Investing in 2024: How To Guarantee Yourself 5%

Trying to figure out where to invest your money has been confusing lately, as you’re unsure what to expect from the economy. While the stock market has been volatile over the last few years, with soaring inflation and rate hikes causing turbulence, investment opportunities can still pay you 5% or more in returns on your money. We will explore different investing options so that you know what to do with your money in the new year. 

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How can you guarantee at least 5% returns by investing in 2024? 

Option 1: Consider Safe Investments Vehicles 

Personal Finance Expert and Founder of Erika.com, Erika Kullberg said, “You see a lot of scary headlines in the news about rising interest rates when it comes to mortgage loans and consumer debt these days.” While Kullberg admitted that there’s plenty of uncertainty in the markets, she also believes there are still solid investment options to help you earn at least 5% on your money. 

“What you don’t see as often is that interest rates are rising across the board, including on investing and savings products. Right now is a great time to invest in a CD or money market fund, as you can find interest rates starting at 5% if you do enough research. If you want to earn long-term returns at that high of a rate, locking yourself into a CD now for a few years can be a great way to go,” said Kullberg.

While this safe investment vehicle doesn’t come with the highest interest rates, you’ll at least be guaranteed the return on your investment so that you don’t have to stress about your money. 

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Option 2: High-Yield Savings Account

If you want to take advantage of the current market climate and have your funds grow with no risk, you can set aside some money for a high-yield savings account. You can browse various online banks offering higher rates than usual. You can set your funds aside without stressing about the risks involved. 

Leaving your funds in a savings account will ensure your money grows so you can focus on other ventures in 2024. These high rates for savings accounts won’t stick around forever, so it’s important that you take advantage of them while you can. 

Option 3: REITs

“REITs allow you to invest in real estate indirectly without having to buy property,” said Taylor Kovar, CFP and founder of Kovar Wealth Management. “They often provide higher dividend yields compared to stocks and can be a source of regular income.” This is your best option if you want to get into real estate without the hassle of being a landlord. You could also potentially earn a higher return than with other investments. 

“Putting your money into a REIT is a solid choice for anyone looking to build long-term wealth that can handle some risk and market craziness,” said Diana Howard, financial analyst at CouponBirds. “Unlike buying real estate to rent, real estate investment trusts can be started with as little as $100, usually offering returns of around 15%, meaning you don’t have to buy rental property by yourself.”

You’ll want to look into different REITs before investing your money, but there are many options. The best part is that you won’t have to go through the process of purchasing a rental property on your own. 

Option 4: Invest In The Stock Market

“Investing in a diversified mix of stocks across different sectors and geographies can offer the potential for returns at or above 5%,” said Kovar. “Consider index funds or ETFs that track a broad market index like the S&P 500. While the stock market can be volatile, a well-diversified portfolio can mitigate some risks and capture growth over time.”

If you can handle the volatility, you could benefit from higher returns in the stock market. While there are risks involved with putting your money into the market, the reality is that you’ll sometimes want to consider taking some chances if you want returns higher than 5%. 

Option 5: Invest In Yourself

One of the best investments you can make is in yourself because you don’t have to worry about external market factors. When you invest in yourself, you generally control the outcome and what kind of returns you receive. 

How can you invest in yourself? 

  • Your education. You can use your money to upgrade your current education level to open more job opportunities. Certain jobs require a higher education, and you’ll see a return as an increased salary. 
  • Invest in your skills. You could take some time to learn a new skill like coding or video editing to give you more income opportunities in the future. Investing in a course or training will pay you returns when you land a new side hustle. 

What You Should Remember About Investing Returns

“Understand your risk tolerance and investment horizon,” Kovar expressed. “Higher returns typically come with higher risk. Keep an eye on economic indicators. Inflation and interest rate changes can impact various investment types differently. Don’t put all your eggs in one basket. Diversifying across asset classes can help manage risk.” When it comes to investment returns, you must remember that some options will come with risks. 

There are three quick rules that you should keep in mind as you look for investing options in 2024:

  1. If it seems too good to be true, it always is. You want to be skeptical of any investment promising high returns with minimal risk, as this is difficult to find. 
  2. High rewards will come with high risks. When you take a risk for a higher reward, there’s risk involved, and you could see the value of your investment drop. 
  3. You have to know your risk tolerance. Before investing your money, you’ll want to assess your risk tolerance to avoid allocating your funds in the wrong direction. 

Closing Thoughts

We encourage you to perform your due diligence before investing your money because you work hard for your money and don’t want to risk losing it because of a poor investment decision. If you’re looking for 5% returns on your money in 2024, various options can take you there.

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This article originally appeared on GOBankingRates.com: Investing in 2024: How To Guarantee Yourself 5%

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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