How to invest money to make it double

If you have a question, either use the contact form on the blog or use my Facebook Fanpage. I ran across one of your articles via Google and wanted to inquire your thoughts on what a first time investor should do in order to maximize ROI. Hypothetically, what are the safest options for a 10, investment, and is it enough to get a good head start in the market? Ideally, I would like to double or triple this over time. If you are interested in learning more about investing an inheritancesafe places to store your money, and the best places to open up a brokerage or savings accounthere are some good reads:. That would be a perfect world. Think of safety and ROI as a seesaw. There are plenty of investments you can make which have very little risk to. Bonds are a common low-risk investment. Bonds will give you a modest return depending on the type of bond and they have almost zero risk. At the other end of the spectrum is stocks, REITs, and high-yield bonds. These are going to have a much higher risk, but there is a chance you could make a lot more money.

If you want to analyze offers like these or establish investment goals for your portfolio, there’s a quick-and-dirty method that will show you how long it will really take you to double your money. It’s called the rule of 72 , and it can be applied to any type of investment. How the Rule Works To use the rule of 72, divide the number 72 by an investment’s expected annual return. The result is the number of years it will take, roughly, to double your money. For example, if the expected annual return of about 2. Depressing, right? CDs are great for safety and liquidity , but let’s look at a more uplifting example: stocks. It’s impossible to actually know in advance what will happen to stock prices. We know that past performance does not guarantee future returns.

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But by examining historical data, we can make an educated guess. Keep in mind that we’re talking about annualized returns , or long-term averages. The rule of 72 doesn’t mean that you’ll definitely be able to take your money out of the stock market in six years. You might have actually doubled your money by then, but the market could be down and you might have to leave your money in for several more years until things turn around. If you must achieve a certain goal and be able to withdraw your money by a certain time, you’ll have to plan carefully, choose your investments wisely and keep an eye on your portfolio. Achieving Your Investing Goals A professional financial advisor may be your best bet for achieving specific investing goals, but the rule of 72 can help you get started. If you know that you need to have a certain amount of money by a certain date say, for retirement or to pay for your kid’s college tuition , the rule of 72 can give you a general idea of which asset classes you’ll need to invest in to achieve your goal.

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That said, doubling your money is a realistic goal that an investor should always aim for. Broadly speaking, there are five ways to get there. Which you choose depends largely on your appetite for risk and your timeline for investing. When it comes to the most traditional way of doubling your money, that commercial’s not too far from reality. The time-tested way to double your money over a reasonable amount of time is to invest in a solid, non-speculative portfolio that’s diversified between blue-chip stocks and investment-grade bonds. It won’t double in a year, it almost surely will eventually, thanks to the old rule of The rule of 72 is a famous shortcut for calculating how long it will take for an investment to double if its growth compounds. Just divide your expected annual rate of return into The result is the number of years it will take to double your money. Dividing that expected return into 72 indicates that this portfolio should double every nine years.

Wall Street Journal For decades, the Wall Street Journal newspaper has been a staple for information and research for investors. Stocks move up an down in value based on market psychology, but over the long term- high quality stocks will appreciate more in value, because they are growing earnings faster or have a compete advantage. All of them are become flat broke now. Even if your employer doesn’t match your contribution, the government will still subsidize a portion by giving you either a tax-deferral up front or a tax-exemption down the road, depending on whether you use a Traditional or a Roth account respectively. By stomping on the accelerator, investors can either reach their final destinations faster or crash and burn. Joyce Lv 4. A Roth IRA is taxed in the year the money is invested, but when it’s withdrawn at retirement no taxes are due on the principal or the profits.

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One year, or whenever? That means that in any given year, stocks may have risen or fallen. Basics Moneh of Thumb. Joyce Lv 4. Your Money. Dressed to impress: Niners pick Super Bowl uniforms. Personally, my account has been housed at Sharebuilder for years now, and their research tools are very good.

