14 great investments to earn compound interest


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Chances are, you’ve heard someone mention the term compound interest, at some point. But do you know exactly what it is and how it can benefit your investments? And just as important, do you know where to find the best compound interest investments?

Whether you are an active investor or an aspiring one, it’s crucial that you understand how compounding works. In my estimation, compound interest is critical to successful investing.

In this article, I’ll explain compound interest, how it works, and how you can use compounding to your advantage in your portfolio.

For help managing your investments, consider working with a fiduciary financial advisor. Find an advisor who serves your area today (Sponsored).

What Is Compound Interest?

Compound interest is earning interest on the interest you’ve already made.

Imagine a rolling snowball. A small snowball – representing your initial investment – gradually becomes larger as it rolls forward and adds more snow to what’s already stuck to the snowball. The more snow (interest) the snowball (your initial investment) takes on, the bigger the snowball becomes (your final investment).

That’s what compound interest can do with your savings and investments.

An Example of Compound Interest

For those of you who like to see the numbers, here’s an example of compound interest at work:

Suppose you invest $1,000 in a five-year certificate of deposit, paying 5% and compounded annually.

The compounding will look like this:

  • At the end of the first year, your CD balance will grow to $1,050. That includes your original investment of $1,000 plus $50 in interest earned.
  • At the end of the second year, your CD balance will be worth $1,102.50. The amount includes $1,000 original investment, $50 in interest earned in the first year, $50 in interest earned in the second year, plus $2.50 earned on the $50 in interest you earned in the first year of the CD.
  • At the end of five years, your CD will have grown to $1,276.28. From that, $26.28 is compound interest earned on your interest over the same five years.

The $26.28 in compound interest isn’t significant, but we were basing it on a modest $1000 investment and a relatively short, 5-year time frame.

The figure would be much higher if you started with a larger amount, made regular contributions, and invested for 20 or 30 years.

You could argue that compound interest is the secret sauce of successful investing.

One of them, at least.

What Is the “Rule of 72”?

The Rule of 72 is a simple formula used to determine the years it will take for a certain investment to double in value based on a given interest rate.

The table below illustrates how many years it will take for $1,000 to double at various interest rates (daily compounding) The Calculations are performed using the Calculator Soup Rule of 72 Calculator.)

Interest Rate Actual Number of Years to Double Your Investment Rule of 72 Calculation
1% 69.66 1% divided by 72 = 72 years
2% 35 2% divided by 72 = 36 years
3% 23.45 3% divided by 72 = 24 years
4% 17.67 4% divided by 72 = 18 years
5% 14.21 5% divided by 72 = 14.4 years
6% 11.9 6% divided by 72 = 12 years
7% 10.24 7% divided by 72 = 10.29 years
8% 9.01 8% divided by 72 = 9 years
9% 8.04 9% divided by 72 = 8 years
10% 7.27 10% divided by 72 = 7.2 years

As you can see from the calculations in the table, the Rule of 72 is just an approximation, a rule of thumb. Also, the higher the interest rate, the more exact the Rule of 72 calculation becomes.

Mixing Compound Interest with Regular Contributions

We’ve already seen how compound interest causes accelerates investment growth. But the effect is even greater when you add regular contributions to the mix. That’s how retirement plans and other investment vehicles work.

Here’s an example, using an initial investment of $1,000, adding $100 in monthly contributions and 10% interest (compounded daily) for 40 years. We’ll use the Compound Interest Calculator from Investor.gov to show how this works.

The input will look like this:

Compound interest

The results are as follows:

Calculator results

From an initial investment of $1,000, the combination of compound interest and regular monthly contributions caused this investment to grow to nearly $700,000!

This is why compound interest – combined with regular monthly contributions – is the small investor’s greatest strategy to build wealth. (Or any investor, for that matter.)

Neither dollar figure is beyond the reach of a person of even modest financial means. The initial investment of $1,000 is less than many people have sitting in an emergency fund. And many people can afford to make a $100 monthly contribution via direct payroll contributions.

