Long-Term Stock

Finally, those wishing to make a more traditional investment may consider purchasing a “set it and forget it” type stock, one that does not include a high amount of risk and that will mature over a lengthy period of time. Also known as bedrock stocks, the ideal candidates for safe investments should be bigger businesses with stable profit and recognizable brands. For a more savvy approach, try investing into a company that follows these specifications but  is also situated in an industry that will grow in the future given the current trends, such as healthcare.

Making a wise investment does not necessarily entail going straight for stocks and bonds and exposing oneself to high-risk, high-reward opportunities. In fact, as this list indicates, some of the most prudent investments can actually be safe enterprises, investing more in a solid future than gambling on start-up businesses. While turning a profit may require some time, patient investors are profiting, able to invest in ways that may not pay off immediately but can provide so much more in the long run.

Dave Landry Jr. is a personal finance manager and small-business adviser located in Southern California. He has only recently started blogging in order to share his thoughts on budgeting and like issues, and hopes that you enjoy this article. 

photo by: epicharmus

Written by Miranda Marquit

Miranda Marquit is a freelance writer and professional blogger, specializing in personal finance, small business, and investing topics. She writes for a number of financial web sites and blogs, and has been featured in numerous media. Read about life as a freelancer at MirandaMarquit.com and in her book Confessions of a Professional Blogger.

3 Responses to How To Make a Rewarding, Profitable Investment

  1. Interesting article, I think paying off debt quickly and saving early for retirement are the cornerstones of financial success. I’m also starting to see the benefit in investing long term in stocks. I’m analyzing a stock a day to find gems to invest in using dollar cost averaging.

  2. I’ve started to buy into profitable long term stock, whenever I look at a 20 year chart I always see a uptrend. I’m now investing in quality stocks that have a durable competitive advantage and pay dividends that rise every year. Great piece Miranda,loving the blog.

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