Buy shares in the stock market: Shares are issued by companies in bid to raise capital from investors. The moment you buy any company’s share, you become its shareholder, and are rightfully entitled to the company’s share of any dividends it declares and pays out. Across the globe, people buy shares in hope that their prices will someday increase. Others buy them in pursuit of dividend payments, or as a shield against inflation.

Notably, listed companies pay dividends out of profits they make (if any). In certain instances, a listed company may decide to re-invest its profits into the business. And when the company is faced with liquidation but you still own part of its shares, then you are rightfully entitled to its remaining assets; but only after all its creditors have been settled.

When you own any company’s shares, you have an option of selling them the moment the prices of the shares increases in value, or hold on when prices are low. Investing in shares best suits economic-savvy persons; people who can forecast the future performances/behaviors of certain listed companies. With good advice from trustworthy stockbrokers or investment advisers, you can take a stab at buying listed companies’ shares.

There is an old-aged adage that ‘you lose 100% of chances you fail to take.’ Most people across the world fear investing their hard-earned proceeds in the stock market. This has give room to a smaller portion of the population who are currently reaping heavy returns in various stock markets across the globe.

Open a fixed deposit account: This is another exciting option offered by several financial institutions. They allow you to deposit/ invest a specific amount of money at an agreed interest rate, for a specific duration of time.

This option may be better than merely opening a savings account since it has better returns on savings. However, you will be required to deposit your money for a specific period of time, without withdrawing any portion of it. In return, your money will yield some interest payable at the end of the agreed period.

You can consider putting your money in a fixed deposit account if you have no urgent/immediate use of it. And before putting your cash in any fixed deposit account, carefully go through the offer from the financial institution and ensure you properly understand the pros and cons of keeping your money with them. It’s advisable to compare the offers from different financial institutions to get the best deal for your money.

Invest in a structured deposit: Just like its name, a structured deposit is a deposit but with an investment product. A structured deposit is different from fixed deposit accounts since it offers potential for higher returns. But on the other hand, it has higher risks; such as receiving lower amounts than your expectation. The returns on structured deposits depend on the performance of assets/products which they are invested in. Such may include shares, bonds, and other fixed income securities etc.

You will receive the principal amount you have invested in a structured deposit as long as you do not withdraw it before maturity. If you leave it to maturity, you will be paid the principal amount and the agreed interest; provided the financial institution does not negate on the deal. Therefore, the credit risk of the financial institution holding your deposit is significant in helping you gauge the quality of your returns.

Invest in bonds: A bond is form of borrowing. It’s a debt security issued by a borrower i.e. a government or a company seeking to raise funds from the financial stock market(s).

A bond is classified as a fixed income security; it pays a steady flow of income at intervals throughout its life. Bonds are usually offered for a period of more than ten years (though there are certain instances where bonds may be offered for periods less than ten years). Other fixed income securities are Bills (debt securities maturing in less than one year), and Notes (debt securities maturing between one to ten years).

The life/duration of a bond is referred to as its tenure, and the interest from bonds are known as coupons. The rates of coupons are expressed as a percentage of the principal amounts, known as face values or par values. The prices of bonds are expressed as a % of the face value. Once a bond matures, it is redeemed at a face value, and those who hold the bonds are generally paid one hundred percent of the face value.

There are certain bonds which do not offer coupon payments at all. They are known as zero-coupon bonds. The prices of zero-coupon bonds are mostly discounted of the bonds’ par values. I.e. a zero-coupon bond of say $10,000 par value is issued for 10 years at $7000. It means that you will be paying $7000 for a bond which will be worth $10,000 in ten years.

The prices of bonds are usually quoted as a percentage of the par value i.e. a bond of 110% or a bond of 80%.

Before you invest in any bond, first carefully go through its terms and conditions. Read in between the lines, and clearly understand the offer. Know what you are to gain from it. Also, never invest money you may intend to use for emergency purposes. Instead, you should have adequate financial liquidity (or other financial resources) to effectively sustain you as you wait for the bond to mature. And most significant, keenly analyze the expected performance of the bond during its tenure. You should involve services of a trusted financial advisor, or you can as well carry out the analysis on your own (if you have the capacity to).

It’s the credit quality of the issuer of a bond which determines the quality of the bond’s yield. Mostly, bonds of higher qualities are issued by governments. Equally, companies/institutions linked to governments such as banks also offer quality bonds. When investing in bonds offered by corporate entities, settle on a bond from good-rated corporate.

Structured Settlements and Annuities: Most do not realize that this can be looked at as an investment, even though it is paying you each month. There are programs available where you can get your structured settlement or annuity cashed out. You can get out of debt, go back to school, remodel your house or go on a dream vacation. Have you always wanted to open your own business? You can by doing a cash out option with your structured settlement. Visit the Top-Companies website on more information on how to sell your structured settlement for the best company.

Invest in unit trusts: A unit trust or unit fund is another favorable investment option offered by several banks, investment banks, financial institutions, and insurance companies. Your money is pooled together with money from other investors, and thereafter, cautiously invested by the relevant institution in a portfolio of assets according to the fund’s declared investment goals and best fitting investment approaches. In a nutshell, unit trusts are managed by experienced fund managers, and operate on a trust structure.

The price of each unit correlates to the fund’s net asset value. It is determined by dividing the current market value of the fund’s net assets by the number of outstanding units. Your main gain from investing in unit trusts is realized when the prices of the units rises above the initial price you paid. And notably, a good number of unit trusts do pay dividends at certain stipulated times.

The beauty of investing in unit trusts is that it gives you a safer avenue for investing in a diversified range of assets, thus minimizing your risk exposure. It also grants you a secure access to markets or assets which may be more costly if you were to purchase them on your own. If you love to own shares in the stock market, but lack the necessary know-how, you can test out with investing in unit trusts.

And most significant, unit trusts offer you flexible options to choose from. If you want total safety for your invested money, you may settle on unit trusts with capital preservation and income generation. Here, it is the investment banks or insurance companies who bear the risk associated with investing your money.  But if you long for more appreciation of your money and you are willing to accept greater risks, then you can settle on funds inclined towards helping your invested money grow.

Re-invest in that business (if you have one): When you feel satisfied with the returns from your business, the least you can do is to plough back all, or part of the profits into the business. By doing so, you are positioning your business for an increased production and more yields. Equally, you can re-invest in the business with the focus of expanding its operations.

Be an angel investor: Do you have a keen eye for identifying those startups with good future potential growth and returns? Today, there are endless startups in pursuit of either financial or technical support. You can identify one with possible good future potential growth, invest in it and reap sweet rewards later after it has stabilized.

Resources

https://en.wikipedia.org/wiki/Structured_settlement_factoring_transaction

http://personalfinance.duke.edu/make-todays-decisions/overview/home/what-do-i-need-understand-about-my-mortgage