But let’s take it a step further – using the same information but increasing the monthly contribution to $200, how will things look at the end of 40 years?

The investment doubles from just under $700,000 to about $1.34 million!

That’s the power of compound interest, which is why would-be investors need to embrace the concept as early in life as possible.

For help managing your investments, consider working with a fiduciary financial advisor. Find an advisor who serves your area today (Sponsored).

What Types of Accounts are Best for Compounding?

Now that you see what compound interest can do to your investments let’s look at where and how you can make that compounding happen.

Banks Savings Accounts. Most savings accounts, money market accounts, and certificates of deposit earn compound interest. However, they fall into the safest asset class, so you won’t get the highest returns.

Discount Brokerages. You can buy just about any investment through an online broker, including bank products like CDs. But it’s also where you’ll find other interest-bearing assets, like corporate bonds, U.S. Treasury securities, municipal bonds, and bond funds. The variety of investment vehicles means you’ll have a better chance of earning higher returns than you can at a bank.

Cryptocurrency exchanges. This is a surprise to anyone who doesn’t invest in crypto. But crypto exchanges aren’t just the place to buy and sell crypto. Many crypto exchanges also offer high interest on crypto balances. Those returns are usually much higher than you can get in a bank or a bond. If you’re willing to accept some risk (okay, a lot of risk), in exchange for a higher return, crypto exchanges can be a place to park some of your investing cash.

Taxable vs. tax-deferred vs. tax-free accounts. Contributions you make to tax-sheltered plans are often tax-deductible, and the investment income earned within the account is tax-deferred.

If you can avoid paying income tax on your investments for many years, you will build wealth much more quickly than if you invest in a taxable account.

It’s also possible to take advantage of tax-free accounts. Roth IRAs and Roth 401(k)s don’t offer tax-deductible contributions. But the investment earnings within each account accumulate on a tax-deferred basis. And once you reach age 59 ½ and have been in a plan for at least five years, you can begin taking tax-free withdrawals.

Next, let’s look closely at various investments that earn compound interest.

Best Compound Interest Investments

1) Certificates of Deposit (CDs)

A CD is an investment contract you enter into with a bank. In exchange for investing a certain amount of money, the bank will provide you with a guaranteed return of principal, as well as interest earned on the certificate. CD terms range from 30 days to five years, allowing you to lock in an attractive interest rate.

Most banks offer CDs. But if you’re looking for the highest rates possible, you can check out an online CD marketplace like  SaveBetter. They have CDs from banks across the country, some paying interest as high as 5.00% APY.

2) High-yield Savings

All banks offer savings accounts, but some pay you more interest than others. A high-yield savings account pays more interest than ordinary savings accounts. Unlike CDs, there’s no guarantee on how long the bank will maintain the same interest rate. It could change at any time.

Even though rates are rising, many banks continue to pay subpar interest. You’ll need to shop to find the institutions with the highest-yielding savings.

An example is ufb Direct. They’re currently paying 3.16% APY on all account balances and with no maintenance fees.

3) Money Market Accounts

There’s not a whole lot of difference between savings accounts and money market accounts anymore. The main difference is that money markets usually allow you to access your account balance with checks, while savings accounts don’t.

Interest rates paid between savings accounts and money market accounts are generally similar. And once again, most banks pay very little interest on these accounts.

ufb Direct also offers high-yield money market accounts, currently paying 3.16% APY. The account offers access by checking, and there is a $10 monthly fee unless you have a minimum balance of $5,000.

4) Bonds

This is a very broad category of interest-bearing securities.

Individual bonds. Bonds are debt securities issued by corporations to expand their operations or to retire old bonds. They’re often issued in denominations of $1,000 and for terms of 20 years. The yield on high-grade corporate bonds is currently around 6%, and 9% on high-yield bonds. High-yield bonds were once known as “junk bonds” because of the higher default risk.

The US Government also makes bonds available, notes (terms of 10 years or less), and bills (terms of less than one year). You can purchase them in amounts as low as $25. Current yields are around 4% or higher.