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That said, doubling your money is a realistic goal that an investor should always aim. Broadly speaking, there are five ways to get. Which you choose depends largely on your appetite for risk and your timeline for investing. When it comes to the most traditional way of doubling your money, that commercial’s not too far from reality.

The time-tested way to double your money over a reasonable amount of time is to invest in a solid, non-speculative portfolio that’s diversified hlw blue-chip stocks and investment-grade bonds.

It won’t double in a year, it almost surely will eventually, thanks to the old rule of The rule of 72 is a famous shortcut for calculating how long it will take for an investment to double if its growth compounds. Just divide your expected annual rate of return into ihvest The result is the number of years it will take to double your money.

Dividing that expected return into 72 indicates that this portfolio should double every nine years. That’s not too shabby when you consider that it will quadruple after 18 years. When dealing with low rates of returnthe rule of 72 is a fairly accurate predictor.

This chart compares the numbers given by the rule of 72 and the actual number of years it would take these investments to double in value. Notice that, although it gives a quick and rough estimate, the rule of 72 gets less hw as rates of return become higher.

Even the most unadventurous investor knows that there comes a time when you must buy, not because everyone is getting in on a good thing but because everyone is getting. Just as great athletes go through slumps when many fans turn their backs, the stock prices of otherwise great companies occasionally go through slumps, which accelerate as fickle investors bail.

As Baron Rothschild once said, smart investors «buy when there is blood in the streets, even if the blood is their. Nobody is arguing that you should buy garbage how to invest money to make it double. The point is that there are times when good investments become oversoldwhich presents a buying opportunity for investors who have done their homework.

The classic barometers used to gauge whether a stock may be oversold are the company’s price-to-earnings ratio and book value. Both measures have well-established historical norms for both the broad markets and for specific industries.

When companies slip well below these historical averages for superficial or systemic reasons, smart investors smell an opportunity to double their money. Just as the fast lane and the slow lane on the highway eventually will get you to the same place, there are quick and slow ways to double your money. If you prefer to play it safe, bonds can be a less hair-raising journey to the same destination. Consider zero-coupon bondsincluding classic U. For the uninitiated, zero-coupon bonds may sound intimidating.

In reality, they’re simple to understand. Instead of purchasing a bond that rewards you with a regular interest payment, you buy a bond at a discount to its eventual value at maturity.

As it moves closer and closer to maturity, doublw value slowly climbs until the bondholder is eventually repaid the face. One hidden benefit is the absence of reinvestment risk. With standard coupon bonds, there are the challenges and risks of reinvesting the interest payments as they’re received. With zero coupon bonds, there’s only one payoff, and it comes when the bond matures. While slow and steady might work for some investors, others find themselves falling asleep at the wheel.

For these folks, the fastest ways to super-size the nest knvest may be the use of optionsmargin trading or penny stocks. All can super-shrink a nest egg just as quickly.

Stock options, such as simple puts and callscan be used to speculate on any company’s stock. For many investors, especially those who have their finger on the pulse of a specific industry, options can turbo-charge a portfolio’s performance. Each stock option potentially represents shares of stock. That means a company’s price might need to increase only a small percentage for an investor to hit one out of the park. Both of these methods allow investors to essentially borrow money from a brokerage house to buy or sell more shares than they actually have, which in turn raises their potential profits substantially.

This method is not for the faint-hearted. A margin call can back you into a corner, and short-selling maake generate infinite losses. Lastly, extreme bargain hunting can turn pennies into dollars. You can roll the dice on one the numerous former blue-chip companies that have sunk to less than a dollar. Or, you can sink some money into a company that looks like the next big thing. Penny stocks can double your money in a single trading day. Just keep in mind that the low prices of these stocks reflect the sentiment of most investors.

