With many popular personal finance magazines around the globe, you may wonder how you can double your hard earned money. Over-zealous advisors will promise you good returns on some investments and you get the same promise when attending important cocktail parties among many other promising sources. You want to double your money and get rich but you definitely want to do it safely.
How to Double Your Money with Investment
Earn It Patiently
From the traditional days, creating a portfolio that has both investment grade bonds and blue-chip stocks in a diversified way has proved to double your money. This is not an option for investors that consider themselves to be speculative. This is an option for the most patient investors who are ready to lose in the short term but know will gain in the long term.
You can know when your capital should be doubled by using rule of 72. All that you have to do is divide the annual rate of return by 72 and you will have your answer. If you are just planning to start investing in bonds and blue chip companies, do a good research on their annual return percentage and use the rule of 72 to calculate when you should double your money. The returns will eventually come when the growth of the investment compounds on itself.
Invest in Bear Market Wisely
A good investor does not walk away from a potential opportunity just because it’s experiencing a tough time or everyone is walking away. This is the best example on how to double your money. This does not mean that you should buy any stock in the stock market, but it simply means that when you have done your research and are satisfied on what you are investing in, buy that stock.
Sometimes there is “blood in the streets” of the stock market or the bear market which can be a great opportunity to buy an oversold good investment. A smart investor or someone who has been investing in stocks for a good period is in a position to know when a counter is oversold by considering its book value and its price-to-earnings ratio. Even the most well-established companies will have these slumps that end up doubling money for many smart investors.
Bonds Are Safe
There are quick and gradual ways in which you can double your hard earned money, but the risk coming along differs greatly. If you want to lower the risk, purchasing bonds is a gradual but safe way to increase your wealth. Bonds are considered to be less risky than many other investment options because the rate agreed at the time of purchase is what you get after the maturity period.
There are different types of bonds such as the zero-coupon bonds that do not pay regular interests but when it matures, you get your face value. Apart from the zero-coupon bonds, you may also opt for standard coupon bonds with which you earn regular interest payments. One reason that standard coupon bonds are considered to be a lot riskier than zero-coupon bonds is the fact that, the interest rate can fall and you have to invest that little interest in a risky investment.
Take the Risk
When learning on how to double your money, you will find that there are many others opting for the speculative ways. This is a bit riskier than many other investment options as it can wipe away all your investments just like it is easier to double your money.
Stock options, such as calls and puts, are ways that investors use to speculate on a counter to boost their portfolio. Selling a stock short or buying on margin is also an option that allows an investor to either sell or buy virtual stocks. Some investors double their money through penny stocks or just go for bargain hunting.
The advantage is that if you speculated in a good way or if you are lucky enough, your money can be doubled in just a day. The speculative way is not a recommended option if you are faint-hearted or if you are not ready to lose some money. Anything could happen.
Use the Retirement Plan
There are some employer-sponsored retirement plans such as the popular 401(k). This matching contribution will help you in doubling your money although you might not see its benefits or enjoy them immediately. This is something you need when you retire. Whatever you contribute to your retirement plan, you tax is billed by a minimum of 10 percent to a maximum of 50 percent.
This is a great way to double your money as some employers will have it deducted directly from your paycheck. This is how to double your money if you cannot invest in other options. This is how it works: Let us say you want to contribute 100 dollars every month, you will actually invest 75 dollars which is worth 100 dollars. That means that for every dollar you invest, you save 25 cents and so on.
More Ways to Double Your Money
Become a mystery shopper: There are actually apps that need you to become a secret or mystery shopper. You do not really have to purchase anything, but you can evaluate a service and participate in a survey to earn some money.
Get paid for your photography: Some apps pay when you submit professional photos or just pictures in your neighborhood.
Sell your baked goods: If you love to bake, you may opt to sell your homemade and fresh baked goods to your colleagues or neighbors.
Take a part-time job: If you are still not sure on how to double your money, take a part time job.
Sell your old items: In the current times, devices tend to become obsolete. There are people who love to use second hand items and this is a great way for you to double your money.
Rent out your parking spot: If you have a driveway or a personal parking space, earn some money by finding a street parking and renting out yours for about a month.
Participate in online surveys: Take the available online surveys for money.
Do your own chores and errands: Doing your own chores instead of hiring someone is an excellent way on how to save and double your money.