Corporate bonds can be purchased through investment brokers, while U.S. Treasury securities can be purchased either through investment brokers or at TreasuryDirect.

Series I savings bonds. These are variations of securities issued by the U.S. Treasury. Series I savings bonds, or simply I Bonds, can be purchased in denominations of $25. You can purchase up to $10,000 in I Bonds annually, with a current variable yield of 6.89% APY.

Municipal bonds. State and municipality governments can issue municipal bonds. They work like other bonds, but the interest earned on those bonds is tax-exempt for federal tax purposes. If your state issues bonds, they will be exempt from state income tax. Municipal bonds are usually purchased through an investment broker.

Bond funds and ETFs. You can buy bonds through a bond fund, like a bond mutual fund or ETF. There are all kinds of bond funds you can choose from. For example, funds can focus on short-term, intermediate, or long-term bonds. They can also hold corporate bonds, government bonds, or a mix of both. Some funds invest in foreign bonds. Bond funds can be purchased through investment brokers.

For help managing your investments, consider working with a fiduciary financial advisor. Find an advisor who serves your area today (Sponsored).

Investments That Compound Quickly

The investments we’ve discussed up to this point combine interest income with a high degree of safety of principal. But if you want higher returns, you can invest in securities with greater risk.

The investments below have varying levels of return as well as risk. You can generally assume higher returns will be available on investments with greater risk.

5) Individual Stocks

Individual stocks don’t pay interest, but many established companies pay dividends to return profits to their shareholders. Dividend rates can rise and fall and are not guaranteed. However, most companies are incentivized to continue paying dividends, and increase them if possible.

The average return on stocks was approximately 12% between 1957 and 2021 when both growth and dividends are factored into the return. Some stocks are considered near recession-proof. Examples include utility, health care, and high-dividend stocks.

But you must be aware of the risk factor with stocks.

While they may provide double returns over the long term, you can experience a decline in value in any given year. That’s the risk/reward factor at play.

You can invest in individual stocks through investment brokers. If you like to choose your own stocks but don’t want to manage your portfolio, check out M1 Finance. It’s a robo advisor that allows you to choose up to 100 stocks or ETFs for your portfolio, all commission-free, then manage the portfolio at no charge. You can even create as many portfolios as you like.

6) ETFs

If you want to invest in stocks but don’t want to choose or manage them, look into an exchange-traded fund (ETF). It works something like a mutual fund in that it holds a portfolio of many individual stocks. ETFs are usually index-based, which means they invest in a recognized stock market index, like the S&P 500.

But the ETF market has become highly specialized. It’s possible to invest in specific stock sectors using a fund. For example, you can invest in energy stocks, healthcare stocks, precious metals, technology, or just about any sector you can imagine.

If you like the ETF concept but don’t want to manage your own portfolio, you can invest through a robo advisor like Betterment. They’ll create an entire portfolio of ETFs invested in both stocks and bonds based on your own investment preferences and temperament. And all for a ridiculously low annual fee.

7) Mutual Funds

Mutual funds are pooled investment funds that are, in most cases, actively managed. Unlike ETFs, which are designed to match the performance of an underlying stock index, a mutual fund manager attempts to outperform market returns. As a result, mutual funds have higher operating costs, which are passed along to the investor through fees, known as Management Expense Ratios (MERs). MERs for actively-managed mutual funds can be as high as 2%.

Mutual funds come in two broad categories, growth funds and balanced funds. As the name implies, growth funds focus on capital appreciation. That means the stocks they hold have a strong orientation toward growth.

Balanced funds include both growth stocks and dividend stocks (and even bonds). The returns on these funds may be lower than on growth funds, but they tend to be more consistent due to the dividend and interest income.

An example of a growth fund is the Vanguard U.S. Growth Fund Investor Shares (VWUSX). The fund actively invests in large US corporations and requires a minimum investment of $3,000. As you might expect, the performance of this fund has been dismal in 2022, down nearly 40%. Hopefully we’ll see a nice turnaround in 2023!