If you decide to hos in stocks, consider using one of the best online stock brokers to keep your costs of investing low. While it’s not nearly as fun as watching your favorite stock on the evening news, the undisputed heavyweight champ is an employer’s matching contribution in a k or another employer-sponsored retirement plan.

It’s not sexy and it won’t wow the neighbors doublee your next block party, but getting an automatic 50 cents for every dollar you save is tough to beat. For most Americans, that means that each dollar invested costs them only 65 to 75 cents. You won’t get a company match, but the tax benefit alone is substantial.

A traditional IRA has the same incest tax benefit as a k. A Roth IRA is taxed in the year the money is invested, but when it’s withdrawn at retirement no taxes are due on the miney or the profits. Either is a good deal for the tax-payer. But if you’re young, think about that Roth IRA. Zero taxes on your capital gains?

That’s an easy way to get a higher effective return. If your current income is low, the government will even effectively match some portion of your retirement savings.

There’s an old saying that if «something seems too good to be true, then it probably is. There are probably more investment scams out there than there are sure things. Be suspicious whenever you’re promised results. Whether it’s your broker, your brother-in-law or a late-night infomercial, take the time to make tp that someone is not using you to double their moneg.

Roth IRA. Investing Essentials. Your Money. Personal Finance. Your Practice. Popular Courses. Just be careful, and be sure to do your homework before trying it. Compare Investment Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation. Related Articles. Partner Links. Compound Interest Definition Compound interest is the numerical value that is calculated on the initial principal and the accumulated interest of previous periods of a deposit or loan.

Compound interest is common mxke loans but is less often used with deposit accounts. Retirement Planning Retirement planning is the process of determining retirement income goals, risk tolerance, and the actions and decisions necessary to achieve those goals. Understanding the Rule of 72 The Rule of 72 is defined as a shortcut or rule of thumb used to estimate the number of years required to double your money at a given annual rate of return, and vice versa.

Personal Finance Personal finance is all about managing your income and your expenses, and saving and investing. Learn which educational resources can guide your planning and the personal characteristics that will help you make the best money-management decisions. Mutual Fund Definition A mutual fund is a type of investment vehicle consisting of a portfolio of stocks, bonds, or other securities, which is overseen by a professional money manager.

How YOU Can Flip $100 Into $1,000 Every Time!

Having a job that pays the bills is an absolute necessity, but basing our financial future on a job alone will never ro about the financial satisfaction and success that most of us are. With only a limited amount of working hours available each day, exchanging our time for money places very serious limitations on our earning potential and the only real way to maximise savings and income is by purchasing assets. Simply tk a job that brings in a monthly pay check will by no means make anyone a millionaire but smart investing certainly has the potential to do so.

Grow Your Investments Slowly

Although this article will focus on both short and long-term investing it is important to note beforehand that long-term investments are more profitable and have a significantly less degree of risk attached to them while short-term investments tend to yield less return and have a higher degree of risk ho. These are things that we buy that cost us money every single month but do not generate any income and this includes both your home and your car. A smart investment is one that will provide a return on a regular basis, invewt by definition means that the investment must be an asset. Assets do not cost you money, they earn you money. If you purchase a property and rent it outearning a profit after all expenses, than this property is an asset. Wealthy people spend their income primarily on assets mohey this is what separates them from the average and middle class who never seem to be able to gain any serious financial wealth. In order to gain wealth we need to invest some time into our financial education. This includes index and mutual funds as well as invdst. These are simply options that will provide you with better returns than either a savings account or a k retirement account. A risky but rewarding short-term investment opportunity is that of penny stocks. Penny stocks are very low priced stocks that are highly volatile but can easily double in value within a matter of hours. Peer to peer lending is also an investment option that has the potential to yield very high returns but is likewise quite risky. You will basically bid and compete for a loan by offering a lower rate than tp lenders. I would recommend these options to anyone looking ro make a short-term investment that has a high earning potential. As mentioned, long-term investments generally tend to pay off greater returns than short-term investments.