The Fidelity Balanced Fund (FBALX) is an example of a balanced mutual fund. Its current composition includes 66% held in stocks and 34% in bonds.

For help managing your investments, consider working with a fiduciary financial advisor. Find an advisor who serves your area today (Sponsored).

8) Rental Real Estate

While real estate doesn’t earn interest like a savings account or CD, it allows you to compound your income by combining rental income and capital appreciation.

There are different ways to invest in real estate. The first and most common is buying a principal residence. Or you can buy a vacation home, which can be held primarily for long-term capital appreciation. However, that can be a money loser if it doesn’t generate any rental income.

A more effective way to invest in real estate is by purchasing rental real estate. This can include everything from a single-family house to investing in apartment buildings.

One portfolio-friendly way to invest in physical real estate is through Roofstock. It’s an online real estate marketplace where you can select single-family properties to invest in. Roofstock fully vets the properties, and they require a 20% down payment on each property you purchase.

9) Real Estate Investment Trusts (REITs)

A real estate investment trust, or REIT, is like a mutual fund that holds commercial real estate. A REIT can specialize in specific property types, like retail space, office buildings, large apartment complexes, or warehouse space. You can purchase shares in a REIT the same way you would buy company stock. You can buy and sell REITs through investment brokerage firms.

If you want to invest more directly in specific real estate activities, consider purchasing shares in large homebuilder companies or the many companies that supply building materials to the construction industry.

There are also mutual funds and ETFs that specialize in real estate. For example, the Vanguard Real Estate ETF (VNQ) invests in various REITs. Fidelity® Select Construction and Housing Portfolio (FSHOX) invests in both homebuilders and construction supply companies.

Yet another option is crowdfunded real estate platforms. These are online real estate investment platforms that enable you to invest in non-publicly traded REITs.

Two popular examples are Fundrise and Realty Mogul. Fundrise is suitable for new and small investors due to its $10 minimum investment. RealtyMogul has a much higher minimum investment ($5000) but invests in real estate equity and debt deals, normally reserved for institutional investors.

10) Alternative Investments

Alternative investments fall outside conventional investing categories, like stocks and bonds or savings accounts and CDs. The risks can be high, but so are the potential rewards. In the past alternative investments have been off-limits to the average investor, but these days you can invest more easily invest in alternative investments via several online platforms.

For example, you can use YieldStreet to invest in unusual asset classes like legal notes, real estate, fine art, and airplanes. The minimum investment required is $1,000. Because these are alternative assets, you must be an accredited investor to participate.

Mainvest is another platform where you can invest in alternative assets, but a very specific one. With as little as $100, you can lend money to small businesses. Those loans carry expected returns of between 10% and 25%. You don’t need to be an accredited investor to participate in this platform.

11) Crypto

You’re probably already aware of cryptocurrencies’ potential gains (and losses). Two of the most popular coins are Bitcoin and Ethereum. The obvious play with both these cryptos is the potential for large gains in value. Bitcoin, for example, started at about $1 in 2009 and rose to nearly $69,000 by 2021. It’s since settled back to $20,000, but that may be setting it up for the next big move upward.

As mentioned, you can earn high interest on your crypto balance through certain crypto exchanges.

Gemini, a popular crypto exchange, is currently advertising paying up to 8.05% APY on crypto balances. That’s about double the rate you can get on U.S. Treasury securities. Remember that while these rates are admittedly high, the FDIC will not insure your deposits.

12) Art

This asset category isn’t so much about compound interest as it is about long-term speculative growth. Fine art has proven to be a great long-term investment, but until recently, only the wealthy have had access.

An online platform called Masterworks aims to change all that. They sell shares in popular fine works of art at $20 a share. With a minimum investment of $1,000, you can invest in 50 pieces of artwork.

Again, it’s speculative in nature but has the potential to pay handsomely over the very long term.

13) Wine

This asset class is similar to fine art, except it involves fine wines. A company called Vinovest claims to be the world’s leading wine investment platform, and they’ll enable you to invest in fine wines with a minimum investment of $1,000. According to Vinovest, fine wines have provided an average annual return of greater than 10% over the past 30 years.

14) Collectibles

Collectibles can be purely speculative, but the return potential is high. A Mickey Mantle baseball card , for example, sold for $12.6 million earlier this year. This is a one-in-a-million opportunity that you would never find if you went looking for it. But it does indicate what’s possible.

There’s no way to know if a given collectible will appreciate in value, certainly not to that degree. But when you see the potential, it can make beginning the search worth considering. Other collectibles include cars, vintage toys, sneakers, and coins.

Final Thoughts on the Best Compound Investments

Investments that earn compound interest offer a ton of potential over the long term. The good news is that plenty of investments allow you to compound your income, from safe, low-yielding bank accounts and CDs to stocks, investment funds, and more.

If you have never invested, now is the time to start! Remember, the longer your money is invested, the more it can compound. If you already have investments, take a look at your portfolio. Are you missing out on compound growth opportunities? If so, look for ways to incorporate compounding in your portfolio.

FAQs on Compounding Investments

How do you calculate compounding interest?

The amount of compounding interest accrued on a loan or deposit over time is determined by the frequency of compounding and the size of the initial principal. For example, if you borrow $100 at 10% interest, with monthly compounding, you will owe $110.63 at the end of the first month, $121.29 at the end of the second month, and so on.

To calculate the compounding interest for a given number of periods, use the following formula:

A = P(1 + r/n)^nt
A = The amount of compounding interest accrued
P = The initial principal
r = The annual interest rate (divided by 100 to convert to a decimal)
n = The number of periods per year
t = The number of years

How does compound interest work?

Compound interest is when the interest that gets accrued on a sum of money gets reinvested back into the account in addition to the initial deposit. This causes the total amount of money in the account to grow at an accelerated rate. The longer the money stays in the account, the more compounded interest will be earned, which will result in a larger final balance.

What compound interest earns the most money?

The compound interest investment that earns the most money is the one with the highest annual percentage yield (APY). The best compound interest investments are typically those that offer the highest returns with the least amount of risk. Some of the most common options include stocks, bonds, and mutual funds.

Other options include:

-High Yield Savings Accounts
-Certificates of Deposit (CDs)
-Treasury Inflation Protected Securities (TIPS)
-Municipal Bonds
-Corporate Bonds
-Dividend Stocks

Can compounding interest make you rich?

Yes, compounding interest can make you rich, but it all depends on how much you save and how long you let your money grow. Over time, the effects of compounding can be quite powerful, so it’s important to start saving as early as possible. If you’re able to consistently save money and let it grow over a long period of time, you could eventually become a millionaire!

More investing tips

You can start investing at any age and with nearly any budget. Just be sure to keep your risk tolerance in mind, especially when the market is volatile.

Additionally, a financial advisor can help you with your investment portfolio. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. (Sponsored)


This article originally appeared on GoodFinancialCents.com and was syndicated by MediaFeed.org.

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15 investing myths you should forget right now


Investing money might help you grow your wealth, but it can be a scary concept for some. According to a recent FinanceBuzz survey on investing habits, nearly three in 10 Americans haven’t started investing yet.

There are many reasons that stop us from investing. Unfortunately, some of these reasons are actually old investing myths. But putting off investing may be one of the most significant money mistakes you can make.

To help more people start investing and making smart money moves, we’re going to present 15 investing myths, explain why they’re outdated and how they could be costing you money.


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FianceBuzz’s survey found 62% of people believe you should have $1,000 or more to open an investment account. A couple of decades ago, some mutual funds required a minimum initial investment of thousands of dollars.

But this widely believed myth that you need lots of money to start investing simply isn’t true. Today, investing apps have changed how we invest, and many traditional brokerage firms allow you to begin investing with very little money. You can even get started in investing with as little as $1 if you buy fractional shares.




It’s a common belief that a bank account is the best place for your short-term investments. The money is usually insured up to at least $250,000 thanks to Federal Deposit Insurance Corp. insurance and at least won’t decrease in value.

Unfortunately, bank accounts typically have awful interest rates. If you want to get decent earnings on your money, other options exist. For instance, certificates of deposit and money market deposit accounts are also normally FDIC insured and may offer higher interest rates.




If you’ve ever tried to watch an investing show on TV, you’ll know that these strategists often talk about very detailed concepts and strategies in an attempt to eke out higher returns. Thankfully, everyday investors don’t need that level of complication in their investing lives.

Some of the best investing apps just have you fill out a questionnaire about your goals, risk tolerance, and other relevant financial information. Based on this, they suggest a portfolio of investments that fits your needs. They can even automate your investing in that portfolio so you can regularly and easily add more money.

Although you don’t want to blindly follow the advice of an investing app (or a human, for that matter), these services can take care of some of the more complicated work for you.


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It’s easy to think stocks are the only option to invest in. You constantly hear about the stock market reaching new all-time highs or dropping by a few percent in the media. The press doesn’t tend to cover other investments as much.

But stocks are only a tiny part of investing. You can invest in many other types of assets, including real estate, cryptocurrency, collectibles, artwork, precious metals, and more. For example, Masterworks helps you invest in fine artwork that you likely couldn’t otherwise afford to own.




The traditional idea of investing makes it sound like it would take up a lot of your time. You have to research investments, read a company’s public financial reports, and keep track of the news that could impact stock prices. And you have to do that for everything you invest in, right?

Thankfully, the answer is no. You can earn decent returns throughout long periods in other ways. For example, you could easily diversify your assets just by investing in index funds.

Index funds often have diverse holdings, which means they spread out the risk over multiple companies rather than concentrating your risk in one or two. You won’t typically see as high a return as you might with an individual stock, but you also won’t have to spend as much time managing the investments and expose yourself to less risk of losing money too.




Investing used to be expensive. You had to pay brokers to make stock trades for you and there were a lot of other potential fees as well. But things have changed over the past couple decades.

Now, there are investing apps that offer fee-free trades. And even some of the major investing powerhouses that have been around for decades have started offering commission-free trades.

If you want to invest in a more diversified investment, such as a mutual fund, some companies even offer no-fee investments. In particular, Fidelity offers four mutual funds that have 0% expense ratios and no minimum initial investment.




If you work at a company that offers a 401(k) plan, it’s easy to think a 401(k) is the only account you’ll need for retirement. Although that may work out in some cases, you may be better off having more than just a 401(k).

You might also consider opening an individual retirement account (IRA). You could also open a taxable investment account. These accounts may work better for you than a 401(k) because you choose where you open them. That means you get to pick where and what you invest in rather than having a 401(k) plan force you into a limited set of options that may come with high expenses.


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When you research investments, you’ll likely see a section detailing the investment’s past performance. And although that may sound good, the truth is it isn’t an indicator of the investment’s future performance.

No one has a crystal ball. What happened yesterday may have nothing to do with what happens tomorrow. For instance, a company with a stellar performance record before a recession may go bankrupt when a recession hits.

Past performance is something you should consider, but know that it doesn’t promise any given returns in the future. Instead, focus on the fundamentals of a company or investment.




When you see your investments taking wild swings from day to day, it’s easy to get worried. You may think that selling your assets today and waiting until the market calms down will protect you from the storm. Unfortunately, that may not work out.

Volatile markets can have wild swings both up and down. If you sell once investments have started to dip, you could miss out when markets begin their recovery. The best days in the market often come after the worst days. If you don’t reinvest at the perfect time, you may miss out on these fantastic opportunities. This could dramatically reduce your investing returns.

smart money move to make in a volatile market could be holding a diversified portfolio for the long term so the wild swings even out over time.


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Gold is an investment that many people have misconceptions about, including the idea that it’s the best investment. Historically, gold may have a good track record. But what happens if a gold mining company finds a massive supply of new gold? If the supply exceeds the demand, gold prices could plummet.

When you invest in only one thing, such as gold, you open yourself to huge risks. Other assets may outperform gold and provide better overall returns if gold performs poorly for an extended period. It’s generally smart to invest in a diversified manner rather than putting all your money into one investment.




Bonds, which is a fancy name for debt, are normally viewed as a stable source of investment returns and retirement income. Many investment experts recommend slowly switching from stocks to bonds as you get older.

Unfortunately, the broader economic picture has made this strategy less certain. The price of bonds increases when interest rates drop. Interest rates have been falling for decades but may start rising in the future. When this happens, the price of bonds may decrease.

Instead of blindly following a rule of thumb, consider why you want to own bonds. If your reasoning aligns with the investment and its risks in the current environment, consider adding bonds to your portfolio.


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Buying shares of big-name companies — such as Google, AmazonApple, and Facebook — can be viewed as some of the best ways to invest by new investors. These stocks have all had meteoric rises in their prices from when they first debuted on the market.

But big companies aren’t always a good investment. Although they may have had reliable performances in the past, their futures may hold risks that result in lower returns. Some behemoth companies even end up going out of business, such as Toys R Us and Circuit City.

Large companies aren’t always able to adapt to changing times. If they can’t, your investment in them may lose value. Instead, it may be wiser to invest in a diversified portfolio of companies of different sizes.




When you look at the long-term historical returns of the stock market as a whole, the market appears to provide reasonable returns. If you only look at this long-term trend, it’s easy to think you face no risk when investing. That isn’t the case.

You always face risks when you invest, even when you invest in the most simple and boring investments. If you suddenly need your money, you may have to sell when an investment’s price has decreased. This means you don’t get the advantage of the long-term historical returns because you had to take the money out of the market early.

If you’re nervous about the risk of investing, that’s a good thing. It forces you to educate yourself and find ways to decrease your risks while still meeting your financial goals. If you’re still too nervous about investing, talking to a fee-only fiduciary financial advisor may help.




According to FinanceBuzz’s survey, one of the top-cited reasons Americans aren’t investing is that they’re afraid of losing money. Investing is risky, as we just discussed, but the degree of risk depends on what you invest in and how long you plan to stay invested.

Some investments are incredibly safe, such as certificates of deposit, money market accounts, and U.S. Treasurys. And even some riskier investments have historically provided positive long-term returns as long as you stay invested and invest in a diversified manner.

Taking a risk tolerance assessment may help you decide on the best path for you. Based on the evaluation results, you’ll be able to craft an investment plan that allows you to take the risks that fall within your comfort level. These sorts of assessments are often part of signing up for an investing app or opening a brokerage account.

The bottom line is that If you don’t take any chances, you reduce your potential returns. This may be disastrous, especially if the cost of living increases over time and the money that’s just sitting in your savings account can’t keep up with those costs.




You’ve probably heard the saying “The best time to plant a tree was 50 years ago. The next best time to plant a tree is today.” Investing works the same way.

In an ideal world, people would start investing early in life to take advantage of compounding returns. But even if you didn’t start early, the next best time to start investing is today. If you start investing now, you’ll have more time to watch your investments grow than if you start next year.

Consider using an investing app to simplify the process of starting to invest while still meeting your goals and current financial situation. Once you’re more comfortable, you can research more investment providers in detail and move your money at that time if that feels like a good fit.


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Investing myths are commonplace in our society because people haven’t taken the time to research the facts. And, quite frankly, investing can be an overwhelming topic to research on your own. But now that you’re aware of why these investing myths aren’t a reality, you can share this knowledge with your friends and family.

More importantly, you can quit using these myths as a reason to put off investing. It’s easier than ever to start because now you know that you can start investing with just the change you have in your pocket.


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This article originally appeared on FinanceBuzz.com and was syndicated by MediaFeed.org.




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